1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number 0-16805
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ASSOCIATED PLANNERS REALTY FUND
-------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4036980
------------- ----------
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5933 W. CENTURY BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90045
-----------------------------
(Address of principal executive offices)
(Zip Code)
(310) 670-0800
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(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
2
ASSOCIATED PLANNERS REALTY FUND
INDEX
PART I - FINANCIAL INFORMATION
PAGE NO.
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Item 1. Consolidated Financial Statements
Balance Sheets -
March 31, 2000 and December 31, 1999 3
Statements of Stockholders' Equity -
Three Months Ended March 31, 2000 and 1999 4
Statements of Income -
Three Months Ended March 31, 2000 and 1999 5
Statements of Cash Flows -
Three Months Ended March 31, 2000 and 1999 6
Summary of Accounting Policies 7
Notes to Financial Statements 9
Item 2. Management's Discussion and Analysis of 13
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 19
Item 2. Changes in Securities 19
Item 3. Defaults Upon Senior Securities 19
Item 4. Submission of Matters to a Vote of Security Holders 19
Item 5. Other Information 19
Item 6. Exhibit and Reports on Form 8-K 19
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PART 1. FINANCIAL INFORMATION
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
===============================================================================================================
MARCH 31, 2000 December 31, 1999
(UNAUDITED) (Audited)
- ---------------------------------------------------------------------------------------------------------------
ASSETS
Rental real estate held for sale, less accumulated
depreciation (Note 2) $2,423,366 $4,385,483
Cash and cash equivalents 503,851 5,223
Note Receivable (Note 3) 1,739,508
Other assets 15,314 14,430
- ---------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $4,682,039 $4,405,136
===============================================================================================================
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $ 6,248 $ 2,270
Related party (Note 5) 6,567 13,934
Notes payable (Note 4) 1,396,829 1,405,674
Security deposits and prepaid rent 26,351 22,079
- ---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,435,995 1,443,957
CONTINGENCIES (NOTE 8)
PARTNERS' EQUITY (NOTES 6 AND 7) Limited partners:
$1,000 stated value per unit - authorized
7,500 units; issued and outstanding 7,499 3,115,724 2,875,885
General partner 130,320 85,294
- ---------------------------------------------------------------------------------------------------------------
TOTAL PARTNERS' EQUITY 3,246,044 2,961,179
- ---------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $4,682,039 $4,405,136
===============================================================================================================
See accompanying notes to financial statements.
4
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
THREE MONTHS ENDED MARCH 31, 2000
(UNAUDITED)
LIMITED PARTNERS
---------------- GENERAL
TOTAL UNITS AMOUNT PARTNER
BALANCE AT DECEMBER 31, 1999 $ 2,961,179 7,499 $ 2,875,885 $ 85,294
Net income 284,865 -- 239,839 45,026
----------- ----- ----------- ---------
BALANCE AT MARCH 31, 2000 $ 3,246,044 7,499 $ 3,115,724 $ 130,320
=========== ===== =========== =========
THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
LIMITED PARTNERS
---------------- GENERAL
TOTAL UNITS AMOUNT PARTNER
BALANCE AT DECEMBER 31, 1998 $ 4,218,566 7,499 $ 4,164,156 $ 54,410
Net income 414,720 -- 370,382 44,338
Distributions to limited partners (1,581,371) -- (1,581,371) --
Distributions to general partner (Note 5 (a)) (17,081) -- -- (17,081)
----------- ----- ----------- ---------
BALANCE AT MARCH 31, 1999 $ 3,034,834 7,499 $ 2,953,167 $ 81,667
=========== ===== =========== =========
See accompanying notes to financial statements.
5
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
=====================================================================================
THREE MONTHS Three Months
ENDED Ended
MARCH 31, 2000 March 31, 1999
(UNAUDITED) (Unaudited)
- -------------------------------------------------------------------------------------
REVENUES
Rental (Note 2) $ 74,988 $150,464
Gain on sale of property (Note 2) 291,151 380,849
Interest 12,794 13,251
- -------------------------------------------------------------------------------------
378,933 544,564
- -------------------------------------------------------------------------------------
COSTS AND EXPENSES
Operating 17,366 39,186
Property taxes 7,453 10,626
Property management fees (Note 5 (c)) 3,567 7,569
General and administrative 22,389 18,849
Depreciation and amortization 22,018 31,847
Interest expense (Note 4) 21,275 21,767
- -------------------------------------------------------------------------------------
94,068 129,844
- -------------------------------------------------------------------------------------
NET INCOME $284,865 $414,720
=====================================================================================
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Note 6) $ 31.98 $ 49.39
=====================================================================================
See accompanying notes to financial statements.
