<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER: 33-633
AMERICAN RETIREMENT VILLAS PROPERTIES
A CALIFORNIA LIMITED PARTNERSHIP
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
CALIFORNIA 33-0154077
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
245 FISCHER AVENUE, SUITE D-1, COSTA MESA, CALIFORNIA 92626
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 751-7400
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
UNITS OF LIMITED PARTNERSHIP
(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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting Units (all voting) held by
non-affiliates of Registrant, computed by reference to the price at which such
units were sold, was $30,000,000 as of March 1, 1995, a date within sixty (60)
days of the filing of this Form 10-K. On that date there were 30,000 Units
outstanding.
<PAGE> 2
PART I
ITEM 1. BUSINESS
FORMATION AND GENERAL DEVELOPMENT.
The Registrant is a California limited partnership formed in September of
1985 to develop, invest in, own and operate residential retirement facilities.
The Registrant owns and operates four facilities, all of which are located in
California. The General Partners continue to make all decisions concerning
property acquisitions and will make all decisions concerning dispositions of
the facilities. The General Partners believe that the Partnership has not made
any investment which puts the Registrant's capital at unusual risk.
INDUSTRY SEGMENTS.
The Registrant considers its business to represent only one industry
segment, the development, investment in, ownership and operation of residential
retirement facilities.
NARRATIVE DESCRIPTION OF BUSINESS.
To understand the business done and intended to be done by the Registrant,
it is first necessary to understand the market for potential residents.
As the average life span increases and more people live longer, the number
of senior citizens continues to grow. As quoted in the 1994 Orange County
Services Directory, the U.S. Census Bureau's statistics show that worldwide,
the number of people over 65 now increases by 800,000 per month and predict
that, by 2010, the rate of increase will be approximately 1,100,000 per month.
Housing alternatives for healthy senior citizens include residing as a senior
member of a family, with a relative, a friend, in a home or apartment, a
boarding house, or a retirement facility. The General Partners believe, based
on their experience, that a housing market exists for the senior citizen who
wishes to rent a private room or suite in a facility which provides food
service, housekeeping and other amenities which ease the daily burdens of such
tasks as shopping, cooking and cleaning. The General Partners are of the
opinion that this market will continue to grow.
Residents rent on a month-to-month basis and for one monthly rate receive
all meals, mail service, linens and laundry. The staff provides services and
security on a 24-hour basis. In addition, certain services ("Assisted Living")
are provided to residents in need of additional care such as bathing and
grooming and assisting with the self administration of medication. Higher
monthly rents are charged for such Assisted Living services. Neither medical
treatment nor facilities, however, are provided. Each project is designed to
cater to the needs of the individuals who are
<PAGE> 3
ambulatory, in relative good health and without need of specialized or
continuing medical attention.
Each of the Registrant's four facilities was designed to fit its particular
site and marketplace. Also, certain common characteristics exist. Each
facility devotes approximately 40% of its space to common areas such as
recreation rooms, dining rooms, hallways, and kitchen facilities. The kitchens
are fully equipped to serve three meals a day and snacks to all residents.
Individual rooms consist of a suite containing a bathroom and sleeping and
sitting area. The buildings are set in garden settings, including patios and
other outdoor areas for resident use.
A key ingredient to Registrant's business is obtaining and retaining
competent on-site management. While the Registrant has established procedures
and operating manuals, obtaining and maintaining competent on-site management
remains a constant challenge.
Registrant was initially capitalized at $30,000,000 and the amount of debt
to which the Registrant is subject totals approximately $989,281 at December
31, 1994, evidencing that the Registrant has adhered to its general policy of
low leverage. The loan bears interest at 9.5% with principal and interest
payments of $8,832 per month, and is due September 20, 2000. The loan may be
prepaid in full on payment of an adjusted premium charge.
Within a particular geographic location, residential retirement facilities
compete principally on the basis of the quality of the housing, food,
recreational activities, resident assistance and other items which make up the
American Retirement Villas package. Competition in the four principal market
areas in which the Registrant's facilities are located is limited, and is
discussed under ITEM 2. below. In addition, other forms of residential housing
such as mobile home parks, Assisted Living facilities, apartments, and to a
lesser extent, single family homes, compete for residents. The General
Partners believe that there is a demand for high quality residential retirement
facilities. They foresee future demand to continue to be high in relation to
supply.
