<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 33-11013
ASSOCIATED PLANNERS REALTY INCOME FUND
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4120092
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5933 W. CENTURY BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90045
(Address of principal executive offices)
(Zip Code)
(310) 670-0800
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last
report)
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
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 1. FINANCIAL STATEMENTS
In the opinion of the General Partner of Associated Planners Realty
Income Fund (the "Partnership"), all adjustments necessary for a fair
presentation of the Partnership's results for the three and six months
ended June 30, 1996 and 1995, have been made in the following financial
statements which are of normal recurring entries in nature. However, such
financial statements are unaudited and are subject to any year-end
adjustments that may be necessary.
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
<CAPTION>
JUNE 30, 1996 DECEMBER 31, 1995
<S> <C> <C>
ASSETS
RENTAL REAL ESTATE, net of
accumulated depreciation (Note 2) $4,023,738 $4,072,847
CASH AND CASH EQUIVALENTS 199,973 261,728
OTHER ASSETS 77,634 46,443
$4,301,345 $4,381,018
LIABILITY AND PARTNERS' EQUITY
ACCRUED LIABILITIES $ 1,663 $ 23,496
SECURITY DEPOSITS & PREPAID RENTS 27,368 26,290
29,031 49,786
COMMITMENTS & CONTINGENCIES
PARTNERS' EQUITY:
Limited Partner:
$1,000 stated value per unit;
authorized 12,000 units;issued - 5,096 4,237,104 4,124,520
General Partners: 35,210 206,712
TOTAL PARTNERS' EQUITY 4,272,314 4,331,232
$4,301,345 $4,381,018
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
<CAPTION>
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 $4,331,232 5,096 $4,124,520 $206,712
Net income 85,469 --- 72,502 12,967
Reallocation of balances prior
to January 1, 1996 (Note 6) --- --- 170,030 (170,030)
Distribution to general partners (14,439) --- --- (14,439)
Distributions to limited partners (129,948) --- (129,948) ---
BALANCE, JUNE 30, 1996 $4,272,314 5,096 $4,237,104 $35,210
SIX MONTHS ENDED JUNE 30, 1995
(UNAUDITED)
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
BALANCE, DECEMBER 31, 1994 $4,380,915 5,096 $4,196,996 $183,919
Net income 55,071 --- 45,150 9,921
Distributions to limited partners (75,329) --- (75,329) ---
BALANCE, JUNE 30, 1995 $4,360,657 5,096 $4,166,817 $193,840
</TABLE>
[FN]
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
REVENUES:
Rental $98,579 $102,270 $201,959 $175,633
Interest 7,905 3,549 10,812 5,526
106,484 105,819 212,771 181,159
COSTS AND EXPENSES:
Operating 16,345 20,504 31,857 33,338
Property taxes 13,267 5,003 16,957 9,293
Property management fees 5,115 4,226 9,513 7,428
General and administrative 10,733 15,493 19,866 29,021
Unrealized (gain) loss from investment in
government securities --- 2,607 --- (2,030)
Depreciation and amortization 24,555 24,519 49,109 49,038
70,015 72,352 127,302 126,088
NET INCOME $36,469 $33,467 $85,469 $55,071
NET INCOME PER
LIMITED PARTNERSHIP UNIT $6.01 $5.48 $14.23 $8.86
</TABLE>
[FN]
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED ENDED
JUNE 30, 1996 JUNE 30, 1995
<S> <C> <C>
Cash flows from operating activities:
Net Income $85,469 $55,071
Adjustments to reconcile net income to
net cashprovidedbyoperating activities:
Depreciation and amortization 49,109 49,038
Net proceeds from sales of investments
in government securities --- (3,647)
Unrealized (gain) from investment
in government securities --- (2,030)
Increase (decrease) from changes in:
Other assets (31,191) (40,651)
Accounts payable (21,833) (6,629)
Security deposits and prepaid rents 1,078 (150)
Net cash provided by operating activities 82,632 51,002
Cash flows from investing activities:
Additions to real estate --- (10,000)
Net cash used by investing activities --- (10,000)
Cash flows from financing activities:
Distributions to general partners (14,439) ---
Distributions to limited partners (129,948) (75,329)
Net cash used in financing activities (144,387) (75,329)
Net (decrease) in cash and cash equivalents (61,755) (34,327)
Cash and cash equivalents at beginning of period 261,728 85,804
CASH AND CASH EQUIVALENTS AT END OF PERIOD $199,973 $51,477
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
BUSINESS
Associated Planners Realty Income Fund (the "Partnership), a California
limited partnership, was formed on December 23, 1986 under the
Revised Limited Partnership Act of the State of California for the
purpose of developing or acquiring, managing and operating unleveraged
income producing real estate. The Partnership met its minimum funding of
$1,200,000 on February 26, 1988 and terminated its offering on
September 5, 1989. The Partnership was formed to acquire
income-producing real property throughout the United States with
emphasis on properties located in California and southwestern states.
