<PAGE> 1
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 March 31, 1995 Commission file number 0-16508
USA REAL ESTATE INVESTMENT TRUST
(Exact Name of Registrant as specified in its Charter)
California 68-0109347
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
455 University Avenue, Suite 100, Sacramento, California 95825
(Address of registrant's principal executive offices) (Zip Code)
(916) 564-4532
(Registrant's telephone number, including area code)
COMMONWEALTH EQUITY TRUST USA
(Former name)
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.
/ X/ Yes / / No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the close of the latest practical date.
Certificates of Beneficial Interest Outstanding at March 31, 1995
par value one dollar per share 4,177,723
IN ACCORDANCE WITH RULE 201 OF REGULATION S-T, THIS FORM 10-Q
IS BEING FILED IN PAPER PURSUANT TO A TEMPORARY HARDSHIP EMEMPTION
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USA REAL ESTATE INVESTMENT TRUST
Index
Part I. Financial Information
Balance Sheets - March 31, 1995 and
December 31, 1994 ................................. 3
Statements of Income - For the Three Months
Ended March 31, 1995 and 1994 ..................... 4
Statements of Cash Flows - For the Three
Months Ended March 31, 1995 and 1994 .............. 5
Notes to Financial Statements ....................... 6
Management's Discussion and Analysis of the
Financial Condition and Results of Operations ..... 7
Part II. Other Information ................................... 8
<PAGE> 3
PART I. FINANCIAL INFORMATION
USA REAL ESTATE INVESTMENT TRUST
Balance Sheets
March 31, December 31,
1995 1994
(Unaudited) (Audited)
----------- -----------
Assets
Investments:
Rental properties, less accumulated
depreciation of $2,069,747 at March 31,
1995 and $1,903,027 at December 31, 1994
and valuation allowances of $5,551,000
at March 31, 1995 and $6,051,000 at
December 31, 1994 $ 24,395,493 $ 23,983,095
Notes receivable 930,620 966,047
---------- -----------
25,326,113 24,949,142
Cash 156,080 378,411
Other assets, net of allowance for doubtful
accounts of $75,519 in 1995 and 1994 770,043 596,319
----------- -----------
Total assets $ 26,252,236 $ 25,923,872
=========== ===========
Liabilities and Shareholders' Equity
Liabilities:
Long-term notes payable $ 3,319,551 $ 3,344,907
Accounts payable and accrued expenses 166,083 133,003
Lease deposits 70,371 73,658
----------- -----------
Total liabilities 3,556,005 3,551,568
----------- -----------
Shareholders' Equity:
Shares of beneficial interest, par value
$1 a share; authorized 7,500,000 shares;
4,177,723 shares outstanding at March 31,
1995 and December 31, 1994 $ 4,177,723 $ 4,177,723
Additional paid-in capital 30,535,678 30,535,678
Distributions in excess of cumulative
net income (12,017,170) (12,341,097)
----------- -----------
Total shareholders' equity 22,696,231 22,372,304
----------- -----------
Total liabilities and shareholders' equity $ 26,252,236 $ 25,923,872
=========== ===========
See accompanying footnotes to financial statements.
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USA REAL ESTATE INVESTMENT TRUST
Statements of Income (Loss)
(Unaudited)
Three Months Ended
March 31,
1995 1994
---------- ----------
Revenues:
Rent $ 727,358 $ 711,023
Interest 22,679 49,121
---------- ----------
750,037 760,144
---------- ----------
Expenses:
Operating expenses 87,493 258,538
Property taxes 54,465 67,568
Property management fees 15,000 39,305
Interest 93,887 143,563
Depreciation and amortization 166,720 150,980
General and administative 193,967 135,207
---------- ----------
611,532 795,161
---------- ----------
Net income (loss) $ 138,505 $ (35,017)
========== ==========
Net income (loss) per share of beneficial interest $ 0.033 $ ( 0.008)
========== ==========
See accompanying footnotes to financial statements.
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USA REAL ESTATE INVESTMENT TRUST
Statements of Cash Flows
(Unaudited)
Three Months Ended
March 31,
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 138,505 (35,016)
---------- ----------
Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization 166,720 149,481
Changes in other assets and liabilities:
Decrease (increase) in receivables 35,427 (92,571)
Decrease (increase) in other assets (173,754) (37,977)
Increase (decrease) in accounts
payable and accrued expenses 33,080 (45,210)
Decrease in lease deposits (4,460) 0
---------- ----------
Total adjustments to income 57,013 (26,277)
---------- ----------
Net cash provided (used) by
operating activities 195,518 (61,293)
CASH FLOWS FROM INVESTING ACTIVITIES:
Improvements to rental properties (79,118) (40,625)
Collections on notes receivable 0 32,076
---------- ----------
Net cash used by investing activities (79,118) (8,549)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term notes payable (25,356) (13,874)
Distributions paid (313,375) (313,350)
---------- ----------
Net cash (used) provided by
financing activities (338,731) (327,224)
---------- ----------
Net decrease in cash (222,331) (397,066)
Cash, beginning of period 378,411 1,012,594
---------- ----------
Cash, end of period $ 156,080 $ 615,528
========== ==========
See accompanying footnotes to financial statements.
