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 SEPTEMBER 30, 2000 ------------------ 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 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 ---------------- (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. - ------------------------------------------------------------------------------------------ Item 1. Financial Statements - ------------------------------------------------------------------------------------------ Balance Sheets - September 30, 2000 and December 31, 1999 3 Statements of Partner's Equity - Nine Months Ended September 30, 2000 and 1999 4 Statements of Income - Three Months and Nine Months Ended September 30, 2000 and 1999 5 Statements of Cash Flow - Nine Months Ended September 30, 2000 and 1999 6 Summary of Accounting Policies 7 Notes to Financial Statements 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 PART II - OTHER INFORMATION Item 1. Exhibit and reports on Form 8-K 19 3 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS SEPTEMBER 30, DECEMBER 31, 2000 1999 (UNAUDITED) - ---------------------------------------------------------------------------------------------- ASSETS Rental real estate held for sale, less accumulated depreciation (Note 2) $2,388,554 $4,385,483 Cash and cash equivalents 53,474 5,223 Note receivable (Note 3) 1,717,470 00 Other assets 15,664 14,430 - ---------------------------------------------------------------------------------------------- TOTAL ASSETS $4,175,162 $4,405,136 LIABILITIES AND PARTNERS' EQUITY LIABILITIES Accounts payable: Trade $ 15,750 $ 2,270 Related party (Note 5) 6,723 13,934 Notes payable (Note 4) 1,378,459 1,405,674 Security deposits and prepaid rent 10,314 22,079 Other liabilities 18,031 -- - ---------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,429,277 1,443,957 PARTNERS' EQUITY (NOTES 6 AND 7) LIMITED PARTNERS: $1,000 stated value per unit - authorized 7,500 units; issued and outstanding 7,499 2,611,455 2,875,885 General partner 134,430 85,294 - ---------------------------------------------------------------------------------------------- TOTAL PARTNERS' EQUITY 2,745,885 2,961,179 - ---------------------------------------------------------------------------------------------- TOTAL LIABILITIES AND PARTNERS' EQUITY $4,175,162 $4,405,136 ============================================================================================== ============================================================================================== See accompanying notes to financial statements. 4 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF PARTNERS' EQUITY NINE MONTHS ENDED SEPTEMBER 30, 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 294,638 -- 245,502 49,136 Distributions to limited partners (509,932) -- (509,932) -- ----------- ----------- ----------- ----------- BALANCE AT SEPTEMBER 30, 2000 $ 2,745,885 7,499 $ 2,611,455 $ 134,430 =========== =========== =========== =========== NINE MONTHS ENDED SEPTEMBER 30, 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 387,886 -- 340,499 47,387 Distributions to limited partners (1,581,371) -- (1,581,371) -- Distributions to general partner (Note 5 (a)) (31,502) -- -- (31,502) ----------- ----------- ----------- ----------- BALANCE AT SEPTEMBER 30, 1999 $ 2,993,579 7,499 $ 2,923,284 $ 70,295 =========== =========== =========== =========== See accompanying notes to financial statements. 5 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF INCOME - ----------------------------------------------------------------------------------------------------------- THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS ENDED ENDED ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30, 2000 1999 2000 1999 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) - ----------------------------------------------------------------------------------------------------------- REVENUES Rental (Note 2) $ 76,720 $ 77,108 $ 228,400 $ 353,981 Gain on sale of property -- -- 291,151 380,849 Interest 26,285 90 64,076 13,766 - -------------------------------------------------------------------------------------------------------- 103,005 77,198 583,627 748,596 - -------------------------------------------------------------------------------------------------------- COSTS AND EXPENSES Operating 6,514 21,245 31,563 42,943 Property taxes 7,477 15,180 20,547 36,156 Property management fees (Note 5(c)) 3,723 3,877 11,571 17,714 General and administrative 19,905 14,792 73,562 81,790 Depreciation and amortization 17,406 31,847 56,830 95,540 Interest expense 31,253 32,305 94,916 86,567 - -------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------- 86,278 119,246 288,989 360,710 - -------------------------------------------------------------------------------------------------------- NET INCOME (LOSS) $ 16,727 $ (42,048) $ 294,638 $ 387,886 ======================================================================================================== NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT (Note 6) $ 1.80 $ (5.43) $ 32.74 $ 45.41 ======================================================================================================== See accompanying notes to financial statements. 