<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Transition period from _______________ to _______________
Commission file number 0-17602
_______________________________________________________________________________
CHRISKEN PARTNERS CASH INCOME FUND L.P.
(Name of small business issuer in its charter)
_______________________________________________________________________________
Delaware 36-3521124
______________________________ ___________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
345 North Canal Street, Chicago, Illinois 60606
_______________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (312) 454-1626
__________________________________
Securities registered under to Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Interests
_______________________________________________________________________________
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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.
___ ___
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form and no disclosure will 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-KSB or any amendment to this Form 10-KSB. [x]
Issuer's total gross rental revenues for its most recent fiscal year
ended December 31, 1995 was $2,289,899. The aggregate sales price of the
limited partnership interests (the "Units") held by non-affiliates was
$18,866,000 (based on the price at which Units were offered to the public) at
December 31, 1995 and March 15, 1996. The aggregate sales price does not
reflect market value; it reflects only the price at which the Units were sold
to the public. Currently, there is no market for the Units and no market is
expected to develop.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Prospectus of the Registrant dated August 28, 1987, as
supplemented and filed pursuant to Rule 424(b) under the Securities Act of
1933, as amended, S.E.C. File No. 33-14921, are incorporated by reference in
Part III of this Annual Report on Form 10-KSB.
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TABLE OF CONTENTS
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<S> <C> <C>
PAGE
PART I
Item 1. Description of Business. . . . . . . . . . . . . . . . . . . . . . . 1
Item 2. Description of Properties. . . . . . . . . . . . . . . . . . . . . . 2
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . . . 6
PART II
Item 5. Market for Registrant's Limited Partnership Interests
and Related Security Holder Matters . . . . . . . . . . . . 7
Item 6. Management's Discussion and Analysis or Plan of Organization . . . . 7
Item 7. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . . . . . . . . 9
PART III
Item 9. Directors' Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act . . . . . . . . . . . . . . . . . 10
Item 10. Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 11. Security Ownership of Certain Beneficial Owners and Management. . . . . . 11
Item 12. Certain Relationships and Related Transactions. . . . . . . . . . . . . . 11
Item 13. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . 12
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
INDEX TO FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . .F-1
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(i)
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PART I
Item 1. DESCRIPTION OF BUSINESS.
ChrisKen Partners Cash Income Fund L.P. (the "Partnership") is a Delaware
limited partnership formed in 1987 for the purpose of acquiring, operating,
holding for investment and disposing of one or more existing income-producing
apartment complexes and/or self-storage facilities. The general partners of
the Partnership are ChrisKen Income Properties, Inc. (the "Managing General
Partner") and ChrisKen Limited Partnership I (the "Associate General
Partner") (collectively, the "General Partners"). The Managing General
Partner is an Illinois corporation, the shares of which are owned by Messrs.
Robert W. Christoph and John F. Kennedy. As of January 1, 1994 and pursuant
to written agreement, Mr. Christoph resigned as an officer and director of
the Managing General Partner and transferred his shares into a voting trust,
of which Mr. Kennedy is the voting trustee. The Associate General Partner is
an Illinois limited partnership of which Mr. Kennedy and ChrisKen Equities,
Inc., an Affiliate of the Partnership, are the general partners. As of
January 1, 1994 and pursuant to written agreement, Mr. Christoph converted
his general partner interest in the Associate General Partner into a special
limited partner interest without any management rights.
The Partnership offered its units of limited partnership (the "Units") in
a public offering (the "Offering") pursuant to a Registration Statement on
Form S-11 under the Securities Act of 1933, as amended, which Offering
registered 56,000 Units. The Partnership had sold a total of 37,732 Units
($18,866,000) when the Offering terminated on August 28, 1989. Capitalized
terms not defined herein shall have the meaning ascribed to them in the
Partnership's Prospectus dated August 28, 1987.
The principal investment objectives of the Partnership are: (i)
preservation and protection of capital; (ii) distribution of current cash
flow, a significant portion of which should not be subject to federal income
taxes in the initial years of the Partnership's operation; and (iii) capital
appreciation.
The Partnership used the net proceeds of the Offering (the "Net
Proceeds") to purchase a 99.9% interest in the partnerships which own the
Springdale Apartments, a 199-unit apartment complex located in Waukesha,
Wisconsin (the "Springdale Apartments"), and Gold Coast Self Storage, a
155,997 gross square foot, seven story self-storage facility located in
Chicago, Illinois ("Gold Coast Storage") (collectively, the "Specified
Properties" or individually a "Property"). Further information concerning
each of the Specified Properties is provided below in Item 2. Properties.
Discussion regarding apartment complexes which may compete with the
Springdale Apartments is set forth below in Item 2. Properties - The
Springdale Apartments -- Analysis. Similarly, discussion regarding storage
facilities which may compete with Gold Coast Storage is set forth below in
Item 2. Properties - Gold Coast Storage -- Analysis. The General Partners
of the Partnership believe that both Specified Properties remain competitive
in their respective markets.
The Partnership has no employees. The General Partners believe that
ChrisKen Real Estate Management Company, Inc., the manager of the Specified
Properties, has sufficient personnel and other required resources to
discharge all of its responsibilities to the Partnership. The General
Partners and their Affiliates are permitted to perform services for the
Partnership. The business of the Partnership is not seasonal and the
Partnership does no foreign or export business.
A presentation of information about industry segments is not applicable
because the Partnership operates solely in the real estate industry. The
Partnership, by virtue of its ownership in real estate, is subject to federal
and state laws and regulations covering various environmental issues. The
Managing General Partner is not aware of any potential liability related to
environmental issues or conditions that would be material to the Partnership.
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Item 2. DESCRIPTION OF PROPERTIES.
The Partnership holds the Specified Properties described below on an
unencumbered or all cash basis. In identifying the Specified Properties, the
General Partners considered various real property and financial factors,
including the condition and use of such Properties, the prospects for
long-range liquidity, income-producing capacity, possible long-term
appreciation prospects and income tax considerations. The Partnership will
not acquire additional properties. The Partnership originally expected to
begin an orderly liquidation of the Specified Properties after a period of
operations of five to ten years. Although the Partnership has been operating
for more than eight years, it has no present intent to commence liquidation.
