UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended June 30, Commission file number 0-14510 1995 CEDAR INCOME FUND, LTD. (Exact name of registrant as specified in its charter) Iowa 42-1241468 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 4333 Edgewood Road N.E., Cedar 52499 Rapids, IA (Zip Code) (Address of principal executive offices) Registrant's telephone number, including area code: (319) 398-8975 N/A (Former name, address and 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 The number of shares of common stock outstanding at August 3, 1995 was 2,245,411. PART I FINANCIAL INFORMATION Item 1. Financial Statements. CEDAR INCOME FUND, Ltd. Balance Sheets (unaudited) June 30 December 31, 1995 1994 1994 ASSETS Real estate Land 4,126,044 4,126,044 4,126,044 Buildings and improvements 14,200,539 14,200,539 14,200,539 Total real estate 18,326,583 18,326,583 18,326,583 Less accumulated depreciation (3,100,148) (2,663,716) (2,881,997) Total net real estate 15,226,435 15,662,867 15,444,586 Mortgage loan receivable 586,886 593,997 590,834 Total real estate and mortgage 15,813,321 16,256,864 16,035,420 participation Cash and cash equivalents 624,886 377,386 447,015 Rent and other receivables 83,039 71,682 62,543 Interest receivable 4,035 1,319 6,103 Prepaid expenses 43,432 47,710 53,583 Deferred lease commissions 150,518 190,317 171,264 Taxes held in escrow 37,390 34,829 10,304 TOTAL ASSETS 16,756,621 16,980,107 16,786,232 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Mortgage loan payable 1,454,517 1,472,912 1,463,929 Accounts payable and accrued 168,927 174,604 86,059 expenses Due to affiliates 25,528 20,212 29,062 Security deposits 68,491 62,084 68,127 Advance rents 41,540 60,169 48,884 TOTAL LIABILITIES 1,759,003 1,789,981 1,696,061 Shareholders' equity Common stock, $1 par value, 5,020,000 shares authorized 2,245,411 2,245,411 2,245,411 Additional paid-in capital 12,752,207 12,944,715 12,844,760 TOTAL SHAREHOLDERS' EQUITY 14,997,618 15,190,126 15,090,171 TOTAL LIABILITIES AND SHAREHOLDERS 16,756,621 16,980,107 16,786,232 EQUITY
CEDAR INCOME FUND, Ltd Statements of Operations (unaudited) Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 REVENUE Rents 599,724 579,377 1,199,911 1,139,487 Interest 21,532 16,226 41,238 31,267 Total revenue 621,256 595,603 1,241,149 1,170,754 EXPENSES Property expenses: Real estate taxes 62,363 68,451 115,903 132,273 Wages and salaries 5,237 10,183 9,859 21,783 Repairs and maintenance 103,389 88,697 197,763 145,344 Utilities 29,610 26,949 56,250 56,348 Management fee 29,985 28,969 59,995 56,974 Insurance 3,623 4,677 7,314 9,171 Other 23,363 24,191 45,495 41,861 Total property expenses, excluding 257,570 252,117 492,579 463,754 depreciation Depreciation 109,063 109,141 218,151 218,281 Total property expenses 366,633 361,258 710,730 682,035 Interest 35,081 35,506 70,273 71,112 Administrative fees 24,825 24,708 49,630 49,364 Directors' fees and expenses 11,233 12,468 22,480 25,714 Other administrative 11,825 14,610 31,507 32,103 Total expenses 449,597 448,550 884,620 860,328 Net earnings 171,659 147,053 356,529 310,426 Net earnings per share .08 .07 .16 .14 Dividends to shareholders 224,541 224,541 449,082 449,082 Dividends to shareholders per share .10 .10 .20 .20 Average number of shares outstanding 2,245,411 2,245,411 2,245,411 2,245,411
CEDAR INCOME FUND, Ltd. Statements of Cash Flows (unaudited) Six Months Ended June 30, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Rents collected 1,157,971 1,127,024 Interest received 43,306 34,785 Payments for operating expenses (500,784) (481,198) Interest paid (68,440) (69,279) Net cash provided by operating 632,053 611,332 activities CASH FLOWS FROM INVESTING ACTIVITIES: Principal portion of scheduled mortgage loan collections 3,948 4,247 Security deposits collected, net 364 (2,245) Net cash provided by investing 4,312 2,002 activities CASH FLOWS FROM FINANCING ACTIVITIES: Principal portion of scheduled mortgage loan payments (9,412) (8,574) Dividends paid to shareholders (449,082) (449,082) Net cash used by financing (458,494) (457,656) activities Net increase in cash and cash 177,871 155,678 equivalents. Cash and cash equivalents at beginning 447,015 221,708 of period Cash and cash equivalents at end of 624,886 377,386 period RECONCILIATION OF NET EARNINGS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net earnings 356,529 310,426 Add (deduct) reconciling adjustments: Depreciation 218,151 218,281 Amortization 1,834 1,833 Increase in rent and other (47,582) (33,826) receivables Decrease in interest receivable 2,068 3,518 Decrease in prepaid expenses 8,317 11,312 Decrease (increase) in deferred 20,746 (2,862) lease commissions Increase in operating accounts payable, accrued expenses and due to 79,334 84,686 affiliates Increase (decrease) in advance rents (7,344) 17,964 Net cash provided by operating 632,053 611,332 activities
