UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
------- SECURITIES EXCHANGE ACT OF 1934
For the quarter ended
March 31, 1996
OR
------- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number
0-15677
-------
RAL YIELD + EQUITIES III LIMITED PARTNERSHIP
--------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1546907
- - ------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
20875 Crossroads Circle
Suite 800
Waukesha, Wisconsin 53186
- - ------------------------------- -----------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (414) 798-0900
--------------
Securities registered pursuant to Section 12(b) of the Act:
None
----
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of Class)
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
------- -------
RAL YIELD + EQUITIES III
LIMITED PARTNERSHIP
FORM 10-Q
TABLE OF CONTENTS
PAGES
PART I FINANCIAL INFORMATION
Item 1. Financial Statements I-1
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations I-7
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K (None)
Signatures
<TABLE>
RAL YIELD + EQUITIES III
LIMITED PARTNERSHIP
BALANCE SHEETS AT MARCH 31, 1996 AND DECEMBER 31, 1995
<CAPTION>
UNAUDITED AUDITED
MAR 31, DECEMBER 31,
ASSETS 1996 1995
- - ------------------------------- ---------- ------------
<S> <C> <C>
INVESTMENT PROPERTIES, (net of
accumulated depreciation of
$1,997,724 and $1,942,969,
respectively) $5,527,462 $5,582,217
CASH AND CASH EQUIVALENTS 492,110 502,133
RENT AND OTHER RECEIVABLES 4,973 1,266
OTHER ASSETS 3,032 5,166
NOTES RECEIVABLE (net of allowance of
$60,309 and $60,790, respectively) 9,000 13,000
DEFERRED CHARGES 7,125 7,500
---------- ----------
TOTAL ASSETS $6,043,702 $6,111,282
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
- - ---------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES $165,385 $180,460
TENANT SECURITY DEPOSITS 72,184 69,871
PREPAID RENT 4,601 6,370
---------- ----------
TOTAL LIABILITIES $242,170 $256,701
LIMITED PARTNERS' CAPITAL 5,760,904 5,815,162
GENERAL PARTNERS' CAPITAL 40,628 39,419
---------- ----------
TOTAL PARTNERS' CAPITAL 5,801,532 5,854,581
---------- ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $6,043,702 $6,111,282
========== ==========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
<TABLE>
I-1
RAL YIELD + EQUITIES III
LIMITED PARTNERSHIP
Statement of Operations
For the three months ended March 31, 1996 and 1995
UNAUDITED
<CAPTION>
3 MONTHS 3 MONTHS
ended ended
MAR 31, MAR 31,
1996 1995
-------- --------
<S> <C> <C>
REVENUE:
Rental income $247,532 $240,446
Restaurant sales 139,665 134,689
Interest and other
income 19,673 9,987
-------- --------
$406,870 $385,122
EXPENSES:
Operating and
administrative $92,696 $ 80,780
Restaurant Operating
expenses 106,454 98,468
Management fees 14,338 11,160
Real estate and other
taxes 17,875 18,250
Bad Debts (480) 39
Depreciation and
amortization 55,130 83,457
-------- --------
$286,013 $292,154
-------- --------
NET INCOME (LOSS) $120,857 $ 92,968
======== ========
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
I-2
<TABLE>
RAL YIELD + EQUITIES III
LIMITED PARTNERSHIP
Statements of Changes in Partners' Capital
For the three months ended March 31, 1996 and
for the year ended December 31, 1995
UNAUDITED
<CAPTION>
General Limited
Partners Partners
(1% ownership) (99% ownership) Total
-------------- --------------- --------
<S> <C> <C> <C>
BALANCE, January 1, 1995 $35,248 $6,044,389 $6,079,637
---------- ---------- ----------
NET INCOME (LOSS) 4,171 412,883 $417,054
CASH DISTRIBUTIONS 0 (642,110) ($642,110)
---------- ---------- ----------
BALANCE, December 31, 1995 $39,419 $5,815,162 $5,854,581
---------- ---------- ----------
NET INCOME 1,209 119,648 120,857
CASH DISTRIBUTIONS (173,906) (173,906)
---------- ---------- ----------
BALANCE, March 31, 1996 $40,628 $5,760,904 $5,801,532
========== ========== ==========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-3
<TABLE>
RAL YIELD + EQUITIES III
LIMITED PARTNERSHIP
Statements of Cash Flows
For the three months ended March 31, 1996 and 1995
UNAUDITED
<CAPTION>
MAR 30, MAR 30,
1996 1995