The Partnership intends to hold the Specified Properties until such time as
sale or other disposition appears to be advantageous to achieving the
Partnership's investment objectives or it appears that such objectives will
not be met. In deciding whether to sell or refinance a Property, the
Partnership will consider factors such as potential capital appreciation,
cash flow and federal income tax considerations, including possible adverse
federal income tax consequences to the Limited Partners. The net proceeds of
any such sale or refinancing would be distributed to the Partners in
accordance with the terms of the Partnership Agreement.
OCCUPANCY/LEASED SPACE
______________________
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DESCRIPTION OF
NAME AND LOCATION PROPERTY 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
- ----------------- --------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Springdale 199 unit residential 89% 90% 96% 95% 96%
Apartments apartment complex
Waukesha, located on 13.9 acres
Wisconsin of land.
Gold Coast 155,997 square foot 75% 72% 76% 83% 81%
Storage (145,000 until 6/88)
Chicago, self-storage facility
Illinois with 87,816 leasable
square feet (78,023
before 6/88) of space.
</TABLE>
_____________________
THE SPRINGDALE APARTMENTS.
GENERAL. The Partnership holds a 99.9% interest, as sole general
partner, in Springdale Associates Ltd., a Delaware limited partnership
affiliated with the Partnership (hereinafter "Springdale Associates").
ChrisKen Limited Partnership I, the Partnership's Associate General Partner
holds the remaining .1% interest as the sole limited partner of Springdale
Associates. Springdale Associates owns the land and buildings located at
2407-17 Springdale Road, Waukesha (Waukesha County), Wisconsin (the
"Springdale Apartments").
PROPERTY. The Springdale Apartments comprise a multi-family rental
complex built in 1972, consisting of 199 rental units located in eight
separate buildings on 13.9 acres of land. Each building is a two-story
structure, with some buildings having exposed basements which allow for
another level of apartments on the exposed sides.
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The Springdale Apartments offer one, two and three bedroom models, with
rents at December 31, 1995 as follows:
<TABLE>
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AVERAGE
NO. OF RENT APPROXIMATE RENT/SQ.FT.
APART- PER APARTMENT (INCLUDES
APARTMENT TYPE MENTS MONTH SIZE HEAT)
_____________ _____ _____ ___________ ___________
<S> <C> <C> <C> <C>
1BR, 1 Bath 73 $590-620 677-733 SF $.87-.85
*1BR, 1 Bath 6 $620-635 677-733 SF $.92-.87
2BR, 2 Baths 91 $690-720 936-966 SF $.74-.75
*2BR, 2 Baths 9 $720-735 936-966 SF $.77-.76
3BR, 2 Baths 19 $850-885 1,150-1,200 SF $.74.-74
*3BR, 2 Baths 1 $890 1,150 SF $.77
</TABLE>
*Fully Renovated
The current rents in the table above reflect an increase of
approximately 2.8% over December 31, 1994. The average occupancy of the
Springdale Apartments was 96% for 1995 and 97% for 1994. Occupancy as of
December 31, 1995 was 96% (see discussion in Item 6 below). All tenant
leases are for periods of from six months to one year and no tenants lease
more than one unit.
ANALYSIS. The General Partners believe that the following information
reflected market conditions as of December 31, 1995 for apartment complexes
which may compete with the Springdale Apartments.
COMPETITIVE PROJECTS
<TABLE>
<CAPTION>
APARTMENT AVERAGE
RENT SIZE RENT/SQ.FT.
RENT PER (AVERAGE (INCLUDES
PROJECT APARTMENT TYPE MONTH IN SF) HEAT)
_______ ______________ _____ _________ ___________
<S> <C> <C> <C> <C>
Meadows A) 1BR/1 Bath $590 685 $.86
B) 1BR/1 Bath $630 708 $.89
A) 2BR/2 Bath $695 943 $.74
B) 2BR/2 Bath $745 1,115 $.67
Monterey * 1BR/1 Bath $620-666 730-860 $.85-.77
(Waukesha) 2BR/2 Bath $695-755 965-1,010 $.72-.73
Willow * 1BR/1 Bath $515-595 630-912 $.82-.65
Creek 2BR/1-1/2 Bath $640-665 940-1,050 $.68-.63
(Waukesha)
</TABLE>
*Does not include heat.
A = Not Remodeled
B = Remodeled
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The Meadows, which is directly across the street from Springdale
Apartments, began remodeling it's clubhouse, leasing center, fitness center
and game room in 1995, and continues to remodel apartment interiors, for
which higher rents are charged. Monterey is a ten-year-old complex and
rental rates do not include heat. Willow Creek is a seven-to-eight year old
complex located next to Springdale Apartments. Willow Creek, whose rental
rates do not include heat, comprises 168 units.
The Springdale Apartments are being depreciated using 27.5 year
straight-line depreciation for the portion of its federal income tax basis
allocable to non-tax-exempt Limited Partners and using a 40-year
straight-line depreciation for the portion allocable to tax-exempt Limited
Partners. The General Partners believe that the Springdale Apartments are
adequately covered by insurance. Material improvements in 1995 primarily
consisted of the replacement of twisted steel beam supports which threatened
building and resident safety, replacement of appliances, and approximately
half of the building exterior siding, window shutters and gutters. The
remainder of the building exterior project will be completed in 1996 (see
discussion in Item 6. below).
GOLD COAST STORAGE.
GENERAL. The Partnership has a 99.9% interest, as the sole general
partner, in Chicago I Self-Storage, Ltd., an Illinois limited partnership
affiliated with the Partnership (the "Halsted Partnership"). ChrisKen
Limited Partnership I, the Associate General Partner, holds the remaining .1%
interest as the sole limited partner of the Halsted Partnership. The Halsted
Partnership owns the land and buildings located at 1015 North Halsted,
Chicago, Illinois ("Gold Coast Storage").
