<PAGE> 1
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 MARCH 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 33-11013
ASSOCIATED PLANNERS REALTY INCOME FUND
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
CALIFORNIA 95-4120092
--------------------------------- ---------------------
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5933 W. CENTURY BLVD., SUITE 900
LOS ANGELES, CALIFORNIA 90045
------------------------------------------
(Address of principal executive offices)
(Zip Code)
(310) 670-0800
------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
<PAGE> 2
PART 1. FINANCIAL INFORMATION
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
<TABLE>
<CAPTION>
=====================================================================================
MARCH 31, 1999 December 31, 1998
(UNAUDITED) (Audited)
- -------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Rental real estate held for sale, less accumulated
depreciation (Note 2) $ 1,143,264 $ 3,605,718
Cash and cash equivalents 2,698,334 223,508
Restricted cash -- 50,000
Other assets 12,516 6,148
- -------------------------------------------------------------------------------------
TOTAL ASSETS $ 3,854,114 $ 3,885,374
=====================================================================================
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES
Accounts payable:
Trade $ 3,852 $ --
Related party (Note 3) 5,361 5,837
Security deposits 9,249 63,576
- -------------------------------------------------------------------------------------
TOTAL LIABILITIES 18,462 69,413
PARTNERS' EQUITY (NOTES 4, 5 AND 6)
Limited partners:
$1,000 stated value per unit - authorized
12,000 units; issued and outstanding 5,096 3,837,330 3,821,794
General partners (1,678) (5,833)
- -------------------------------------------------------------------------------------
TOTAL PARTNERS' EQUITY 3,835,652 3,815,961
- -------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 3,854,114 $ 3,885,374
=====================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 3
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' EQUITY
THREE MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
LIMITED PARTNERS
-------------------- GENERAL
TOTAL UNITS AMOUNT PARTNER
----------- ----- ----------- --------
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1998 $ 3,815,961 5,096 $ 3,821,794 $ (5,833)
Net income 178,233 -- 158,224 20,009
Distributions to limited partners (142,688) -- (142,688) --
Distributions to general partner (Note 3(a)) (15,854) -- -- (15,854)
----------- ----- ----------- --------
BALANCE AT MARCH 31, 1999 $ 3,835,652 5,096 $ 3,837,330 $ (1,678)
=========== ===== =========== ========
</TABLE>
THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
LIMITED PARTNERS
-------------------- GENERAL
TOTAL UNITS AMOUNT PARTNER
----------- ----- ----------- --------
<S> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 $ 4,260,748 5,096 $ 4,212,880 $ 47,868
Net income 33,969 -- 28,266 5,703
Distributions to limited partners (107,016) -- (107,016) --
Distributions to general partner (Note 3(a)) (11,891) -- -- (11,891)
----------- ----- ----------- --------
BALANCE AT MARCH 31, 1998 $ 4,175,810 5,096 $ 4,134,130 $ 41,680
=========== ===== =========== ========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 4
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
======================================================================================
THREE MONTHS Three Months
ENDED Ended
MARCH 31, 1999 March 31, 1998
(UNAUDITED) (Unaudited)
- --------------------------------------------------------------------------------------
<S> <C> <C>
REVENUES
Rental (Note 2) $ 47,226 $85,006
Gain on sale of property (Notes 2 and 6) 199,006 --
Interest 5,213 2,595
- --------------------------------------------------------------------------------------
251,445 87,601
- --------------------------------------------------------------------------------------
COSTS AND EXPENSES
Operating 24,755 8,495
Property taxes 6,490 --
Property management fees (Note 3 (c)) 2,361 4,185
General and administrative 15,326 15,334
Depreciation and amortization 24,280 25,618
- --------------------------------------------------------------------------------------
73,212 53,632
- --------------------------------------------------------------------------------------
NET INCOME $178,233 $33,969
======================================================================================
NET INCOME PER LIMITED PARTNERSHIP
UNIT (Note 4) $ 31.05 $ 5.55
======================================================================================
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
ASSOCIATED PLANNERS REALITY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
=============================================================================================
THREE MONTHS Three Months
ENDED Ended
MARCH 31, 1999 March 31, 1998
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (UNAUDITED) (Unaudited)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 178,233 $ 33,969
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 24,280 25,618
Gain on sale of property (199,006) --
Increase (decrease) from changes in:
Other assets (6,368) 3,859
Accounts payable and security deposits (50,951) (4,303)
- ---------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (53,812) 59,143
- ---------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of rental real estate 2,637,180 --
Forfeited deposit on sale of San Marcos property 50,000
- ---------------------------------------------------------------------------------------------
NET CASH PROVIDED BY INVESTING ACTIVITIES 2,687,180 --
- ---------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions to limited partners (142,688) (107,016)
Distributions to general partners (15,854) (11,891)
- ---------------------------------------------------------------------------------------------
NET CASH (USED IN) FINANCING ACTIVITIES (158,542) (118,907)
- ---------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,474,826 (59,764)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 223,508 230,503
- ---------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,698,334 $ 170,739
=============================================================================================
</TABLE>
See accompanying notes to financial statements
<PAGE> 6
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 the southwestern states. The Partnership
purchased such properties on an all cash basis and 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 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
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 REVENUE
Rental revenue is recognized when the amount is due and payable under the terms
of a lease agreement and collection is probable.