The personnel working at each facility are all employed by ARV Management,
Inc., a wholly owned subsidiary of the corporate managing general partner. The
four facilities employ 150 employees.
Although the expiration of the minimum holding period (five to seven years)
is approaching, there is no definite plan to sell any facility in accordance
with a timetable. Any determination regarding sale will be dependent upon the
current and projected operating performance, the needs of the Registrant, the
availability of buyers and buyers' financing and, in general, the relative
merits of continued operation as opposed to sale. On any sale, the Registrant
may accept purchase money obligations secured by mortgages as part payment,
depending upon then prevailing economic
<PAGE> 4
conditions, credit of the buyer and available financing alternatives. In such
event, full distribution to the Partners may be delayed until the notes are
paid at maturity, sold, refinanced or otherwise liquidated.
The average occupancy percent for each of the last five years ending
December 31, 1990 through December 31, 1994 were 80.6%, 82.4%, 82.4%, 80.9%,
84.9%, respectively. No tenant occupies more than 10% of the rentable square
footage. The building size of the four properties ranges from 66,500 square
feet to 100,000 square feet, and the average rental per square foot for each of
the last five years ending December 31, 1994 were, $17.63, $19.77, $21.48,
$21.87, $23.65, respectively.
The realty taxes and tax rates for the 1994 assesment year vary between the
four properties. The tax rates per county range from 1.00376% to 1.0560%, and
the realty taxes range from $36,394 to $83,120.
Depreciation is calculated on the straight line method. Building and
improvements are depreciated over a 27.5 year life and equipment is depreciated
over a 5 year life.
The four properties follow improvement programs to maintain the quality
living conditions recognized by our residents. The programs include
improvements to the building exteriors and interiors, as well as to the
property grounds.
All four properties are adequately covered by full comprehensive business
plan coverage. The security ownership of management is as follows:
<TABLE>
<CAPTION>
TITLE PERCENT
----- -------
OF OF
-- --
NAME CLASS AMOUNT CLASS
---- ----- ------ -----
<S> <C> <C> <C>
Gary L. Davidson General Partner 0.2475% 024.75%
John A. Booty General Partner 0.2475% 024.75%
Tony Rota General Partner 0.2475% 024.75%
John Jason General Partner 0.2475% 024.75%
ARV Assisted Living,
Inc. (Formally ARV Managing
Housing Group, Inc.) General Partner 0.0100% 001.00%
------- -------
1.0000% 100.00%
======= =======
</TABLE>
<PAGE> 5
FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES.
None.
<PAGE> 6
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<PAGE> 7
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Annual Report--Form 10-K
Financial Statements and Schedule
Items 8 and 14(a)
December 31, 1994, 1993 and 1992
(With Independent Auditors' Report Thereon)
<PAGE> 8
INDEPENDENT AUDITORS' REPORT
To ARV Housing Group, Inc. as the Managing General Partner of
American Retirement Villas Properties:
We have audited the financial statements of American Retirement Villas
Properties, a California limited partnership, listed in the accompanying index.
In connection with our audits of the financial statements, we have also audited
the financial statement schedule listed in the accompanying index. These
financial statements and financial statement schedule are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements and financial statement schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American Retirement Villas
Properties as of December 31, 1994 and 1993, and the results of its operations
and its cash flows for each of the years in the three-year period ended
December 31, 1994, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Orange County, California
March 22, 1995
<PAGE> 9
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Annual Report--Form 10-K
Items 8 and 14(a)
Index to Financial Statements and Schedule
Financial Statements
Independent Auditors' Report
Balance Sheets--December 31, 1994 and 1993
Statements of Income--Years ended
December 31, 1994, 1993 and 1992
Statements of Partners' Capital--Years ended
December 31, 1994, 1993 and 1992
Statements of Cash Flows--Years ended
December 31, 1994, 1993 and 1992
Notes to Financial Statements
Schedule
Real Estate and Related Accumulated Depreciation--
December 31, 1994 Schedule III
All other schedules are omitted, as the required information is inapplicable or
the information is presented in the financial statements or related notes.