PROPERTY. Gold Coast Storage is a seven-story, loft-type industrial
building constructed in approximately 1930 for use as a light manufacturing
facility and warehouse. In 1982, the building was converted to a
self-storage facility by a prior owner. When acquired, the building
contained a total gross floor area of approximately 145,000 square feet, in
addition to a full basement area, and was constructed with load-bearing
exterior masonry walls and wood floors and joists. The foundation walls are
masonry with exterior elevations of common brick and face brick. The office
areas in the front of the building are provided with heating, ventilation and
air conditioning systems which the General Partners believe to be in
satisfactory condition. The storage areas of the building are heated to
temperatures held in the 50 degree Fahrenheit range by ceiling-mounted space
heaters with fans. The Halsted Partnership replaced the prior boiler
arrangement with two new high-efficiency boilers in the Fall of 1987. The
building is serviced by two freight elevators and has a TV security system,
fire escape and sprinkler system. The Gold Coast Storage parking lot has 40
spaces for automobiles.
Lessees of rental units in self-storage facilities include individuals,
small businesses, professionals and to some extent, large businesses.
Individuals usually rent space for the storage of furniture, household
appliances, personal belongings, motor vehicles, boats, campers, motorcycles
and household goods. Businesses normally rent space for storage of excess
inventory, records and equipment. Such usage may be on a long-term or
short-term basis. Substantially all leases for storage space in 1995, with
the exception of approximately 8,464 square feet, were on a month-to-month
basis. The average lease rate for self-storage space is $9.04 per square
foot, although rates on individual storage areas vary, based upon the number
of square feet in the specific storage area. At December 31, 1995,
approximately 81% of the space was leased compared to 83% at December 31,
1994. On an economic basis, the average occupancy during 1995 was 80% as
compared to 77% during 1994. The General Partners believe that the increase
of leased space in 1995, as compared to the prior year, is the result of a
combination of several factors which include continued marketing efforts, and
moderately improved economic conditions.
The Partnership has obtained insurance covering the contents of rented
storage units where damage is due to negligence or malfeasance. However, the
scope of this type of insurance is limited and will not cover wrongful action
deemed to be willful. The expense of defending and, where appropriate,
settling or paying such claims is an added cost of business to be borne by
the Partnership. Although the past experience of ChrisKen Management would
indicate that such claims should not materially affect the Partnership's
financial condition or its results of operations, no assurance can be given
regarding the number or amount of such claims or the cost of defending or
disposing of them, which the Partnership may have to bear.
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The size and type of self-storage units which are available are set
forth in the chart below:
(1) Gold Coast Storage - Interior
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<CAPTION>
COST COST COST PER
SQ. FT. SIZE PER MONTH ANNUALLY SQ. FT.
______ ____ _________ ________ _________
<S> <C> <C> <C> <C>
16 4x4x4 $ 19.00 $ 228.00 $14.25
32 8x4x5 36.00 432.00 13.50
40 5x8x9 49.00 588.00 14.70
50 5x10x9 78.00 936.00 18.72
64 8x8x9 75.00 900.00 14.06
80 8x10x9 86.00 1,032.00 12.90
104 8x13x9 124.00 1,488.00 14.31
144 8x18x9 132.00 1,584.00 11.00
192 12x16x9 150.00 1,800.00 9.38
352 22x16 255.00 3,060.00 8.69
</TABLE>
(2) Gold Coast Storage - Exterior
<TABLE>
<CAPTION>
COST COST COST PER
SQ. FT. SIZE PER MONTH ANNUALLY SQ. FT.
______ ____ _________ ________ _________
<S> <C> <C> <C> <C>
200 10x20 $155.00 $1,860.00 $9.30
250 10x25 175.00 2,100.00 8.40
264 12x22 189.00 2,268.00 8.59
300 10x30 210.00 2,520.00 8.40
403 13x31 287.00 3,444.00 8.55
</TABLE>
ANALYSIS. The General Partners believe that the following information
reflects the current market conditions for self-storage space for those
facilities which may compete with Gold Coast Storage.
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(1) East Bank Storage (This location now offers sales representatives a business
429 West Ohio Street center which includes private offices and free local telephone
use and copier service.)
</TABLE>
<TABLE>
<CAPTION>
COST COST COST PER
SQ. FT. SIZE PER MONTH ANNUALLY SQ. FT.
______ ____ _________ ________ _________
<S> <C> <C> <C> <C>
25 5x5x4 $45.00 $540.00 $21.60
50 5x10x8 60.00 720.00 14.40
64 8x8x8 75.00 900.00 14.40
80 8x10x8 85.00 1,020.00 12.75
100 10x10x8 110.00 1,320.00 13.20
</TABLE>
5
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<TABLE>
<CAPTION>
<S> <C> <C>
(2) Strong Box (This property has modified some space into a temperature
1516 North Orleans controlled wine cellar).
</TABLE>
<TABLE>
<CAPTION>
COST COST COST PER
SQ. FT. SIZE PER MONTH ANNUALLY SQ. FT.
______ ____ _________ ________ _________
<S> <C> <C> <C> <C>
16 4x4x4 $21.00 $252.00 $15.75
25 5x5x8 46.00 552.00 22.08
50 5x10x8 75.00 900.00 18.00
64 8x8x8 91.00 1,092.00 17.06
80 8x10x8 108.00 1,296.00 16.20
100 10x10x8 131.00 1,572.00 15.72
144 8x18x8 169.00 2,028.00 14.08
</TABLE>
Parking lot spaces are leased to an Affiliate at Gold Coast Storage
which operates a rental truck service. Rent is paid on a month-to-month
basis and is based on volume of rentals as an indication of use of the space.
Rent of the parking lot space is expected to average approximately $2,000
per month.
Gold Coast Storage is being depreciated using a part 31.5-year and part
19-year straight-line depreciation method for the portion of its federal
income tax basis allocable to non-tax-exempt Limited Partners and using a
40-year straight-line depreciation method for the portion allocable to
tax-exempt Limited Partners. Major improvements during 1995 consisted of
the completion of the window replacement program which began in the fourth
quarter, 1994, and the replacement of building roofs (see Item 6. below for
further discussion).
