UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 33-11013
ASSOCIATED PLANNERS REALTY INCOME FUND, (A CALIFORNIA LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4120092
State or other jurisdiction of (IRS Employer
incorporation or organization Identification)
5933 WEST CENTURY BLVD., 9TH FLOOR, LOS ANGELES, CA 90045-5454
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 670-0800
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ]
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PART I
Certain statements in the Annual Report on Form 10-K, particularly under Items 1
through 8, constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act"). Such
forward-looking statements involve known and unknown risks, uncertainties, and
other factors which may cause the actual results, performance or achievements of
the Partnership to be materially different from any future results, performance
or achievements, expressed or implied by such forward-looking statements.
ITEM 1. BUSINESS
Associated Planners Realty Income Fund (the "Partnership"), was organized in
December 1986, under the California Revised Limited Partnership Act. West Coast
Realty Advisors, Inc. ("WCRA"), a California corporation, and W. Thomas Maudlin
Jr., an individual, are general partners (collectively referred to herein as the
"General Partner").
The Partnership was organized for the purpose of investing in, holding, and
managing improved, unleveraged income-producing property, such as residential
properties, office buildings, commercial buildings, industrial properties, mini-
warehouse facilities, and shopping centers ("Properties"), which are believed to
have potential for cash flow and capital appreciation. The Partnership intends
to own and operate such Properties for investment over an anticipated holding
period of approximately five to ten years. At December 31, 1997, the
Partnership had no employees.
The Partnership's principal investment objectives are to invest the net proceeds
in real 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 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.
On February 26, 1988, the Partnership attained its minimum funding requirement
with the initial release of escrow funds totaling $1,272,000 and terminated its
offering on September 5, 1989. As of December 31, 1989, gross proceeds from
sales of Partnership units totaled $5,106,000 and $4,594,101 net of syndication
costs and sales commissions.
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On October 25, 1988. the Partnership acquired a shopping center located in
Chino, California (the "Center"). On January 9, 1990, the Partnership, together
with Associated Planners Realty Growth Fund ("Growth Fund"), purchased a one-
story building located in San Marcos, California. The acquisition was paid for
entirely in cash totaling $3,118,783 of which $2,806,905 was provided by the
Partnership and $311,878 by the affiliate.
On November 1, 1996, Associated Planners Realty Income Fund ("Income Fund")
purchased the remaining 10% interest in the one story building located in San
Marcos, California from Growth Fund. Income Fund paid Growth Fund $185,968 on
November 2, 1996 for the 10% interest in the San Marcos property. This amount
consisted of $188,001 for the property itself, less $2,033 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. Growth Fund terminated business
shortly thereafter.
The ownership and operation of any income-producing real estate is subject to
those risks inherent in all real estate investments. These include national and
local economic conditions, the supply of and demand for similar types of real
property, competitive marketing conditions, zoning changes, possible casualty
losses, and increases in real estate taxes, assessments, and operating expenses,
as well as others.
The Partnership is subject to competitive conditions that exist in the local
markets where it operates rental real estate. These conditions are discussed in
ITEM 2-- "PROPERTIES".
The Partnership is operated by 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 West Coast Realty
Advisors Inc. ("WCRA") - the co-General Partner.
ITEM 2. PROPERTIES
The properties acquired by the Partnership are described below:
YORBA CENTER
On October 25, 1988, the Partnership purchased Yorba Center (the "Center"), a
retail shopping center located in Chino, California.
The Center, constructed in 1987, provides 12,697 rentable square feet located on
a .91-acre parcel of land. As of December 31, 1997, the Center was 100% leased
to nine tenants. The average monthly rent per occupied square foot was $1.15.
All but two tenants are renting space on a "triple net" lease basis, i.e., each
tenant being proportionately responsible for payment of all expenses including
insurance, taxes, maintenance, and other operating expenses. The remaining two
tenants are renting space on a "gross" basis, i.e. the landlord is responsible
for payment of all expenses pertaining to these tenants.
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The building and improvements are depreciated over 31.5 to 40 years using a
straight-line method for both financial and income tax reporting purposes. The
financial and income tax basis for the property are the same. In the opinion of
the General Partner, the property is adequately insured. The property is
managed by West Coast Realty Management, Inc. ("WCRM"), an affiliate of the
corporate General Partner.
The Center is dependent upon the vitality of the consumer market in the general
area. Since the City of Chino applies strict building regulations on
developers, it is expected that new development will be limited, thereby
preserving the Center's competitive edge during the Partnership's intended
holding period. Although all areas of Southern California have occasionally
been affected by the economic slowdowns, layoffs, plant closings and military
cutbacks, these economic factors are not expected to significantly impact the
occupancy of the shopping center.
Tenants occupying 10% or more of rental square footage as of December 31, 1997:
Mels Liquor: 15.79% of rental square footage; $36,000 rent per year; lease
expires on May 31, 2002; Renewal Options: Lessee has option to extend lease 5
years to May 31, 2007.
Video Club: 13.69% of rental square footage; $12,690 rent per year; lease
expires on August 31, 1998; Renewal Options: No renewal options.
San Bernardino County Superintendent Schools: 17.11% of rental square footage;
$28,188 rent per year; lease expires on June 30, 1997; Renewal Options: Lessee
has one option to extend the lease for one additional year.
Descry Cal: 10.04% of rentable square footage; $22,508 rent per year; lease
expires on May 31, 2002.
During 1997, the Yorba Center had no tenants accounting for more than 10% of the
total Partnership rental revenue.