<PAGE> 10
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Balance Sheets
December 31, 1994 and 1993
<TABLE>
<CAPTION>
Assets 1994 1993
------ ---- ----
<S> <C> <C>
Properties, at cost (notes 4 and 6):
Land $ 2,695,099 2,695,099
Buildings and improvements, less accumulated
depreciation of $4,689,608 in 1994 and
$3,974,068 in 1993 15,035,175 15,622,928
Furniture, fixtures and equipment, less
accumulated depreciation of $330,734 in
1994 and $900,125 in 1993 239,999 288,194
---------- ----------
Net properties 17,970,273 18,606,221
Cash and cash equivalents 245,898 498,543
Other assets 135,935 250,070
---------- ----------
$ 18,352,106 19,354,834
========== ==========
Liabilities and Partners' Capital
---------------------------------
Notes payable (note 6) $ 989,281 1,324,439
Accounts payable and accrued expenses 350,833 324,105
Amounts payable to affiliate (note 3) 9,601 10,186
Distributions payable to Partners 455,919 492,946
---------- ----------
Total liabilities 1,805,634 2,151,676
---------- ----------
Partners' capital (deficit) (note 2):
General partners' deficit (202,627) (197,280)
Limited partners' capital, 30,000
limited partnership units authorized,
issued and outstanding 16,749,099 17,400,438
---------- ----------
Total partners' capital 16,546,472 17,203,158
---------- ----------
$ 18,352,106 19,354,834
========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 11
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Statements of Income
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Revenues:
Rent $ 6,890,345 6,510,555 6,395,253
Assisted living 671,543 505,722 346,077
Interest 329 503 10,576
Other 195,026 166,357 330,776
--------- --------- ---------
Total revenues 7,757,243 7,183,137 7,082,682
--------- --------- ---------
Costs and expenses:
Rental property operations (including
$2,429,622, $2,166,911 and $2,100,283
related to affiliates in 1994, 1993
and 1992, respectively)
(notes 3 and 7) 4,656,539 4,213,063 4,042,045
Assisted living (all related
to affiliates)
(note 3) 299,864 242,613 205,725
General and administrative (including
$363,844, $378,248 and $382,168
related to affiliates in 1994, 1993
and 1992, respectively) (note 3) 485,050 443,283 423,926
Depreciation and amortization 864,396 982,452 1,113,579
Property taxes 304,546 281,584 275,031
Advertising 43,307 47,308 48,605
Interest (note 6) 106,937 69,692 57,944
Legal 7,736 12,149 88,386
Bad debt 1,683 5,219 118,542
--------- --------- ---------
Total costs and expenses 6,770,058 6,297,363 6,373,783
--------- --------- ---------
Net income $ 987,185 885,774 708,899
========= ========= =========
Net income allocated:
To the General Partner $ 9,872 8,858 7,089
To the Limited Partner 977,313 876,916 701,810
--------- --------- ---------
$ 987,185 885,774 708,899
========= ========= =========
Net income per limited partner unit
(30,000) units outstanding $ 32.58 29.23 23.39
========= ========= =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 12
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Statements of Partners' Capital
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
Total
General Limited Partners'
Partners Partners Capital
-------- -------- ---------
<S> <C> <C> <C>
Balance (deficit) at December 31, 1991 $(175,327) 19,573,971 19,398,644
Distributions to partners ($65.05 per
limited partner unit) (19,710) (1,951,439) (1,971,149)
Net income 7,089 701,810 708,899
-------- ---------- ----------
Balance (deficit) at December 31, 1992 (187,948) 18,324,342 18,136,394
Distributions to partners ($60.03 per
limited partner unit) (18,190) (1,800,820) (1,819,010)
Net income 8,858 876,916 885,774
-------- ---------- ----------
Balance (deficit) at December 31, 1993 (197,280) 17,400,438 17,203,158
Distributions to partners ($54.29 per
limited partner unit) (15,219) (1,628,652) (1,643,871)
Net income 9,872 977,313 987,185
-------- ---------- ----------
Balance (deficit) at December 31, 1994 $ 202,627 16,749,099 16,546,472
======== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 13
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 987,185 885,774 708,899
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 864,396 982,452 1,113,579
Write-off of note receivable from sale of land - 72,642
Change in assets and liabilities:
Decrease (increase) in other assets 106,402 32,941 (131,136)
Increase (decrease) in accounts payable and
accrued expenses 26,728 (5,077) 54,384