STATEMENTS OF CASH FLOWS
For the 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.
<PAGE> 7
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
SUMMARY OF ACCOUNTING POLICIES
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.
NET INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT
Net income (loss) per limited partnership unit is calculated by dividing the
limited partners' share of net income (loss) by the weighted average number of
limited partnership units outstanding for the period.
<PAGE> 8
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1998
NOTE 1 - PRESENTATION OF INTERIM INFORMATION
In the opinion of the General Partner of Associated Planners Realty Income Fund
(the "Partnership"), the accompanying unaudited financial statements include all
normal adjustments considered necessary to present fairly the financial position
as of March 31, 1999, and the results of operations and cash flows for the three
months ended March 31, 1999 and 1998. Interim results are not necessarily
indicative of results for a full year.
The financial statements and notes are presented as permitted by Form 10Q, and
do not contain certain information included in the Partnership's audited
financial statements and notes for the fiscal year ended December 31, 1998.
NOTE 2 - RENTAL REAL ESTATE HELD FOR SALE
The Partnership owns the following rental real estate property:
<TABLE>
<CAPTION>
Location (Property Name) Date Purchased Cost
==========================================================================================
<S> <C> <C>
Chino, California
(Yorba Center) - Sold April 1, 1999 October 25, 1988 $1,537,354
The major categories of rental real estate:
MARCH 31, DECEMBER 31,
1999 1998
==========================================================================================
Land $ 452,358 $1,237,407
Building and improvements 1,084,996 3,299,781
- ------------------------------------------------------------------------------------------
1,537,354 4,537,188
Less accumulated depreciation 394,090 931,470
- ------------------------------------------------------------------------------------------
Net rental real estate held for sale 1,143,264 3,605,718
==========================================================================================
</TABLE>
On March 24, 1999 the San Marcos property was sold to an unaffiliated buyer. The
sales price of $2,730,000 was arrived at through arms-length negotiations with
the buyer. The net proceeds from the sale equaled $2,582,158 which will be
distributed to the limited and general partners in accordance with the terms of
the partnership agreement. The Partnership recognized a gain of $199,006 from
the sale.
<PAGE> 9
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1998
(CONTINUED)
NOTE 2 - RENTAL REAL ESTATE HELD FOR SALE (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:
One tenant accounted for 100% for the three months ended March 31, 1999;
Two tenants accounted for 55% and 45%, respectively, for the three months ended
March 31, 1998;
During the quarter ended September 30, 1998, the Partnership determined that the
total expected future cash flows from the disposition of the Yorba Center
Property are less than the carrying value of the property. As a result, an
impairment loss of $350,000 was recorded, measured as the amount by which the
carrying amount of the asset exceeded its fair value less cost to sell. The fair
value was determined based on a negotiated sales contract with an unrelated
buyer of 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 $15,854 for the three months ended March 31,
1999 and $11,891 for the three months ended March 31, 1998. See Note 6.