PENDING TRANSACTIONS
The Yorba Center located in Chino, California was listed for sale with a
commercial real estate broker in October 1997. The original acquisition cost of
this property was $1,881,147. There is no debt on the property. At this time,
there are no clear indications as to the amount of net proceeds to be realized
from the sale of the property. However, the General Partner expects to be able
to consummate a sale of the property during 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.
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Although the Partnership intends to aggressively market the sale of the Yorba
Center, there are no guarantees that a sale will actually take place within the
time frame mentioned above, and at a sales price acceptable to the Partnership.
SAN MARCOS INDUSTRIAL BUILDING
On January 9, 1990, the Partnership together with Associated Planners Growth
Fund (a 90%/10% interest, respectively) purchased the San Marcos Industrial
Building located in San Marcos, California. On November 1, 1996, Associated
Planners Realty Income Fund ("Income Fund") purchased the remaining 10% from
Associated Planners Realty Growth Fund ("Growth Fund"). This asset consisted of
the remaining 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 $188,001 for the property itself,
less $2,033 for the share of a cash security deposit from the current tenant
that Growth Fund retained. There are no debts in connection with the property.
The industrial building, constructed in 1986 located on a 2.66 acre parcel of
land, consists of 40,720 rentable square feet including 6,000 square feet of
office area plus 1,300 square feet of mezzanine above the office area. The
building was 100% occupied by Professional Care Products, Inc. through January
8th, 1995, on a triple net lease.
On February 13, 1995, a new triple net lease was executed with No Fear, Inc.,
which expires on June 30, 1998. This lease required the tenant to pay
insurance, taxes, maintenance, and all other operating costs.
The building is located in North San Diego County, in an area of increasing
population and desirability for San Diego area professional and skilled workers
and significant employers. It is expected, that the building will benefit from
the projected growth in the North San Diego County area.
The building and improvements are depreciated over 31.5 to 40 years using a
straight-line method for both financial and income tax reporting purposes. The
financial and income tax basis for the property are the same. In the opinion of
the General Partner, the property is adequately insured. The property is
managed by WCRM.
Tenants occupying 10% or more of rental square footage as of December 31, 1997:
No Fear Inc.: 100% of rental square footage; $219,481 rent for the current year;
lease expires on June 30, 1998; Renewal Options: Extend lease for 60 additional
months at lessee's option.
The San Marcos property represented 57.7% of the Partnership's total rental
revenue.
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SUMMARY
As of December 31, 1997, the combined occupancy rate for all of the
Partnership's properties was 100%. The properties were fully leased and are
generating a level of cash flow consistent with the market conditions in which
the properties operate.
The total acquisition cost to the Partnership of each property and the date of
acquisition are as follows:
ACQUISITION ACQUISITION
DESCRIPTION COST DATE
YORBA CENTER $1,882,283 10/25/88
SAN MARCOS INDUSTRIAL BUILDING (90%) $2,816,904 01/09/90
SAN MARCOS INDUSTRIAL BUILDING (10%) $188,001 11/01/96
The schedule below indicates the average occupancy rate expressed as a
percentage of square feet for the last five years:
YEAR YORBA CENTER SAN MARCOS INDUSTRIAL
BUILDING
1997 100% 100%
1996 100% 100%
1995 90% 88%
1994 90% 100%
1993 61% 100%
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
At December 31, 1997, there were 5,096 limited partnership units outstanding and
429 unit holders of record. The units sold are not freely transferable and no
public market for the sold units presently exists or is likely to develop.
Distributions totaling $157,976, $231,812 and $189,361 were made to limited
partners in 1997, 1996, and 1995, to unit holders of record at the end of the
calendar quarters indicated below. These distributions constituted a return of
capital of $36,234, $63,402 and $49,683, in 1997, 1996, and 1995, respectively.
The general partner distributions totaled $17,553, $25,763 and $21,092 for 1997,
1996, and 1995. In addition, $107,016 ($21.00/partnership unit) in
distributions were paid to unit holders subsequent to year-end on February 6,
1998.
The Partnership began paying distributions on a semi-annual basis with the first
record date and payment date being December 31, 1997 and February 6, 1998,
respectively. This change will permit the Partnership to operate more
efficiently with lower Partnership operating expenses. These semi-annual
distributions will include cash distributions for the previous six months of
operations. The decrease in 1997 distributions was due to the fact that the
third and fourth quarter distributions were paid in February 1998, as the
partnership converted to a semi-annual distribution payment method. If the
third quarter distribution for 1997 had been paid in 1997, the total
distribution would have been approximately $211,484.
The limited partner distribution amounts for 1997 and 1996 are summarized below:
RECORD DATE PER UNITS TOTAL
DATE PAID UNIT OUTSTANDING PAID
12/31/94 02/03/95 $6.25 5,096 $31,850
03/31/95 05/05/95 8.4088 5,096 42,851
06/30/95 08/04/95 10.00 5,096 50,960
09/30/95 11/06/95 12.50 5,096 63,700
12/31/95 02/06/96 12.50 5,096 63,700
03/31/96 04/30/96 13.00 5,096 66,248
06/30/96 08/06/96 10.00 5,096 50,904
09/30/96 11/05/96 10.00 5,096 50,960
12/31/96 02/03/97 10.00 5,096 50,960
03/31/97 05/09/97 10.50 5,096 53,508
06/30/97 08/05/97 10.50 5,096 53,508
Distributions are made out of the income from operations, before depreciation
and amortization, available as a result of the previous six months of
operations.
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ITEM 6. SELECTED FINANCIAL DATA
The selected financial data should be read in conjunction with the financial
statements and related notes and ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS appearing elsewhere in this
report.