Increase (decrease) in amounts payable to
affiliates 585 (6,396) 13,969
---------- ---------- ----------
Net cash provided by operating
activities 1,985,296 1,889,694 1,832,337
---------- ---------- ----------
Cash flows from investing activities--
capital expenditures (220,653) (145,531) (144,201)
---------- ---------- ----------
Cash flows from financing activities:
Proceeds from notes payable - 1,000,000 -
Net borrowings (payments) under line-of-credit
agreement - (100,000) 100,000
Principal repayments of notes payable (335,158) (355,561) (30,000)
Payment of loan fees - (36,281) -
Distributions paid (1,682,130) (1,846,996) (1,943,752)
---------- ---------- ----------
Net cash used in financing
activities (2,017,288) (1,338,838) (1,873,752)
---------- ---------- ----------
Net (decrease) increase in cash and cash equivalents (252,645) 405,325 (185,616)
Cash and cash equivalents at beginning of year 498,543 93,218 278,834
---------- ---------- ----------
Cash and cash equivalents at end of year $ 245,898 498,543 93,218
========== ========== ==========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 106,937 64,942 57,944
========== ========== ==========
Supplemental schedule of noncash investing and
financing activities:
Distributions accrued to partners $ 455,919 492,946 520,932
========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 14
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Notes to Financial Statements
December 31, 1994
(1) Summary of Significant Accounting Policies
Basis of Accounting
American Retirement Villas Properties (the "Partnership") maintains
its records on the accrual method of accounting for financial
reporting and Federal and state tax purposes.
Carrying Value of Real Estate
Real estate investments are carried at cost less accumulated
depreciation. The Partnership considers whether there are any events
or changes in circumstances that indicate that the carrying amount of
its individual real estate investments may not be recoverable. In the
event that there are indications of the possible existence of
impairment of an individual real estate asset, the Partnership will
estimate the gross future cash flows resulting from the operation of
the related real estate and its ultimate disposition. If the
estimated undiscounted cash flows are less than the real estate's
carrying value, a loss will be recognized based on the difference
between the carrying value of the real estate and its estimated fair
market value. Assets held for sale are recorded at the lower of
carrying value or estimated fair market value less cost to dispose.
In March 1995 the Financial Accounting Standard Board issued Statement
of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" ("SFAS 121"). This statement is effective for fiscal
years beginning after December 15, 1995 and accordingly the
Partnership will be required to adopt SFAS 121 in its fiscal year
ending December 31, 1996. The Partnership's current accounting policy
is consistent with the requirements of SFAS 121 and there would be no
effect on the Partnership had this statement been effective at
December 31, 1994.
Depreciation is computed using the straight-line method over the
estimated useful lives of buildings and improvements, furniture,
fixtures and equipment, ranging from 3 to 27-1/2 years.
Loan Fees
Loan fees are amortized using the straight-line method over the term
of the related note payable and are included in other assets.
Rental Income
Rent agreements with tenants are on a month-to-month basis. Advance
deposits are applied to the first month's rent.
Revenue Recognition
The Partnership recognizes rental and assisted living services revenue
from the properties when earned.
Income Taxes
Under provisions of the Internal Revenue Code and the California
Revenue and Taxation Code, partnerships are generally not subject to
income taxes. For tax purposes, any income or losses realized are
those of the individual partners, not the Partnership.
The Partnership has not requested a ruling from the Internal Revenue
Service to the effect that it will be treated as a partnership and not
an association taxable as a corporation for Federal income tax
purposes. The Partnership has received an opinion of counsel as to
its tax status prior to its effectiveness for the offering of limited
partnership units, but such opinion is not binding upon the Internal
Revenue Service.