Item 3. LEGAL PROCEEDINGS.
Other than ordinary and routine litigation incidental to the
Partnership's business, the Partnership is not a party to any material legal
proceeding nor, to the best of its knowledge, are any such proceedings either
pending or threatened.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matters were submitted to a vote of security holders during the
fourth quarter of the Partnership's fiscal year covered by this report. PART
II
6
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Item 5. MARKET FOR REGISTRANT'S LIMITED PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS.
The Units are not readily transferable. There is no public market for
the Units and it is not currently expected that any will develop. There are
restrictions upon the transferability of the Units, including the requirement
that the General Partners consent to any transferee becoming a substituted
Limited Partner (which consent may be granted or withheld at the sole
discretion of the General Partners). In addition, restrictions on transfer
may be imposed under federal and state securities laws.
The Revenue Act of 1987 contains provisions which may have an adverse
impact on investors in certain "publicly traded partnerships." If the
Partnership were to be classified as a "publicly traded partnership," income
attributable to the Units would be characterized as portfolio income and the
gross income attributable to Units acquired by tax-exempt entities would be
unrelated business income, with the result that the Units could be less
marketable. The General Partners will, if necessary, take appropriate steps
to ensure that the Partnership will not be deemed a "publicly traded
partnership."
At December 31, 1995 and March 15, 1996, there were 37,732 Units issued
and outstanding which were held by a total of 1,869 Unitholders.
The Limited Partners were paid four cash distributions totaling $17.49
per Unit in 1995 and $17.37 per Unit in 1994.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF ORGANIZATION.
LIQUIDITY AND CAPITAL RESOURCES.
The Partnership had cash and cash equivalents of approximately $663,387
as of December 31, 1995 and $832,475 as of December 31, 1994. The reduction
in cash and cash equivalents on hand is the result of several primary
factors; an increase in net income in 1995 as compared to 1994, offset by
increases in accounts receivable and prepaid expenses, and decreases in
accounts payable, accrued real estates taxes, and major repairs to the
Specified Properties during 1995(see discussion below). The Partnership's
restricted cash represents operating and contingency reserve (the "Reserve")
funded by proceeds from the Offering had a balance of $377,320 on December
31, 1995 and December 31, 1994 (representing 2% of the gross proceeds of the
Offering as required by the Limited Partnership Agreement). The Reserve is
available for unanticipated contingencies and capital improvements and
repairs at the Specified Properties (see additional discussion below).
The source of future liquidity and cash distributions to the Partners is
dependent primarily upon cash generated by the Specified Properties and
secondarily through the sale or financing of these properties.
The Partnership's Reserve is intended to assist the Partnership in
maintaining liquidity to meet cash requirements. Based upon a review of the
existing leases and occupancy levels at the Springdale Apartments and Gold
Coast Storage and further based upon the Partnership's investment objectives
and the fact that the Specified Properties are held on an all-cash basis in
connection with such acquisitions, the General Partners do not anticipate a
lack of liquidity. In the event such Reserve is insufficient to meet cash or
liquidity needs, the Partnership would be required to borrow funds to meet
such costs. Nonetheless, in addition to the Reserve discussed above, the
General Partners believe that the equity in the Partnership's Specified
Properties which are now held on an all-cash basis, will provide additional
sources of liquidity, if required. The General Partners therefore believe
that, if required, the Partnership would be able to obtain financing
collateralized by the Properties in order to provide funds to meet working
capital needs.
RESULTS OF OPERATIONS.
COMPARISON OF 1995 TO 1994. Occupancy at the Springdale Apartments was
96% at December 31, 1995, compared to 95% at December 31, 1994. Occupancy at
Springdale Apartments remained level throughout 1995 and
7
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is anticipated to remain at approximately 95% during 1996. Leased space at
Gold Coast Storage was 81% at December 31, 1995, compared to 83% at December
31, 1994. On an economic basis, the average occupancy at Gold Coast Storage
during 1995 was 80% as compared to 77% during 1994. At December 31, 1995,
the average annual lease rate for self-storage space was $9.04 as compared to
$8.65 one year earlier. The General Partners believe that the increase in
occupancy at Gold Coast Storage, on an economic basis, reflects continued
marketing efforts, and moderately improved market conditions. During the
second quarter of 1995 the Partnership began converting approximately 4,000
square feet of undivided storage space that had been previously occupied rent
free by a charitable, not for profit organization. After conversion the
space yielded approximately 2,900 square feet of revenue generating space, of
which approximately 89% was leased as of December 31, 1995. The General
Partners believe that occupancy, on a square footage basis, at Gold Coast
Storage during 1996 will remain at approximately 80%. Management continues
to aggressively market both apartment units at the Springdale Apartments and
lease space at Gold Coast Storage in order to increase occupancy percentages
at both locations.
Overall rental revenue in 1995 attributable to the Specified Properties
($2,289,899) increased by approximately 5% from 1994 (2,180,364). Rental
revenue increased for Springdale Apartments (approximately 1.7%) from
$1,469,698 for the year ended December 31, 1994 to $1,495,283 for the year
ended December 31, 1995, due primarily to higher rental rates offset by
slightly lower occupancy in 1995 as compared to 1994. The General Partners
anticipate that rental revenue at Springdale Apartments should remain at
approximately these levels through 1996. Rental revenue increased at Gold
Coast Storage (approximately 11.8%) from $710,666 for the year ended December
31, 1994 to $794,616 for the year ended December 31, 1995. Although square
footage occupancy as of December 31, 1995, (81%) was lower than at December
31, 1994 (83%) rental income increased in 1995 due to a 6.5% increase in
rental rates and a 9.3% increase in economic occupancy. Rental rates of
larger storage units rent at lower per square foot rates as compared to
smaller storage units which rent at higher per square foot rates. The
General Partners believe that rental revenue at Gold Coast Storage will
improve during 1996 and remain relatively stable over the next few years.