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
Operations for the years ended December 31,:
Revenues 421,630 424,537 378,489 474,562 $433,422
Net Income 194,210 168,410 139,678 222,525 192,315
Net Income per Limited Partner Unit * 32.49 27.97 22.94 37.57 32.23
Distributions per Limited Partner Unit * + 31.00 45.50 37.16 43.75 47.50
Financial position at December 31:
Total Assets 4,303,178 4,275,221 4,381,018 4,435,929 4,468,918
Partners' Equity 4,260,748 4,242,067 4,331,232 4,380,915 4,381,340
</TABLE>
[FN]
*Net income and distributions per limited partner unit were based on the
weighted average number of outstanding units.
+Approximately $10.50 per limited partner unit was paid in February 1998 -
representing the third quarter 1997 distribution.
ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Certain statements in the Management Discussion and Analysis constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"). Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors
which may cause the actual results, performance or achievements of the
Partnership to be materially different from any future results, performance or
achievements, expressed of implied by such forward-looking statements.
RESULTS OF OPERATIONS - 1997 VS. 1996
Operations for the year ended December 31, 1997 represented a full year of
rental operations for all of the Partnership properties. However,
operations for the year ended December 31, 1996 represented a full year of
rental operations for all properties expect the San Marcos property which was
wholly owned for only two months, and 90% owned for the other ten months of the
1996.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT.)
The net income for the year ended December 31, 1997 ($194,210) was higher than
the year ended December 31, 1996 ($168,410) due to the acquisition of the
remaining 10% interest in the San Marcos property in November 1996, as well as
a decrease in a one-time prior year property tax assessment imposed by the
County of San Bernardino for the Yorba Center property. The Partnership did
not have any adverse events that significantly impacted net income during the
year ended December 31, 1997, and all properties that have been purchased by the
Partnership have operated at levels equal to current expectations. All tenants
were current on their lease obligations.
Rental revenue increased by $6,901 (1.7%) due to the purchase of the remaining
10% of the San Marcos property on November 2, 1996. The purchase generated
additional rental revenue of approximately $3,800 a year and $815 per month
during the year ended December 31, 1997.
Operating expenses decreased by $25,011 (22%) primarily as a result of the
elimination of a one-time prior year property tax assessment imposed by the
County of San Bernardino for the Yorba Center property. General and
administrative costs decreased by $5,943 (15%) due to lower accounting, and
general insurance expense. Interest income decreased by $9,808 (67%) due to
less cash reserve balances maintained during the year ended December 31, 1997 as
compared to the year ended December 31, 1996. Depreciation and amortization
expense increased by $2,247 (2%) as a result of the purchase of the remaining
10% in the San Marcos property during 1996.
During the year ended December 31, 1997, the Partnership distributed $157,976 to
the limited partners and $17,553 to the general partners, as compared to the
year ended December 31, 1996 when the Partnership distributed $231,812 to the
limited partners and $25,763 to the general partners. Cash basis income for the
year ended December 31, 1997 was $296,663. Cash basis income was derived by
adding depreciation and amortization expense to net income. Cash distributions
during 1997 were less ($121,134) than cash basis net income due to the
Partnership electing distribute cash basis net income on a semi-annual basis.
The record dates for the cash distributions are December 31, and June 30 with
payment dates being February and August, respectively. In contrast,
distributions in 1996 were less than cash basis income $11,041.
Overall, the Partnership generated $296,663 in income from operations before
depreciation expense of $102,453. This compares favorably to 1996 when income
from operations totaled $268,616 before depreciation of $100,206. Net income
per limited partnership unit increased from $27.97 in 1996 to $32.49 in 1997.
The number of limited partnership units outstanding in both years was 5,096.
In summary, the operating performance of the Partnership continued to improve
and all properties were operating profitably.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT.)
RESULTS OF OPERATIONS - 1996 VS. 1995
Operations for the year ended December 31, 1996 represented a full year of
rental operations for all properties expect the San Marcos property which
was wholly owned for only two months, and 90% owned for the other ten months of
the year.
The net income for the year ended December 31, 1996 ($168,410) was higher than
the year ended December 31, 1995 ($139,678) due to the acquisition of the
remaining 10% interest in the San Marcos property in November 1996, as well as
the San Marcos property being leased throughout all of 1996 but not leased from
January 8, to February 12, 1995. The Partnership did not have any adverse
events that significantly impacted net income during the year ended December 31,
1996, and all properties that have been purchased by the Partnership have
operated at levels equal to current expectations. All tenants were current on
their lease obligations.
Rental revenue increased $45,172 (12%) due to the San Marcos property not being
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 of 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. Additionally, the remaining 10% in San Marcos that the
Partnership had not owned was acquired on November 2, 1996 which was responsible
for approximately $3,800 in additional rental revenue.
Operating expenses increased $38,524 (49%) as a result of a one-time prior year
property tax assessment imposed by the County of San Bernardino for the Yorba
Center property. General and administrative costs decreased $21,733 (35%) due
to lower accounting, taxes, and general insurance expense. Interest income
increased $876 due to larger cash reserve balances maintained during the year
ended December 31, 1996 as compared to the year ended December 31, 1995.
Depreciation and amortization expense increased $2,130 (2%) as the result of the
ownership of the remaining 10% in the San Marcos property during 1996.
During the year ended December 31, 1996, the Partnership distributed $231,812 to
the limited partners and $25,763 to the general partners, as compared to the
year ended December 31, 1995 when the Partnership distributed $189,361 to the
limited partners and zero to the general partners. Cash basis income for the
year ended December 31, 1996 was $268,616. This was derived by adding
depreciation and amortization expense to net income. Thus, cash distributions
this year were less ($11,041) than cash basis net income. In contrast,
distributions in 1995 were less ($48,393) than cash basis income.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT.)