(Continued)
<PAGE> 15
2
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Notes to Financial Statements
Following are the Partnership's assets and liabilities as determined
in accordance with generally accepted accounting principles ("GAAP")
and for Federal income tax reporting purposes at December 31:
<TABLE>
<CAPTION>
1994 1993
----------------------------- -----------------------------
GAAP Basis Tax Basis(1) GAAP Basis Tax Basis(1)
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Total assets $ 18,350,874 18,778,064 19,354,834 24,093,135
Total liabilities $ 1,805,634 1,754,206 2,151,676 2,151,676
</TABLE>
Following are the differences between the financial statement and tax
return income:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Net income per financial
statements $ 987,185 885,774 708,899
Depreciation differences on
properties (1) (201,370) (39,935) 107,583
Amortization differences on
intangible assets (1) 8,413 18,052 (59,580)
Bad debt accrual (1) - (109,251) 109,251
Other (1) (1,756) 3,890 (25,401)
------- -------- -------
Taxable income per Federal tax
return (1) $ 792,472 758,530 840,752
======= ======== =======
</TABLE>
(1) Unaudited
Net Income per Limited Partner Unit
Net income per limited partner unit was based on the weighted average
number of limited partner units outstanding of 30,000 in 1994, 1993
and 1992.
Cash and Cash Equivalents
For purposes of reporting cash flows, the Partnership considers all
highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.
(Continued)
<PAGE> 16
3
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Notes to Financial Statements
Reclassifications
Certain 1993 and 1992 amounts have been reclassified to conform to
1994 presentation.
(2) Organization and Partnership Agreement
The Partnership was formed on September 9, 1985 for the purpose of
acquiring, developing and operating residential retirement facilities.
The term of the Partnership is 60 years and may be dissolved earlier
under certain circumstances.
Limited partner units (minimum of 2 units per investor) were offered
for sale to the general public. A maximum number of 30,000 units were
offered at $1,000 per unit. The Partnership obtained the maximum
capitalization in July 1988, representing a total capital investment
of $30,000,000. No additional capital contributions are required from
any Limited Partner. Under the Partnership Agreement, the maximum
liability of the Limited Partners is the amount of their capital
contribution.
The Managing General Partner is ARV Housing Group, Inc. ("ARVHG"), a
California corporation, and the individual General Partners are John
A. Booty, John S. Jason, Gary L. Davidson and Tony Rota. The
individual General Partners are substantially all of the stockholders
of the Managing General Partner. The General Partners are not
required to make capital contributions to the Partnership.
Profits and losses from operations are allocated, 1% to the General
Partners and 99% to the Limited Partners.
Cash available for distribution from operations is to be distributed
1% to the General Partners and 99% to the Limited Partners.
Upon any sale, refinancing or other disposition of the Partnership's
real properties, distributions are to be made 1% to the General
Partners and 99% to the Limited Partners until the Limited Partners
have received an amount equal to 100% of their capital contributions
plus an amount equal to a 12% cumulative but not compounded per annum
return from the date of each partner's investment until the close of
the offering and 6% per annum thereafter. The 6% cumulative return
will be reduced, but not below zero, by the aggregate amount of prior
distributions from all sources. Thereafter, distributions are to be
15% to the General Partners and 85% to the Limited Partners, except
that after the sale of the properties, the proceeds of sale of any
last remaining assets owned by the Partnership are to be distributed
in accordance with the partners' positive capital account balances.
(Continued)
<PAGE> 17
4
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Notes to Financial Statements
(3) Transactions with Affiliates
The Partnership has an agreement with ARVHG providing for a property
management fee of 5% of gross revenues and a Partnership management fee
of 10% of cash flow before distribution, as defined in the Partnership
Agreement, amounting to $387,862, $359,267, $353,384 and $212,238,
$212,789, $206,029, respectively, at December 31, 1994, 1993 and 1992,
respectively.