The Partnership purchases such properties on an all cash basis and intends
to own and operate such properties for investment over an anticipated
holding period of approximately five to ten years.
BASIS OF PRESENTATION
The financial statements do not give effect to any assets that the partners
may have outside of their interest in the partnership, nor to any
personal obligations, including income taxes, of the partners.
RENTAL REAL ESTATE AND ESTATE AND DEPRECIATION
Assets are stated at cost. Depreciation is computed using the
straight-line method over estimated useful lives ranging from 31.5 to
40 years for financial reporting and income tax reporting purposes.
In the event that facts and circumstances indicate that the cost of an asset
may be impaired, an evaluation of recoverability would be performed.
If an evaluation is required, the estimated future undiscounted cash flows
associated with the asset would be compared to the carrying amount to
determine if a write-down to market vale is required.
LEASE COMMISSIONS
Lease commissions which are paid to real estate brokers for locating tenants
are capitalized and amortized over the life of the lease.
RENTAL REVENUE
Rental revenue is recognized when the amount is due and payable under the
terms of a lease agreement.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
(CONTINUED)
INVESTMENTS
During 1994, the Partnership changed its method of accounting for Investments.
Investments which represent trading securities, are accounted for in
accordance with SFAS No. 115. The difference between historical cost and
market value are reported as unrealized gains or losses in the statement
of income. The effect of this change in accounting policy is not material
to the financial statements.
STATEMENTS OF CASH FLOWS
For purposes of the statements of cash flows, the Partnership considers cash
in the bank and all highly-liquid investments purchased with original
maturities of three months or less to be cash and cash equivalents.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
RECLASSIFICATIONS
For comparative purposes, certain prior year amounts have been reclassified
to conform to the current year presentation.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1995
NOTE 1 - NATURE OF PARTNERSHIP BUSINESS
Associated Planners Realty Income Fund, a California limited partnership
(the "Fund"), was formed on December 23, 1986 under the Revised Limited
Partnership Act of the State of California for the purpose of acquiring,
managing, and operating income-producing real estate.
The Partnership began accepting subscriptions in October 1987 and closed
the offering on September 5, 1989. The Partnership began operations in
March 1988.
Under the terms of the partnership agreement, the General Partners (West
Coast Realty Advisors, Inc. and W. Thomas Maudlin Jr.) are entitled
to cash distributions from 10% to 15%. The General Partners are also
entitled to net income (loss) allocations varying from 1% to 15% and 1%
of depreciation and amortization in accordance with the partnership
agreement. Further, the General Partners receive acquisition fees for
locating and negotiating the purchase of rental real estate, management
fees for operating the Partnership and a commission on the sale of the
partnership properties.