--------- ---------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) $120,857 $92,968
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization expense 55,130 83,457
Change in assets and liabilities:
Accounts receivable (3,707) 1,724
Notes receivable 4,000 (451)
Other assets 2,134 11
Accounts payable and
accrued expenses (15,075) (3,062)
Tenants' security deposits 2,313 2,841
Prepaid Rent (1,769) 3,868
---------- ----------
Net Cash provided by
operating activities: $163,883 $181,356
CASH FLOWS FROM INVESTING
ACTIVITIES:
Acquisitions of and additions to
investment properties $0 $0
---------- ----------
Net Cash used in
investing activities $0 $0
---------- ----------
I-4
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions paid ($173,906) ($147,152)
---------- ----------
Net cash provided by (used
in) financing activities ($173,906) ($147,152)
---------- ----------
Net increase (decrease)
in cash (10,023) 34,204
Cash at beginning of period 502,133 415,471
---------- ----------
Cash at end of period $492,110 $449,675
========== ==========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-5
RAL YIELD + EQUITIES III
LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Pursuant to Rule 10-01(a)(5) of Regulation S-X (17 CFR Part 210)
RAL Yield + Equities III Limited Partnership is omitting its
footnote disclosure. The Registrant has presumed that users of the
interim financial information have read or have access to the
audited financial statements for the preceding fiscal year. Copies
of the audited statements will be furnished upon request. The
disclosure is being omitted since it substantially duplicates the
disclosure contained in the most recent annual report to security
holders, Form 10-K for the fiscal year ended December 31, 1995. No
events have occurred (other than those discussed in the
Management's Discussion and Analysis of Financial Condition and
Results of Operations) subsequent to the end of the most recent
fiscal year which would have a material impact on RAL Yield +
Equities III Limited Partnership.
In the opinion of management, the unaudited financial statements
presented herein reflect all adjustments necessary to a fair
statement of the results for the interim periods presented.
I-6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RAL YIELD + EQUITIES III LIMITED PARTNERSHIP (the "Partnership") is
a Wisconsin Limited Partnership formed on April 29, 1985, under the
Wisconsin Revised Uniform Limited Partnership Act. The Partnership
was organized to acquire new and existing income-producing
properties. Currently held properties consist of restaurants
(including land and building) leased on a "triple net" lease basis
(i.e. for the tenant to pay for maintenance, repairs, real estate
taxes and insurance) to chain restaurants, including Hardee's,
Pizza Hut, and Wendy's. The Partnership also leases a warehouse
facility to a single tenant who sublets to various tenants. The
Partnership also owns and operates four mobile home communities
located in Wisconsin and Minnesota. The Partnership's offering of
limited partnership interests to the public pursuant to the
Securities Act of 1933 raised $13,725,000, in which the
above-described properties, in addition to the properties which
have been sold as mentioned below, were purchased for cash. During
1993 four of the commercial properties and one of the mobile home
communities were sold. In 1994 an additional commercial property
was sold.
Liquidity and Capital Resources:
Properties acquired by the Partnership are generally intended to be
held from seven to ten years. During the Properties' holding
periods, the investment strategy is to maintain (on the "triple net
lease" restaurant properties) and improve (on the mobile home
parks) occupancy rates through the application of professional
property management (including selective capital improvements).
The Partnership also accumulates working capital reserves for
normal repairs, replacements, working capital, and contingencies.
Net cash flow provided by operating activities for the three months
ended March 31 was $163,883 in 1996 and $181,356 in 1995,
primarily from earnings and depreciation (amortization).
