<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, 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 co-General Partner (West Coast Realty Advisors, Inc.)
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, 1997 and 1996, have been made in the following
financial statements which are normal recurring entries in nature. However,
such financial statements are unaudited and are subject to any year-end
adjustments that may be necessary.
BALANCE SHEETS
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
June 30, December 31,
1997 1996
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $4,109,415 $4,160,642
Cash and cash equivalents 96,441 72,207
Other assets 50,355 42,372
TOTAL ASSETS $4,256,211 $4,275,221
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable - Related party (Note 3) $ 8,631 $ 4,578
Security deposits 31,941 28,576
TOTAL LIABILITIES 40,572 33,154
PARTNERS' EQUITY (NOTE 6)
Limited partners:
$1,000 stated value per unit - authorized
12,000 units; issued and outstanding 5,096 4,176,892 4,205,288
General partners 38,747 36,779
TOTAL PARTNERS' EQUITY 4,215,639 4,242,067
TOTAL LIABILITIES AND PARTNERS' EQUITY $4,256,211 $4,275,221
</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, 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 89,647 -- 76,072 13,575
Distributions to limited partners (104,468) -- (104,468) --
Distributions to general partner (11,607) -- -- (11,607)
BALANCE AT JUNE 30, 1997 $4,215,639 5,096 $4,176,892 $38,747
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
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 85,469 -- 72,502 12,967
Reallocation of balances prior
to January 1, 1996 (Note 6) -- -- 170,030 (170,030)
Distributions to limited partners (129,948) -- (129,948) --
Distributions to general partner (14,439) -- -- (14,439)
BALANCE AT JUNE 30, 1996 $4,272,314 5,096 $4,237,104 $35,210
</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, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS THREE MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
REVEUES:
Rental $106,313 $98,579 $208,071 $201,959
Interest 805 7,905 1,064 10,812
107,118 106,484 209,135 212,771
COSTS AND EXPENSES:
Operating 15,915 16,345 29,692 31,857
Property taxes 5,045 13,267 10,091 16,957
Property management fees 5,631 5,115 9,987 9,513
General and administrative 8,852 10,733 18,491 19,866
Depreciation and amortization 25,613 24,555 51,227 49,109
61,056 70,015 119,488 127,302
NET INCOME $46,062 $36,469 $89,647 $85,469
INCOME PER
LIMITED PARTNERSHIP UNIT $7.68 $6.01 $14.93 $14.23
</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, 1997 AND 1996
(UNAUDITED)
<CAPTION>
SIX SIX
MONTHS MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $89,647 $85,469
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 51,227 49,109
Increase (decrease) from changes in:
Other assets (7,983) (31,191)
Accounts payable 4,053 (21,833)
Security deposits and prepaid rents 3,365 1,078
NET CASH PROVIDED BY OPERATING ACTIVITIES 140,309 82,632
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to limited partners (104,468) (129,948)
Distributions to general partners (11,607) (14,439)
NET CASH (USED IN) FINANCING ACTIVITIES (116,075) (144,387)
NET INCREASE (DECREASE) IN CASH AND CASH 24,234 (61,755)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 72,207 261,728
CASH AND CASH EQUIVALENTS, END OF PERIOD $96,441 $199,973
</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.
<PAGE>
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 SIX MONTHS ENDED JUNE 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:
June 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 777,773 726,546
Net rental real estate 4,109,415 4,160,642
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 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 June 30, 1997
and $7,613 for the quarter ended June 30, 1996, and $11,607 for the six months
ended June 30, 1997 and $14,439 for the six months ended June 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 $6,000 for the six months ended June 30, 1997 and June 30, 1996
and $3,000 for the quarters ending June 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 $5,631 for the quarter ended June 30, 1997, and $5,115
for the quarter ended June 30, 1996, and $9,987 for the six months ended June
30, 1997 and $9,513 for the six months ended June 30, 1996.
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 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
March 31, 1997 5,096 $10.50 $53,508
December 31, 1996 5,096 10.00 50,960
Total $104,468
March 31, 1996 5,096 $13.00 $66,248
December 31, 1995 5,096 12.50 63,700
Total $129,948
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, 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.
NOTE 7 - SUBSEQUENT EVENTS
The Partnership distributed $53,508 ($10.50 per unit) on August 6, 1997 to
Limited Partners as of June 30, 1997.