Overall, the Partnership generated $268,616 in income from operations before
depreciation expense of $100,206. This compares favorably to 1995 when income
from operations totaled $239,359 before depreciation of $98,076 and loss on
government securities of $1,605. Net income per limited partnership unit
increased from $22.94 in 1995 to $27.97 in 1996. The number of limited
partnership units outstanding in each year was 5,096.
In summary, the operating performance of the Partnership continued to improve
and all properties were operating profitably.
LIQUIDITY AND CAPITAL RESOURCES
During the year ended December 31, 1997, the Partnership made distributions to
the limited partners totaling $157,976, of which $36,234 constituted a return of
capital. On February 6, 1998, the Partnership made distributions of $21.00 a
unit to unit holders of record at December 31, 1997. 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 semi-annual distributions of cash, subject to maintaining a
reasonable reserve.
The Partnership began paying distributions on a semi-annual basis with the first
record date and payment date being December 31, 1997 and February 6, 1998,
respectively. This change will permit the Partnership to operate more
efficiently with lower Partnership operating expenses. These semi-annual
distributions will include cash distributions for the previous six months of
operations.
Management uses cash as its primary measure of a partnership's liquidity. Cash
representing 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. Distributions to partners.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT.)
The Partnership has adequate liquidity based upon the above four factors. The
first factor 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. The 1% property reserve requirement is the
minimum guideline that is disclosed in the Partnership's prospectus; the
Partnership had more than enough funds to meet this requirement as of December
31, 1997. The second factor relates to the condition of the Partnership's
properties. Since the properties are in good condition, no unusual maintenance
and repair expenditures are anticipated. The third factor 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 factor relates to partner
distributions. The Partnership makes semi-annual distributions from the results
of operations. Such distributions are subject to payments of Partnership
expenses and reasonable reserves for expenses, maintenance, and replacements.
During the year ended December 31, 1997 the Partnership paid the General Partner
a partnership management fee of $17,553 and distributed $157,976 to the limited
partners, of which $36,234 constituted a return of capital. In February 1998,
the Partnership paid the General Partner a partnership management fee of $11,891
and distributed $107,016 to the limited partners. Partnership management fees
were 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 tenants
that would help alleviate much of the negative impact of inflation.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT.)
CASH FLOWS 1997 VS. 1996
Cash resources increased by $158,296 during 1997 compared to the $189,521
decrease in 1996. The increase was primarily due to the Partnership electing to
begin paying distributions semi-annually instead of quarterly beginning with the
first record and payment dates being December 31, 1997 and February 6, 1998,
respectively. This change represented approximately $107,000 of the increase in
cash resources for the year ended December 31, 1997. In contrast, the decrease
in cash resources during 1996 was the result of the investing activity involving
the acquisition of the 10% interest in San Marcos. Cash provided by operating
activities increased by $333,825 with the largest contributor being $296,663 in
cash basis income. In contrast, cash provided by operating activities in 1996
was $256,054 due primarily to $268,616 in cash basis income. During 1997, cash
used in financing activities was $175,529 which represented distributions to the
limited and general partners. In contrast, cash used for financing activities
in 1996 was $257,575 due to distributions to the limited and general partners.
There were no investing activities during 1997. In contrast, the sole use of
cash in investing activities in 1996 was the $188,001 expended for the
acquisition of the remaining 10% in San Marcos property.
CASH FLOWS 1996 VS. 1995
Cash resources decreased by $189,521 during 1996 compared to the $175,924
increase in 1995. This was the result of normal amounts of financing and
operating activities which took place during the year and the extraordinary
investing activity involving the acquisition of the 10% interest in San Marcos.
Cash provided by operating activities increased by $256,054 with the largest
contributor being the $268,616 of cash basis income. In contrast, cash provided
by operating activities in 1995 was $375,284 due to $237,754 in cash basis
income and the $163,272 received from the sale of government securities (such
securities were purchased in 1993 primarily). During 1996 cash used in
financing activities was $257,575 due to the distributions paid to the limited
and general partners. This continues the Partnership's trend of distributing
virtually all of the cash basis income to partners in the form of quarterly
distributions. In contrast, 1995's cash used in financing activities was
$189,361 due to distributions to the limited and general partners. The sole use
of cash in investing activities in 1996 was the $188,001 expended for the
acquisition of the remaining 10% of the San Marcos property. In contrast in
1995, $9,999 was used to pay for additional tenant improvements for the San
Marcos property.
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ITEM 7. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONT.)
PENDING TRANSACTIONS
The Yorba Center located in Chino, California was listed for sale with a
commercial real estate broker in October 1997. The acquisition cost of this
property was $1,882,283. There is no debt associated with the property. At
this time, there is no clear indication as to the amount of net proceeds to be
realized from the sale of the property. However, the General Partner expects to
be able to consummate a sale of the property during 1998. The proceeds from the
sale of the property will be distributed to the limited partners and the General
Partner in accordance with the terms of the Partnership Agreement.
Although the Partnership intends to aggressively market the Yorba Center
property, 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.
NEW ACCOUNTING PRONOUNCEMENTS
Statement of Financial Accounting Standards No. 130 (SFAS No. 130) "Reporting
Comprehensive Income," issued by the Financial Accounting Standards Board is
effective for financial statements with fiscal years beginning after December
15, 1997. Earlier application is permitted. SFAS No. 130 establishes standards
for reporting and display of comprehensive income and its components in a full
set of general-purpose financial statements. The Company has not determined the
effect on its financial position or results of operations, is any, from the
adoption of this statement.