Major improvements completed in 1995 at Springdale Apartments include:
exterior building siding replacement; $93,000, appliance replacement;
$22,000, and structural steel beam replacement; $105,000. Major improvements
budgeted for 1996 include the completion of the exterior building siding
replacement; $80,000, roof replacement; $67,000, balcony replacement/repair;
$106,000, and continued appliance replacement; $54,000. During 1995, major
improvements at Gold Coast Storage included completion of the window
replacement program which began in the fourth quarter of 1994; $152,000, and
roof replacement; $106,000. The Gold Coast Storage 1996 major improvement
budget includes: brochure and signage redesign; $4,500, fire escape repairs;
$7,500, and replacement of the interior/exterior monitoring cameras and
intercom system; $14,000.
Overall expenses in 1995 attributable to the Specified Properties
($1,805,554) decreased by approximately 3.3% from 1994 ($1,867,418).
Expenses in 1995 attributable to Springdale ($1,094,762) decreased by
approximately 1.7% from 1994 ($1,113,362). In aggregate, Property Operations
expenses at Springdale remained level for the years ended December 31, 1995
and 1994 with reductions in utility costs offset by higher protection and
security, rubbish removal, and carpet replacement expenses. Real Estate
Taxes at Springdale were lower in 1995 as compared to 1994 due to a
successful valuation assessment appeal. Advertising expense at Springdale
remained level for the years ended December 31, 1995 and 1994. Depreciation
and Amortization expense at Springdale Apartments increased in 1995 as
compared to 1994 due to the affects of capitalizing certain expenditures in
1994 and 1995. In aggregate, General and Administrative expenses at
Springdale remained level during 1995 as compared to 1994 with reductions in
administrative staff payroll, payroll taxes, and professional fees offset by
increased administrative and office expenses. Management Fees at Springdale
increased during 1995 as compared to 1994 due to higher Total Revenue in
1995. Expenses attributable to Gold Coast Storage in 1995 ($710,792)
decreased by approximately 5.7% from 1994 ($754,056). Property Operations
expense at Gold Coast Storage decreased for the year ended December 31, 1995
as compared to the same period one year earlier due to reductions in
protection and security costs, and utilities offset by increased landscaping
repair expense. Real Estate Taxes at Gold Coast Storage decreased in 1995 as
compared to 1994 due to a successful assessment appeal. Repairs and
Maintenance expense at Gold Coast Storage increased in 1995 as compared to
1994 due to increases in janitorial personnel, elevator maintenance,
electrical and heating equipment repairs offset by reductions in grounds
maintenance contract and supplies, maintenance personnel salaries, and
structural and repairs expense. Advertising expense at Gold Coast Storage
dropped slightly during 1995 as compared to 1994. Depreciation and
Amortization expense at Gold Coast Storage increased in 1995 as compared to
1994 due to the affects of the capitalization of certain expenditures during
1995 and 1994. General and Administrative expenses at Gold Coast Storage
decreased significantly in 1995 as compared
8
<PAGE>
to 1994 due to reductions in administrative personnel salaries, lessee
eviction legal fees, bad debt write off, workers compensation insurance, and
real estate tax abatement service fees offset by increases in data processing
costs, and property insurance expense. Management Fee expense at Gold Coast
Storage is higher in 1995 as compared to 1994 due to higher Total Revenue in
1995.
Net income for 1995 ($477,452) from Springdale Apartments increased by
approximately 13.2% from 1994 ($421,594) due to an increase in rental
revenues and decreased expenses. Net income for 1995 ($157,335) from Gold
Coast Storage increased by approximately 341% from 1994 ($46,195) as a result
to the factors affecting rental revenue and expenses as detailed above. The
combined net income for the Specified Properties for 1995 ($634,787)
increased by approximately 35.7% from 1994 ($467,789).
Distributions to Limited Partners in 1995 totalled $660,113, an increase
from 1994 distributions of $655,466. Distributions, on a per unit basis, to
Limited Partners in 1995 ($17.49) increased from 1994 ($17.37), of which $-0-
and $3.43 per unit, respectively was a return of capital. Net income per
Unit in 1995 ($13.93) increased from 1994 ($9.88) primarily as the result of
the factors detailed above affecting the Specified Properties. The General
Partners anticipate distributions and net income per Unit to increase in the
future due to a projected increase in occupancy and rental rates, and
controlled expenses at the Specified Properties.
INFLATION.
Inflation has several types of potentially conflicting impacts on real
estate investments. Short-term inflation can increase real estate operating
costs which may or may not be recovered through increased rents and/or sales
prices, depending on general or local economic conditions. In the long-term,
inflation can be expected to increase operating costs and replacement costs
and may lead to increased rental revenues and real estate values.
Item 7. FINANCIAL STATEMENTS.
See Index to Financial Statements on Page F-1 of this Form 10-KSB for
Financial Statements.
Item 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
9
<PAGE>
PART III
Item 9. DIRECTORS' EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The Partnership does not have directors or officers. The General
Partners of the Partnership are ChrisKen Income Properties, Inc., an Illinois
corporation, as Managing General Partner, and ChrisKen Limited Partnership I,
an Illinois limited partnership, as Associate General Partner.
All issued and outstanding shares of the Managing General Partner are
owned by Messrs. Robert W. Christoph and John F. Kennedy. As of January 1,
1994 and pursuant to written agreement, Mr. Christoph resigned as an officer
and director of the Managing General Partner and transferred his shares into
a voting trust which terminates on December 31, 2003. Mr. Kennedy is the
voting trustee of this voting trust and has the power to exercise all voting
rights with respect to Mr. Christoph's shares; Mr. Christoph retains the
economic and beneficial interest in such shares. The sole officer of the
Managing General Partner is John F. Kennedy, who is President and Secretary.
Mr. Kennedy is its sole director. The general partners of the Associate
General Partner are Mr. Kennedy and ChrisKen Equities, Inc., an Affiliate.