NOTE 2 - RENTAL REAL ESTATE
The Partnership owns the following two rental real estate properties, one
is wholly-owned and the second, a 90% undivided interest:
Original
Location (Property Name) Date Purchased Acquisition
Cost
Chino, California
(Yorba Center) October 25, 1988 $ 1,851,147
San Marcos, California January 9, 1990 2,806,905
The major categories of rental real estate:
June 30, 1996 December 31, 1995
Land $1,282,861 $1,282,861
Building and Improvements 3,416,326 3,416,326
4,699,187 4,699,187
Less accumulated depreciation 675,449 626,340
Net rental real estate 4,023,738 4,072,847
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1995
(CONTINUED)
NOTE 2 - RENTAL REAL ESTATE (CONTINUED)
A significant portion of the Partnership's rental revenue was earned
from tenants whose individual rents represented more than 10% of
total rental revenue. Specifically:
Two tenants accounted for 54% and 10%, respectively, in 1996
Two tenants accounted for 12% and 53%, respectively, in 1995
NOTE 3 - RELATED PARTY TRANSACTIONS
(a) For Partnership management services rendered to the Partnership,
the General Partner is entitled to receive 10% of all distributions of
Cash from Operations. These amounts totaled $7,361 for the quarter ended
June 30, 1996 and $4,813 for the quarter ended June 30, 1995, and $14,439
for the six months ended June 30, 1996 and $8,352 for the six months
ended June 30, 1995. The amounts paid to the general partner in 1995
were treated as an expense of the Partnership, while the amounts paid in
1996 were treated as distributions to the general partner (see Note 6).
(b) For administrative services provided to the Partnership, the
General Partner, in accordance with the partnership agreement, is
entitled to reimbursement for the cost of certain personnel and
relevant expenses. These amounts totaled $6,000 for the six months ended
June 30, 1996 and June 30, 1995 and $3,000 for the quarters ending
June 30, 1996 and 1995.
(c) Property management fees incurred in accordance with the
Partnership Agreement to West Coast Realty Management, Inc., an affiliate
of the corporate General Partner, totaled $5,115 for the quarter ended
June 30, 1996, and $4,226 for the quarter ended June 30, 1995, and $9,513
for the six months ended June 30, 1996 and $7,428 for the six months ended
June 30, 1995.
(d) During 1990, the Partnership acquired a 90% undivided interest
in property located in San Marcos, California (Note 2). The remaining 10%
interest is owned by Associated Planners Realty Growth Fund, an affiliate.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1995
(CONTINUED)
NOTE 4 - NET INCOME AND CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP UNIT
The Net Income per Limited Partnership Unit was computed in accordance with
the partnership agreement on the basis of the weighted average number of
outstanding Limited Partnership Units of 5,096 for 1996 and 1995.
The Limited Partner cash distributions, computed in accordance with
the Partnership Agreement, were as follows:
Record Date Outstanding Amount Total
Units Per Unit Distribution
March 31, 1996 5,096 $13.00 $66,248
December 31, 1995 5,096 12.50 63,700
Total $129,948
March 31, 1995 5,096 8.5000 43,479
December 31, 1994 5,096 6.2500 31,850
Total $75,329
Distributions were paid in the fiscal quarter following the record date.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1995
(CONTINUED)
NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS
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 No. 121) issued by the Financial Accounting Standards
Board (FASB) is effective for financial statements for fiscal years
beginning after December 15, 1995. The new standard establishes new
guidelines regarding when impairment losses on long-lived assets, which
include plant and equipment, and certain identifiable intangible assets,
should be recognized and how impairment losses should be measured. The
Partnership elected adoption of SFAS No. 121 on January 1, 1996. This
adoption had no effect on the statement of income for the six months
ended June 30, 1996 as there were no impairment amounts recorded during
the period.
NOTE 6 - REALLOCATION OF PARTNER BALANCES
Per the provisions of Section 11.1 (V)(ii) of the Partnership Agreement,
the General Partner determined that action was necessary to "cure the
ambiguities" caused by the Agreement itself. The ambiguity involved the
treatment of the partnership management fee, being paid to the General
Partner, as an expense of the Partnership, when in fact, it was recently
determined, that these fees should have been treated as a general partner
withdrawal of capital. In order to properly reflect this inception to
date correction, a transfer of $170,030 was made from the General
Partner's capital account to the Limited Partners capital account
during the quarter ended March 31, 1996.