Statement of Financial Accounting Standards No. 131 (SFAS No. 131), "Disclosure
about Segments of an Enterprise and Related Information," issued by the
Financial Accounting Standards Board is effective for financial statements with
fiscal years beginning after December 15, 1997. The new standard requires that
public business enterprises report certain information about operating segments
in complete sets of financial statements of the enterprises and in condensed
financial statements of interim periods issued to shareholders. It also
requires that public business enterprises report certain information about their
products and services, the geographic areas in which they operate and their
major customers. The Company has not determined the effect on its financial
position or results of operations, if any, from the adoption of this statement.
14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
PAGE
Report of Independent Certified Public Accountants 16
Balance Sheets - December 31, 1997 and 1996 17
Statements of Income for the years ended
December 31, 1997, 1996 and 1995 18
Statements of Partners' Equity for the years ended
December 31, 1997, 1996 and 1995 19
Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995 20
Summary of Accounting Policies 21-22
Notes to Financial Statements 23-27
Financial Statement Schedule
Schedule III Real Estate and Accumulated Depreciation 33
15
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Associated Planners Realty Income Fund
(a California limited partnership)
Los Angeles, California
We have audited the accompanying balance sheets of Associated Planners Realty
Income Fund (a California limited partnership) as of December 31, 1997 and 1996
and the related statements of income, partners' equity, and cash flows for each
of the three years in the period ended December 31, 1997. We have also
audited the schedule listed in the accompanying index. These financial
statements and schedule are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements and
schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and schedule are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
schedule. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Associated Planners Realty
Income Fund (a California limited partnership), at December 31, 1997 and 1996,
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1997 in conformity with generally accepted
accounting principles.
Also, in our opinion, the schedule presents fairly, in all material respects,
the information set forth therein.
BDO SEIDMAN,LLP
Los Angeles, California
January 29, 1998
16
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
<CAPTION>
December 31, 1997 1996
<S> <C> <C>
ASSETS
Rental real estate, less accumulated
depreciation (Note 2) $ 4,058,189 $ 4,160,642
Cash and cash equivalents 230,503 72,207
Other assets 14,486 42,372
Total assets $4,303,178 $4,275,221
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $ 4,609 $ ---
Related party (Note 4(d)) 8,421 4,578
Security deposits 29,400 28,576
Total liabilities 42,430 33,154
PARTNERS' EQUITY (Notes 5 and 6)
Limited partners:
$1,000 stated value per unit - authorized
12,000 units; issued and outstanding 5,096 4,212,880 4,205,288
General partners 47,868 36,779
Total partners' equity 4,260,748 4,242,067
Total liabilities and partners' equity $4,303,178 $4,275,221
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to financial
statements.
17
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
<CAPTION>
Years ended December 31, 1997 1996 1995
<S> <C> <C> <C>
REVENUES
Rental (Notes 2 and 3) $416,896 $409,995 $364,823
Interest 4,734 14,542 13,666
421,630 424,537 378,489
COSTS AND EXPENSES
Operating 91,257 116,268 77,744
General and administrative 33,710 39,653 61,386
Depreciation and amortization 102,453 100,206 98,076
Loss on government securities --- --- 1,605
227,420 256,127 238,811
NET INCOME $194,210 $168,410 $139,678
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Note 5) $32.49 $27.97 $22.94
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to financial
statements.
18
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
<CAPTION>
Limited Partners General
Total Units Amount Partner
<S> <C> <C> <C> <C>
BALANCE, January 1, 1995 4,380,915 5,096 4,196,996 183,919
Net income for the year 139,678 --- 116,885 22,793
Distribution to limited partners ( 189,361) --- (189,361) ---
BALANCE, December 31, 1995 4,331,232 5,096 4,124,520 206,712
Net income for the year 168,410 --- 142,550 25,860
Distribution to limited partners (231,812) --- (231,812) ---
Distribution to general partners (25,763) --- --- (25,763)
Reallocation of capital (Note 6) --- --- 170,030 (170,030)
BALANCE, December 31, 1996 $4,242,067 5,096 $4,205,288 $36,779
Net income for the year 194,210 --- 165,568 28,642
Distribution to limited partners (157,976) --- (157,976) ---
Distribution to general partners (17,553) --- --- (17,553)
BALANCE, December 31, 1997 $4,260,748 5,096 $4,212,880 $47,868
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to financial
statements.
19
<PAGE>
<TABLE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<CAPTION>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
Years ended December 31, 1997 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $194,210 $168,410 $139,678
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 102,453 100,206 98,076
Increase (decrease) from changes in operating
assets and liabilities:
Government securities --- --- 163,272
Accounts receivable --- --- 5,991
Other assets 27,886 4,071 (26,505)
Accounts payable 8,452 (18,918) (820)
Security deposits 824 2,286 (4,408)
Net cash provided by operating activities 333,825 256,055 375,284
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to rental real estate --- (188,001) (9,999)
Net cash (used in) investing activities --- (188,001) (9,999)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to limited partners (157,976) (231,812) (189,361)
Distributions to general partners (17,553) (25,763) ---
Net cash (used in) financing activities (175,529) (257,575) (189,361)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 158,296 (189,521) 175,924
CASH AND CASH EQUIVALENTS, beginning of year 72,207 261,728 85,804
CASH AND CASH EQUIVALENTS, end of year $230,503 $72,207 $261,728
</TABLE>
[FN]
See accompanying summary of accounting policies and notes to financial
statements.
