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
September 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
- ------ THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number
0-14548
-------
RAL-YIELD EQUITIES II LIMITED PARTNERSHIP
-----------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1494302
- ------------------------------- ---------------------------
(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 II
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 II
LIMITED PARTNERSHIP
BALANCE SHEETS
September 30, 1996 and December 31, 1995
<CAPTION>
UNAUDITED AUDITED
SEPTEMBER 30, DECEMBER 31,
ASSETS 1996 1995
- ------------------------------------- ----------- -----------
<S> <C> <C>
INVESTMENT PROPERTY, less accumulated
depreciation of $1,623,646 in 1996
and $1,503,961 in 1995 4,051,149 4,137,023
CASH AND CASH EQUIVALENTS 491,275 796,258
RENT AND OTHER RECEIVABLES 17,495 7,510
DEFERRED CHARGES, less accumulated
amortization of $7,719 in 1996
and $5,844 in 1995 7,281 8,406
NOTE RECEIVABLE 235,087 244,865
OTHER ASSETS 4,433 5,155
---------- ----------
TOTAL ASSETS 4,806,720 5,199,217
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 105,090 145,170
TENANT SECURITY DEPOSITS 30,928 29,554
---------- ----------
136,018 174,724
LIMITED PARTNERS' CAPITAL 4,615,489 4,974,396
GENERAL PARTNERS' CAPITAL 55,213 50,097
---------- ----------
PARTNERS' CAPITAL 4,670,702 5,024,493
---------- ----------
TOTAL LIABILITIES AND PARTNERS' CAPITAL 4,806,720 5,199,217
========== ==========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-1
<TABLE>
RAL-YIELD EQUITIES II
LIMITED PARTNERSHIP
Statement of Operations
For three months and nine months ended September 30, 1996 and 1995
UNAUDITED
<CAPTION>
3 MONTHS 9 MONTHS 3 MONTHS 9 MONTHS
ended ended ended ended
SEPT. 30, SEPT. 30, SEPT. 30, SEPT. 30,
1996 1996 1995 1995
-------- --------- --------- ---------
<S>
REVENUE: <C> <C> <C> <C>
Rental income 202,655 603,751 195,786 584,752
Restaurant sales 226,263 658,166 233,091 606,559
Interest & other 21,734 61,610 26,200 64,635
-------- -------- -------- --------
450,652 1,323,527 455,077 1,255,946
OPERATING EXPENSES:
Restaurant operating
expenses 163,857 476,907 144,196 414,292
Management fees 13,647 39,649 10,890 32,670
Mobile home park
operating and
administrative exp. 58,290 174,515 56,412 184,357
Depreciation and
amortization 40,741 120,811 39,751 119,253
-------- -------- -------- --------
276,535 811,882 251,249 750,572
-------- -------- -------- --------
NET INCOME (LOSS) 174,117 511,645 203,828 505,374
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-2
<TABLE>
RAL-YIELD EQUITIES II
LIMITED PARTNERSHIP
Statements of Changes in Partners' Capital
For the nine months ended September 30, 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, Jan. 1, 1995 43,552 4,968,522 5,012,074
---------- ----------- -----------
NET INCOME 6,545 647,995 654,540
CASH DISTRIBUTIONS 0 (642,121) (642,121)
---------- ----------- -----------
BALANCE, Dec. 31, 1995 50,097 4,974,396 5,024,493
NET INCOME 5,116 506,529 511,645
CASH DISTRIBUTIONS 0 (865,436) (865,436)
BALANCE,
September 30, 1996 55,213 4,615,489 4,670,702
========== =========== ===========
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
I-3
<TABLE>
RAL-YIELD EQUITIES II
LIMITED PARTNERSHIP
Statements of Cash Flows
For the nine months ended September 30, 1996 and 1995
UNAUDITED
<CAPTION>
SEPT. 30, SEPT. 30,
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income (loss) 511,645 505,374
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization expense 120,811 119,253
Gain on sale of equipment (1,000) 0
Change in assets and
liabilities:
Rent and Receivables (9,985) 5,020
Due from affiliate 0 51,325
Other Assets 722 3,449
Accounts payable and
accrued expenses (40,080) (35,698)
Tenants' security
deposits 1,373 839
----------- -----------
Net Cash provided by
operating activities: 583,486 649,562
Cash flows from investing
activities:
Proceed from sale of
equipment 1,000 0
Additions to investment
properties (33,811) 0
----------- -----------
Net Cash provided by
(used in) investing
activities (32,811) 0
I-4
Cash flows from financing
activities:
Note Receivable 9,778 8,939
Cash distributions paid (865,436) (453,261)
----------- -----------
Net Cash used in
financing activities (855,658) (444,322)
----------- -----------
Net increase (decrease)
in cash (304,983) 205,240
Cash at beginning of period 796,258 573,155
Cash at end of period 491,275 778,395
=========== ===========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
I-5
RAL YIELD EQUITIES II
LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Pursuant to Rule 10-01(a)(5) of Regulation S-X (17 CFR Part 210)
RAL-Yield Equities II 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. 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.
In the opinion of management, the unaudited interim financial
statements presented herein reflect all adjustments necessary to
a fair statement of the results for the interim periods
presented.
