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 SEPTEMBER 30, 1997
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
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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 nine months ended
September 30, 1997 and 1996, have been made in the following financial
statements which are normal and recurring in nature. However, such financial
statements are unaudited and are subject to any year-end adjustments that may
be necessary.
BALANCE SHEETS
SEPTEMBER 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
<CAPTION>
SEPTEMBER 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $4,083,802 $4,160,642
Cash and cash equivalents 133,405 72,207
Other assets 27,554 42,372
TOTAL ASSETS $4,244,761 $4,275,221
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable-Related party (Note 3) $ 7,200 $ 4,578
Security deposits 30,351 28,576
TOTAL LIABILITIES 37,551 33,154
PARTNERS' EQUITY (NOTE 6)
Limited partners:
$1,000 stated value per unit - authorized
12,000 units; issued and outstanding 5,096 4,167,000 4,205,288
General partners 40,210 36,779
TOTAL PARTNERS' EQUITY 4,207,210 4,242,067
TOTAL LIABILITIES AND PARTNERS' EQUITY $4,244,761 $4,275,221
</TABLE>
[FN]
See accompanying notes to financial statements.
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ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<CAPTION>
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1996 $4,242,067 5,096 $4,205,288 $36,779
Net income 140,671 -- 119,688 20,983
Distributions to limited partners (157,976) -- (157,976) --
Distributions to general partner (17,552) -- -- (17,552)
BALANCE AT SEPTEMBER 30, 1997 $4,207,210 5,096 $4,167,000 $40,210
NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<CAPTION>
LIMITED PARTNERS GENERAL
TOTAL UNITS AMOUNT PARTNER
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1995 $4,331,232 5,096 $4,124,520 $206,712
Net income 123,581 -- 104,593 18,988
Reallocation of balances prior to
January 1, 1996 (Note 6) -- -- 170,030 (170,030)
Distributions to limited partners (180,852) -- (180,852) --
Distributions to general partner (20,101) -- -- (20,101)
BALANCE AT SEPTEMBER 30, 1996 $4,253,860 5,096 $4,218,291 $35,569
</TABLE>
[FN]
See accompanying notes to financial statements.
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ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS THREE MONTHS NINE MONTHS NINE MONTHS
ENDED ENDED ENDED ENDED
SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER
30, 1997 30, 1996 30, 1997 30, 1996
<S> <C> <C> <C> <C>
REVENUES:
Rental $106,885 $100,928 $314,956 $302,887
Interest 1,353 2,350 2,417 13,162
108,238 103,278 317,373 316,049
COSTS AND EXPENSES:
Operating 12,058 7,946 41,750 39,802
Property taxes 5,045 17,925 15,136 34,882
Property management fees 5,660 4,963 15,646 14,476
General and administrative 8,839 9,777 27,330 29,643
Depreciation and amortization 25,613 24,555 76,840 73,665
57,215 65,166 176,702 192,468
NET INCOME $51,023 $38,112 $140,671 $123,581
NET INCOME PER
LIMITED PARTNERSHIP UNIT $8.56 $6.30 $23.49 $20.52
</TABLE>
[FN]
See accompanying notes to financial statements.
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
NINE NINE
MONTHS MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
INCREASE (DECREASE) IN CASH AND CASH 1997 1996
EQUIVALENTS
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $140,671 $123,581
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 76,840 73,665
Increase (decrease) from changes in:
Other assets 14,818 (4,455)
Accounts payable 2,622 (8,667)
Security deposits and prepaid rents 1,775 255
NET CASH PROVIDED BY OPERATING ACTIVITIES 236,726 184,379
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to limited partners (157,976) (180,852)
Distributions to general partners (17,552) (20,101)
NET CASH (USED IN) FINANCING ACTIVITIES (175,528) (200,953)
NET INCREASE (DECREASE) IN CASH AND CASH 61,198 (16,574)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 72,207 261,728
CASH AND CASH EQUIVALENTS, END OF PERIOD $133,405 $245,154
</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 originally
intended 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 value 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.
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ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
(CONTINUED)
INVESTMENTS
The difference between historical cost and market value are reported
as unrealized gains or losses in the statement of income.
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.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS
No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishments
of liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive application is not permitted. The new
standard provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities. The
Partnership does not expect adoption to have a material effect on its
financial position or results of operations.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
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:
Acquisition
Location (Property Name) Date Purchased Cost
Chino, California
(Yorba Center) October 25, 1988 $ 1,881,147
San Marcos, California (90%) January 9, 1990 2,816,904
San Marcos, California (10%) November 1, 1996 188,001
The major categories of rental real estate:
September 30, 1997 December 31, 1996
Land $1,332,861 $1,332,861
Building and improvements 3,554,327 3,554,327
4,887,188 4,887,188
Less accumulated depreciation 803,386 726,546
Net rental real estate 4,083,802 4,160,642
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
(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 65% and 12% in 1997
One tenant accounted for 58% in 1996
On November 1, 1996, Associated Planners Realty Income Fund ("Income Fund")
purchased the remaining real estate asset from Associated Planners Realty
Growth Fund ("Growth Fund"). This asset consisted of the 10% interest that
Income Fund had not already owned in an office building located in San Marcos,
California.
