12
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1995 Commission file number 33-00152
AMRECORP REALTY FUND III
(Exact name of registrant as specified in its charter)
TEXAS 75-2045888
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
16415 Addison Road, Suite 200
Dallas, Texas 75248
(Address of principal executive offices)
Registrant's telephone number, including area code: (214) 380-8000
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: Y No:
REGISTRANT IS A LIMITED PARTNERSHIP
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The following unaudited financial statements are filed herewith:
Balance Sheet......................................................Page 3
Statement of Income and Expense....................................Page 4
(Quarterly)
Statement of Income and Expense....................................Page 5
(Year To Date)
Statement of Changes In Partner's Equity...........................Page 6
Statement of Cash Flows............................................Page 7
Notes to Financial Statements......................................Page 8
The statements, insofar as they relate to the period subsequent
to December 31, 1994, are unaudited.
AMRECORP REALTY FUND III
BALANCE SHEET
JUNE 30, 1995 JUNE 30, 1994
UNAUDITED UNAUDITED
ASSETS
Investment in realestate
Land $ 1,000,000 $ 1,000,000
Building & improvements 6,015138 6,015,138
$ 7,015,138 $ 7,015,138
Less: accumulated depreciation (2,350,012) (2,226,012)
$ 4,665,126 $ 4,789,126
Cash including cash investments 28,872 72,051
Escrow deposits 196,921 127,666
Capital replacement reserve 104,838 189,444
Liquidity reserve 78,068 78,068
Other assets 16,352 12,715
Total assets $ 5,090,177 $ 5,269,070
Liabilities: and partner equity:
Mortgage and notes payable 3,186,317 3,208,542
Accounts payable & accrued 67,832 60,821
expenses
Real estate taxes payable 47,835 95,338
Security deposits 32,668 31,204
Due to affiliates 133,151 124,138
Total liabilities $ 3,467,803 $ 3,520,043
Partners equity $ 1,622,374 $ 1,749,027
Total liabilities and partner $ 5,090,177 $ 5,269,070
equity
AMRECORP REALTY FUND III
STATEMENT OF INCOME AND EXPENSES
(UNAUDITED)
Quarter Ended Quarter Ended
June 30, 1995 June 30, 1994
INCOME
Rentals $ 320,329 $ 309,407
Other 16,032 14,669
Total $ 336,361 $ 324,076
EXPENSES
Salary & wages 77,393 50,283
Maintenance & repairs 73,237 58,675
Utilities 36,508 40,518
Real estate taxes 23,835 31,500
General & administrative 16,375 14,104
Insurance 6,530 6,570
Contract service 8,187 6,587
$ 242,065 $ 208,237
Interest $ 64,998 $ 65,917
Depreciation and amortization $ 66,926 $ 64,926
General partner fees:
Property management fees $ 16,825 $ 16,792
Total expenses $ 390,814 $ 355,872
Net income $ (54,453) $ (31,796)
AMRECORP REALTY FUND III
STATEMENT OF INCOME AND EXPENSES
(UNAUDITED)
Year To Date Year To Date
June 30,1995 June 30,1994
INCOME
Rentals $ 630,897 $ 616,735
Other 30,002 31,530
Total $ 660,899 $ 648,265
Expenses:
Salaries & wages 140,819 98,077
Maintenance & repairs 123,609 83,558
Utilities 77,949 74,136
Real estate taxes 47,835 63,000
General & administrative 21,161 26,814
Insurance 13,676 12,482
Contract service 15,386 13,699
$ 440,435 $ 371,766
Interest $ 130,223 $ 154,100
Depreciation and $ 133,852 $ 129,852
amortization
General partner fees:
Property management fees $ 33,044 $ 33,001
Total expenses $ 737,554 $ 688,719
Net income $ (76,655) $ (40,454)
AMRECORP REALTY FUND III
STATEMENT OF CHANGES IN PARTNER'S EQUITY
THREE MONTHS ENDED JUNE 30, 1995
Special
Total General Limited Limited
Partner Partners Partners
Balance April 1, $1,726,827 $ (139,046) $ 2,193,233 $ (327,360)
1995
Net income (loss) (54,453) (545) 0 (53,908)
Distribution (50,000) 0 (50,000) 0
Balance June 30, $1,622,374 $ (139,591) $ 2,143,233 $ (381,268)
1995
AMRECORP REALTY FUND III
STATEMENT OF CASH FLOW
For The Quarter
Ended
JUNE 30, 1995
Cash flows from operating activities:
Net income (loss) $ (54,453)
Adjustments to reconcile net income to
Cash provided by operations:
Depreciation and amortization 64,926
Changes in assets and liabilities
Real estate taxes payable 23,835
Escrow deposits (27,464)
Amounts due affiliates 10,870
Accounts payable and accrued expenses 20,127
Security deposits 2,873
Other assets (13,708)
Total adjustments $ 81,459
Net cash provided by operating activities $ 27,006
Cash flows provided by investing activities
Distribution to specisl limited partner (50,000)
Net cash provided by investing activities $ (50,000)
Cash flows provided by financing activities
Payments on mortgage payable (11,226)
Net cash provided by financing activities $ (11,226)
Net increase (decrease) in cash
And cash equivalents $ (34,220)
Cash and cash equivalents
Begining of quarter 63,092
Cash and cash equivalents
End of quarter $ 28,872
Supplemental disclosure of cash flow
information:
Cash paid during the quarter for interest $ 64,998
AMRECORP REALTY FUND III
NOTES TO FINANCIAL STATEMENTS
Basis of Presentation:
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading.