ARVHG pays certain expenses such as repairs and maintenance, supplies,
payroll and retirement benefit expenses on behalf of the Partnership
and is subsequently reimbursed by the Partnership. The retirement
benefit expense (see note 7) of $58,143, $53,710 and $39,133 at
December 31, 1994, 1993 and 1992, respectively, consists of
contributions made to an employee stock ownership plan ("ESOP"). The
total reimbursements to ARVHG, including the retirement benefit
expense, are included in rental property operations and general and
administrative expenses in the accompanying statements of operations
and amounted to $2,493,230, $2,215,716 and $2,128,763 at December 31,
1994, 1993 and 1992, respectively.
Amounts payable to affiliates at December 31, 1994 and 1993 includes
expense reimbursements and accrued property management fees.
(4) Properties
Villa Bonita
In March 1987, the Partnership purchased the Villa Bonita land in San
Diego County and constructed a residential retirement facility.
Rancho Park Villa
In October 1987, the Partnership purchased Rancho Park Villa, an
existing residential retirement facility in San Dimas, California.
Tamalpais Creek
In January 1988, the Partnership purchased Tamalpais Creek, an
existing residential retirement facility in Novato, California.
Maria del Sol
In September 1988, the Partnership purchased Maria del Sol, an
existing residential retirement facility in Santa Maria, California.
(Continued)
<PAGE> 18
5
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Notes to Financial Statements
(5) Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses as of December 31, 1994 and 1993
consists of the following:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Trade payables $ 162,878 122,040
Accrued payroll 95,055 72,394
Other 92,900 129,671
------- -------
$ 350,833 324,105
======= =======
</TABLE>
(6) Notes Payable
At December 31, 1994 and 1993, notes payable included the following:
<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Note payable to bank, secured by deed of trust on the
Villa Bonita property; all principal and interest paid on
March 31, 1994. $ - 325,000
Note payable to bank, secured by deed of trust on the
Rancho Park Villa property, interest at 9.5%; payable
in monthly principal and interest installments of
$8,832; all unpaid principal and interest due on
September 20, 2000. 989,281 999,439
------- ---------
$ 989,281 1,324,439
======= =========
</TABLE>
The annual principal payments of the notes payable are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31,
------------
<S> <C>
1995 $ 12,540
1996 13,785
1997 15,153
1998 16,657
1999 18,310
Thereafter 912,836
-------
$ 989,281
=======
</TABLE>
(Continued)
<PAGE> 19
6
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Notes to Financial Statements
The Partnership also maintains a revolving line of credit that expires
on July 15, 1995. There were no borrowings against this line of
credit as of December 31, 1994.
(7) ESOP
ARVHG offers an Employee Stock Ownership Plan ("ESOP") to all eligible
employees which includes the employees of the Partnership. The amount
of stock contributed annually to the ESOP is at the discretion of
ARVHG. During 1994, 1993 and 1992, ARVHG's Board of Directors
declared a contribution that approximated 3% of each employee's
payroll expense. The Partnership contributed $58,143, $53,710 and
$39,133 to the ESOP (as a reimbursement to ARVHG) in 1994, 1993 and
1992, respectively.