6
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
THREE MONTHS Three Months
ENDED Ended
MARCH 31, 2000 March 31, 1999
(UNAUDITED) (Unaudited)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 284,865 $ 414,720
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 22,018 31,847
Gain on sale of property (291,151) (380,849)
Increase (decrease) from changes in:
Other assets (884) 12,497
Accounts payable (3,389) (4,933)
Security deposits 4,272 (4,007)
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 15,731 69,275
----------- -----------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Proceeds from sale of rental real estate 2,231,250 1,283,129
Investment in Note Receivable (1,750,000) --
Principal payments on Note Receivable 10,492 --
----------- -----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 491,742 1,283,129
----------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repayment of notes payable (8,845) (8,098)
Distributions to minority interests -- (2,270)
Distributions to limited partners -- (1,581,371)
Distributions to general partner -- (17,081)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (8,845) (1,608,820)
----------- -----------
NET INCREASE, (DECREASE) IN CASH AND CASH EQUIVALENTS 498,628 (256,416)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,223 257,749
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 503,851 $ 1,333
=========== ===========
See accompanying notes to financial statements.
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ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
BUSINESS
Associated Planners Realty Fund (the "Partnership"), a California limited
partnership, was formed on November 19, 1985 under the Revised Limited
Partnership Act of the State of California. The Partnership was formed to
acquire income-producing real property throughout the United States with an
emphasis on properties located in California and the southwestern states. The
Partnership purchased these properties on an all cash basis or on a moderately
leveraged basis and intended on owning and operating such properties for
investment over an anticipated holding period of approximately five to ten
years.
BASIS OF PRESENTATION
The consolidated financial statements do not give effect to any assets that the
partners may have outside of their interest in the partnership, nor to any
personal obligations, including income taxes, of the partners.
The consolidated financial statements include the accounts of Associated
Planners Realty Fund and all joint ventures in which it has a majority interest.
RENTAL REAL ESTATE AND DEPRECIATION
Assets are stated at cost. Depreciation is computed using the straight-line
method over estimated useful lives ranging from 5 to 35 years.
In the event that facts and circumstances indicate that the cost of an asset may
be impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated future undiscounted cash flows associated
with the asset would be compared to the carrying amount to determine if a
write-down to market value is required.
RENTAL INCOME
Rental revenue is recognized on a straight-line basis to the extent that rental
revenue is deemed collectible and collection is probable.
STATEMENTS OF CASH FLOWS
For the purposes of the statements of cash flows, the Partnership considers cash
in the bank and all highly liquid investments purchased with original maturities
of three months or less, to be cash and cash equivalents.
8
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income," ("SFAS 130") establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. Comprehensive income is comprised of net income and all
changes to stockholders' equity except those due to investments by owners and
distribution to owners. The Company does not have any components of
comprehensive income for the three months ended March 31, 2000 or 1999.
NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partnership unit is calculated by dividing the limited
partners' share of net income by the weighted average number of limited
partnership units outstanding for the period.
9
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1999
NOTE 1 - PRESENTATION OF INTERIM INFORMATION
In the opinion of the General Partner of Associated Planners Realty Fund (the
"Partnership"), the accompanying unaudited financial statements include all
normal adjustments considered necessary to present fairly the financial position
as of March 31, 2000, and the results of operations and cash flows for the three
months ended March 31, 2000 and 1999. Interim results are not necessarily
indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10Q, and
do not contain certain information included in the Partnership's audited
consolidated financial statements and notes for the fiscal year ended December
31, 1999.
NOTE 2 - RENTAL REAL ESTATE HELD FOR SALE
As of March 31, 2000, the Partnership owns the following rental real estate
property.
