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, 2001
------------------
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
--------------
(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 [ ]
ASSOCIATED PLANNERS REALTY FUND
INDEX
PART I -- FINANCIAL INFORMATION
PAGE NO.
==============================================================================================
Item 1. Financial Statements
- ----------------------------------------------------------------------------------------------
Balance Sheets --
September 30, 2001 and December 31, 2000 3
Statements of Partner's Equity --
Nine Months Ended September 30, 2001 and 2000 4
Statements of Income -
Three Months and Nine Months Ended September 30, 2001 and 2000 5
Statements of Cash Flow -
Nine Months Ended September 30, 2001 and 2000 6
Summary of Accounting Policies 7
Notes to Financial Statements 10
Item 2. Management's Discussion and Analysis of 14
Financial Condition and Results of Operations
PART II- OTHER INFORMATION
Item 1. Exhibits and reports on Form 8-K 19
2
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
September 30, December 31,
2001 2000
(Unaudited) Audited
------------- ------------
ASSETS
Rental real estate held for sale, less accumulated
depreciation (Note 2, and 8) $2,318,930 $2,371,148
Cash and cash equivalents 214,866 113,192
Note receivable (Note 3) 1,626,567 1,695,634
Other assets 23,180 7,498
---------- ----------
TOTAL ASSETS $4,183,543 $4,187,472
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $ 27,900 $ 31,000
Related party (Note 5) 11,680 6,875
Notes payable (Note 4) 1,339,171 1,368,968
Security deposits and prepaid rent 14,993 12,614
Other liabilities 17,737 12,154
---------- ----------
TOTAL LIABILITIES 1,411,481 1,431,611
PARTNERS' EQUITY (NOTES 6 AND 7) LIMITED PARTNERS:
$1,000 stated value per unit -- authorized
7,500 units; issued and outstanding 7,499 2,621,250 2,618,867
General partner 150,812 136,994
---------- ----------
TOTAL PARTNERS' EQUITY 2,772,062 2,755,861
---------- ----------
TOTAL LIABILITIES AND PARTNERS' EQUITY $4,183,543 $4,187,472
========== ==========
See accompanying notes to financial statements.
3
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 2001
(UNAUDITED)
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
----------- ----------- ---------------- -----------
BALANCE AT DECEMBER 31, 2000 $ 2,755,861 7,499 $ 2,618,867 $ 136,994
Net income 91,191 -- 77,373 13,818
Distributions to limited partners (74,990) -- (74,990) --
----------- ----------- ----------- -----------
BALANCE AT SEPTEMBER 30, 2001 $ 2,772,062 7,499 $ 2,621,250 $ 150,812
=========== =========== =========== ===========
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
=========== =========== =========== ===========
See accompanying notes to financial statements.
4
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,
2001 2000 2001 2000
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
REVENUES
Rental (Note 2) $ 88,087 $ 76,720 $268,539 $228,400
Gain on sale of property -- -- -- 291,151
Interest 25,968 26,285 78,407 64,076
- -------- -------- -------- --------
114,055 103,005 346,946 583,627
- -------- -------- -------- --------
COSTS AND EXPENSES
Operating 6,177 6,514 23,437 31,563
Property taxes 5,817 7,477 17,410 20,547
Property management fees (Note 5(c)) 4,251 3,723 13,005 11,571
General and administrative 18,814 19,905 57,371 73,562
Depreciation 17,406 17,406 52,218 56,830
Interest expense (Note 4) 30,544 31,253 92,314 94,916
- -------- -------- -------- --------
83,009 86,278 255,755 288,989
- -------- -------- -------- --------
NET INCOME (LOSS) $ 31,046 $ 16,727 $ 91,191 $294,638
======== ======== ======== ========
NET INCOME (LOSS) PER LIMITED PARTNERSHIP
UNIT (Note 6) $ 3.52 $ 1.80 $ 10.32 $ 32.74
======== ======== ======== ========
See accompanying notes to financial statements.
