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, 1997 Commission file number 0-14510
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 Identification No.)
incorporation or organization)
4333 Edgewood Road N.E., Cedar Rapids, IA 52499
(Address of principal executive offices) (Zip Code)
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 1, 1997
was 2,245,411.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements.
Cedar Income Fund, Ltd.
Balance Sheets
(unaudited)
June 30, December 31,
1997 1996 1996
ASSETS
Real estate
Land $ 4,126,044 4,126,044 4,126,044
Buildings and improvements 14,634,859 14,200,539 14,336,858
18,760,903 18,326,583 18,462,902
Less accumulated depreciation (3,972,946) (3,536,985) (3,755,012)
14,787,957 14,789,598 14,707,890
Mortgage loan receivable 569,315 578,473 573,991
15,357,272 15,368,071 15,281,881
Cash and cash equivalents 463,351 885,556 670,306
Rent and other receivables 83,807 77,487 95,413
Interest receivable 3,914 3,977 3,946
Prepaid expenses 74,425 39,091 84,758
Deferred lease commissions 175,419 116,864 116,148
Taxes held in escrow 45,378 41,532 17,697
Total Assets $ 16,203,566 16,532,578 16,270,149
LIABILITIES AND SHAREHOLDERS'
EQUITY
Liabilities
Mortgage loan payable $ 1,412,147 1,434,320 1,423,492
Accounts payable and
accrued expenses 176,557 185,076 103,337
Due to affiliates 31,631 25,576 36,538
Security deposits 82,480 64,810 66,655
Advance rents 18,125 15,305 15,047
Total Liabilitities 1,720,940 1,725,087 1,645,069
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 12,237,215 12,562,080 12,379,669
Total Shareholders' Equity 14,482,626 14,807,491 14,625,080
Total Liabilities and
Shareholders' Equity $ 16,203,566 16,532,578 16,270,149
Cedar Income Fund, Ltd.
Statements of Operations
(unaduited)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
REVENUE
Rents $ 603,699 521,652 1,143,318 1,080,699
Interest 19,923 23,251 41,219 46,496
Total Revenue 623,622 544,903 1,184,537 1,127,195
EXPENSES
Property expenses:
Real estate taxes 64,070 62,617 128,493 125,340
Wages and salaries 5,436 5,423 10,584 10,779
Repairs and maintenance 87,338 63,234 162,873 119,691
Utilities 35,735 34,039 67,546 68,261
Management fee 30,185 26,082 57,166 54,035
Insurance 4,835 5,227 9,748 9,538
Other 26,621 29,540 51,724 53,344
Property expenses, excluding 254,220 226,162 488,134 440,988
depreciation
Depreciation 105,575 109,063 217,934 218,712
Total property expenses 359,795 335,225 706,068 659,700
Interest 34,103 34,615 68,340 69,351
Administrative fees 25,266 25,004 50,619 49,979
Directors' fees and expenses 10,034 9,879 21,899 21,023
Other administrative 12,003 11,256 30,983 32,197
Total Expenses 441,201 415,979 877,909 832,250
Net earnings $ 182,421 128,924 306,628 294,945
Net earnings per share $ .08 .06 .14 .13
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
(unaduited)
Six Months Ended
June 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Rents collected $ 1,158,002 1,090,091
Interest received 41,251 46,526
Payments for operating expenses (601,774) (498,508)
Interest paid (66,507) (67,518)
Net cash provided by operating activities 530,972 570,591
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (298,001) -
Principal portion of scheduled
mortgage loan collections 4,676 4,296
Security deposits collected, net 15,825 (2,059)
Net cash provided (used) by investing activities (277,500) 2,237
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal portion of scheduled
mortgage loan payments (11,345) (10,334)
Dividends paid to shareholders (449,082) (449,082)
Net cash used by financing activities (460,427) (459,416)
Net increase (decrease) in cash and cash equivalents (206,955) 113,412
Cash and cash equivalents at beginning of period 670,306 772,144
Cash and cash equivalents at end of period $ 463,351 885,556
RECONCILIATION OF NET EARNINGS TO NET
CASH PROVIDED BY OPERATING ACTIVITIES:
Net earnings $ 306,628 294,945
Add (deduct) reconciling adjustments:
Depreciation 217,934 218,712
Amortization 1,833 1,833
Increase in rent and other receivables (16,075) (35,226)
Decrease in interest receivable 32 30
Decrease in prepaid expenses 8,500 3,351
Increase in deferred lease commissions (59,271) (2,057)
Increase in operating accounts payable
and accrued expenses 73,220 85,403
Decrease in due to affiliates (4,907) (3,186)
Increase in advance rents 3,078 6,786
Net cash provided by operating activities $ 530,972 570,591
NOTES TO FINANCIAL STATEMENTS
Note 1: The unaudited 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 1996 Annual Report.
Note 2: Shareholders' equity, December 31, 1996 $ 14,625,080
Net earnings 306,628
Dividends to shareholders (449,082)
Shareholders' equity, June 30, 1997 $ 14,482,626
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, 1997 were $182,421 ($.08 per share)
and $306,628 ($.14 per share), respectively, compared to
$128,924 ($.06 per share) and $294,945 ($.13 per share) for
the same periods in 1996. Net earnings increased slightly
from 1996 to 1997, primarily due to an increase in rental
income at Corporate Center East in Bloomington, Illinois,
partially offset by an increase in repairs and maintenance
expense. The Company's real estate portfolio had an overall
occupancy rate of 97% at June 30, 1997.
Rental income for the three and six months ended June 30,
1997 was $603,699 and $1,143,318, respectively, compared to
$521,652 and $1,080,699 for the same periods in 1996. This
increase is attributable to the Company's eventual success
in locating replacement tenants at Corporate Center East for
20,000 square feet of space that had been vacant since the
end of 1995. Rental income at Broadbent Business Center in
Salt Lake City, Utah increased by $27,000 for the six months
ended June 30, 1997 compared to the same period one year ago
due to an increase in occupancy. This increase was offset
by a $29,000 decrease in rental income at Southpoint Parkway
in Jacksonville, Florida due to a decrease in occupancy
experienced during the first quarter of 1997. The Company
has subsequently leased this vacant space at Southpoint to
an existing tenant who began paying rent on the entire space
in May 1997. Rental income at Germantown Square in
Louisville, Kentucky was relatively unchanged from a year
ago. Interest income decreased by 11% due to a lower
balance of funds available for investment.
Total property expenses, excluding depreciation, increased
from $440,988 for the first six months of 1996, to $488,134
for the same period in 1997, representing 41% and 43% of
rental income, respectively. Repairs and maintenance were
higher for the first six months of 1997 compared to the same
period in 1996 primarily due to tenant remodeling and other
expenses incurred in 1997 that were not required last year.
As mentioned above, the Company has been successful in
locating replacement tenants for the vacant spaces that
existed at Corporate Center East and Southpoint. As a
result of releasing this space, the Company incurred capital
expenditures of $298,000 and lease commissions of $73,000
through June 30, 1997.
Capital resources of the Company consist of equity in real
estate investments 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, 1997 is represented by cash and cash
equivalents, a mortgage loan participation, and cash flow
from operating activities. This liquidity is considered
sufficient to meet current obligations, including capital
expenditures.
The Board of Directors declared a dividend of $.10 per
share, payable August 18, 1997 to shareholders of record
August 5, 1997. The Board of Directors will continue to
consider leasing prospects, operating results and the
financial condition of the Company in determining future
dividends.
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/ Roger L. Schulz
Roger L. Schulz
Controller
(principal accounting officer)
Dated: August 1, 1997