20
<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 estate
throughout the United States with emphasis on properties located
in California and southwestern states. The Partnership purchased
such properties on an all cash basis and intended on owning and
operating such properties for investment over an anticipated
holding period of approximately five to ten years.
BASIS OF The financial statements do not give effect to any assets that
PRESENTATION the partners may have outside of their interest in the partner-
ship, nor to any personal obligations, including income taxes,
of the partners.
RENTAL REAL
ESTATE AND Assets are stated at cost. Depreciation is computed using the
DEPRECIATION straight-line method over estimated useful lives ranging from
31.5 to 40 years for financial 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.
RENTAL Rental revenue is recognized when the amount is due and payable
REVENUE under the terms of a lease agreement.
INVESTMENTS The difference between historical cost and market value are
reported as unrealized gains or losses in the statement of
income.
For the purposes of the statements of cash flows, the
STATEMENTS Partnership considers cash in the bank and all highly liquid
OF investments purchased with original maturities of three months
CASH FLOWS or less, to be cash and cash equivalents.
USE OF The preparation of financial statements in conformity with
ESTIMATES 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.
21
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
EARNINGS On March 3, 1997, the FASB issued Statement of Financial
(LOSS) PER Accounting Standards No. 128. Earnings per share (SFAS 128).
SHARE This pronouncement provides a different method of calculating
earnings per share than is currently used in accordance with
APB 15, Earnings per Share. SFAS 128 provides for the
calculation of Basic and Diluted earnings per share. Basic
earnings per share includes no dilution and is computed by
dividing income available to common shareholders by the
weighted average number of common shares outstanding for the
period. Diluted earnings per share reflects the potential
dilution of securities that could share in the earnings of
the entity, similar to fully diluted earnings per share.
Except where the provisions of the Securities and Exchange
Commission's Staff Accounting Bulletin No. 98 are applicable,
common share equivalents have been excluded in all years
presented in the Statements of Operations when the effect of
their inclusion would be anti-dillutive. SFAS 128 is
effective for fiscal years and interim periods after December
15, 1997; early adoption is not permitted. The Company has
adopted this pronouncement during the fiscal year ended
December 31, 1997. The adoption of SFAS 128 does not effect
earnings per share for fiscal year ended December 31, 1997
and prior years.
NEW ACCOUNTING
PRONOUNCEMENTS Statement of Financial Accounting Standards No. 130 (SFAS
No. 130) "Reporting Comprehensive Income," issued by the
Financial Accounting Standards Board is effective for
financial statements with fiscal years beginning after
December 15, 1997. Earlier application is permitted. SFAS
No. 130 establishes standards for reporting and display of
comprehensive income and its components in a full set of
general-purpose financial statements. The Company has not
determined the effect on its financial position or results of
operations, is any, from the adoption of this statement.
Statement of Financial Accounting Standards No. 131 (SFAS No.
131), "Disclosure about Segments of an Enterprise and Related
Information," issued by the Financial Accounting Standards
Board is effective for financial statements with fiscal years
beginning after December 15, 1997. The new standard requires
that public business enterprises report certain information
about operating segments in complete sets of financial
statements of the enterprises and in condensed financial
statements of interim periods issued to shareholders. It
also requires that public business enterprises report certain
information about their products and services, the geographic
areas in which they operate and their major customers. The
Company has not determined the effect on its financial
position or results of operations, if any, from the adoption
of this statement.
22
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
1. NATURE OF The Partnership began accepting subscriptions in October
PARTNERSHIP 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.
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 $1,882,283
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 are:
December 31, 1997 1996
Land $1,332,861 $1,332,861
Buildings and improvements 3,554,327 3,554,327
4,887,188 4,887,188
Less accumulated depreciation 828,999 726,546
Rental real estate, net $4,058,189 $4,160,642
23
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
2. RENTAL REAL A significant portion of the Partnership's rental revenue
ESTATE was earned from tenants whose individual rents
(CONTINUED) represented more than 10% of total rental revenue.
Specifically:
One tenant accounted for 58% in 1997;
One tenant accounted for 48% in 1996;
Two tenants accounted for 12% and 52% in 1995.
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 $188,001 for the property itself, less
$2,033 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.
The General Partner of Associated Planners Realty Income
Fund made a decision to attempt to sell one of the
Partnership's two properties. The Yorba Center located
in Chino, California will be listed for sale with a
commercial real estate broker. 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 during 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.
3. FUTURE As of December 31, 1997, future minimum rental income
MINIMUM under existing leases, excluding month to month rental
RENTAL INCOME agreements, that have remaining noncancelable terms in
excess of one year are as follows:
Years ending
December 31, Amount
1998 256,307
1999 120,507
2000 115,463
2001 109,662
2002 86,027
Thereafter ---
Total $687,966
Future minimum rental income does not include lease
renewals or new leases that may result after a noncan-
celable-lease expires.
24
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
4. Related Party (a) In accordance with the partnership agreement,
Transactions compensation earned by or services reimbursed to the
General Partner consisted of the following:
Year ended December 31, 1997 1996 1995
Partnership management fees $17,553 $25,860 $21,092
Administrative services:
Data processing 4,851 4,805 4,709
Postage 2,363 2,387 2,582
Investor processing 1,961 1,999 1,884
Duplication 833 898 942
Investor Communications 1,497 1,405 1,413
Miscellaneous 495 506 471
$29,553 $37,860 $33,093
(b) 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.
(c) Property management fees incurred in accordance with
the partnership agreement with West Coast Realty
Management, Inc., an affiliate of the corporate General
Partner, totaled $21,068, $20,054 and $17,568 for 1997,
1996 and 1995.