<PAGE> 20
Schedule III
AMERICAN RETIREMENT VILLAS PROPERTIES
(A California Limited Partnership)
Real Estate and Related Accumulated Depreciation
December 31, 1994
<TABLE>
<CAPTION>
Costs
Initial Cost Capitalized
------------------------- Subsequent to
Building Acquisition
and Im- or
Description Encumbrances Land provements Construction Retirements
----------- ------------ ---- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Villa Bonita $ - 976,000 5,454,933 197,018 -
Rancho Park Villa 989,281 441,775 3,444,769 1,069,692 157,346
Tamalpais Creek - 900,000 5,200,000 1,026,562 -
Maria del Sol - 350,000 2,950,000 566,479 -
------- --------- ---------- --------- -------
$ 989,281 2,667,775 17,049,702 2,859,751 157,346
======= ========= ========== ========= =======
<CAPTION>
Gross Amount Date of
-------------------------- ---------------------- Depre-
Building Accumu- Completion ciable
and Improve- lated De- on Con- Acqui- Lives
Description Land ments Total (1) preciation struction sition (Years)
----------- ---- ------------ ---------- ---------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Villa Bonita 1,146,000 5,481,951 6,627,951 1,193,191 1/89 3/87 27-1/2
Rancho Park Villa 291,079 4,507,811 4,798,890 1,158,318 N/A 10/87 27-1/2
Tamalpais Creek 902,734 6,223,828 7,126,562 1,549,671 N/A 1/88 27-1/2
Maria del Sol 355,286 3,511,193 3,866,479 788,428 N/A 9/88 27-1/2
--------- ---------- ---------- ---------
2,695,099 19,724,783 22,419,882 4,689,608
========= ========== ========== =========
</TABLE>
Following is a summary of investment in properties for the years ended
December 31, 1994, 1993 and 1992:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 22,292,095 22,261,390 22,230,928
Improvements/construction 127,787 30,705 30,462
---------- ---------- ----------
Balance at end of year $ 22,419,882 22,292,095 22,261,390
========== ========== ==========
</TABLE>
Following is a summary of accumulated depreciation of investment in properties
for the years ended December 31, 1994, 1993 and 1992:
<TABLE>
<CAPTION>
1994 1993 1992
---- ---- ----
<S> <C> <C> <C>
Balance at beginning of year $ 3,974,068 3,262,130 2,551,277
Additions charged to expense 715,540 711,918 710,853
--------- --------- ---------
Balance at end of year $ 4,689,608 3,974,068 3,262,130
========= ========= =========
</TABLE>
____________
(1) Aggregate cost for Federal income tax purposes is $22,419,882 at December
31, 1994.
<PAGE> 21
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K
(a) The following documents are filed as part of this Report:
(i) Independent Auditors' Report.
(ii) Balance Sheets - December 31, 1994 and 1993.
(iii) Statements of Income - Years ended December 31, 1994,
1993 and 1992.
(iv) Statements of Partners' Capital - Years ended December
31, 1994, 1993 and 1992.
(v) Statements of Cash Flows - Years ended December 31,
1994, 1993 and 1992.
(vi) Notes to Financial Statements.
(vii) Financial Statement Schedule - Schedule III - Real
Estate and Related Accumulated Depreciation -
December 31, 1994.
(b) The Registrant did not file any reports on Form 8-K during the
last quarter of fiscal year 1994.
(c) Exhibits
Exhibit 27 - Financial Data Schedule
<PAGE> 22
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
AMERICAN RETIREMENT VILLAS PROPERTIES,
A CALIFORNIA LIMITED PARTNERSHIP,
BY ALL OF THE DIRECTORS OF ARV ASSISTED LIVING, INC. ("ARVAL"), (Formerly
ARV Housing Group, Inc.)
MANAGING GENERAL PARTNER
/s/ JOHN A. BOOTY
-------------------------------------------------------------------
By: John A. Booty, President and Director
/s/ GARY L DAVIDSON
-------------------------------------------------------------------
By: Gary L. Davidson, Chairman of the Board and Director
/s/ GRAHAM P. ESPLEY-JONES
-------------------------------------------------------------------
By: Graham P. Espley-Jones, Chief Financial Officer and Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons, constituting a majority
of the General Partners, on behalf of the Registrant and in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ JOHN A BOOTY President and August 17, 1995
----------------------------- Director, ARVAL
John A. Booty
/s/ GARY L. DAVIDSON Chairman of the Board August 17, 1995
----------------------------- and Director, ARVAL
Gary L. Davidson
/s/ GRAHAM P. ESPLEY-JONES Chief Financial Officer August 17, 1995
----------------------------- and Secretary, ARVAL
Graham P. Espley-Jones
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1995
<PERIOD-START> APR-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 245,898
<SECURITIES> 0
<RECEIVABLES> 107,784
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 353,682
<PP&E> 23,024,396
<DEPRECIATION> 5,025,972
<TOTAL-ASSETS> 18,352,106
<CURRENT-LIABILITIES> 1,805,634
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 16,546,472
<TOTAL-LIABILITY-AND-EQUITY> 18,352,106
<SALES> 0
<TOTAL-REVENUES> 7,757,243
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,661,438
<LOSS-PROVISION> 1,683
<INTEREST-EXPENSE> 106,937
<INCOME-PRETAX> 987,185
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 987,185
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
