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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, 2000 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)
PMB 314, PO Box 255427, Sacramento, California 95865-5427
(Address of registrant's principal executive offices) (Zip Code)
1-800-308-4532
(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 June 30, 2000
par value one dollar per share 116,760
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USA REAL ESTATE INVESTMENT TRUST
Index
Part I. Financial Information
Balance Sheets - June 30, 2000 and
December 31, 1999 ................................. 3
Statements of Income - For the Three Months
Ended June 30, 2000 and 1999 ...................... 4
Statements of Income - For the Six Months
Ended June 30, 2000 and 1999 ...................... 5
Statements of Cash Flows - For the Six
Months Ended June 30, 2000 and 1999 ............... 6
Notes to Financial Statements ....................... 7
Management's Discussion and Analysis of the
Financial Condition and Results of Operations ..... 8
Part II. Other Information ................................... 8
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PART I. FINANCIAL INFORMATION
USA REAL ESTATE INVESTMENT TRUST
Balance Sheets
June 30, December 31,
2000 1999
(Unaudited) (Audited)
----------- -----------
Assets
Investments:
Rental properties, less accumulated
depreciation of $3,796,316 at June 30,
2000 and $3,472,316 at December 31, 1999 $ 24,473,941 $ 24,680,481
Notes receivable 350,000 1,076,000
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24,823,941 25,756,481
Cash 25,750 71,679
Other assets 465,432 393,710
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Total assets $ 25,315,123 $ 26,221,870
=========== ===========
Liabilities and Shareholders' Equity
Liabilities:
Long-term notes payable $ 6,446,063 $ 6,534,539
Line of credit 2,424,000 2,341,000
Accounts payable and accrued expenses 0 0
Lease deposits 58,501 62,282
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Total liabilities 8,928,564 8,937,821
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Shareholders' Equity:
Shares of beneficial interest, par value
$1 a share; authorized 250,000 shares;
116,760 shares outstanding at June 30,
2000 and 120,984 at December 31, 1999 $ 116,760 $ 120,984
Additional paid-in capital 31,974,810 32,498,365
Distributions in excess of cumulative
net income (15,705,011) (15,335,300)
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Total shareholders' equity 16,386,559 17,284,049
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Total liabilities and shareholders' equity $ 25,315,123 $ 26,221,870
=========== ===========
See accompanying notes to financial statements.
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USA REAL ESTATE INVESTMENT TRUST
Statements of Income
(Unaudited)
Three Months Ended
June 30,
2000 1999
---------- ----------
Revenues:
Rent $ 823,229 $ 797,943
Interest 15,366 23,987
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838,595 821,930
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Expenses:
Operating expenses 74,914 73,473
Property taxes 54,000 48,957
Property management fees 13,200 13,200
Interest 191,510 118,695
Depreciation and amortization 162,000 162,000
General and administative 65,797 75,835
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561,421 492,160
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Net income $ 277,174 $ 329,770
========== ==========
Net income per share of beneficial interest $ 2.37 $ 2.63
========== ==========
See accompanying notes to financial statements.
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USA REAL ESTATE INVESTMENT TRUST
Statements of Income
(Unaudited)
Six Months Ended
June 30,
2000 1999
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Revenues:
Rent $ 1,646,946 $ 1,601,331
Interest 39,656 39,113
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1,686,602 1,640,444
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Expenses:
Operating expenses 149,363 147,183
Property taxes 108,000 99,957
Property management fees 26,400 26,400
Interest 376,136 245,620
Depreciation and amortization 324,000 324,000
General and administrative 138,386 165,425
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$ 1,122,285 $ 1,008,585
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Net income before loss on sale of rental properties 564,317 631,859
Loss on sale of rental properties 0 (92,558)
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Net income $ 564,317 $ 539,301
========== ==========
Net income per share of beneficial interest $ 4.77 $ 4.26
========== ==========
See accompanying notes to financial statements.
<PAGE> 6 Statements of Cash Flows
(Unaudited)
Six Months Ended
June 30,
2000 1999
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 564,317 539,301
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Adjustments to reconcile net income
to net cash used by operating activities:
Depreciation and amortization 324,000 324,000
Loss on sale of rental properties 0 92,558
Changes in other assets and liabilities:
(Increase) decrease in other assets (71,722) 68,003
Decrease accounts payable and
accrued expenses 0 (5,460)
Decrease in lease deposits (3,781) 0
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Total adjustments to income 248,497 479,101
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Net cash provided by
operating activities 812,814 1,018,402
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of and improvements to
rental properties (117,460) (3,550,994)
Decrease (increase) in notes receivable 726,000 (350,000)
Proceeds from the sale of properties 0 3,036,577
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Net cash provided (used)
by investing activities 608,540 (864,417)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term notes payable 0 2,600,000
Line of credit 83,000 512,000
Redemption of shares (527,779) (372,263)
Principal payments on long-term notes payable (88,476) (1,979,986)
Distributions paid (934,028) (911,680)
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Net cash used by
financing activities (1,467,283) (151,929)
---------- ----------
Net (decrease) increase in cash (45,929) 2,056
Cash and cash equivalents, beginning of period 71,679 24,097
---------- ----------
Cash and cash equivalents, end of period $ 25,750 $ 26,153
========== ==========
See accompanying notes to financial statements.
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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 June 30, 2000, and the results of its operations
for the six months ended June 30, 2000 and 1999 and cash flows for the six
months ended June 30, 2000 and 1999.
The accounting policies followed by the Trust are set forth in Note 1 to
the Trust's financial statements in the 1999 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.
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USA REAL ESTATE INVESTMENT TRUST
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
The $92,558 or $0.73 per share loss on sale of rental properties was
attributed to the sale of 170-174 West Shaw Avenue in Clovis, California,
in March, 1999.
Net income was $2.37 and $4.77 per share for the three months and six months
ended June 30, 2000, repsectively, compared to $2.63 and $4.26 for the three
months and six months ended June 30, 1999, respectively.
The Trust paid distributions of $3.96 and $7.92 per share for the three months
and six months ended June 30, 2000, respectively, compared to $3.60 and $7.20
per share for the three months and six months ended June 30, 1999, respectively.
CAPITAL RESOURCES AND LIQUIDITY
The Trust expects that operating income, proceeds from the sale of properties,
collections on notes receivable, and borrowings collateralized by specific
properties will provide for its future liquidity and capital resource needs.
PART II. OTHER INFORMATION
USA REAL ESTATE INVESTMENT TRUST
ITEM 5: OTHER INFORMATION:
On May 8, 2000, the Annual Meeting of the Shareholders of the Trust was held
in Sacramento, California. The three trustees were re-elected: Gregory E.
Crissman, Benjamin A. Diaz and Joyce A. Marks.
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
----------------------------------------
August 14, 2000 Gregory Crissman
-------------------- ----------------------------------------
Date Gregory Crissman
Chairman
August 14, 2000 Benjamin Diaz
-------------------- ----------------------------------------
Date Benjamin Diaz
Trustee
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EXHIBIT INDEX
Exhibit No. Description
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27 Financial Data Schedule