Location (Property Name) Date Purchased Cost
==================================================================================
Clovis, California January 23, 1987 $2,854,221
The major categories of property are: March 31, 2000 December 31, 1999
- ----------------------------------------------------------------------------------
Land $ 878,645 $1,631,966
Building and Improvements 1,959,467 3,822,668
Furniture and Fixtures 16,109 16,109
- ----------------------------------------------------------------------------------
2,854,221 5,470,743
Less accumulated depreciation 430,855 1,085,260
- ----------------------------------------------------------------------------------
Net rental real estate held for sale $2,423,366 $4,385,483
==================================================================================
A significant portion of the Partnership's rental revenue was earned from
tenants whose individual rents represent more than 10% of total rental revenue.
Specifically:
Two tenants accounted for 62% and 24%, respectively, for the three months ended
March 31, 2000;
Two tenants accounted for 52% and 45%, respectively, for the three months ended
March 31, 1999.
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ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1999 (CONTINUED)
NOTE 3 - NOTE RECEIVABLE
On February 4, 2000, the Partnership sold its property located in the Simi
Valley of California to an unaffiliated buyer for $2,350,000 and received cash
and a note receivable for $1,750,000. The note, which is secured by the property
sold, provides for interest at 6% and monthly payments of principal and interest
of $10,492. The note matures on February 4, 2004 and all remaining amounts of
principal and interest are due on that date. $1,739,508 was the receivable
balance at March 31, 2000.
NOTE 4 - NOTES PAYABLE
In October 1996, the Partnership obtained permanent financing secured by a first
deed of trust from a major insurance company to replace the construction loan on
Shaw Villa Shopping Center, which is located in Clovis, California. The terms of
the loan are as follows: Principal - $1,500,000; Interest Rate of 9.1% fixed for
five years then may be adjusted to the weekly average of the five year Treasury
Note yield for the seventh week prior to the adjustment date (5th anniversary
date) plus 250 basis points, but in no event less than the existing rate, nor to
exceed the maximum rate allowed by law; Amortized over twenty years; due
November 1, 2006; and current monthly payments of principal and interest of
$13,593. The note payable balance is $1,396,829 and $1,405,674 at March 31, 2000
and December 31, 1999.
The fair value of the note approximated $1,391,000 based on current lending
rates, which approximate industry lending rate on this type of property at this
location.
The aggregate annual future principal maturities at March 31, 2000 are as
follows:
AMOUNT
================================================================================
2001 $ 37,547
2002 41,110
2003 45,011
2004 49,282
2005 53,959
Thereafter 1,169,920
- --------------------------------------------------------------------------------
Total $ 1,396,829
================================================================================
11
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1999 (CONTINUED)
NOTE 5 - RELATED PARTY TRANSACTIONS
(a) For management services rendered to the Partnership, the General Partner is
entitled to receive 10% of all distributions of cash from operations. These
amounts totaled $0 for the quarter ended March 31, 2000 and $17,081 for the
quarter ended March 31, 1999. See also Note 6.
(b) For administrative services provided to the Partnership, the General Partner
is entitled to reimbursement for the cost of certain personnel and relevant
expenses. These amounts totaled $3,000 for the three months ended March 31, 2000
and March 31, 1999.
(c) Property management fees incurred, in accordance with the Partnership
Agreement, to West Coast Realty Management, Inc., an affiliate of the corporate
General Partner, totaled $3,567 for the quarter ended March 31, 2000, and $7,569
for the quarter ended March 31, 1999.
NOTE 6 - NET INCOME AND CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP LIST
The Net Income per Limited Partnership Unit was computed in accordance
with the partnership agreement using the weighted average number of outstanding
limited partnership units of 7,499 for 2000 and 1999.
The Limited Partner cash distributions, computed in accordance with the
Partnership Agreement, were as follows:
Outstanding Amount Total
Record Date Units Per Unit Distribution
================================================================================
March 19, 1999 7,499 $191.03 to $188.52 $ 1,427,641
December 31, 1998 7,499 $ 20.50 153,730
- --------------------------------------------------------------------------------
Total $ 1,581,371
================================================================================
12
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND 1999 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1999 (CONTINUED)
NOTE 7 - LIQUIDATION OF PARTNERSHIP
At March 31, 2000, the Partnership's remaining property is held for sale.