Organization:
The Partnership was formed August 3O, 1985 by filing a
Certificate of Limited Partnership under the Statutes of the
State of Texas for the purpose of investing in income-producing
real estate. The distribution of limited partnership interests
commenced November 26, 1985, pursuant to a registration statement
on Form S-11 under the Securities Act of 1933. On May 5, 1986
the Partnership raised the minimum proceeds of $1,000,000. The
sale of Fund III concluded on November 25, 1986 with sales of
2,128 interests.
Item 2. Management Discussion and Analysis of Financial Condition
and Results of Operations.
On July 31, 1986 the Partnership purchased the Las Brisas
Apartments. The purchase provided for the sellers to receive
cash at closing and notes totaling $660,000. On June 30, 1987
the principal balance due totaled $210,000. In order to obtain
the necessary proceeds to finally retire these notes the General
Partners offered 254 Units of the Partnership to two investors at
the price of $200,660. No commissions were taken nor did the
General Partner receive any fees in connection with these
interests. The Partnership then obtained short term financing
from Resource Savings Association totaling $260,000, bearing
interest at the rate of 2% over prime and payable quarterly
together with principal payments of $15,000 each. Security for
the loan was provided by a $100,000 certificate of deposit and
the personal guaranties of the Partnership's General Partners.
The Resource Savings Association loan matured December 31, 1989.
In September, 1991 Mr. Werra paid $40,750 in satisfaction of his
personal guaranty of the Partnership Loan.
The Partnership defaulted in its debt obligations in August,
1988. The Partnership was forced to seek protection under
Chapter 11 of the United States Bankruptcy Code in December, 1988
when negotiations with Aetna Life Insurance Company, ("Aetna")
the holder of the two underlying first mortgage notes and Las
Brisas Apartments, Ltd. and Abilene Associates, Ltd., the holders
of respective wrap mortgage notes ("Wrap Note Holders") failed to
provide any relief.
The Partnership emerged from bankruptcy on May 15, 199O, having
negotiated a modification of its debt with it's major creditors.
In June, 1989 an affiliate of the Individual General Partner
provided $401,910.77 to bring the Aetna notes current. At the
same time the Wrap Note Holders agreed to reduce the payments due
on their respective wrap notes in order to mirror the payments
made on the underlying Aetna notes. The term of each wrap note
will be extended from July 31, 1995 to July 1, 2002 and July 1,
2OO7 respectively. The $401,910.77 note is collateralized by a
junior mortgage on the property. In addition, the affiliate has
the option to purchase the wrap notes for $85,OOO at any time
prior to the respective maturity dates of the wrap notes.
Commencing on July 1, 1992, payments on the notes reverted to the
original amounts of $19,442 and $15,454.00. During the prior two
years the Partnership deferred $214,460 in debt service payments.
The modification gave the Partnership room to deal with the
economic difficulties experienced in the market at that time.
In February, 1991, Amrecorp Realty Inc. resigned as the Managing
General Partner of the Partnership. As was communicated to all
limited partners this step was taken in order to minimize any
effect that Amrecorp's financial difficulties might have on the
Partnership. Management of the Partnership's assets was
transferred to Univesco, Inc., a Texas corporation, Robert J.
Werra, President.
On November 12, 1993 the Partnership refinanced the property's
secured debt with a 8.15%, ten year, mortgage loan from Lexington
Mortgage Company. The loan proceeds a Real Estate Mortgage
Investment Contract sponsored by Donaldson, Lufkin & Jenrette.
The $3,250,000 mortgage loan provides for monthly payments of
$41,500.00 based on an amortization schedule of 300 months with a
final payment of the entire remaining principal balance in
December, 2003. The proceeds of this new loan were used to pay
off the $2,500,000 and $2,300,000 mortgage notes which previously
held the first mortgage position. The old first mortgagee
provided a discount of approximately ten percent of the
outstanding principal balances of the two old notes. The balance
of funds needed to retire the old notes (approximately $100,000)
were provided by Robert J. Werra. In addition Robert J. Werra
exercised his option in the property's wrap mortgage notes. The
new lender prohibited subordinate debt. To meet this requirement
the subordinate debt held by Mr. Werra was converted to a class
of equity with the same terms and conditions as it possessed as
debt. The wrap mortgage lender would not agree to the change in
status so Mr. Werra paid $85,000 to complete his purchase of the
wrap notes and now holds an equity position in the partnership as
a special limited partner.
The partnership agreement was amended by vote of the limited
partners to include the appointment of a new corporate general
partner, LBAL, Inc., a Texas corporation wholly owned by Robert
J. Werra.
PART II
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) The following documents are filed herewith or incorporated
herein by reference as indicated as Exhibits:
Exhibit Designation Document Description
3 Certificate of Limited
Partnership,incorporated by
reference to Registration
Statement No. 33-00152 effective
November 26, 1985.
4
Limited Partnership
Agreement, incorporated
by reference to
Registration Statement
No. 33-00152 effective
November 26, 1985.
9 Not applicable.
10 None.
11 Not applicable.
12 Not applicable.
13 Not applicable.
18 Not applicable.
19 Not applicable.
22 Not applicable.
23 Not applicable.
24 Not applicable.
25 Power of Attorney,
incorporated by
reference to Registration
Statement No. 33-00152 effective
November 26, 1985.
28 None.
(b) Report on Form 8-K for the quarter ended June 30, 1995.
1. None.
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 hereunto duly authorized.
AMRECORP REALTY FUND III, A Texas
limited partnership
By: /s/ Robert J. Werra
Robert J. Werra, General Partner
Date: August 11, 1995
