SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: June 30, 2001
Commission file number: 0-29274
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1789725
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) 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
Transitional Small Business Disclosure Format:
Yes No [X]
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
INDEX
PART I.Financial Information
Item 1.Balance Sheet as of June 30, 2001 and December 31, 2000
Statements for the Periods ended June 30, 2001 and 2000:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2.Management's Discussion and Analysis
PART II.Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
BALANCE SHEET
JUNE 30, 2001 AND DECEMBER 31, 2000
(Unaudited)
ASSETS
2001 2000
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,589,308 $ 1,388,156
Receivables 24,401 5,100
Short-Term Note Receivable 0 675,920
----------- -----------
Total Current Assets 1,613,709 2,069,176
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 6,418,920 6,134,768
Buildings and Equipment 11,279,266 10,832,312
Construction in Progress 166,957 0
Property Acquisition Costs 0 15,395
Accumulated Depreciation (1,612,911) (1,504,698)
----------- -----------
Net Investments in Real Estate 16,252,232 15,477,777
----------- -----------
Total Assets $17,865,941 $17,546,953
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 39,420 $ 61,934
Distributions Payable 405,730 390,705
Unearned Rent 87,600 0
----------- -----------
Total Current Liabilities 532,750 452,639
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (23,854) (38,243)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized and issued;
23,322 Units outstanding 17,357,045 17,132,557
----------- -----------
Total Partners' Capital 17,333,191 17,094,314
----------- -----------
Total Liabilities and Partners' Capital $17,865,941 $17,546,953
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Three Months Ended Six Months Ended
6/30/01 6/30/00 6/30/01 6/30/00
INCOME:
Rent $ 490,012 $ 432,023 $ 946,807 $ 854,427
Investment Income 13,059 26,565 40,843 55,599
--------- --------- ---------- ---------
Total Income 503,071 458,588 987,650 910,026
--------- --------- ---------- ---------
EXPENSES:
Partnership Administration -
Affiliates 71,750 57,728 137,724 131,233
Partnership Administration
and Property Management -
Unrelated Parties 6,452 21,869 13,461 46,491
Depreciation 125,927 118,529 245,184 237,058
--------- --------- ---------- ---------
Total Expenses 204,129 198,126 396,369 414,782
--------- --------- ---------- ---------
OPERATING INCOME 298,942 260,462 591,281 495,244
GAIN ON SALE OF REAL ESTATE 209,232 0 450,620 0
--------- --------- ---------- ---------
NET INCOME $ 508,174 $ 260,462 $1,041,901 $ 495,244
========= ========= ========== =========
NET INCOME ALLOCATED:
General Partners $ 17,082 $ 2,604 $ 22,419 $ 4,952
Limited Partners 491,092 257,858 1,019,482 490,292
--------- --------- ---------- ---------
$ 508,174 $ 260,462 $1,041,901 $ 495,244
========= ========= ========== =========
NET INCOME PER
LIMITED PARTNERSHIP UNIT
(23,322 and 23,548 weighted
average Units outstanding
in 2001 and 2000,
respectively) $ 21.05 $ 10.95 $ 43.71 $ 20.82
========= ========= ========== =========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,041,901 $ 495,244
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 245,184 237,058
Gain on Sale of Real Estate (450,620) 0
Increase in Receivables (19,301) (19,019)
Decrease in Payable to
AEI Fund Management, Inc. (22,514) (3,237)
Increase in Unearned Rent 87,600 107,796
----------- -----------
Total Adjustments (159,651) 322,598
----------- -----------
Net Cash Provided By
Operating Activities 882,250 817,842
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (2,051,958) (1,033,144)
Proceeds from Sale of Real Estate 1,482,939 0
Payments Received on Short-Term
Note Receivable 675,920 0
----------- -----------
Net Cash Provided By (Used For)
Investing Activities 106,901 (1,033,144)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 15,025 0
Distributions to Partners (803,024) (787,880)
----------- -----------
Net Cash Used For
Financing Activities (787,999) (787,880)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 201,152 (1,003,182)
CASH AND CASH EQUIVALENTS, beginning of period 1,388,156 2,412,278
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,589,308 $ 1,409,096
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED JUNE 30
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1999 $(33,456) $17,606,412 $17,572,956 23,548.50
Distributions (7,879) (780,001) (787,880)
Net Income 4,952 490,292 495,244
--------- ----------- ----------- -----------
BALANCE, June 30, 2000 $(36,383) $17,316,703 $17,280,320 23,548.50
========= =========== =========== ===========
BALANCE, December 31, 2000 $(38,243) $17,132,557 $17,094,314 23,322.18
Distributions (8,030) (794,994) (803,024)
Net Income 22,419 1,019,482 1,041,901
--------- ----------- ---------- -----------
BALANCE, June 30, 2001 $(23,854) $17,357,045 $17,333,191 23,322.18
========= =========== ========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Income & Growth Fund XXI Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XXI, Inc.