(b) For administrative services rendered to the Partnership, the General
Partner, in accordance with the partnership agreement, was reimbursed $3,000 for
the three months ended March 31, 1999 and 1998.
(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 $2,361 for the three months March 31, 1999, and $4,185
for the three months ended March 31, 1998.
<PAGE> 10
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1998
(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 1999 and 1998.
The Limited Partner cash distributions, computed in accordance with the
Partnership Agreement, were as follows:
<TABLE>
<CAPTION>
Record Date Outstanding Amount Total
Units Per Unit Distribution
==================================================================================
<S> <C> <C> <C>
December 31, 1998 5,096 28.000 142,688
- ----------------------------------------------------------------------------------
Total $142,688
==================================================================================
June 30, 1998 5,096 30.000 152,881
December 31, 1997 5,096 21.000 107,016
- ----------------------------------------------------------------------------------
Total $259,897
==================================================================================
</TABLE>
NOTE 5 - REALLOCATION OF PARTNER BALANCES
Per the provisions of Section 11.1 (V)(ii) of the Partnership Agreement, the
General Partner determined that action was necessary to "cure the ambiguities"
within the Agreement. The ambiguity involved the treatment of the partnership
management fee, being paid to the General Partner, as an expense of the
Partnership, as opposed to a general partner withdrawal of capital. It was
determined that the partnership management fee shall be treated as a withdrawal
of capital in 1996 and beyond with a retroactive reallocation of capital for
partnership management fees paid prior to 1996. In order to properly reflect
this reallocation, a transfer of $170,030 was made from the General Partner's
capital account to the Limited Partners capital account during the quarter ended
March 31, 1996.
<PAGE> 11
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 1999 AND 1998 (UNAUDITED)
AND YEAR ENDED DECEMBER 31, 1998 (CONTINUED)
NOTE 6 - SUBSEQUENT EVENT
On April 1, 1999, the Partnership sold the last remaining property, known as the
Yorba Center property, located in Chino, California. The sales price of
$1,325,000 was arrived through arm-length negotiations with an unaffiliated
buyer. The net proceeds from the sale equaled $601,853 in cash, which will be
distributed to the limited and general partners in accordance with the terms of
the partnership agreement. Additionally, the Partnership received a three-year,
8%, $625,000 note secured by a first deed of trust on the Yorba Center property
from the buyer. The Partnership recognized a gain of $90,533 from the sale.
<PAGE> 12
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S 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 Company
to be materially different from any future results, performance or achievements,
expressed of implied by such forward-looking statements.
INTRODUCTION
The Partnership began offering for sale limited partnership units on October
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, un-leveraged income-producing property, such as residential
property, office buildings, commercial buildings, industrial properties, and
shopping centers. The Partnership intended on owning and operating such
properties for investment over an anticipated holding period of approximately
five to ten years.
The Partnership's principal investment objectives were to invest in rental real
estate properties that would:
(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> 13
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
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.
RESULTS OF OPERATIONS - MARCH 31, 1999 VS. MARCH 31, 1998
Operations for the quarter ended March 31, 1999 represented a full quarter of
rental operations for the Partnership's two properties, except the San Marcos
property which was sold on March 24, 1999.
The net income for the quarter ended March 31, 1999 ($178,233) was higher than
the quarter ended March 31, 1998 ($33,969) due to a $199,006 gain recognized on
the sale of the San Marcos property, offset by lower rents collected from the
San Marcos property. On March 24, 1999, the Partnership sold the property
located in San Marcos, California to an unaffiliated buyer. The sales price of
$2,730,000 was arrived through arms-length negotiations with the buyer.
Rental revenue decreased $37,780 (44%) for the three months ended March 31, 1999
as compared to the three months ended March 31, 1998, due to lower rents
collected from the San Marcos property. Interest income increased $2,618 (101%)
for the three months ended March 31, 1999 as compared to the three months ended
March 31, 1998 due to higher cash balances maintained in money market accounts
during the quarter ended March 31, 1999, compared to the quarter ended March 31,
1998.
Operating expenses increased $16,260 (191%) as a result of higher common area
maintenance, expenses, property legal expenses and closing escrow costs
pertaining to the sale of the San Marcos property during the quarter ended March
31, 1999 compared to the quarter ended March 31, 1998. General and
administrative expenses decreased $8 from March 31, 1998 to March 31, 1999.