(d) Related party accounts payable (receivable) are as
follows:
December 31, 1997 1996
West Coast Realty Adivisors, Inc. $ 3,000 $ (1,000)
West Coast Realty Management, Inc. 5,421 5,578
8,421 4,578
25
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
5. NET INCOME The Net Income per Limited Partnership Unit was computed
AND CASH in accordance with the partnership agreement on the basis
DISTRIBUTIONS of the weighted average number of outstanding Limited
PER LIMITED Partnership Units of 5,096 for 1997, 1996 and 1995.
PARTNERSHIP
UNIT The Limited Partner cash distributions, computed in
accordance with the Partnership Agreement, were as
follows:
Outstanding Amount Total
Record Date 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
September 30, 1996 5,096 $ 10.00 $50,960
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 $231,812
September 30, 1995 5,096 $ 12.50 $ 63,700
June 30, 1995 5,096 10.00 50,960
March 31, 1995 5,096 8.4088 42,851
December 31, 1994 5,096 6.25 31,850
Total $189,361
The Partnership began paying distributions on a semi-
annual basis with the first record date and payment date
being December 31, 1997 and February 6, 1998,
respectively. This change will permit the Partnership to
operate more efficiently with lower Partnership operating
expenses. These semi-annual distributions will include
cash distributions for the previous six months of
operations.
26
<PAGE>
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
6 REALLOCATION OF Per the provisions of Section 11.1 (V)(ii) of the
PARTNER BALANCES 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.
27
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
28
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Partnership is managed by the General Partners and the Limited Partners
have no right to participate in the management of the Partnership or its
business.
Resumes of the General Partners' principal officers and directors and a
description of the General Partners are set forth in the following paragraphs.
See description below.
WEST COAST REALTY ADVISORS, INC.
West Coast Realty Advisors, Inc. ("WCRA") is a California corporation
formed on May 10, 1983 for the purpose of structuring real estate programs and
to act as general partner of such programs. It is a subsidiary of Associated
Financial Group, Inc.
PHILIP N. GAINSBOROUGH (Born 1938) is Chairman and a Director of West Coast
Realty Advisors, Inc. Mr. Gainsborough is also currently the President of
Associated Financial Group, Inc., Associated Securities Corp., Associated
Planners Insurance Services, Inc., and Associated Planners Investment Advisory,
Inc. In addition, from January 1981 to the present, he has served as President
of Gainsborough Financial Consultants, Inc., a financial planning firm located
in Los Angeles, California. From January 1981 to December 1982, Mr.
Gainsborough served as a Registered Principal of Private Ledger Financial
Services, Inc. From January 1977 to December 1980, he was employed by
E.F.Hutton & Co. as a Registered Representative.
W. THOMAS MAUDLIN JR. (Born 1936) is a Director and President of West Coast
Realty Advisors, Inc. ("WCRA"). He is also co-General Partner (with WCRA) of
the Partnership. Mr. Maudlin has been active in the real estate area for over
30 years, serving as co-developer of high-rise office buildings and
condominiums. He has structured transactions for syndicators in apartment
housing, including sale leasebacks, all-inclusive trust deeds, buying and
restructuring transactions to suit a particular buyer, and as a buyer acting as
a principal. Mr. Maudlin was co-developer of the Gateway Los Angeles office
building, a 165,000 square foot, fourteen-story office building located in West
Los Angeles. From 1980 to 1985, in partnership with the Muller Company, he
developed eleven acres in San Bernardino which included a 42,000 square-foot
office building, a six-plex movie theater and two restaurants. From 1980 to
1985, Mr. Maudlin was involved in building a 134-unit condominium development in
San Bernardino, California, a shopping center, and a restaurant in Ventura. He
is a graduate of the University of Southern California.
29
<PAGE>
NEAL NAKAGIRI (Born 1954) serves as Executive Vice President, General
Counsel, Chief Operating Officer and Secretary of Associated Financial Group,
Inc. He is Vice President for two subsidiaries, Associated Securities Corp. and
Associated Planners Investment Advisory, Inc. He joined the "Associated" group
of companies in March 1985. He was Vice President of Compliance with Morgan,
Olmstead, Kennedy & Gardner from 1984 to 1985. He was First Vice President and
Director of Compliance with Jefferies and Co., Inc. from 1981 to 1984. He was
Vice President and Director of Compliance at W & D Securities, Inc. from 1980 to
1983. He was an Investigator with the National Association of Securities
Dealers, Inc. from 1976 to 1980. He has a B.A. degree in Economics from UCLA
(1976) and a J.D. from Loyola Law School of Los Angeles (1991). He is a member
of the California Bar and the Compliance and Legal Division of the Securities
Industry Association.
MICHAEL G. CLARK (Born 1956) is Senior Vice President/Treasurer of West
Coast Realty Advisors, Inc., Associated Financial Group, Inc., and Associated
Securities Corp. Prior to joining AFG in 1986, he served as Controller for
Quest Resources, a Los Angeles-based syndicator and operator of alternative
energy projects, from October 1984 to March 1986, and Assistant Controller for
Valley Cable T.V., from March 1982 through September 1984. In addition, Mr.
Clark served as an auditor for Arthur Young & Co. in Los Angeles, from July 1978
to March 1982. He is a graduate of the University of California, Santa Barbara
(BA) and California State University, Northridge (MS).
ITEM 11. EXECUTIVE COMPENSATION
During its last calendar year, the Registrant paid no direct or indirect
compensation to directors or officers.
The Registrant has no annuity, pension or retirement plans, or existing
plan or arrangement pursuant to which compensatory payments are proposed to
be made in the future to directors or officers.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Registrant is a limited partnership and has no officers or directors.