The General Partner plans to liquidate the Partnership after the final property
is sold. There is no assurance that the remaining property will be sold and the
Partnership will be liquidated during 2000. The financial statements do not
contain any adjustments that might result from the liquidation of the
Partnership.
NOTE 8 - SUBSEQUENT EVENT
On April 5, 2000 the Partnership distributed $479,936 or $64.00 per Limited
Partnership unit.
13
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Certain statements in the Management Discussion and Analysis constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the
Partnership to be materially different from any future results, performance or
achievements, expressed or implied by such forward-looking statements.
INTRODUCTION
Associated Planners Realty Fund (the "Partnership") was organized in November
1985, under the California Revised Limited Partnership Act. The Partnership
began offering units for sale on March 28, 1986. As of December 27, 1987, the
Partnership had raised $7,499,000 in gross capital contributions. The
Partnership netted approximately $6,720,000 after sales commissions and
syndication costs.
The Partnership was organized for the purpose of investing in, holding, and
managing improved, leveraged income-producing property, such as residential
property, office buildings, commercial buildings, industrial properties, and
shopping centers. The Partnership intended to own and operate such properties
for investment over an anticipated holding period of approximately five to ten
years.
The Partnership's principal investment objectives are to invest in rental real
estate properties, which will:
(1) Preserve and protect the Partnership's invested capital;
(2) Provide for cash distributions from operations;
(3) Provide gains through potential appreciation; and
(4) Generate federal income tax deductions so that during the early
years of property operations, a portion of cash distributions may be
treated as a return of capital for tax purposes and, therefore, may
not represent taxable income to the limited partners.
The ownership and operation of any income-producing real estate is subject to
those risks inherent in all real estate investments, including national and
local economic conditions, the supply and demand for similar types of
properties, competitive marketing conditions, zoning changes, possible casualty
losses, increases in real estate taxes, assessments, and operating expenses, as
well as others.
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ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
INTRODUCTION (CONTINUED)
The Partnership is operated by the General Partner subject to the terms of the
Amended and Restated Agreement of Limited Partnership. The Partnership has no
employees, and all administrative services are provided by West Coast Realty
Advisors, Inc., the General Partner.
RESULTS OF OPERATIONS - MARCH 31, 2000 VS. MARCH 31, 1999
Operations for the quarter ended March 31, 2000, reflect the operations of the
Shaw Villa Shopping Center and the Simi Valley building prior to its sale on
February 4, 2000.
Net income for the quarter ended March 31, 2000 of $284,865 was lower than the
net income for the quarter ended March 31, 1999 of $414,720, primarily because
the $380,849 gain recognized from the sale of the Encinitas, California
properties in 1999 exceed the gain of $291,151 recognized on the Simi Valley
property in 2000.
Rental revenue for the three months ended March 31, 2000 decreased from that for
the three months ended March 31, 1999 by $75,476, due to lower rents collected
as a result of properties sold during 1999. Interest income decreased $457 for
the three months ended March 31, 2000 as compared to the three months ended
March 31, 1999 due to lower cash balances maintained in money market accounts
during the quarter ended March 31, 2000, compared to the quarter ended March 31,
1999
Operating expenses decreased $21,820 (56%) because fewer properties were owned
during the quarter ended March 31, 2000 compared to the quarter ended March 31,
1999. General and administrative expenses increased $3,540 (19%) due to higher
legal and accounting expenses. Depreciation expense decreased $9,829 (31%)
during the quarter ended March 31, 2000 compared to the quarter ended March 31,
1999 primarily because of the properties sold in 1999 and 2000.
During the quarter ended March 31, 1999, the Partnership distributed $1,598,452
to the general and limited partners and $2,270 to the holder of the minority
interest. No amounts were distributed in the quarter ended March 31, 2000. Cash
proceeds from the sale of the Simi Valley property were distributed in April
2000. Cash basis income for the quarter ended March 31, 2000 was $15,732. This
was derived by adding depreciation and amortization expense to net income, less
the gain on sale of properties. In contrast, cash basis income for the quarter
ended March 31, 1999 was $65,718.