NOTE 7 - SUBSEQUENT EVENTS
The Partnership distributed $50,960 ($10.00 per unit) on August 6, 1996
to Limited Partners as of June 30, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
The Partnership began offering for sale limited partnership units on
October 20, 1987. On February 26, 1988, the Partnership reached its minimum
offer level of $1,200,000. The Partnership sold units throughout the
remainder of the year, and had raised $3,891,000 in gross proceeds or
$3,483,788 net of syndication costs and sales commissions as of
December 31, 1988. During 1989, the Partnership continued to raise
funds through the sale of Units and had raised $5,106,000 in gross
proceeds or $4,594,101 net of syndication costs and sales commissions as
of September 5, 1989, the day the Partnership terminated its offering
of limited partnership units.
The Partnership was organized for the purpose of investing in, holding,
and managing improved, leveraged income-producing property, such as
residential property, office buildings, commercial buildings, industrial
properties, and shopping centers. The Partnership intends to own and
operate such properties for investment over an anticipated holding period
of approximately five to ten years.
The Partnership's principal investment objectives are to invest in rental
real estate properties which will:
(1) Preserve and protect the Partnership's invested capital;
(2) Provide for cash distributions from operations;
(3) Provide gains through potential appreciation; and
(4) Generate Federal income tax deductions so that during the early
years of property operations, a portion of cash distributions
may be treated as a return of capital for tax purposes and,
therefore, may not represent taxable income to the limited
partners.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
The ownership and operation of any income-producing real estate is subject
to those risks inherent in all real estate investments, including national
and local economic conditions, the supply and demand for similar
types of properties, competitive marketing conditions, zoning changes,
possible casualty losses, increases in real estate taxes, assessments, and
operating expenses, as well as others.
The Partnership is operated by West Coast Realty Advisors, Inc. ("WCRA")
(the corporate General Partner) and Mr. W. Thomas Maudlin Jr. (an individual
General Partner), collectively the "General Partner," subject to the
terms of the Amended and Restated Agreement of Limited Partnership. The
Partnership has no employees, and all administrative services are provided
by WCRA, the corporate General Partner.
LIQUIDITY AND CAPITAL RESOURCES
On February 6, and May 6, 1996, the Partnership made distributions to
the limited partners totaling $63,700 and $66,248, ($12.50 and $13.00 per
unit), of which approximately $14,700 and $17,248 constituted a return of
capital to the unit holders of record at December 31, 1995 and
March 31, 1996, respectively. Distributions are determined by management
based on cash flow and the liquidity position of the Partnership and
anticipated occupancy of the properties. It is the intention of management
to make quarterly distributions of cash, subject to maintenance of
reasonable reserves.
Management uses cash as its primary measure of a partnership's liquidity.
The amount of cash that represents adequate liquidity for a real estate
limited partnership depends on several factors. Among them are:
1. Relative risk of the partnership;
2. Condition of the partnership's properties;
3. Stage in the partnership's life cycle (e.g., money-raising,
acquisition,operating or disposition phase); and
4. Distribution to partners
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
The Partnership has adequate liquidity based upon the above four points.
The first point refers to the approximately 1% property reserve
requirement of capital funds raised that the Partnership currently has;
this relatively low reserve level is appropriate since all Partnership
properties are acquired without the use of debt financing. This is
a minimum guideline that is disclosed in the Partnership's prospectus;
the Partnership had more than enough funds to meet this requirement as of
June 30, 1996. Related to the property reserve requirement is the second
point - the condition of the Partnership's properties. Since the
properties are in good condition, no unusual maintenance and repair
expenditures are anticipated. The third point is relevant to the
Partnership because after the January 1990 purchase of the San Marcos
property, the Partnership had completed its acquisition phase, and entered
the operating phase. The fourth point relates to partner distributions.