Depreciation expense decreased $1,338 (5.2%) from March 31, 1998 to March 31,
1999, due to the sale of the San Marcos property on March 24, 1999.
<PAGE> 14
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
RESULTS OF OPERATIONS - MARCH 31, 1999 VS. MARCH 31, 1998 (CONT.)
During the quarter ended March 31, 1999, the Partnership distributed $142,688 to
the limited partners and $15,854 to the general partners, as compared to the
quarter ended March 31, 1998 when the Partnership distributed $107,016 to the
limited partners and $11,891 to the general partners. This increase was due to
the Partnership converting from a quarterly distribution cycle to a semi-annual
distribution cycle with the first record date and payment date being December
31, 1997 and February 6, 1998, respectively. Cash basis income for the quarter
ended March 31, 1999 was $202,513. This was derived by adding depreciation and
amortization expense to net income. In contrast, cash basis income for the
quarter ended March 31, 1998 was $59,587.
Overall, the Partnership generated $202,513 in income from operations before
depreciation expense of $24,280 for the quarter ended March 31, 1999. This
compares unfavorably to the quarter ending March 31, 1998 when income from
operations totaled $59,587 before depreciation of $25,618. Net income per
limited partnership unit increased from $5.55 in 1998 to $31.05 in 1999. The
number of limited partnership units outstanding in each quarter was 5,096.
RESULTS OF OPERATIONS - MARCH 31, 1998 VS. MARCH 31, 1997
Operations for the quarter ended March 31, 1998 represented a full quarter of
rental operations for the Partnership's two properties.
The net income for the quarter ended March 31, 1998 ($33,969) was lower than the
quarter ended March 31, 1997 ($43,586) due to lower rents collected from the San
Marcos property. The Partnership did not have any adverse events that
significantly impacted net income during the quarter ended March 31, 1998, 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 decreased $16,751 (16%) for the three months ended March 31, 1998
as compared to the three months ended March 31, 1997, due to lower rents
collected from the San Marcos property. Interest income increased $2,335 for the
three months ended March 31, 1998 as compared to the three months ended March
31, 1997. This increase was due to the Partnership converting from a quarterly
distribution cycle to a semi-annual distribution cycle with the first record
date and payment date being December 31, 1997 and February 6, 1998,
respectively. Hence, net income for the third quarter 1997 was held in a
interest bearing account and paid on February 6, 1998. In contrast, the net
income for the third quarter in 1996 was paid in November 1996.
<PAGE> 15
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
RESULTS OF OPERATIONS - MARCH 31, 1998 VS. MARCH 31, 1997 (CONTINUED)
Operating expenses decreased $5,283 (38%) as a result of lower property taxes
and leasing commission expenses during the quarter ended March 31, 1998 compared
to the quarter ended March 31, 1997. General and administrative expenses
increased $5,695 (59%) due to higher legal and accounting fees. Depreciation
expense remained constant for the quarters ending March 31, 1998 and March 31,
1997.
During the quarter ended March 31, 1998, the Partnership distributed $107,016 to
the limited partners and $11,891 to the general partners, as compared to the
quarter ended March 31, 1997 when the Partnership distributed $50,960 to the
limited partners and $5,662 to the general partners. This increase was due to
the Partnership converting from a quarterly distribution cycle to a semi-annual
distribution cycle with the first record date and payment date being December
31, 1997 and February 6, 1998, respectively. Cash basis income for the quarter
ended March 31, 1998 was $59,587. This was derived by adding depreciation and
amortization expense to net income. In contrast, cash basis income for the
quarter ended March 31, 1997 was $69,199.
Overall, the Partnership generated $59,587 in income from operations before
depreciation expense of $25,618 for the quarter ended March 31, 1998. This
compares unfavorably to the quarter ending March 31, 1997 when income from
operations totaled $69,199 before depreciation of $25,613. Net income per
limited partnership unit decreased from $7.38 in 1997 to $5.55 in 1998. The
number of limited partnership units outstanding in each quarter was 5,096.