<PAGE> 6
USA REAL ESTATE INVESTMENT TRUST
Notes to Financial Statements
1. In the opinion of the Trust, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly
the Trust's financial position as of March 31, 1995, and the
results of its operations for the three months ended March 31,
1995 and 1994 and cash flows for the months ended March 31, 1995
and 1994.
The accounting policies followed by the Trust are set forth in
Note 1 to the Trust's financial statements in the 1994 Form 10-K,
which are incorporated herein by reference.
2. In 1987, the Trust elected to be taxed as a real estate investment
trust and, as such, will not be taxed on that portion of its
taxable income which is distributed to shareholders provided that
at least 95% of its real estate investment trust taxable income
is distributed.
The Trust intends to continue to qualify as a real estate
investment trust and, accordingly, no provision for income taxes
has been made in the financial statements.
<PAGE> 7
USA REAL ESTATE INVESTMENT TRUST
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Interest revenues decreased $26,442 for the three months ended
March 31, 1995, compared to the same period in 1994, primarily
due to the collection of the $940,000 note receivable
collateralized by 151 and 175 Opportunity Street in December,
1994.
Operating expenses decreased $171,045 for the three months
ended March 31, 1995, compared to the same period in 1994,
primarily due to $149,121 in the cost to repair uninsured
earthquake damage to the property, owned by the Trust, located
at 19401 Parthenia Street, in Northridge, California, incurred
in 1994.
Interest expense decreased $49,676 for the three months ended
March 31, 1995, compared to the same period in 1994, due to
lower outstanding borrowings and lower interest rates.
Property taxes decreased $13,103 for the three months ended
March 31, 1995, compared to the same period in 1994, primarily
because certain properties were reassessed to reflect lower
current values.
Property management decreased $24,305 for the three months
ended March 31, 1995, compared to the same period in 1994,
because of the termination of the former property management
agreement and the hiring of a new property manager who provided
similar service at a reduced cost.
Depreciation and amortization increased $15,740 for the three
months ended March 31, 1995, compared to the same period in
1994, primarily due to the amortization of leasing commissions.
General and administrative expense increased $58,760 for the
three months ended March 31, 1995, compared to the same period
in 1994, primarily due to two factors, first, expenses of
litigation with the former advisor and second, expenses of
preparing, printing and soliciting proxies for the annual
shareholder meeting which did not occur in the three months
ended March 31, 1994.
CAPITAL RESOURCES AND LIQUIDITY
The Trust anticipates that operating income, property sales and
borrowing collateralized by deeds of trust on specific properties
will provide for its future liquidity and capital resource needs.
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PART 11. OTHER INFORMATION
USA REAL ESTATE INVESTMENT TRUST
ITEM 6: REPORTS ON FORM 8-K
None.
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USA REAL ESTATE INVESTMENT TRUST
Signatures
Pursuant to the requirement 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.
USA Real Estate Investment Trust
----------------------------------------
May 15, 1995 Gregory Crissman
-------------------- ----------------------------------------
Date Gregory Crissman,
Chairman
May 15, 1995 Benjamin Diaz
-------------------- ----------------------------------------
Date Benjamin Diaz
Trustee
<PAGE> 10
EXHIBIT INDEX
Exhibit No. Description
- - ----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Statement of Financial Condition at March 31, 1995 (Unaudited) and the
Statement of Income for the Three Months Ended March 31, 1995 (Unaudited)
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 156,080
<SECURITIES> 0
<RECEIVABLES> 202,600
<ALLOWANCES> 75,519
<INVENTORY> 0
<CURRENT-ASSETS> 358,681
<PP&E> 32,016,240
<DEPRECIATION> 2,069,747
<TOTAL-ASSETS> 26,252,236
<CURRENT-LIABILITIES> 166,083
<BONDS> 0
<COMMON> 4,177,723
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 26,252,236
<SALES> 750,037
<TOTAL-REVENUES> 750,037
<CGS> 0
<TOTAL-COSTS> 611,532
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 93,887
<INCOME-PRETAX> 138,505
<INCOME-TAX> 0
<INCOME-CONTINUING> 138,505
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 138,505
<EPS-PRIMARY> 0.033
<EPS-DILUTED> 0.033
</TABLE>