(AFM), the Managing General Partner. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner and an affiliate of AFM, AEI Fund
Management, Inc. (AEI), performs the administrative and
operating functions for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on April 14, 1995 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 31, 1997, the
offering terminated when the maximum subscription limit of
24,000 Limited Partnership Units ($24,000,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$24,000,000 and $1,000, respectively. During operations,
any Net Cash Flow, as defined, which the General Partners
determine to distribute will be distributed 90% to the
Limited Partners and 10% to the General Partners; provided,
however, that such distributions to the General Partners
will be subordinated to the Limited Partners first receiving
an annual, noncumulative distribution of Net Cash Flow equal
to 10% of their Adjusted Capital Contribution, as defined,
and, provided further, that in no event will the General
Partners receive less than 1% of such Net Cash Flow per
annum. Distributions to Limited Partners will be made pro
rata by Units.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to
10% of their Adjusted Capital Contribution per annum,
cumulative but not compounded, to the extent not previously
distributed from Net Cash Flow; (ii) any remaining balance
will be distributed 90% to the Limited Partners and 10% to
the General Partners. Distributions to the Limited Partners
will be made pro rata by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated in the
same ratio as the last dollar of Net Cash Flow is
distributed. Net losses from operations will be allocated
99% to the Limited Partners and 1% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 10% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, the balance of any
remaining gain will then be allocated 90% to the Limited
Partners and 10% to the General Partners. Losses will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(3) Short-Term Note Receivable -
On August 2, 2000, the Partnership received a Contract for
Deed from an affiliate of the buyer of the Media Play store
in Apple Valley, Minnesota. The Note bore interest at 9%
and was secured by the land, building and equipment. As of
December 31, 2000, the Partnership's share of outstanding
principal due on the Note was $675,920. On January 16,
2001, the Partnership received the outstanding principal and
accrued interest on the Note.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
(Continued)
(4) Investments in Real Estate -
On August 2, 2000, the Media Play store was sold to an
unrelated third party for $2,500,000. The sale agreement
required $500,000 in cash and a $2,000,000 Contract for
Deed, which bore interest at 9%. On January 16, 2001, the
Partnership received its share of the outstanding principal
and accrued interest on the Note. The Partnership's share
of the net sale proceeds was $820,651, which resulted in a
net gain of $129,813. At the time of sale, the cost and
related accumulated depreciation was $833,860 and $143,022.
Through June 30, 2001, the Partnership sold its interest in
the Champps Americana restaurant in Columbus, Ohio, in
eleven separate transactions, to unrelated third parties.
The Partnership received total net sale proceeds of
$2,295,174, which resulted in a total net gain of $631,607.
The total cost and related accumulated depreciation of the
interests sold was $1,808,880 and $145,313, respectively.
For the six months ended June 30, 2001, the net gain was
$289,679.
Through June 30, 2001, the Partnership sold 16.1171% of the
Champps Americana restaurant in Schaumburg, Illinois, in
five separate transactions, to unrelated third parties. The
Partnership received total net sale proceeds of $930,207,
which resulted in a total net gain of $254,776. The total
cost and related accumulated depreciation of the interests
sold was $733,218 and $57,787, respectively. For the six
months ended June 30, 2001, the net gain was $160,941.
Subsequent to June 30, 2001, the Partnership sold an
additional 5.8928% of the Champps Americana restaurant in
Schaumburg, Illinois, in two separate transactions, to
unrelated third parties. The Partnership received net sale
proceeds of approximately $335,000 which resulted in a net
gain of approximately $91,000.
During the first six months of 2000, the Partnership
distributed $55,577 of the net sale proceeds to the Limited
and General Partners as part of their regular quarterly
distributions which represented a return of capital of $2.34
per Limited Partnership Unit. The remaining net sale
proceeds will either be reinvested in additional property or
distributed to the Partners in the future.
On March 8, 2000, the Partnership purchased a parcel of land
in Fort Wayne, Indiana for $549,000. The land is leased to
Tumbleweed, Inc. (TWI) under a Lease Agreement with a
primary term of 15 years and annual rental payments of
$48,038. Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership advanced funds to TWI for the
construction of a Tumbleweed restaurant on the site.
Initially, the Partnership charged interest on the advances
at a rate of 8.75%. Effective July 5, 2000, the interest
rate was increased to 9.875%. On September 11, 2000, after
the development was completed, the Lease Agreement was
amended to require annual rental payments of $132,621.