15
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS - MARCH 31, 2000 VS. MARCH 31, 1999 (CONTINUED)
Overall the Partnership generated $15,732 in income from operations before
depreciation expense of $22,018 and $291,151 gain from the sale of the Simi
Valley, California property for the quarter ended March 31, 2000. This compares
to the quarter ended March 31, 1999 when cash basis income totaled $65,718
before depreciation expense of $31,847 and $380,849 gain from the sale of the
Encinitas, California properties. Net income per limited partnership unit
decreased from $49.39 in 1999 to $31.98 in 2000. The number of limited
partnership units outstanding in each quarter was 7,499.
RESULTS OF OPERATIONS - MARCH 31, 1999 VS. MARCH 31, 1998
Operations for the quarter ended March 31, 1999, reflect an entire period of
operations for the Partnership's properties, except for the two properties
located in Encinitas, California which were sold in January 1999.
Net income for the quarter ended March 31, 1999 of $414,720 was higher than the
net loss for the quarter ended March 31, 1998 of $10,172 due primarily to a
$380,849 gain recognized from the sale of the Encinitas, California property.
Rental revenue for the three months ended March 31, 1999 decreased from that for
the three months ended March 31, 1998 by $15,690, due to lower rents collected
from multi-tenant Santa Fe Business Park Building, as a result of these two
properties being sold during January 1999. Interest income increased $10,444 for
the three months ended March 31, 1999 as compared to the three months ended
March 31, 1998 due to higher cash balances maintained in money market accounts
during the quarter ended March 31, 1999, compared to the quarter ended March 31,
1998
Operating expenses decreased $16,816 (30%) as a result of lower common area
maintenance charges, utilities and consulting fees during the quarter ended
March 31, 1999 compared to the quarter ended March 31, 1998. General and
administrative expenses increased $4,437 (31%) due to higher legal and
accounting expenses. Depreciation expense decreased $9,461 (23%) during the
quarter ended March 31, 1999 compared to the quarter ended March 31, 1998
primarily due to the sale of the Encinitas properties during January 1999.
During the quarter ended March 31, 1999, the Partnership distributed $1,598,452
to the general and limited partners and $2,270 to the minority interest partner,
as compared to the quarter ended March 31, 1998 when the Partnership distributed
$169,894 to the general and limited partners and $3,659 to the minority interest
partner. This increase was primarily due to the Partnership selling
16
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS - MARCH 31, 1999 VS. MARCH 31, 1998 (CONTINUED)
the two properties located in Encinitas, California in January 1999. Cash basis
income for the quarter ended March 31, 1999 was $65,718. This was derived by
adding depreciation and amortization expense to net income, less the gain on
sale of properties. In contrast, cash basis income for the quarter ended March
31, 1998 was $31,136.
Overall the Partnership generated $65,718 in income from operations before
depreciation expense of $31,847 and $380,849 gain from the sale of the
Encinitas, California properties for the quarter ended March 31, 1999. This
compares favorably to the quarter ended March 31, 1997 when cash basis income
totaled $31,136 before depreciation expense of $41,308. Net income (loss) per
limited partnership unit increased from $(1.72) in 1998 to $49.39 in 1999. The
number of limited partnership units outstanding in each quarter was 7,499.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended March 31, 2000, the Partnership made no distributions
to the limited or general partners. During the quarter ended March 31, 1999, the
Partnership made distributions to the limited partners totaling $1,581,371 of
which $1,474,510 constituted a return of capital. This includes a distribution
of $1,427,641 from the sale of the two properties located in Encinitas,
California, which were sold in January 1999. The remaining distribution of
$153,730 or $20.50 per limited partnership unit compares unfavorably to the
$190,529 in cash generated from property operations (net income plus
depreciation expense). Additionally, the partnership distributed $17,081 to the
general partner and $2,270 to the minority interest partner during the quarter
ended March 31, 1999.
Management uses cash as its primary measure of the Partnership's liquidity. The
amount of cash that represents adequate liquidity for a real estate limited
partnership, in the short-term and long-term, depends on several factors. Among
them are:
1. Relative risk of the partnership;
2. Condition of the partnership's properties;
3. Stage in the partnership's life cycle (e.g., money-raising, acquisition,
operating or disposition phase); and
4. Distributions to partners.
The Partnership believes that it has the ability to generate sufficient cash to
meet both short-term and long-term liquidity needs, based upon the above four
factors.
17
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The first factor refers to the risk of Partnership's investments. The
Partnership's investments in properties were paid for in cash or on a moderately
leveraged basis.