Income Fund paid $185,968 on November 2, 1996 for the 10% interest in the San
Marcos property. This amount consisted of $188,000 for the property itself,
less $2,032 for the share of a cash security deposit from the current tenant
that Growth Fund retained. There is no debt in connection with the property.
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 $5,945 for the quarter ended
September 30, 1997 and $5,662 for the quarter ended September 30, 1996, and
$17,552 for the nine months ended September 30, 1997 and $20,101 for the nine
months ended September 30, 1996.
(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 $9,000 for the nine months ended September 30, 1997 and
September 30, 1996 and $3,000 for the quarters ending September 30, 1997 and
1996.
(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 $5,660 for the quarter ended September
30, 1997, and $4,963 for the quarter ended September 30, 1996, and $15,646
for the nine months ended September 30, 1997 and $14,476 for the nine
months ended September 30, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
(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 1997 and 1996.
The Limited Partner cash distributions, computed in accordance with the
Partnership Agreement, were as follows:
Record Date Outstanding Amount Total
Units Per Unit Distribution
June 30, 1997 5,096 $10.50 $53,508
March 31, 1997 5,096 10.50 53,508
December 31, 1996 5,096 10.00 50,960
Total $157,976
June 30, 1996 5,096 $10.00 $50,904
March 31, 1996 5,096 13.00 66,248
December 31, 1995 5,096 12.50 63,700
Total $180,852
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 NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1996
(CONTINUED)
NOTE 5 - NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS
No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishments
of liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive application is not permitted. The
new standard provides accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities. The
Partnership does not expect adoption to have a material effect on its
financial position or results of operations.
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" within the Agreement. The ambiguity involved the treatment of
the partnership management fee, being paid to the General Partner, as an
expense of the Partnership, as opposed to a general partner withdrawal of
capital. It was determined that the partnership management fee shall be
treated as a withdrawal of capital in 1996 and beyond with a retroactive
reallocation of capital for partnership management fees paid prior to 1996.
In order to properly reflect this reallocation, 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.
<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 originally intended 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
During the nine months ended September 30, 1997, the Partnership made
distributions to the general and limited partners totaling $175,528, of which
$32,981 constituted a return of capital. The $175,528 in distributions compared
favorably to the $219,387 in cash generated from property operations (net income
plus depreciation expense). On February 3, 1997, May 9, 1997, and August 5,
1997 the Partnership made distributions to the limited partners totaling
$50,960, $53,508, and $53,508 ($10.00 and $10.50 per unit), of which
approximately $7,374, $7,446, and $609 constituted a return of capital to the
unit holders of record at December 31, 1996, March 31, 1997 and June 30, 1997,
respectively. Distributions are determined by management based on cash flow and
the liquidity position of the Partnership and anticipated occupancy of the
properties.
As of September 30, 1997 management has decided to make semi-annual
distributions of cash, (instead of quarterly distributions) subject to
maintenance of reasonable reserves. The semi-annual distributions will begin
with the record date of December 31, 1997, and will be paid in early February
1998. The primary reason for this change is to reduce operating costs of the
Partnership.
<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)
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
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 September 30, 1997. 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 effectively completed its acquisition
phase, and entered the operating phase. The subsequent purchase of the
remaining 10% interest in San Marcos property was achieved utilizing a
combination of reserves and, undistributed operating profits that were held back
for the purpose of facilitating the acquisition. The fourth point relates to
partner distributions. The Partnership makes distributions from operations semi-
annually beginning with the record date of December 31, 1997. Such distributions
are subject to payment of Partnership expenses and reasonable reserves for
expenses, maintenance, and replacements.
During the nine months ended September 30, 1997, the Partnership paid the
General Partner a partnership management fee of $17,552 and distributed $157,976
to the limited partners, of which $34,857 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.
<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 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.
CASH FLOWS - NINE MONTHS ENDED SEPTEMBER 30, 1997 VS. NINE MONTHS ENDED
SEPTEMBER 30, 1996
Cash resources increased $61,198 during the nine months ended September 30, 1997
compared to a $16,574 decrease in cash resources for the nine ended September
30, 1996. Cash provided by operating activities increased by $236,726 with the
largest contributor being $217,511 in cash basis income for the nine months
ended September 30, 1997. In contrast, the nine months ended September 30, 1996
provided $184,379 in cash from operating activities due primarily to $197,246 in
cash basis income offset by a $4,455 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 $8,667 decrease in accounts payable (primarily due
to a decrease in the amount of trade payables). There were no investing
activities for the nine months ended September 30, 1997 or September 30, 1996.
Cash used in financing activities totaled $175,528 due to $157,976 distributed
to the limited partners and $17,552 distributed to the general partner for
partnership management fees during the nine months ended September 30, 1997. In
contrast, cash used for financing activities totaled $200,953 due to $180,852
distributed to the limited partners and $20,101 distributed to the general
partner for the nine months ended September 30, 1996.