As of January 1, 1994 and pursuant to written agreement, Mr. Christoph
converted his general partner interest in the Associate General Partner into
a special limited partner interest without any management rights.
The following is a list of the executive officers and directors of the
Managing General Partner as of March 15, 1995:
<TABLE>
<CAPTION>
NAME AGE POSITION
____ ___ ________
<S> <C> <C>
John F. Kennedy 45 Director, President and Secretary
</TABLE>
John F. Kennedy holds a Bachelor of Arts degree in Psychology from
DePaul University. Mr. Kennedy co-founded The ChrisKen Group with Mr.
Christoph and has been an officer, director, and shareholder of its
affiliated companies as they have been formed or incorporated. Mr. Kennedy
has been a Director, President (Vice President until 1994) and Secretary of
the Managing General Partner since 1986, Secretary of ChrisKen Real Estate
Management Company, Inc. and is a general partner of the Associate General
Partner. Prior to co-founding The ChrisKen Group, he was involved from 1977
to 1978 with marketing various properties for American Invesco, a condominium
conversion firm headquartered in Chicago. Mr. Kennedy served as Vice
President of marketing for a privately held real estate securities firm based
in Hawaii from 1978 to 1980.
Mr. Kennedy has been a licensed real estate broker since 1981 and is
currently a general partner in 29 privately-offered real estate partnerships
located primarily in the Midwest. He also serves as a principal of the
general partners of ChrisKen Growth & Income L.P. II, a public real estate
limited partnership.
Item 10. EXECUTIVE COMPENSATION.
The Partnership does not have directors or officers. Furthermore, the
Partnership is not required to pay the officers and directors of its General
Partners any current nor any proposed compensation in such capacities.
However, the Partnership is required to pay certain fees, make distributions
and allocate a share of the profits or losses of the Partnership to the
General Partners as described under the caption "Management Compensation" on
pages 16 through 19 of the Partnership's Prospectus, which description is
incorporated herein by reference.
The following is a schedule of the compensation paid for the period
ended December 31, 1995 by the Partnership to the General Partners or their
Affiliates and a description of the transactions giving rise to such
compensation:
10
<PAGE>
<TABLE>
<CAPTION>
DESCRIPTION OF TRANSACTION AND AMOUNT OF
ENTITY RECEIVING COMPENSATION COMPENSATION
_____________________________ ____________
<S> <C>
Reimbursement of property operating payroll costs to Affiliate
of General Partners $266,087
________
Property Management Fee to Affiliate of the General Partners 132,802
________
Total $398,889
________
________
</TABLE>
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
(a) To the best knowledge of the Partnership, as of December 31, 1995
and March 15, 1996, no person held more than five percent (5%) of the Units.
(b) The Partnership, as an entity, does not have any directors or
officers. As of December 31, 1995 and March 15, 1996 37,732 Units were
beneficially owned by 2,352 Limited Partners. No Units were owned by any
directors or executive officers of the General Partners.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
ChrisKen Real Estate Management Company, Inc. ("ChrisKen Management"),
an Affiliate of the General Partners, provides management services for the
properties owned by the Partnership. The manager's duties and
responsibilities include supervision of the day-to-day management of the
operations of the Properties, the rendition of long-range planning services
and rendering such assistance and consultation to the Managing General
Partner as may be necessary to provide for the efficient administration and
the protection of the Properties. Any fees for management services will be
in addition to the General Partners' distributive share of cash flow.
ChrisKen Management earned $132,802 and $122,747 in 1995 and 1994,
respectively, for such management services. In addition, the Partnership
reimbursed ChrisKen Management for payroll expenses for personnel directly
related to property operations totaling $266,087 and $260,368 in 1995 and
1994, respectively.
There may be conflicts of interest on the part of ChrisKen Management
since ChrisKen Management may be rendering similar services to other
partnerships. However, the General Partners believe that ChrisKen Management
has sufficient personnel and other required resources to discharge all of its
responsibilities to the various properties that it manages and will manage in
the future on behalf of the Partnership.
Neither the General Partners nor their Affiliates are prohibited from
providing services to, and otherwise dealing or doing business with, persons
who deal with the Partnership. However, no rebates or "give ups" may be
received by the General Partners or any such Affiliates of the General
Partners, nor may the General Partners or any such Affiliates participate in
any reciprocal business arrangements which would have the effect of
circumventing any of the provisions of the Limited Partnership Agreement.
The Partnership may enter into other transactions with an Affiliate,
provided that such transactions will be conducted by the General Partners on
terms which are not less favorable to the Partnership than those available
from others, the fees and other terms of the contact are fully disclosed and
such party must have been previously engaged in such business independently
of the Partnership and as an ordinary and ongoing business.
An affiliate of the General Partners leases space at Gold Coast Storage.
During 1995 and 1994 the Partnership recognized rental revenue of $25,000
and $24,000, respectively from this lease.
Upon the sale or refinancing of a real estate investment purchased by
the Partnership, the General Partners will receive real estate brokerage
commissions in an amount equal to the lesser of: (a) 3% of the gross sales
price of the property; or (b) 1/2 of the competitive real estate commission
if they have rendered such services; provided, however, that payment of such
commissions to the General Partners shall be subordinated to receipt by the
Limited Partners of their Adjusted Investment and Preferential Distribution.
Reference is made to and Note 4 of the Notes to the Financial Statements for
amounts paid to related parties.
11
<PAGE>
Item 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) The following exhibits are included herein or incorporated by
reference:
<TABLE>
<CAPTION>
NUMBER EXHIBIT
<S> <C>
(3) Certificate of Limited Partnership (incorporated by reference from Exhibit 3 of the Registrant's Form S-11 Registration
Statement filed June 9, 1987, S.E.C. File No. 33-14921).
(4) Limited Partnership Agreement of Registrant dated as of August 3, 1987 (incorporated by reference from Exhibit 3.1,
Registrant's Form S-11 Registration Statement filed June 9, 1987, S.E.C. File No. 33-14921).