The second factor relates to the condition of the Partnership's property. The
Partnership's property is in good condition. There is no foreseeable need to
increase reserves to fund deferred or unusual maintenance and repair
expenditures.
The third factor relates to life cycle. The Partnership completed its funding,
acquisition and operating stages of properties in previous years. The
Partnership is in the disposition stage. As part of the disposition stage, the
Partnership has listed its remaining property for sale.
The fourth factor relates to Partnership distributions. The Partnership is
currently making semi-annual distributions from operations. Such distributions
are subject to payments of Partnership expenses and reasonable reserves for
expenses, maintenance, and replacements. In addition, at least six months of
cash profits are left in the Partnership's balance sheet at each quarter end,
since the Partnership makes distributions to the limited partners one month
after each record date of June 30, and December 31. The General Partner believes
that the Partnership will have the ability to meet its cash requirements in both
the short-term and long-term.
Slowdowns in the economy, inflation and changing prices have had a nominal
effect on the Partnership's revenues and income from continuing operations.
During the thirteen years of the Partnership's existence, inflationary pressures
in the U.S. economy have been minimal, and this has been consistent with the
experience of the Partnership in operating rental real estate in California.
The General Partner is attempting to sell the remaining property owned by the
Partnership. Once the Shaw Villa Shopping Center is sold and the note receivable
taken in connection with the sale of the Simi Valley property is liquidated, the
net proceeds will be distributed to the limited and general partners in
accordance with the partnership agreement, and the partnership will then be
terminated and dissolved.
CASH FLOWS - MARCH 31, 2000 VS. MARCH 31, 1999
Cash resources increased $498,628 during the three months ended March 31, 2000
compared to a $256,416 decrease in cash resources for the three months ended
March 31, 1999. The primary reason for the increase in cash resources in 2000
was cash provided from the sale of the Simi Valley Property. Such proceeds were
distributed to the Limited Partners and the General Partner in April 2000. Cash
provided by operating activities increased by $15,731 with the largest
18
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
contributor being $15,732 in cash basis net income for the three months ended
March 31, 2000. In contrast, the three months ended March 31, 1999 provided
$69,275 in cash from operating activities due primarily to $65,718 in cash basis
net income. For the three months ended March 31, 1999, financing activities used
$1,608,820 via distributions to limited, general and minority partners totaling
$1,600,722 and repayments on notes payable of $8,098. In contrast, for the three
months ended March 31, 2000, financing activities used $8,845 for repayments on
note payable.
CASH FLOWS - MARCH 31, 1999 VS. MARCH 31, 1998
Cash resources decreased $256,416 during the three months ended March 31, 1999
compared to a $157,992 decrease in cash resources for the three months ended
March 31, 1998. Cash provided by operating activities increased by $69,275 with
the largest contributor being $446,567 in cash basis net income, offset by
$380,849, resulting from the gain on the sale of the Encinitas, California, for
the three months ended March 31, 1999. In contrast, the three months ended March
31, 1998 provided $22,958 in cash from operating activities due primarily to
$31,136 in cash basis net income. The sole source of cash from investing
activities during the quarter ended March 31, 1999 was $1,283,129 in proceeds
received from the sale of the two properties located in Encinitas, California.
In contrast, there were no investing activities during the quarter ended March
31, 1998. For the three months ended March 31, 1999, financing activities used
$1,608,820 via distributions to limited, general and minority partners totaling
$1,600,722 and repayments on notes payable of $8,098. In contrast, for the three
months ended March 31, 1998, financing activities used an additional $180,950
via distributions to these same parties totaling $173,553 and repayments on
notes payable of $7,397.
19
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
PART II
O T H E R I N F O R M A T I O N
ITEM 1. LEGAL PROCEEDINGS
None
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. EXHIBIT AND REPORTS ON FORM 8-K
(a) Information required under this section has been included in the
financial statements.
(b) Reports on Form 8-K
None
20
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
S I G N A T U R E S
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.
ASSOCIATED PLANNERS REALTY FUND
A California Limited Partnership
(Registrant)
By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
General Partner
John R. Lindsey
May 10, 2000 --------------------------------
Vice President/Treasurer
W. Thomas Maudlin Jr.
May 10, 2000 --------------------------------
President of General Partner