<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
During the six months ended June 30, 1997, the Partnership made distributions to
the general and limited partners totaling $116,075, of which $26,428 constituted
a return of capital. The $116,075 in distributions compared favorably to the
$140,874 in cash generated from property operations (net income plus
depreciation expense). On February 3, 1997 and May 9, 1997, the Partnership
made distributions to the limited partners totaling $50,960 and $53,508, ($10.00
and $10.50 per unit), of which approximately $7,374 and $7,446 constituted a
return of capital to the unit holders of record at 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. 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, 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 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, 1997, the Partnership paid the General
Partner a partnership management fee of $11,607 and distributed $104,468 to the
limited partners, of which $26,428 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)
CASH FLOWS - SIX MONTHS ENDED JUNE 30, 1997 VS. SIX MONTHS ENDED JUNE 30, 1996
Cash resources increased $24,234 during the six months ended June 30, 1997
compared to a $61,755 decrease in cash resources for the six ended June 30,
1996. Cash provided by operating activities increased by $140,309 with the
largest contributor being $140,874 in cash basis income for the six months ended
June 30, 1997. In contrast, the six months ended June 30, 1996 provided $82,632
in cash from operating activities due primarily to $134,578 in cash basis income
offset by a $31,198 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). There were no investing activities for the
six months ended June 30, 1997 or June 30, 1996. Cash used in financing
activities totaled $116,075 due to $104,468 distributed to the limited partners
and $11,607 distributed to the general partner for partnership management fees
during the six months ended June 30, 1997. In contrast, cash used for financing
activities totaled $144,387 due to $129,948 distributed to the limited partners
and $14,439 distributed to the general partner for the six months ended June 30,
1996.
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)
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, 1997 represented six months of
rental operations for the Partnership's two properties.
The net income for the six months ended June 30, 1997 ($89,647) was higher than
the six months ended June 30, 1996 ($85,469) 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 six months ended June 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 $6,112 (3%) for the six months ended June 30, 1997 as
compared to the six months ended June 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 $9,748 (90%) for the six months ended June 30, 1997 as
compared to the six months ended June 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 six months of 1996.
Operating expenses decreased $2,165 (7%) as a result of lower property
insurance, consulting fees and repairs and maintenance costs during the six
months ended June 30, 1997 compared to the six months ended June 30, 1996.
General and administrative expenses decreased $1,375 (7%) due primarily to lower
errors and omissions (E&O) insurance premiums paid during the six months ended
June 30, 1997 compared to the six months ended June 30, 1996. Depreciation
expense increased $2,118 (4%) as a result of the ownership of the remaining 10%
in the San Marcos property.
<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, 1997, the Partnership distributed $104,468
to the limited partners and $11,607 to the general partners, as compared to the
six months ended June 30, 1996 when the Partnership distributed $129,948 to the
limited partners and $14,439 to the general partners. Cash basis income for the
six months ended June 30, 1997 was $140,874. This was derived by adding
depreciation and amortization expense to net income. Thus, cash distributions
this period were ($24,799) less than cash basis net income. In contrast,
distributions during the six months ending June 30, 1996 were ($9,809) greater
than cash basis net income. Cash distributions were significantly less than
cash available for distribution for the six months ended June 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 $140,874 in income from operations before
depreciation expense of $51,227 for the six months ended June 30, 1997. This
compares favorably to the six months ending June 30, 1996 when income from
operations totaled $134,578 before depreciation of $49,109. Net income per
limited partnership unit increased from $14.23 in 1996 to $14.93 in 1997. The
number of limited partnership units outstanding in each quarter was 5,096.
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.
In summary then, the operating performance of the Partnership continued to
improve and all properties were operating profitably. 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 12, 1997 By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
A General Partner
Neal E. Nakagiri
Vice President / Secretary
August 12, 1997
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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 96,441
<SECURITIES> 0
<RECEIVABLES> 5,933
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 146,796
<PP&E> 4,887,188
<DEPRECIATION> (777,773)
<TOTAL-ASSETS> 4,256,211
<CURRENT-LIABILITIES> 40,572
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,215,639
<TOTAL-LIABILITY-AND-EQUITY> 4,256,211
<SALES> 208,071
<TOTAL-REVENUES> 209,135
<CGS> 119,488
<TOTAL-COSTS> 119,488
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 89,647
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 89,647
<EPS-PRIMARY> 14.93
<EPS-DILUTED> 14.93
</TABLE>