Total acquisition costs, including the cost of the land,
were $1,334,315.
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2001
(Continued)
(4) Investments in Real Estate - (Continued)
On March 30, 2001, the Partnership purchased a Children's
World daycare center in Mundelein, Illinois for $1,618,824.
The property is leased to ARAMARK Educational Resources,
Inc. under a Lease Agreement with a primary term of 15 years
and annual rental payments of $153,710.
On March 8, 2001, the Partnership purchased a 25% interest
in a parcel of land in Austin, Texas for $283,000. The land
is leased to Kona Restaurant Group, Inc. (KRG) under a Lease
Agreement with a primary term of 17 years and annual rental
payments of $29,715. Simultaneously with the purchase of
the land, the Partnership entered into a Development
Financing Agreement under which the Partnership will advance
funds to KRG for the construction of a Johnny Carino's
restaurant on the site. Through June 30, 2001, the
Partnership had advanced $166,957 for the construction of
the property and was charging interest on the advances at a
rate of 10.5%. The Partnership's share of the total
purchase price, including the cost of the land, will be
approximately $573,000. After the construction is complete,
the Lease Agreement will be amended to require annual rental
payments of approximately $60,000. The remaining interests
in the property are owned by AEI Real Estate Fund 85-A
Limited Partnership, AEI Net Lease Income & Growth Fund XX
Limited Partnership, and AEI Income & Growth Fund 23 LLC,
affiliates of the Partnership.
(5) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the six months ended June 30, 2001 and 2000, the
Partnership recognized rental income of $946,807 and $854,427,
respectively. During the same periods, the Partnership earned
investment income of $40,843 and $55,599, respectively. In 2001,
rental income increased as a result of additional rent received
from three property acquisitions in 2000 and 2001, and rent
increases on five properties. These increases in rental income
were partially offset by a decrease in rental income due to the
property sales discussed below.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
During the six months ended June 30, 2001 and 2000, the
Partnership paid Partnership administration expenses to
affiliated parties of $137,724 and $131,233, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $13,461 and $46,491, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The decrease
in these expenses in 2001, when compared to 2000, is mainly the
result of expenses incurred in 2000 related to the Media Play
store.
As of June 30, 2001, the Partnership's annualized cash
distribution rate was 6.75%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. The Leases contain cost of living increases which
will result in an increase in rental income over the term of the
Leases. Inflation also may cause the Partnership's real estate
to appreciate in value. However, inflation and changing prices
may also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
During the six months ended June 30, 2001, the
Partnership's cash balances increased $201,152 mainly as a result
of cash generated from the sale of property, which was partially
offset by cash used to purchase property. Net cash provided by
operating activities increased from $817,842 in 2000 to $882,250
in 2001 as a result of an increase in income and a decrease in
Partnership administration expenses in 2001, which were partially
offset by net timing differences in the collection of payments
from the lessees and the payment of expenses.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the six months ended June
30, 2001, the Partnership generated cash flow from the sale of
real estate of $1,482,939. During the six months ended June,
2001 and 2000, the Partnership expended $2,051,958 and
$1,033,144, respectively, to invest in real properties (inclusive
of acquisition expenses) as the Partnership reinvested cash
generated from property sales.
On August 2, 2000, the Media Play store was sold to an
unrelated third party for $2,500,000. The sale agreement
required $500,000 in cash and a $2,000,000 Contract for Deed,
which bore interest at 9%. On January 16, 2001, the Partnership
received its share of the outstanding principal and accrued
interest on the Note. The Partnership's share of the net sale
proceeds was $820,651, which resulted in a net gain of $129,813.
At the time of sale, the cost and related accumulated
depreciation was $833,860 and $143,022.
Through June 30, 2001, the Partnership sold its interest
in the Champps Americana restaurant in Columbus, Ohio, in eleven
separate transactions, to unrelated third parties. The
Partnership received total net sale proceeds of $2,295,174, which
resulted in a total net gain of $631,607. The total cost and
related accumulated depreciation of the interests sold was
$1,808,880 and $145,313, respectively. For the six months ended
June 30, 2001, the net gain was $289,679.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Through June 30, 2001, the Partnership sold 16.1171% of
the Champps Americana restaurant in Schaumburg, Illinois, in five
separate transactions, to unrelated third parties. The
Partnership received total net sale proceeds of $930,207, which
resulted in a total net gain of $254,776. The total cost and
related accumulated depreciation of the interests sold was
$733,218 and $57,787, respectively. For the six months ended
June 30, 2001, the net gain was $160,941.