I-6
MANAGEMENT'S DISCUSSIONS AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RAL-YIELD EQUITIES II LIMITED PARTNERSHIP (the "Registrant" or
"Partnership") is a Wisconsin Limited Partnership formed on March
30, 1984, under the Wisconsin Revised Uniform Limited Partnership
Act. The Registrant was organized to acquire real estate
including mobile home communities and other commercial
properties. The Partnership sold $8,301,500 in Limited
Partnership Interests (8,301.5 Interests at $1,000 per unit) from
March 30, 1984, through June 30, 1985. After deducting offering
costs, the Partnership had approximately $6,641,200 with which to
make investments in income producing residential and commercial
properties, to pay legal fees and other costs related to such
investments and for working capital reserves. The Partnership
utilized the net offering proceeds to purchase real property
investments.
Liquidity and Capital Resources:
Properties acquired by the Partnership were purchased for cash.
Therefore, liquidity is not reduced by debt service payments.
During the Properties' holding periods, the investment strategy
is to maintain (on the "triple net lease" restaurant properties)
and improve (on Spacious Acres Mobile Home Park) occupancy rates
through the application of professional property management
(including selective capital improvements). The Partnership also
accumulates cash reserves for normal repairs, replacements, working
capital, and contingencies.
Net cash flow provided by operating activities for the nine
months ended September 30 was $583,486 in 1996 and $649,562 in
1995, primarily from earnings and depreciation, net of increases in
receivables. The 9.7% decline in cash from operations is a result
of the inclusion in 1995 of a $51,000 payment received on a note
receivable. This resulted in a $51,000 increase in cash from
operations in 1995 that will not reoccur. The decline is not
indicative of a decline in operating results.
As of September 30, 1996, the Partnership had cash and cash
equivalents of $491,275 representing undistributed cash flow,
working capital reserves, repair and improvement reserves, and
tenant security deposits. The Partnership has the following cash
needs for repairs and improvements:
The Partnership has approved the plan to upgrade the sewage
treatment plant at Spacious Acres Mobile Home Park. The upgrade
will improve and expand the life of the sewage treatment plant.
The approximate cost to perform this repair, including
engineering fees, has been estimated at $100,000. This should
I-7
not effect the level of cash distributions to the limited
partners due to the large amount of cash reserves on hand. It is
hoped the repairs will begin in Fall, 1996.
In August, 1996 the Partnership remodeled the restaurant it
operates in Wauwatosa, Wisconsin. The remodel included replacement
of carpet, a new dish machine and repair of drywall in the kitchen
area. The total cost was approximately $21,000 which was funded
out of cash reserves.
A distribution totaling approximately $201,000 was made to the
Limited Partners in August, 1996.
Results of Operations:
Gross rental revenues of $603,751 for the period ended September
30, 1996 increased 3.2% percent over gross rental revenues of
$584,752 for the first nine months of 1995. This is primarily due
to the annual rent increases at the mobile home park and the effect
of the rent increase at the commercial property in Waterloo, Iowa.
Rental property operating and administrative expenses were
$174,515 for the period ended September 30, 1996 and $184,357 for
the period ended September 30, 1995.
Restaurant operations reported net income for the first three
quarters of 1996 of $148,356 on sales of $658,166. In the first
three quarters of 1995, restaurant operations reported net income
of $157,228 on sales of $606,559. The increase in revenue from
the restaurant is a result of an increase in sales volume. Due
to rising food and labor costs, the restaurant will instituted a
price increase of about 4% after Labor Day, 1996. Together with
projected increased sales volume, the price increase should have a
positive impact on the amount of sales and cash flow the restaurant
produces.
Net income for the period ended September 30, 1996 was $511,645
compared to net income of $505,374 for the period ended September
30, 1995.
<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's investment in Spacious
Acres Mobile Home Park during the period covered by this report.
<CAPTION>
Occupancy Rate
Nine months
ended September 30, 1996 1995
-------------------- ----
<S> <C> <C>
Spacious Acres MHP 100% 100%
</TABLE>
I-8
Inflation:
Due to the comparatively low level of inflation in the
Partnership's last three fiscal years, the effect of inflation on
the Partnership has not been material. Should the rate of
inflation increase substantially over the life of the
Partnership, it is likely to moderately influence ongoing
operations, in particular, the operating expenses of the
Partnership. The commercial leases generally 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 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 II LIMITED PARTNERSHIP
(Registrant)
Date: November 12, 1996 Robert A. Long
-------------------------
Robert A. Long
General Partner
Christine Kennedy
-------------------------
Christine Kennedy
Controller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 491,275
<SECURITIES> 0
<RECEIVABLES> 17,495
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 513,203
<PP&E> 4,051,149
<DEPRECIATION> 1,623,646
<TOTAL-ASSETS> 4,806,720
<CURRENT-LIABILITIES> 136,018
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,670,702
<TOTAL-LIABILITY-AND-EQUITY> 4,806,720
<SALES> 0
<TOTAL-REVENUES> 1,323,527
<CGS> 0
<TOTAL-COSTS> 811,882
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 511,645
<INCOME-TAX> 0
<INCOME-CONTINUING> 511,645
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 511,645
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
