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
June 30, 1997
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 JUNE 30, 1997 AND DECEMBER 31, 1996
<CAPTION>
UNAUDITED AUDITED
JUNE 30, DECEMBER 31,
ASSETS 1997 1996
- ------------------------------- ---------- ------------
<S> <C> <C>
INVESTMENT PROPERTIES, (net of
accumulated depreciation of
$1,596,783 and $1,517,554,
respectively) 4,035,534 4,114,763
CASH AND CASH EQUIVALENTS 332,810 383,182
RENT AND OTHER RECEIVABLES 5,184 1,820
OTHER ASSETS 2,954 3,327
NOTES RECEIVABLE (net of allowance of
$61,025 and $60,427, respectively) 0 0
DEFERRED CHARGES 5,250 6,000
---------- ----------
TOTAL ASSETS 4,381,732 4,509,092
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 77,434 74,711
TENANT SECURITY DEPOSITS 59,623 56,495
PREPAID RENT 2,537 6,959
---------- ----------
TOTAL LIABILITIES 139,594 138,165
LIMITED PARTNERS' CAPITAL 4,193,189 4,323,648
GENERAL PARTNERS' CAPITAL 48,949 47,279
---------- ----------
TOTAL PARTNERS' CAPITAL 4,242,138 4,370,927
---------- ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL 4,381,732 4,509,092
========== ==========
<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 three months and six months ended June 30, 1997 and 1996
UNAUDITED
<CAPTION>
3 MONTHS 6 MONTHS 3 MONTHS 6 MONTHS
ended ended ended ended
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1997 1996 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUE:
Rental income 190,043 377,465 243,148 490,679
Restaurant sales 153,574 300,168 155,328 294,993
Gain on sale 0 0 372,939 372,939
Interest and other
income 6,549 22,202 9,764 29,439
-------- -------- -------- ---------
350,166 699,835 781,179 1,188,050
EXPENSES:
Operating and
administrative 97,280 196,240 106,863 210,540
Restaurant operating
expenses 113,430 233,944 112,072 224,941
Management fees 11,876 22,646 14,394 28,732
Depreciation and
amortization 39,990 79,979 55,168 110,298
-------- -------- -------- --------
262,576 532,809 288,497 574,511
-------- -------- -------- --------
NET INCOME 87,590 167,026 492,682 613,539
======== ======== ======== ========
<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 six months ended June 30, 1997 and
for the year ended December 31, 1996
UNAUDITED
<CAPTION>
General Limited
Partners Partners
(1% ownership) (99% ownership) Total
-------------- --------------- --------
<S> <C> <C> <C>
BALANCE, January 1, 1996 39,419 5,815,162 5,854,581
---------- ---------- ----------
NET INCOME (LOSS) 7,860 778,108 785,968
CASH DISTRIBUTIONS 0 (2,269,622) (2,269,622)
---------- ---------- ----------
BALANCE, December 31, 1996 47,279 4,323,648 4,370,927
---------- ---------- ----------
NET INCOME 1,670 165,356 167,026
CASH DISTRIBUTIONS 0 (295,815) (295,815)
---------- ---------- ----------
BALANCE, June 30, 1997 48,949 4,193,189 4,242,138
========== ========== ==========
<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 six months ended June 30, 1997 and 1996
UNAUDITED
<CAPTION>
JUNE 30, JUNE 30,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) 167,026 613,539
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization expense 79,979 110,298
Gain on sale of assets 0 (372,939)
Change in assets and liabilities:
Accounts receivable (3,364) (6,682)
Notes receivable 0 7,000
Other assets 373 2,190
Accounts payable and
accrued expenses 2,723 (95,655)
Tenants' security deposits 3,128 (15,060)
Prepaid rent (4,422) 0
---------- ----------
Net Cash provided by
operating activities: 245,443 242,691
CASH FLOWS FROM INVESTING
ACTIVITIES:
Net proceeds from
sale of assets 0 1,689,077
---------- ----------
Net Cash used in
investing activities 0 1,689,077
---------- ----------
I-4
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions paid (295,815) (347,810)
---------- ----------
Net cash provided by (used
in) financing activities (295,815) (347,810)
---------- ----------
Net increase (decrease)
in cash (50,372) 1,583,958
Cash at beginning of period 383,182 502,133
---------- ----------
Cash at end of period 332,810 2,086,091
========== ==========
<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, 1996. 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. The properties consist primarily 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
owns and operates three 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
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. During the second
quarter of 1996 one mobile home park and the warehouse building
were 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 six
months ended June 30 was $245,443 in 1997 and $242,691 in 1996,
primarily from earnings and depreciation (amortization).
As of June 30, 1997, the Partnership had cash of approximately
$330,000 representing undistributed cash flow, working capital
reserves, and tenant's security deposits. Current liabilities
amounted to approximately $140,000.
The Partnership operates a Rocky Rococo restaurant in Milwaukee,
Wisconsin. The restaurant contributed $61,800 to cash flow in
the first half of 1997 compared to $64,900 in the first
half of 1996. 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 six months ended June 30 were
$377,465 in 1997 versus $490,679 in 1996. Operating expenses,
excluding restaurant operations, from rental properties
for the six months ended June 30 were $196,240 in 1997 and
$210,540 in 1996. The decrease in gross rental revenues and
operating expenses is primarily due to the sale of the warehouse
and mobile home park in 1996.
Net Income for the six months ended June 30 was $167,026 in 1997
and $613,539 in 1996. The decrease in net income is primarily due
to the gain recognized on the sale of the warehouse in 1996.
The restaurant property on Howell Avenue in Milwaukee, Wisconsin
opened as a Rocky Rococo's in the fourth quarter of 1994. Revenues
of $301,802 generated $47,135 of net income for the partnership
during the first six months of 1997 compared to revenues of
$295,797 and net income of $50,395 for the first six months of
1996. The decrease in net income is due to increased labor costs.
<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's mobile home parks during
the six months ended June 30, 1997 and calendar year 1996:
<CAPTION>
6 Months Calendar
ended June Year
30, 1997 1996
----------- --------
<S> <C> <C>
1. Forest Junction 93% 90%
2. Cloverleaf 90% 88%
3. Shamrock 99% 98%
</TABLE>
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-8
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: August 1, 1997 Robert A. Long
--------------------------
Robert A. Long
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 332,810
<SECURITIES> 0
<RECEIVABLES> 5,184
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 340,948
<PP&E> 5,632,317
<DEPRECIATION> 1,596,783
<TOTAL-ASSETS> 4,381,732
<CURRENT-LIABILITIES> 139,594
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,242,138
<TOTAL-LIABILITY-AND-EQUITY> 4,381,732
<SALES> 0
<TOTAL-REVENUES> 699,835
<CGS> 0
<TOTAL-COSTS> 532,809
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 167,026
<INCOME-TAX> 0
<INCOME-CONTINUING> 167,026
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 167,026
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