As of March 31, 1996, the Partnership had cash of approximately
$492,000 representing undistributed cash flow, working capital
reserves, and tenant's security deposits. Current liabilities
amounted to approximately $242,000.
The Partnership operates a Rocky Rococo restaurant in Milwaukee,
Wisconsin. The restaurant contributed $26,794 to cash flow in the
first quarter of 1996 compared to $27,320 in the first quarter of
1995. As sales continue to increase at this restaurant, it should
continue to be a large contributor to overall partnership cash
flow.
I-7
Results of Operations:
Gross rental revenues for the three months ended March 31 were
$247,532 in 1996 versus $240,446 in 1995. Operating expenses,
excluding restaurant operations, from rental properties
for the three months ended March 31 were $92,696 in 1996 and
$80,780 in 1995. Operating expenses rose 15% from 1995 to 1996. A
large part of this increase is due to an $8,000 increase in
insurance costs due to the payment of a large worker's compensation
audit bill. This effect of this bill will even out as the year
progresses.
Net Income for the three months ended March 31 was $120,857 in 1996
and $92,968 in 1995. Income continues to improve due to the
addition of the Partnership operated restaurant.
The restaurant property on Howell Avenue in Milwaukee, Wisconsin
opened as a Rocky Rococo's in the fourth quarter of 1994. Revenues
of $140,431 generated $19,522 of net income for the partnership
during the first quarter of 1996 compared to revenues of $134,715
and net income of $21,530 for the first quarter of 1995. The
decrease in net income is a primarily a result of the worker's
compensation insurance audit bill mentioned above, $4,000 of which
impacted the Rocky's restaurant.
The lease at the warehouse property in Fond du Lac, Wisconsin
expired on December 31, 1995. The Partnership is working with the
current tenant to negotiate a sale to them for a price of
$1,550,000. The terms of the sale have not been finalized and an
offer to purchase has not been signed. The tenant is currently
occupying the property and paying rent on a month to month basis.
The Partnership is currently negotiating to sell Coachlite
Mobile Home Park. An interested party has offered the Partnership
$160,000, but no formal purchase offer has been signed at this
point.
<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's mobile home parks during the
three months ended March 31, 1996 and calendar year 1995:
<CAPTION>
3 Months Calendar
ended Mar. Year
30, 1996 1995
----------- --------
<S> <C> <C>
1. Forest Junction 92% 97%
2. Coachlite 100% 99%
3. Cloverleaf 88% 89%
4. Shamrock 97% 95%
</TABLE>
I-8
Inflation:
Due to the comparatively low level of inflation since the
Partnership commenced operations, the effect of inflation on the
Partnership has not been material to date. Should the rate of
inflation increase substantially over the life of the Partnership,
it is likely to influence ongoing operations, in particular, the
operating expenses of the Partnership. Most of the commercial
leases contain clauses permitting pass-through of certain increased
operating costs. Residential leases are typically of one year or
less in duration; this allows the Partnership to react quickly
(through rental increases) to changes in the level of inflation.
These factors should serve to reduce, to a certain degree, any
impact of rising costs on the Partnership.
I-9
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.
RAL YIELD + EQUITIES III LIMITED PARTNERSHIP
(Registrant)
Date: April 29, 1996 Robert A. Long
--------------------------
Robert A. Long
General Partner
Christine Kennedy
--------------------------
Christine Kennedy
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 492,110
<SECURITIES> 0
<RECEIVABLES> 4,973
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 509,115
<PP&E> 5,527,462
<DEPRECIATION> 1,997,724
<TOTAL-ASSETS> 6,043,702
<CURRENT-LIABILITIES> 242,170
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,801,532
<TOTAL-LIABILITY-AND-EQUITY> 6,043,702
<SALES> 0
<TOTAL-REVENUES> 406,870
<CGS> 0
<TOTAL-COSTS> 286,013
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 120,857
<INCOME-TAX> 0
<INCOME-CONTINUING> 120,857
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 120,857
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