The Registrant has no outstanding securities possessing general voting rights.
30
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Registrant was organized in December 1986 as a California Limited
Partnership. Its General Partners (collectively referred to herein as the
"General Partner") are West Coast Realty Advisors, Inc. and W. Thomas Maudlin
Jr., an individual. The Registrant has no executive officers or directors.
Philip N. Gainsborough, an officer of the General Partner, made an original
limited partnership contribution to the Partnership in March 1987, which was
subsequently paid back to him in March 1988 when the Partnership met its minimum
funding requirement. The General Partner and its affiliates are entitled to
compensation from the Partnership for the following services:
1. For Partnership management services rendered to the Partnership, the
General Partner is entitled to receive up to 10% of all distributions of cash
from operations. For the year ended December 31, 1997, the amount paid the
General Partner was $17,553. In addition, the General Partner is entitled to
reimbursement for certain public offering expenses, the cost of certain
personnel employed in the organization of the Partnership, and certain
administrative services performed by the General Partner. For the year ended
December 31, 1997, the Partnership reimbursed $12,000 to the General Partner for
these expenditures.
2. For property management services, the General Partner engaged
West Coast Realty Management, Inc. ("WCRM") an affiliate of the General Partner.
For the year ended December 31, 1997, the Partnership incurred property
management fees of $21,068 with WCRM.
3. The General Partner received a 10% allocation of net income before
depreciation and amortization and 1% of depreciation and amortization. For the
year ended December 31, 1997 this resulted in a $29,667 allocation of net income
before depreciation and amortization and a $1,025 allocation of depreciation and
amortization, or a net income allocation of $28,642.
4. On December 31, 1997 the Partnership was indebted to WCRM for $5,421
and to WCRA for $3,000, both of which were paid subsequent to year-end.
31
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. FINANCIAL STATEMENTS
The following financial statements of Associated Planners Realty
Income Fund, a California Limited Partnership, are included in
PART II, ITEM 8:
PAGE
Report of Independent Certified Public Accountants........ 16
Balance Sheets -- December 31, 1997 and 1996 .............. 17
Statements of Income for the years ended
December 31, 1997, 1996, and 1995 .................... 18
Statements of Partners' Equity for the years ended
December 31, 1997, 1996, and 1995 .................... 19
Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995...................... 20
Summary of Accounting Policies ............................ 21-22
Notes to Financial Statements ............................. 23-27
2. FINANCIAL STATEMENT SCHEDULES
Schedule III --Real Estate and Accumulated Depreciation .. 33
All other schedules have been omitted because they are either not
required, not applicable or the information has been otherwise \
supplied.
(b) REPORTS ON FORM 8-K
NONE
(c) EXHIBITS
NONE
32
<PAGE>
<TABLE>
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 1997
INFORMATION REQUIRED BY RULE 12-28 IS AS FOLLOWS
Gross Amount at
Initial Cost Cost which Carried at
Capitalized Close of Period Life (Years)
Building Subsequent on which
to Building Depreciation
& Acquisition & Year Computed
Improve- Improve- Improve- Total Accumulated Construction Date Building &
Description Land ments ments Land ments Cost Depreciation Completed Acquired Improvements
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Yorba Center
Chino, California 555,344 1,295,803 31,136 555,344 1,326,939 1,882,283 346,172 1987 10-88 31.5-40
San Marcos
Industrial
Building
San Marcos,
California 727,517 2,079,388 198,000 777,517 2,227,388 3,004,905 482,827 1986 1-90 31.5-40
TOTAL 1,282,861 3,375,191 229,136 1,332,861 3,554,327 4,887,188 828,999
</TABLE>
<TABLE>
There were no mortgage notes payable on the properties at December 31, 1997.
<CAPTION>
A reconciliation of accumulated depreciation is as follows: A reconciliation of the total cost is as follows:
<S> <C> <S> <C>
Balance at January 1, 1995........... 528,264 Balance at January 1, 1995.......... 4,689,188
1995 Depreciation .................. 98,076 1995 Additions ..................... 9,999
Balance at December 31, 1995 ........ 626,340 Balance at December 31, 1995 ....... 4,699,187
1996 Depreciation ................... 100,206 1996 Additions ..................... 188,001
Balance at December 31, 1996 ........ 726,546 Balance at December 31, 1996 ....... 4,887,188
1997 Depreciation ................... 102,453 1997 Additions ..................... ---
Balance at December 31, 1997 ........ $828,999 Balance at December 31, 1997 ...... $4,887,188
</TABLE>
33
<PAGE>
SIGNATURES
Pursuant to the requirements of the 13 or 15(d) 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)
W. THOMAS MAUDLIN JR.
(A General Partner)
By: WEST COAST REALTY ADVISORS, INC.
(A General Partner)
NEAL E. NAKAGIRI
(Director and Executive Vice President/General Counsel)
MICHAEL G. CLARK
(Vice President/Treasurer)
Date: March 19, 1998
34
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000808420
<NAME> ASSOCIATED PLANNERS REALTY INCOME FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 230,503
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 244,989
<PP&E> 4,887,188
<DEPRECIATION> (828,999)
<TOTAL-ASSETS> 4,303,178
<CURRENT-LIABILITIES> 42,430
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,260,748
<TOTAL-LIABILITY-AND-EQUITY> 4,303,178
<SALES> 416,896
<TOTAL-REVENUES> 421,630
<CGS> 0
<TOTAL-COSTS> 227,420
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 194,210
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 194,210
<EPS-PRIMARY> 32.49
<EPS-DILUTED> 32.49
</TABLE>