Subsequent to June 30, 2001, the Partnership sold an
additional 5.8928% of the Champps Americana restaurant in
Schaumburg, Illinois, in two separate transactions, to unrelated
third parties. The Partnership received net sale proceeds of
approximately $335,000 which resulted in a net gain of
approximately $91,000.
During the first six months of 2000, the Partnership
distributed $55,577 of the net sale proceeds to the Limited and
General Partners as part of their regular quarterly distributions
which represented a return of capital of $2.34 per Limited
Partnership Unit. The remaining net sale proceeds will either be
reinvested in additional property or distributed to the Partners
in the future.
On March 8, 2000, the Partnership purchased a parcel of
land in Fort Wayne, Indiana for $549,000. The land is leased to
Tumbleweed, Inc. (TWI) under a Lease Agreement with a primary
term of 15 years and annual rental payments of $48,038.
Simultaneously with the purchase of the land, the Partnership
entered into a Development Financing Agreement under which the
Partnership advanced funds to TWI for the construction of a
Tumbleweed restaurant on the site. Initially, the Partnership
charged interest on the advances at a rate of 8.75%. Effective
July 5, 2000, the interest rate was increased to 9.875%. On
September 11, 2000, after the development was completed, the
Lease Agreement was amended to require annual rental payments of
$132,621. Total acquisition costs, including the cost of the
land, were $1,334,315.
On March 30, 2001, the Partnership purchased a Children's
World daycare center in Mundelein, Illinois for $1,618,824. The
property is leased to ARAMARK Educational Resources, Inc. under a
Lease Agreement with a primary term of 15 years and annual rental
payments of $153,710.
On March 8, 2001, the Partnership purchased a 25% interest
in a parcel of land in Austin, Texas for $283,000. The land is
leased to Kona Restaurant Group, Inc. (KRG) under a Lease
Agreement with a primary term of 17 years and annual rental
payments of $29,715. Simultaneously with the purchase of the
land, the Partnership entered into a Development Financing
Agreement under which the Partnership will advance funds to KRG
for the construction of a Johnny Carino's restaurant on the site.
Through June 30, 2001, the Partnership had advanced $166,957 for
the construction of the property and was charging interest on the
advances at a rate of 10.5%. The Partnership's share of the
total purchase price, including the cost of the land, will be
approximately $573,000. After the construction is complete, the
Lease Agreement will be amended to require annual rental payments
of approximately $60,000. The remaining interests in the
property are owned by AEI Real Estate Fund 85-A Limited
Partnership, AEI Net Lease Income & Growth Fund XX Limited
Partnership, and AEI Income & Growth Fund 23 LLC, affiliates of
the Partnership.
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year. Effective April 1, 2001, the Partnership's distribution
rate was increased from 6.5% to 6.75%. As a result,
distributions were higher in 2001, when compared to 2000.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 2000, twelve Limited Partners redeemed a total of
226.32 Partnership Units for $186,379 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In prior years, thirteen
Limited Partners redeemed a total of 451.47 Partnership Units for
$393,500. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
Market and economic conditions which affect the value
of the properties the Partnership owns and the cash
from rental income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
affects of these consequences for investors;
resolution by the General Partners of conflicts with
which they may be confronted;
the success of the General Partners of locating
properties with favorable risk return characteristics;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the Partnership operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
PART II - OTHER INFORMATION
(Continued)
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5.OTHER INFORMATION
None.
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 Purchase Agreement dated April 3, 2001 between the
Partnership and Lynn and Camille Bushman relating to the
property at 161 E. Campus View Boulevard, Columbus, Ohio.
10.2 Purchase Agreement dated May 8, 2001 between the
Partnership and The Wood Family Trust relating to the
property at 161 E. Campus View Boulevard, Columbus, Ohio.
10.3 Purchase Agreement dated May 17, 2001 between the
Partnership, AEI Real Estate Fund XVIII Limited Partnership
and Walter L. Schrock relating to the property at 161 E.
Campus View Boulevard, Columbus, Ohio.
10.4 Purchase Agreement dated June 26, 2001 between the
Partnership and David L. Cruickshank relating to the
property at 955 Golf Road, Schaumburg, Illinois.
10.5 Purchase Agreement dated July 2, 2001 between the
Partnership and The Charles M. and Judith K. Westfahl
Community Trust relating to the property at 955 Golf Road,
Schaumburg, Illinois.
10.6 Purchase Agreement dated July 20, 2001 between the
Partnership and The White Family Living Trust relating to
the property at 955 Golf Road, Schaumburg, Illinois.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: August 7, 2001 AEI Income & Growth Fund XXI
Limited Partnership
By: AEI Fund Management XXI, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)