6 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS - --------------------------------------------------------------------------------------------- NINE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2000 1999 (UNAUDITED) (UNAUDITED) - --------------------------------------------------------------------------------------------- CASH FLOW FROM OPERATING ACTIVITIES: Net income $ 294,638 $ 387,886 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 56,830 95,540 Gain on sale of property (291,151) (380,849) Increase (decrease) from changes in: Other assets (1,234) 15,654 Accounts payable 6,269 (7,258) Security deposits and prepaid rent (11,765) (3,794) Other liabilities 18,031 -- ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 71,618 107,179 ----------- ----------- CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: Proceeds from sale of rental real estate 481,250 1,283,129 Principal payments from note receivable 32,530 -- ----------- ----------- NET CASH PROVIDED BY INVESTING ACTIVITIES 513,780 1,283,129 ----------- ----------- CASH FLOWS USED IN FINANCING ACTIVITIES: Repayment of notes payable (27,215) (24,856) Distributions to minority interests -- (2,270) Distributions to limited partners (509,932) (1,581,371) Distributions to general partner -- (31,502) ----------- ----------- NET CASH USED IN FINANCING ACTIVITIES (537,147) (1,639,999) ----------- ----------- NET INCREASE, (DECREASE) IN CASH AND CASH EQUIVALENTS 48,251 (249,691) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5,223 257,749 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 53,474 $ 8,058 =========== =========== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the period for interest $ 94,916 $ 86,567 SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING ACTIVITY: Note Receivable issued in sale of real estate $ 1,750,000 -- See accompanying notes to financial statements. 7 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 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. 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. STATEMENT 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 (LOSS) 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 (loss) for the nine months ended September 30, 2000 or 1999. NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT Net income (loss) per limited partnership unit is calculated by dividing the limited partners' share of net income (loss) 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 NINE MONTHS ENDED SEPTEMBER 30, 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 September 30, 2000, and the results of operations and cash flows for the three and nine months ended September 30, 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 10-Q, 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 September 30, 2000, the Partnership owns the following rental real estate property. LOCATION (PROPERTY NAME) DATE PURCHASED COST =============================================================================== Clovis, California January 23, 1987 $2,854,220 The major categories of property are: SEPTEMBER 30, DECEMBER 31, 2000 1999 =============================================================================== Land $ 878,646 $1,631,966 Building and Improvements 1,959,465 3,822,668 Furniture and Fixtures 16,109 16,109 - ------------------------------------------------------------------------------- 2,854,220 5,470,743 Less accumulated depreciation 465,666 1,085,260 - ------------------------------------------------------------------------------- Net rental real estate held for sale $2,388,554 $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: Three tenants accounted for 49%, 14% and 11%, respectively, for the nine months ended September 30, 2000; Two tenants accounted for 63% and 31%, respectively, for the nine months ended September 30, 1999. 10 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 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. The receivable balance was $1,717,470 as of September 30, 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; balance due November 1, 2006; and current monthly payments of principal and interest of $13,593. The note payable balance was $1,378,459 and $1,405,674 as of September 30, 2000 and December 31, 1999. The aggregate annual future principal maturities at September 30, 2000 are as follows: AMOUNT ====================================================================== 2001 $ 39,288 2002 43,016 2003 47,098 2004 51,568 2005 56,461 Thereafter 1,141,028 ---------------------------------------------------------------------- Total $ 1,378,459 ====================================================================== 11 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 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 September 30, 2000 and $0 for the quarter ended September 30, 1999 and $0 for the nine months ended September 30, 2000 and $31,502 for the nine months ended September 30, 1999. (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 quarter ended September 30, 2000 and September 30, 1999 and $9,000 for the nine months ended September 30, 2000 and 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 $3,723 for the quarter ended September 30, 2000 and $3,877 for the quarter ended September 30, 1999, and $11,571 for the nine months ended September 30, 2000 and $17,714 for the nine months ended September 30, 1999 . NOTE 6 - NET INCOME (LOSS) AND CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP LIST The Net Income (Loss) 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 ================================================================================ December 31, 1998 7,499 $ 20.50 $ 153,730 March 19, 1999 7,499 $191.03 to $188.52 1,427,641 March 15, 2000 7,499 $64.00 479,936 July 31, 2000 7,499 $4.00 29,996 - -------------------------------------------------------------------------------- Total $ 2,091,303 ================================================================================ 12 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1999 (CONTINUED) NOTE 7 - LIQUIDATION OF PARTNERSHIP At September 30, 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. 