5
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
Nine Months Nine Months
Ended Ended
September 30, 2001 September 30, 2000
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Unaudited) (Unaudited)
------------------ ------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 91,191 $ 294,638
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 52,218 56,830
Gain on sale of property -- (291,151)
Increase (decrease) from changes in:
Other assets (15,682) (1,234)
Accounts payable 1,705 6,269
Security deposits and prepaid rent 2,379 (11,765)
Other liabilities 5,583 18,031
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 137,394 71,618
----------- -----------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Proceeds from sale of rental real estate -- 481,250
Principal payments from note receivable 69,067 32,530
----------- -----------
NET CASH PROVIDED BY INVESTING ACTIVITIES 69,067 513,780
----------- -----------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Repayment of notes payable (29,797) (27,215)
Distributions to limited partners (74,990) (509,932)
----------- -----------
NET CASH USED IN FINANCING ACTIVITIES (104,787) (537,147)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 101,674 48,251
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 113,192 5,223
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 214,866 $ 53,474
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 92,540 $ 94,916
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
ACTIVITY:
Note Receivable issued in sale of real estate -- $ 1,750,000
See accompanying notes to financial statements.
6
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 40 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.
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.
7
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
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 three or nine months ended September 30,
2001 or 2000.
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.
NEW ACCOUNTING PRONOUNCEMENTS
In June 2001, the Financial Accounting Standards Board finalized FASB Statements
No. 141, Business Combinations (SFAS 141), and No. 142, Goodwill and Other
Intangible Assets (SFAS 142). SFAS 141 requires the use of the purchase method
of accounting and prohibits the use of the pooling-of-interests method of
accounting for business combinations initiated after June 30, 2001. SFAS 141
also requires that the Partnership recognize acquired intangible assets apart
from goodwill if the acquired intangible assets meet certain criteria. SFAS 141
applies to all business combinations initiated after June 30, 2001 and for
purchase business combinations completed on or after July 1, 2001. It also
requires, upon adoption of SFAS 142, that the Partnership reclassify the
carrying amounts of intangible assets and goodwill based on the criteria in SFAS
141. SFAS 142 requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually. In
addition, SFAS 142 requires that the Partnership identify reporting units for
the purposes of assessing potential future impairments of goodwill, reassess the
useful lives of other existing recognized intangible assets, and cease
amortization of intangible assets with an indefinite useful life. An intangible
asset with an indefinite useful life should be tested for impairment in
accordance with the guidance in SFAS 142. SFAS 142 is required to be applied in
fiscal years beginning after December 15, 2001 to all goodwill and other
intangible assets recognized at that date, regardless of when those assets were
initially recognized. SFAS 142 requires the Partnership to complete a
transitional goodwill impairment test six months from the date of adoption. The
Partnership is also required to reassess the useful lives of other intangible
assets within the first interim quarter after adoption of SFAS 142. The
Partnership had no previous transactions that resulted in the recognition of
goodwill. The adoption of SFAS 141 and SFAS 142 had no material affect on the
Partnership's financial results.
8
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
Statement of Financial Accounting Standard No. 143, (SFAS 143) Accounting for
Asset Retirement Obligations, was issued in June 2001 and is effective for
fiscal years beginning after June 15, 2002. SFAS 143 requires that any legal
obligation related to the retirement of long-lived assets be quantified and
recorded as a liability with the associated asset retirement cost capitalized
on the balance sheet in the period it is incurred when a reasonable estimate of
the fair value of the liability can be made. The Partnership believes this
statement will not have a material affect on its financial statements.
Statement of Financial Accounting Standard No. 144, (SFAS 144) Accounting for
the Impairment or Disposal of Long-Lived Assets, was issued in August 2001 and
is effective for fiscal years beginning after December 15, 2001. SFAS 144
provides a single, comprehensive accounting model for impairment and disposal
of long-lived assets and discontinued operations. The Partnership is assessing
but has not yet determined how the adoption of SFAS 144 will impact its
financial statements.
9
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 2000
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, 2001, and the results of operations and cash flows for the
three and nine months ended September 30, 2001 and 2000. 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
financial statements and notes for the fiscal year ended December 31, 2000.