NOTES TO FINANCIAL STATEMENTS Note 1: Interim financial statements are prepared in accordance with generally accepted accounting principles and include all adjustments of a normal recurring nature necessary for a fair presentation of the financial position and quarterly results. Interim reports should be read in conjunction with the audited financial statements and related notes included in the 1994 Annual Report. Note 2: Shareholders' equity, December 31, 1994 15,090,171 Net earnings 356,529 Dividends to shareholders (449,082) Shareholders' equity, June 30, 1995 14,997,618
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. We are pleased to present the second quarter report for Cedar Income Fund, Ltd. Net earnings for the three and six months ended June 30, 1995 were $171,659 ($.08 per share) and $356,529 ($.16 per share), respectively, compared to $147,053 ($.07 per share) and $310,426 ($.14 per share) for the same periods in 1994. Funds from operations (earnings from operations plus depreciation) were $574,680 for the first six months of 1995 compared to $528,707 for the same period in 1994. The increases in net earnings and funds from operations were primarily the result of higher revenues. Rental income for the second quarter of 1995 increased 4% over the prior year (from $579,377 to $599,724) and 5% year-to-date (from $1,139,487 to $1,199,911). Rents increased at Broadbent Business Center in Salt Lake City, Utah due to higher occupancy and rental rates. Southpoint Parkway Center in Jacksonville, Florida also experienced higher rents due to stable occupancies and higher rental rates. As of June 30, 1995, the Company's real estate portfolio had an overall occupancy rate of 98%. Total property expenses, excluding depreciation, increased from $463,754 for the first six months of 1994 to $492,579 for the same period in 1995, which represented 41% of rental income for both years, respectively. Higher repairs and maintenance expenses at Broadbent and Southpoint were the primary cause of the increase in property expenses. Real estate taxes decreased primarily as a result of a partial refund of 1994 taxes on Germantown Square Shopping Center in Louisville, Kentucky. Wages and salaries were reduced due to a reduction in property management personnel at Broadbent. Hewlett Packard Corporation has notified the Company that it does not intend to renew its lease for 20,400 square feet of space at Corporate Center East in Bloomington, Illinois when it expires on September 30, 1995, but has exercised its option to extend the current lease until November 30, 1995. This lease represented 11% of the Company's revenue in 1994. The Company has begun efforts to secure one or more replacement tenants for this space. The Company's capital resources consist of its current equity in real estate investments (current value less mortgage indebtedness) and a mortgage loan receivable. The Company maintains its real estate in good condition and provides adequate insurance coverage. The Company's liquidity at June 30, 1995 is represented by cash and cash equivalents of $624,886, a mortgage loan participation of $586,886, and cash flow from operating activities. This liquidity is considered sufficient to meet current obligations. On July 20, 1995, the Board of Directors declared a dividend of $.10 per share payable August 21, 1995 to shareholders of record on August 8, 1995. The Board of Directors will continue to consider leasing activity, operating results and financial condition of the Company in determining future dividends. For the Board of Directors, David Blankenship President August 3, 1995 SIGNATURE 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. CEDAR INCOME FUND, LTD. /s/ Alan F. Fletcher Alan F. Fletcher Vice President and Treasurer (principal financial officer) /s/ Edward J. Kittleson Edward J. Kittleson Controller (principal accounting officer) Dated: August 3, 1995