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. 14 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 - NINE MONTHS ENDED SEPTEMBER 30, 2000 VS. NINE MONTHS ENDED SEPTEMBER 30, 1999 Operations for the nine months ended September 30, 2000, reflect the operations of the Simi Valley building prior to its sale on February 4, 2000 and of the Shaw Villa Shopping Center. Operations for the nine months ended September 30, 1999, reflect an entire period of operations for all the Partnership's properties, except for the two properties located in Encinatas, California which were sold in January 1999. Net income for the nine months ended September 30, 2000 of $294,638 was lower than the net income for the nine months ended September 30, 1999 of $387,886, primarily because the $380,849 gain recognized from the sale of the Encinitas, California properties in January 1999 exceeded the gain of $291,151 recognized on the Simi Valley property in February 2000. Rental revenue for the nine months ended September 30, 2000 decreased from that for the nine months ended September 30, 1999 by $125,581, due to lower rents collected as a result of the vacancy of the Simi Valley property starting May 31, 1999 and its subsequent sale in February 2000. Interest income increased $50,310 for the nine months ended September 30, 2000 as compared to the nine months ended September 30, 1999 primarily due to interest income on the note receivable received in connection with the sale of the Simi Valley property. Operating expenses, property taxes, and property management fees decreased $33,132 (34.22%) because fewer properties were owned during the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999. General and administrative expenses decreased $8,228 (10.06%) due to lower property leasing expenses, partially offset by higher legal and accounting expenses. Depreciation expense decreased $38,710 (40.52%) during the nine months ended September 30, 2000 compared to the nine months ended September 30, 1999 primarily because of the sale of the Simi Valley property in February 2000. During the nine months ended September 30, 2000 the Partnership distributed $509,932 to the limited partners as compared to the nine months ended September 30, 1999 when the Partnership distributed $1,612,873 to the general and limited partners and $2,270 to the minority interest. Cash proceeds from the sale of the Simi Valley property were distributed in April 2000, while the proceeds from the sale of the two properties located in Encinatas were distributed March 1999. Cash basis income for the nine months ended September 30, 2000 was $60,317. This was derived 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 - NINE MONTHS ENDED SEPTEMBER 30, 2000 VS. NINE MONTHS ENDED SEPTEMBER 30, 1999 (CONTINUED) by adding depreciation and amortization expense to net income, less the gain on sale of properties. In contrast cash basis income for the nine months ended September 30, 1999 was $102,577. Overall the Partnership generated $60,317 in income from operations before depreciation expense of $56,830 and $291,151 gain from the sale of the Simi Valley, California property for the nine months ended September 30, 2000. This compares to the nine months ended September 30, 1999 when cash basis income totaled $102,577 before depreciation expense of $95,540 and $380,849 gain from the sale of the Encinitas, California properties. Net income per limited partnership unit decreased from $45.41 in 1999 to $32.74 in 2000. The weighted average number of limited partnership units remained unchanged at 7,499 in each nine month period. RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2000 VS. THREE MONTHS ENDED SEPTEMBER 30, 1999 Operations for the quarter ended September 30, 2000, reflect the operations of the Partnership's remaining property Shaw Villa Shopping Center. In contrast the quarter ending September 30, 1999 also includes the operations of the Simi Valley property which was sold in February 2000. The net income for the quarter ended September 30, 2000 of $16,727 compares with a net loss of $42,048 for the quarter ended September 30, 1999. The loss for the quarter ended September 30, 1999 was the result of continued expenses for operating the Simi Valley property while it remained vacant during the quarter. The Simi Valley property was sold in February 2000, reducing expenses and generating interest income from the note receivable received in connection with that sale. Rental revenue of $76,720 for the quarter ended September 30, 2000 