NOTE 2 -- RENTAL REAL ESTATE HELD FOR SALE
As of September 30, 2001, 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, 2001 December 31, 2000
=====================================================================================================
Land $878,646 $878,646
Building and Improvements 1,959,465 1,959,465
Furniture and Fixtures 16,109 16,109
- -----------------------------------------------------------------------------------------------------
2,854,220 2,854,220
Less accumulated depreciation 535,290 483,072
- -----------------------------------------------------------------------------------------------------
Net rental real estate held for sale $2,318,930 $2,371,148
=====================================================================================================
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 50%, 13%, and 11%, respectively, for the nine months
ended September 30, 2001;
Three tenants accounted for 49%, 14% and 11%, respectively, for the nine months
ended September 30, 2000.
10
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 2000 (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
$1,626,567 as of September 30, 2001.
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 9.10% 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 $1,339,171 and $1,368,968
as of September 30, 2001 and December 31, 2000.
The aggregate annual future principal maturities at September 30, 2001 are as
follows:
AMOUNT
-------------------------------------------------------------
2002 $ 43,016
2003 47,098
2004 51,567
2005 56,461
2006 61,819
Thereafter 1,079,210
-------------------------------------------------------------
Total $ 1,339,171
-------------------------------------------------------------
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 quarters ended September 30, 2001 and September 30,
2000 and $0 for the nine months ended September 30, 2001 and September 30, 2000.
11
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 2000 (CONTINUED)
NOTE 5 -- RELATED PARTY TRANSACTIONS (CONTINUED)
(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 quarters ended September 30, 2001
and September 30, 2000 and $9,000 for the nine months ended September 30, 2001
and September 30, 2000.
(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 $4,250 for the quarter ended September 2001 and $3,723
for the quarter ended September 30, 2000, and $13,005 for the nine months ended
September 30, 2001 and $11,571 for the nine months ended September 30, 2000.
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 2001 and 2000.
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 15, 2000 7,499 $64.00 479,936
July 31, 2000 7,499 4.00 29,996
December 31, 2000 7,499 5.00 37,495
June 30, 2001 7,499 5.00 37,495
- --------------------------------------------------------------------------------
Total $584,922
================================================================================
NOTE 7 - LIQUIDATION OF PARTNERSHIP
At September 30, 2001, the Partnership's remaining property is held for sale.
The General Partner plans to liquidate the Partnership after all it's assets are
sold and any remaining notes receivable are settled. There is no assurance that
the remaining property will be sold or that the Partnership will be liquidated
during 2001. The financial statements do not contain any adjustments that might
result from the liquidation of the Partnership.
12
ASSOCIATED PLANNERS REALTY FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 2000 (CONTINUED)
NOTE 8 -- SUBSEQUENT EVENTS
On October 12, 2001 the Partnership entered into an agreement with an unrelated
individual for the sale of the Partnership's remaining property, the Shaw Villa
Shopping Center in Clovis, California. Terms of the sale call for no sales
commission and a carryback 2nd Trust Deed that matures on February 1, 2004. If,
however, the note is prepaid within one year the buyer will receive a discount
upon the payoff of the loan. Escrow is scheduled to close on February 15, 2002.
The buyer has substantial contingencies remaining to be satisfied and therefore
there is no assurance that the contemplated sale will occur.
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, 2001 VS. NINE MONTHS
ENDED SEPTEMBER 30, 2000
Operations for the nine months ended September 30, 2001 reflect the operations
of the Partnership's remaining property Shaw Villa Shopping Center. The nine
months ending September 30, 2000 also includes operations of the Simi Valley
property before its sale on February 4, 2000.
Net income for the nine months ended September 30, 2001 of $91,191 was lower
than the net income for the nine months ended September 30, 2000 of $294,638
primarily as a result of the $291,151 gain on sale of the Simi Valley property
in February 2000.
Rental revenue of $268,539 for the nine months ended September 30, 2001
increased $40,139 (17.57%) from the nine months ended September 30, 2000 due to
higher base rents on the lease contracts for the Shaw Villa Shopping Center.
Due to the vacancy of the Simi Valley property and its subsequent sale in
February 2000, the Shaw Villa Shopping Center was the only income producing
property for both nine month periods. Interest income increased $14,331 (22.37%)
for the nine months ended September 30, 2001 as compared to the nine months
ended September 30, 2000 primarily due to interest income on the note receivable
received in connection with the sale of the Simi Valley property.