(10)(1) Property Management Agreement between Registrant and ChrisKen Real Estate Management Company (incorporated by
reference from Exhibit 19.1 to the Registrant's Form S-11 Registration Statement filed June 9, 1987, S.E.C. File
No. 33-14921).
(28)(1) Pages 16-19 of final Prospectus dated August 28, 1987 as filed with the Securities and Exchange Commission pursuant to
Rule 424(b) promulgated under the Securities Act of 1933, as amended.
(b) Reports on Form 8-K.
</TABLE>
The Partnership did not file any reports on Form 8-K during the
quarter ended December 31, 1995.
12
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended, the registrant has caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
CHRISKEN PARTNERS CASH INCOME FUND L.P.
By: ChrisKen Income Properties, Inc.,
Managing General Partner
Date: March 29, 1996 By: /s/ John F. Kennedy
____________________________________
John F. Kennedy
Director and President
In accordance with 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: /s/ John F. Kennedy
_______________________________________
John F. Kennedy, Director
and President of the Managing General
Partner
Date: March 29, 1996
13
<PAGE>
Consolidated Financial Statements
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
YEARS ENDED DECEMBER 31, 1995 AND 1994
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Index to Consolidated Financial Statements
<TABLE>
<CAPTION>
<S> <C>
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Financial Statements
Consolidated Balance Sheet - December 31, 1995. . . . . . . . . . . . . . . F-3
Consolidated Statements of Income for the Years Ended
December 31, 1995 and 1994. . . . . . . . . . . . . . . . . . . . . . . . F-4
Consolidated Statements of Partners' Capital for the Years
Ended December 31, 1995 and 1994. . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995 and 1994. . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . F-7
</TABLE>
F-1
<PAGE>
Report of Independent Auditors
To the Partners
Chrisken Partners Cash Income Fund L.P.
We have audited the accompanying consolidated balance sheet of Chrisken
Partners Cash Income Fund L.P. (a Delaware limited partnership), as of
December 31, 1995, and the related consolidated statements of income, partners'
capital, and cash flows for each of the two years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally 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, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Chrisken Partners
Cash Income Fund L.P., at December 31, 1995, and the consolidated results of
its operations and its cash flows for each of the two years in the period ended
December 31, 1995, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
March 18, 1996
F-2
<PAGE>
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Consolidated Balance Sheet
December 31, 1995
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and cash equivalents $ 663,387
Restricted cash 377,320
Accounts receivable 12,434
Prepaid expenses 29,743
-----------
1,082,884
Investment in real estate, at cost:
Land 2,220,195
Buildings and improvements 13,827,581
Equipment 308,821
-----------
16,356,597
Accumulated depreciation (3,682,668)
-----------
12,673,929
-----------
Total assets $13,756,813
-----------
-----------
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 60,037
Tenants security deposits 61,298
Deferred income and prepaid rent 80,440
Accrued real estate taxes 331,478
-----------
Total liabilities 533,253
Partners' capital, 37,732 limited partnership units issued and
outstanding 13,223,560
-----------
Total liabilities and partners' capital $13,756,813
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES.
F-3
<PAGE>
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Consolidated Balance Sheet
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994
---------- ----------
<S> <C> <C>
REVENUE
Rental $2,289,899 $2,180,364
Interest 31,611 28,406
Other 150,442 154,843
---------- ----------
Total revenue 2,471,952 2,363,613
EXPENSES
Property operations 235,579 245,731
Real estate taxes 330,119 348,481
Repairs and maintenance 246,520 256,345
Advertising 66,932 68,626
Depreciation and amortization 510,878 493,738
General and administrative 364,951 413,777
Management fees - Affiliate 132,802 122,747
---------- ----------
Total expenses 1,887,781 1,949,445
---------- ----------
Net income $ 584,171 $ 414,168
---------- ----------
---------- ----------
Net income allocated to general partners $ 58,417 $ 41,417
---------- ----------
---------- ----------
Net income allocated to limited partners $ 525,754 $ 372,751
---------- ----------
---------- ----------
Net income allocated to limited partners per limited
partnership unit outstanding $ 13.93 $ 9.88
---------- ----------
---------- ----------
Limited partnership units outstanding 37,732 37,732
---------- ----------
---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES.
F-4
<PAGE>
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Consolidated Statements of Partners Capital
<TABLE>
<CAPTION>
PARTNERS' CAPITAL ACCOUNTS
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
-------- ----------- -----------
<S> <C> <C> <C>
Balance at January 1, 1994 $168,962 $13,371,838 $13,540,800
Distributions (A) - (655,466) (655,466)
Net income 41,417 372,751 414,168
-------- ----------- -----------
Balance at December 31, 1994 210,379 13,089,123 13,299,502
Distributions (A) - (660,113) (660,113)
Net income 58,417 525,754 584,171
-------- ----------- -----------
Balance at December 31, 1995 $268,796 $12,954,764 $13,223,560
-------- ----------- -----------
-------- ----------- -----------
</TABLE>
Note (A): Summary of quarterly cash distributions paid per limited
partnership unit:
<TABLE>
<CAPTION>
1995 1994
----- -----
<S> <C> <C>
First quarter $4.41 $4.19
Second quarter 4.31 4.36
Third quarter 4.36 4.41
Fourth quarter 4.41 4.41
</TABLE>
SEE ACCOMPANYING NOTES.
F-5
<PAGE>
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1995 1994
-------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $584,171 $414,168
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization 510,878 493,738
Provision for doubtful accounts 11,712 73,898
Net changes in operating assets and liabilities:
Increase in accounts receivable (14,730) (24,480)
Increase in prepaid expenses (25,334) (3,750)
Increase (decrease) in accounts payable and
accrued real estate taxes (81,470) 45,161
Increase (decrease) in deferred income and
prepaid rent (8,219) 21,227
Increase (decrease) in tenants' security deposits 1,231 (1,323)
Decrease in due to affiliates (3,917) (543)
-------- ---------
Net cash provided by operating activities 974,322 1,018,096
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (483,297) (310,726)
-------- ---------
Cash used in investing activities (483,297) (310,726)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to partners (660,113) (655,466)
-------- ---------
Cash used in financing activities (660,113) (655,466)
-------- ---------
Net (decrease) increase in cash and cash equivalents (169,088) 51,904
Cash and cash equivalents, beginning of year 832,475 780,571
-------- ---------
Cash and cash equivalents, end of year $663,387 $832,475
-------- ---------
-------- ---------
</TABLE>
SEE ACCOMPANYING NOTES.