The Partnership makes distributions from operations quarterly. Such
distributions are subject to payment of Partnership expenses and
reasonable reserves for expenses, maintenance, and replacements.
During the six months ended June 30, 1996 the Partnership paid the
General Partner a partnership management fee of $14,439 and distributed
$129,948 to the limited partners of which $31,948 constituted a return
of capital. The partnership management fee distribution to the general
partner was calculated and paid in accordance with the Partnership Agreement.
The Tax Reform Acts of 1986 and 1987 and the Revenue Reconciliation Acts of
1990 and 1993 did not have a material impact on the Partnership's operations.
The effects of the slowdown in the economy, inflation and changing prices
have not had a material impact on the Partnership's revenues and
income from operations. During the years of the Partnership's
existence, inflationary pressures in the U.S. economy have been minimal,
and this has been consistent with the experience of the Partnership in
operating rental real estate in California. The Partnership has
several clauses in the leases with its properties' tenants that would
help alleviate much of the negative impact of inflation.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
NEW ACCOUNTING PRONOUNCEMENTS
Statements of Financial Accounting Standards No.121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed of" (SFAS No. 121) issued by the Financial Accounting Standards
Board (FASB) is effective for financial statements for fiscal years
beginning after December 15, 1995. The new standard establishes new
guidelines regarding when impairment losses on long-lived assets, which
include plant and equipment, and certain identifiable intangible assets,
should be recognized and how impairment losses should be measured. The
Partnership elected adoption of SFAS No.121 on January 1, 1996. This
adoption had no effect on the statement of income for the six months
ended June 30, 1996 as there were no impairment amounts recorded during
the period.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS
Operations for the six months ended June 30, 1996 and 1995 reflect full
quarters of rental activities for the Partnership's properties. However,
the San Marcos property was not leased from January 8 to February 12, 1995.
This was due to vacancy at the property between the time that the
Professional Care Products (previous tenant) lease terminated and the No
Fear (current tenant) lease began. In addition to the vacancy at the
property, the lease rate that No Fear entered into was approximately 30%
less than the rate that Professional Care Products was paying during its
tenancy. The occupancy rate at the Yorba Center Shopping Center was at
100% as of June 30, 1996 (as compared to 90% at June 30, 1995). The
increased occupancy at the Yorba Center Shopping Center, offset by the drop
in rental rates at the San Marcos property, was responsible for
a 15% ($26,326) increase in rental revenue for the six months ended
June 30, 1996 as compared to the six months ended June 30, 1995.
Operating expenses decreased 4.4% ($1,481) as the result of less repairs
and maintenance costs at the Yorba Center Shopping Center property. The
Partnership also experienced a 31.5% decrease in general and administrative
costs ($9,155) due to lower insurance costs and lower legal & accounting
expenses. Interest income increased $5,286 due to larger cash reserve
balances maintained during the first six months of 1996 as compared to the
first six months of 1995.
Overall, the Partnership generated $134,578 in income from operations
before depreciation expense of $49,109 for the six months ended
June 30, 1996. This compares favorably to 1995 when income from operations
totaled $104,109 before depreciation of $49,038 and gain on government
securities of $2,030. Net income per limited partnership unit rose from
$8.86 in 1995 to $14.23 in 1996. The number of limited partnership units
outstanding in each period was 5,096.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS (CONT.)
In 1994, the Partnership purposely started reducing the amount of
distributions to investors in anticipation of lower rental revenues
from the San Marcos property. Up until January 1995, it was not clear to
the General Partner as to what rent, if any, could be realized on an
ongoing basis from the San Marcos Property. Distributions to limited
partners fell from a high of $47.50 per unit in 1993, to $43.75 in 1994,
to $37.16 in 1995. With the placement of a tenant in the San Marcos
Building (No Fear, Inc.) and the build-up of a track record of rent
collections from the tenant, the general partner now feels it would be
prudent to make cash distributions to limited partners so that a large
portion of the large cash balance is gradually paid out (contingent upon
maintenance of reasonable reserve levels). Therefore, distributions
are expected to total between $40.00 and $45.00 per unit for 1996.