PENDING TRANSACTIONS
The Yorba Center located in Chino, California was listed for sale with a
commercial real estate broker in early October of this year. The original
acquisition cost of this property was $1,881,147. There is no debt on the
property. At this time, there is not a clear indication as to how much net
proceeds will be realized from the sale of the property. However, the General
Partner expects to be able to consummate a sale of the property by March, 1998.
Upon sale of this property, all the proceeds from the sale will be distributed
to the limited partners and the General Partner in accordance with the terms of
the Partnership Agreement.
Although the Partnership does intend to aggressively market the Yorba Center
property for sale, there is no guarantee that a sale will actually take place,
within the time frame mentioned above, and at a sales price acceptable to the
Partnership.
<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
Statement of Financial Accounting Standards No. 125, "Accounting for Transfers
and Servicing of Financial Assets and Extinguishments of Liabilities" (SFAS No.
125) issued by the Financial Accounting Standards Board (FASB) is effective for
transfers and servicing of financial assets and extinguishments of liabilities
occurring after December 31, 1996, and is to be applied prospectively. Earlier
or retroactive application is not permitted. The new standard provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities. The Partnership does not expect
adoption to have a material effect on its financial position or results of
operations.
RESULTS OF OPERATIONS
Operations for the nine months ended September 30, 1997 represented nine months
of rental operations for the Partnership's two properties.
The net income for the nine months ended September 30, 1997 ($140,671) was
higher than the nine months ended September 30, 1996 ($123,581) due to increased
rent, resulting from the acquisition of the remaining 10% interest of the San
Marcos property in November 1996, offset by lower rents collected from the Yorba
Center property. The Partnership did not have any adverse events that
significantly impacted net income during the nine months ended September 30,
1997, and all properties that have been purchased by the Partnership have
operated at levels equal to current expectations. All tenants are current on
their lease obligations.
Rental revenue increased $12,069 (4%) for the nine months ended September 30,
1997 as compared to the nine months ended September 30, 1996, due to increased
rent resulting from the acquisition of the remaining 10% interest of the San
Marcos property in November 1996, offset by lower rents collected from the Yorba
Center property. Interest income decreased $10,745 (82%) for the nine months
ended September 30, 1997 as compared to the nine months ended September 30, 1996
due to $188,000 in cash reserves being used to purchase the remaining 10% of the
San Marcos property in November 1996. This $188,000 was earning interest during
the first nine months of 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
(CONTINUED)
RESULTS OF OPERATIONS (CONT.)
Operating expenses increased $1,948 (5%) as a result of higher legal and repairs
and maintenance costs during the nine months ended September 30, 1997 compared
to the nine months ended September 30, 1996. General and administrative
expenses decreased $2,313 (8%) due primarily to lower errors and omissions (E&O)
insurance premiums paid during the nine months ended September 30, 1997 compared
to the nine months ended September 30, 1996. Depreciation expense increased
$3,175 (4%) as a result of the ownership of the remaining 10% in the San Marcos
property.
During the nine months ended September 30, 1997, the Partnership distributed
$157,976 to the limited partners and $17,552 to the general partners, as
compared to the nine months ended September 30, 1996 when the Partnership
distributed $180,852 to the limited partners and $20,101 to the general
partners. Cash basis income for the nine months ended September 30, 1997 was
$217,511. This was derived by adding depreciation and amortization expense to
net income. Thus, cash distributions this period were ($41,983) less than cash
basis net income. In contrast, distributions during the nine months ending
September 30, 1996 were ($3,707) greater than cash basis net income. Cash
distributions were significantly less than cash available for distribution for
the nine months ended September 30, 1997 in anticipation of lower rental income
at the Yorba Center property, as tenants' leases come up for renewal at rental
rates that are expected to be slightly lower than current rates.
Overall, the Partnership generated $217,511 in income from operations before
depreciation expense of $76,840 for the nine months ended September 30, 1997.
This compares favorably to the nine months ending September 30, 1996 when income
from operations totaled $197,246 before depreciation of $73,665. Net income per
limited partnership unit increased from $20.52 in 1996 to $23.49 in 1997. The
number of limited partnership units outstanding in each quarter was 5,096.
The Partnership anticipates continuing to operate properties during 1997 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.
In summary then, the operating performance of the Partnership continued to
improve and all properties were operating profitably.
<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
Dated September 10, 1997: Item 2 Acquisition or Disposition of
Assets
<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)
November 11, 1997 By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
A General Partner
Neal E. Nakagiri
Vice President / Secretary
November 11, 1997
Michael G. Clark
Vice President/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000808420
<NAME> ASSOCIATED PLANNERS REALTY INCOME FUND L.P.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 133,405
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 155,929
<PP&E> 4,887,188
<DEPRECIATION> (803,386)
<TOTAL-ASSETS> 4,244,761
<CURRENT-LIABILITIES> 37,551
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,207,210
<TOTAL-LIABILITY-AND-EQUITY> 4,244,761
<SALES> 314,956
<TOTAL-REVENUES> 317,373
<CGS> 176,702
<TOTAL-COSTS> 176,702
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 140,671
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 140,671
<EPS-PRIMARY> 23.49
<EPS-DILUTED> 23.49
</TABLE>