F-6
<PAGE>
Chrisken Partners Cash Income Fund L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Notes to Consolidated Statements of Cash Flows
Years ended December 31, 1995 and 1994
1. ORGANIZATIONAL DATA
Chrisken Partners Cash Income Fund L.P. (CPCIF) is a Delaware limited
partnership, organized on May 4, 1987, with Chrisken Income Properties, Inc.
(Managing General Partner) and Chrisken Limited Partnership I as the General
Partners. Pursuant to a public offering (the Offering), CPCIF sold 37,732
limited partnership units at $500 for each unit. CPCIF has 99.9% ownership
interests in Springdale Associates Limited Partnership (Springdale) and Chicago
I Self-Storage Limited Partnership (Self-Storage). Springdale owns a 199-unit
residential complex located in Waukesha, Wisconsin, and Self-Storage owns a
155,997 square foot self-storage facility located in Chicago, Illinois.
2. SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
CPCIF, Springdale, and Self-Storage (collectively, the Partnership).
Intercompany balances and transactions have been eliminated. Amounts
attributable to the minority interests in Springdale and Self-Storage have not
been reflected as those amounts are not material.
CASH EQUIVALENTS
The Partnership considers all highly liquid investments with an original
maturity of three months or less when purchased to be cash equivalents. Cash
and cash equivalents are stated at cost, which approximates their market value.
INVESTMENT IN REAL ESTATE
In March 1995, the FASB issued Statement No. 121, ACCOUNTING FOR THE IMPAIRMENT
OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO BE DISPOSED OF, which
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. The Partnership has adopted Statement No. 121 in 1995, and the
effect of adoption did not have an impact on the financial statements.
F-7
<PAGE>
Chrisken Partners Cash Income Fund, L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Notes to Consolidated Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Depreciation of property and improvements is computed using the straight-line
method over the estimated useful lives of the assets. Residential and
nonresidential properties are being depreciated over 27.5 years and 31.5 years,
respectively, and equipment is depreciated over seven years.
INCOME TAXES
The Partnership is not liable for federal income taxes. Each partner includes
his proportionate share of partnership income or loss in his own tax return.
Therefore, no provision for income taxes is made in the consolidated financial
statements of the Partnership.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
3. PARTNERSHIP AGREEMENT
The Partnership agreement provides that profits, losses, and cash distributions
be allocated 10% to the General Partner and 90% to the Limited Partners, except
that: (a) cash distributions to the General Partners will be subordinated to
the Limited Partners receiving their noncumulative, noncompounded annual
preferred return of 7% per annum on their aggregate contributed capital (Annual
Preferred Return) as defined; and (b) the special allocation provisions, as
defined, in the event of a refinancing, sale, or other disposition of the
property of the Partnership. Distributions to partners in 1995 and 1994 were
not sufficient to meet the Annual Preferred Return.
The Partnership shall continue until December 31, 2027, unless sooner
terminated pursuant to the applicable provisions of the Partnership agreement.
F-8
<PAGE>
Chrisken Partners Cash Income Fund, L.P.
(A DELAWARE LIMITED PARTNERSHIP)
Notes to Consolidated Financial Statements (continued)
3. PARTNERSHIP AGREEMENT (CONTINUED)
The Partnership agreement provides that the Partnership is to maintain working
capital reserves in an amount not less than 2% of the proceeds of the Offering.
However, to the extent that these reserves are utilized to fund unanticipated
cash requirements, the reserves can be decreased. At December 31, 1995, cash
restricted for working capital reserve purposes was $377,320.
4. RELATED PARTY TRANSACTIONS
The Partnership pays management fees to Chrisken Real Estate Management
Company, Inc. (Chrisken), an affiliate of the General Partners. Management
fees are calculated at 5% of gross revenue for Springdale and 6% of gross
revenue for Self-Storage. Total management fees for 1995 and 1994 were
$132,802 and $122,747, respectively. The agreement is subject to annual
renewal. In addition, the Partnership reimburses Chrisken for payroll expenses
for personnel directly related to property operations, totaling $266,087 and
$260,368 in 1995 and 1994, respectively.
In 1995 and 1994, an affiliate of the General Partner rented space at Self-
Storage. Rent was based on a percentage of net income of the affiliate and
totaled $25,000 and $24,000, respectively
5. BASIS OF PRESENTATION
The Partnership maintains its accounting books and records in accordance with
the Internal Revenue Code's rules and regulations. The accompanying
consolidated financial statements are prepared in accordance with generally
accepted accounting principles which will differ from the federal income tax
basis method of accounting due to the different treatment of various items as
specified in the Internal Revenue Code, principally depreciation expense and
prepaid rent. The net effect of these accounting differences is that the net
income in the financial statements for 1995 and 1994 is approximately $135,000
and $170,000, respectively, less than the taxable income of the Partnership.
The aggregate cost of real estate for federal income tax purposes at December
31, 1995, is $12,341,057.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-01-1995
<CASH> 1040707
<SECURITIES> 0
<RECEIVABLES> 12434
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1082884
<PP&E> 16356597
<DEPRECIATION> 3682668
<TOTAL-ASSETS> 13756813
<CURRENT-LIABILITIES> 533253
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 13223560
<TOTAL-LIABILITY-AND-EQUITY> 13756813
<SALES> 2289899
<TOTAL-REVENUES> 2440341
<CGS> 0
<TOTAL-COSTS> 1887781
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 584,171
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 0
<EPS-PRIMARY> 13.93
<EPS-DILUTED> 0
</TABLE>