In addition, the Partnership is currently considering purchasing the 10%
portion of the San Marcos Building that it does not already own. This
purchase is being contemplated in order to increase the level of cash
distributions to the limited partners in 1997, and ultimately, increase
the value of their investment in the Partnership. This purchase is
contingent upon a number of factors including approval from the State of
California to allow the seller (Associated Planners Realty Growth Fund,
an affiliated partnership) to sell the interest, acceptance by the
Partnership of the sales price as being reasonable, and sufficient cash
resources to purchase the interest. Given these contingencies, there is
no assurance that the Partnership will purchase this additional interest in
the San Marcos property. However, in anticipation of the purchase taking
place, the general partner anticipates that cash distributions will remain
at a lower level of $10.00 per unit through February 1997 to finance the
purchase of the 10% interest. If it appears the purchase will not take
place, it is anticipated that distributions to the limited partners would
be restored to the $12.00 to $13.00 per unit level.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
RESULTS OF OPERATIONS (CONT.)
During the six months ended June 30, 1996, $82,632 in cash was provided
by operating activities. This resulted from a net cash basis income of
$134,578 from operations (net income plus depreciation expense) plus a
$1,078 increase in security deposits and prepaid rents (primarily due to a
new tenant security deposit receivable plus prepaid April 1996 rent received
in March 1996). These amounts were offset by a $31,191 increase in other
assets (primarily due to a increase in prepaid assets and deferred rent
receivable due to free tenant rent for January 1996), and a $21,833
decrease in accounts payable (primarily due to a decrease in the amount of
trade payables). In contrast, during the six months ended June 30, 1995,
$51,002 in cash was provided by operating activities. The increase in
operating activities of $31,604 ($85,632 minus $51,002) was primarily
the result of the $30,398 increase in net income for the six months ended
June 30,1996 compared to the six months ended June 30, 1995. There were
no investing activities for the six months ended June 30, 1996. In
contrast, $10,000 in investing activities was used for tenant improvements
on the San Marcos property during the six months ended June 30, 1995.
Cash used in financing activities totaled $144,387 due to $129,948
distributed to the limited partners and $14,439 distributed to the
general partner for partnership management fees during the six months
ended June 30, 1996. In contrast, $75,329 in financing activities was used
for distributions to limited partners during the six months ended
June 30, 1995.
The area in which Yorba Center operates continues to experience a
relatively high level of economic vitality, and the General Partner
does not foresee significant challenges in keeping the center occupied by
various small retailers and service businesses.
The Partnership anticipates continuing to operate properties during 1996 for
the purpose of generating the maximum amount of cash available for
distribution to the limited partners, while maintaining a reasonable
level of cash reserves. There are currently no plans to dispose of either
of the two properties.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
PART II
O T H E R I N F O R M A T I O N
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. EXHIBIT AND REPORTS ON FORM 8-K
(a) Information required under this section has been included in
the financial statements.
(b) Reports on Form 8-K
None
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
S I G N A T U R E S
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.
ASSOCIATED PLANNERS REALTY INCOME FUND
A California Limited Partnership
(Registrant)
August 14, 1996 By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
A General Partner
Neal E. Nakagiri
Vice President / Secretary
August 14, 1996
Michael G. Clark
Vice President/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000808420
<NAME> ASSOCIATED PLANNERS REALTY INCOME FUND
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 199,973
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 268,188
<PP&E> 4,699,187
<DEPRECIATION> (675,449)
<TOTAL-ASSETS> 4,301,345
<CURRENT-LIABILITIES> 29,031
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,272,314
<TOTAL-LIABILITY-AND-EQUITY> 4,301,345
<SALES> 201,959
<TOTAL-REVENUES> 212,771
<CGS> 127,302
<TOTAL-COSTS> 127,302
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 85,469
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 85,469
<EPS-PRIMARY> 14.23
<EPS-DILUTED> 14.23
</TABLE>