Operating expenses and property taxes decreased $11,263 (21.61%) for the nine
months ended September 30, 2001 compared to the nine months ended September 30,
2000, primarily due to the sale of the Simi Valley property in February 2000.
Property management fees increased $1,434 (12.39%) due to higher rental income
received for the nine months ended September 30, 2001. General and
administrative expenses decreased $16,191 (22.01%) primarily due to disposition
fees and expenses recorded as of June 30, 2000 associated with the sale of the
Simi Valley property. Depreciation and amortization expense decreased $4,612
(8.12%) because fewer properties were owned during the nine months ended
September 30, 2001.
The Partnership generated $143,409 in income from operations before depreciation
expense of $52,218 for the nine months ended September 30, 2001. In contrast
cash basis income for the nine months ended September 30, 2000 was $60,317
before depreciation expense of $56,830 and $291,151 gain from the sale of the
Simi Valley property. Net income per limited partnership unit decreased from
$32.74 in 2000 to $10.32 in 2001. The number of limited partnership units
outstanding in each quarter was 7,499.
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 -- THREE MONTHS ENDED SEPTEMBER 30, 2001 VS. THREE MONTHS
ENDED SEPTEMBER 30, 2000
Operations for the both the quarter ended September 30, 2001 and September 30,
2000 reflect the operations of the Partnership's remaining property Shaw Villa
Shopping Center.
The net income for the quarter ended September 30, 2001 of $31,046 compares with
net income of $16,727 for the quarter ended September 30, 2000.
Rental revenue increased $11,367 (14.82%) for the three months ended September
30, 2001 compared to the three months ended September 30, 2000 due to higher
base rents on the lease contracts for the Shaw Villa Shopping Center.
Total Costs and Expenses decreased $3,269 (3.79%) during the quarter ended
September 30, 2001 compared to the quarter ended September 30, 2000 primarily
due to adjustments to the accrual for property taxes recorded in September 2000.
Overall the Partnership generated $48,452 in income from operations before
depreciation expense of $17,406 for the quarter ended September 30, 2001. This
compares favorably to the quarter ended September 30, 2000 when cash basis
income totaled $34,133 before depreciation expense of $17,406. Net income (loss)
per limited partnership unit increased from $1.80 in 2000 to $3.52 in 2001. The
number of limited partnership units outstanding in each quarter was 7,499.
LIQUIDITY AND CAPITAL RESOURCES
During the nine months ended September 30, 2001, the Partnership made
distributions to the limited partners totaling $74,990 none of which constituted
a return of capital. During the nine months ended September 30, 2000, the
Partnership distributed $509,932 to the limited partners of which $232,458
constituted a return of capital. 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.
16
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 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 any notes
receivable remaining are settled, 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 2001. The financial statements do not contain any adjustments that might
result from the liquidation of the partnership.
17
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, 2001 VS. NINE MONTHS ENDED
SEPTEMBER 30, 2000
Cash resources increased $101,674 during the nine months ended September 30,
2001 compared to a $48,251 increase in cash resources for the nine months ended
September 30, 2000. The nine months ended September 30, 2001 provided $137,394
in cash from operating activities with the largest contributors being $91,191 in
net income and $52,218 in depreciation. In contrast, the nine months ended
September 30, 2000 provided $71,618 in cash from operating activities due
primarily to $294,638 in net income and $56,830 in depreciation, offset by
$291,151 resulting from the gain on the sale of the Simi Valley property.
Investing activities resulted in a $69,067 increase in cash resources during the
nine months ended September 30, 2001, due to principal repayments on the note
receivable. Investing activities resulted in a $513,780 increase in cash
resources during the nine months ended September 30, 2000, primarily due to cash
proceeds from the sale of the Simi Valley property. For the nine months ended
September 30, 2001 financing activities used $104,787 because of distributions
to limited partners totaling $74,990 and repayments on notes payable of $29,797.
Cash from financing activities used $537,147 during the nine months ended
September 30, 2000 because of distributions to limited partners of $509,932 and
principal repayments on notes payable of $27,215.
18
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. EXHIBITS 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
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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
/s/ JOHN R. LINDSEY
November 14, 2001 -----------------------------------
John R. Lindsey
(Vice President/Treasurer,
Principal Financial Officer,
Principal Accounting Officer, and
Duly Authorized Officer)
20