remained almost unchanged from the quarter ended September 30, 1999. Due to the vacancy of the Simi Valley property during the quarter ended September 30, 1999 and it subsequent sale in February 2000, the Shaw Villa Shopping Center was the only income producing property for both these quarters. Interest income increased $26,195 for the three months ended September 30, 2000 as compared to the three months ended September 30, 1999 primarily due to interest income on the note receivable received in connection with the sale of the Simi Valley property. Operating expenses decreased $14,731 (69.34%) and depreciation expense decreased $14,441 (45.34%) during the quarter ended September 30, 2000 compared to the quarter ended September 30, 1999 primarily due to the sale of the Simi Valley property in February 2000. General and administrative expenses increased $5,113 (34.57%) due to higher accounting expenses. 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 - THREE MONTHS ENDED SEPTEMBER 30, 2000 VS. THREE MONTHS ENDED SEPTEMBER 30, 1999 (CONTINUED) During the quarter ended September 30, 2000, the Partnership distributed $29,996 to the limited partners, as compared to the quarter ended September 30, 1999 when the Partnership made no distributions to the partners. Cash basis income for the quarter ended September 30, 2000 was $34,133. This was derived by adding depreciation and amortization expense to net income. In contrast cash basis net loss for the quarter ended September 30, 1999 was $10,201. Overall the Partnership generated $34,133 in income from operations before depreciation expense of $17,406. This compares favorably to the quarter ended September 30, 1999 when cash basis net loss totaled $10,201 before depreciation expense of $31,847. Net income (loss) per limited partnership unit for the quarter increased from $(5.43) in 1999 to $1.80 in 2000. The number of limited partnership units outstanding in each quarter was 7,499. LIQUIDITY AND CAPITAL RESOURCES During the nine months ended September 30, 2000, the Partnership made distributions to the limited partners totaling $509,932 of which $232,458 constituted a return of capital. This includes the distribution of proceeds from the sale of the Simi Valley property. During the nine months ended September 30, 1999, the Partnership made distributions to the general and limited partners totaling $1,612,873 of which $1,506,012 constituted a return of capital, primarily due to proceeds distributed of $1,427,641 from the sale of the two properties located in Encinitas, California. 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) for the six months ended December 31, 1998 on which such distributions were based. Additionally, the partnership distributed $31,502 to the general partner and $2,270 to the minority interest during the nine months ended September 30, 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. 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 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. 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 fourteen 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. 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. 18 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) CASH FLOWS - NINE MONTHS ENDED SEPTEMBER 30, 2000 VS. NINE MONTHS ENDED SEPTEMBER 30, 1999 Cash resources increased $48,251 during the nine months ended September 30, 2000 compared to a $249,691 decrease in cash resources for the nine months ended September 30, 1999. Cash provided by operating activities increased by $71,618 for the nine months ended September 30, 2000 with the largest contributor being $294,638 in net income offset by $291,151 resulting from the sale of the Simi Valley property. In contrast, the nine months ended September 30, 1999 provided $107,179 in cash from operating activities due primarily to $387,886 in net income offset by $380,849, resulting from the gain on the sale of the two Encinatas properties. Investing activities resulted in a $513,780 increase in cash resources during the nine months ending September 30, 2000, due to cash proceeds from the sale of the Simi Valley property of $481,250 and principal payments on the note receivable of $32,530. Investing activities resulted in a $1,283,129 increase in cash resources during the nine months ended September 30, 1999 due to cash proceeds from the sale of the two properties located in Encinitas, California. For the nine months ended September 30, 2000 financing activities used $537,147 because of distributions to limited partners totaling $509,932 and repayments on notes payable of $27,215. Cash from financing activities decreased $1,639,999 during the nine months ended September 30, 1999 due to $1,615,143 being distributed to the limited, general and minority interests and $24,856 used as payments on notes payable. 19 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) PART II OTHER INFORMATION ITEM 1. 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) SIGNATURES 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 November 14, 2000 /s/ John R. Lindsey ------------------------------------ John R. Lindsey Vice President/Treasurer November 14, 2000 /s/ W. Thomas Maudlin Jr. ------------------------------------ W. Thomas Maudlin Jr. President of General Partner