In summary then, despite lower rents at the San Marcos property all properties
and the Partnership itself, were operating profitably.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended March 31, 1999, the Partnership made distributions to
the limited partners totaling $142,688, of which $58,493 constituted a return of
capital. This distribution represented income from operations for the period
from July 1, 1998 through December 31, 1998.
<PAGE> 16
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
LIQUIDITY AND CAPITAL RESOURCES (CONT.)
The restricted cash of $50,000 received as a deposit from an unaffiliated buyer
of the San Marcos property was forfeited in February 1999 due to non-performance
of the buyer. On March 24, 1999 the San Marcos property was sold to a new
unaffiliated buyer. The sales price of $2,730,000 was arrived at through
arms-length negotiations with the buyer. The net proceeds from the sale equaled
$2,582,158 which will be distributed to the limited and general partners in
accordance with the terms of the partnership agreement. The Partnership
recognized a gain of $199,006 from the sale.
On April 1, 1999, the Partnership sold the last remaining property, known as the
Yorba Center property, located in Chino, California. The sales price of
$1,325,000 was arrived through arm-length negotiations with an unaffiliated
buyer. The net proceeds from the sale equaled $601,853 in cash, which will be
distributed to the limited and general partners in accordance with the terms of
the partnership agreement. Additionally, the Partnership received a three-year,
8%, $625,000 note secured by a first deed of trust on the Yorba Center property
from the buyer. The Partnership recognized a gain of $90,533 from the sale.
During the quarter ended March 31, 1999 the Partnership paid the General Partner
a partnership management fee of $15,854 and distributed $142,688 to the limited
partners, of which $58,493 constituted a return of capital. Partnership
management fees were calculated and paid in accordance with the Partnership
Agreement.
As of May 17, 1999, the Partnership's sole remaining (non-cash) asset consists
of the $625,000, 8%, three-year promissory note secured by a first deed of trust
on the Yorba Center property. Once the General Partner sells this promissory
note, the remaining proceeds will be distributed to the limited and general
partners in accordance with the partnership agreement, and the partnership will
be terminated and dissolved.
SALE OF PROPERTY
The Yorba Center property located in Chino, California was sold on April 1, 1999
to an unaffiliated buyer. The sales price of $1,325,000 was arrived through
arms-length negotiations with the buyer. This was the last remaining property
owned by the Partnership. Once, the final liquidating distribution is paid to
the limited and general partners in accordance with the Partnership Agreement,
the partnership will be dissolved.
<PAGE> 17
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
CASH FLOWS - MARCH 31, 1999 VS. MARCH 31, 1998
Cash resources increased $2,474,826 during the three months ended March 31, 1999
compared to a $59,764 decrease in cash resources for the three months ended
March 31, 1998. Cash provided by operating activities decreased by $53,812 with
the largest contributor being $199,006 from a gain on the sale of the San Marcos
property, offset by $178,233 in net income for the three months ended March 31,
1999. In contrast, the three months ended March 31, 1998 provided $59,143 in
cash from operating activities due primarily to $59,587 in cash basis net
income. The sources of cash from investing activities during the quarter ended
March 31, 1999 were $2,637,180 in proceeds received from the sale of the San
Marcos property and $50,000 forfeited in February 1999 by a prospective buyer of
the Yorba Center property. (which was ultimately sold to another buyer on April
1, 1999) . In contrast, there were no investing activities during the quarter
ended March 31, 1998. Additionally during 1999, $158,542 was distributed to the
limited and general partners as noted in a large use of cash under financing
activities. This continues the Partnership's trend of paying virtually all the
cash basis income out to partners in the form of semi-annual distributions. In
contrast, 1997's cash used for financing activities was $118,907 due to
distributions to the limited and general partners. There were no investing
activities during the three months ended March 31, 1998 or 1997.
CASH FLOWS - MARCH 31, 1998 VS. MARCH 31, 1997
Cash resources decreased $59,764 during the three months ended March 31, 1998
compared to a $226 increase in cash resources for the three months ended March
31, 1997. Cash provided by operating activities increased by $59,143 with the
largest contributor being $59,587 in cash basis net income (net income plus
depreciation expense) for the three months ended March 31, 1998. In contrast,
the three months ended March 31, 1997 provided $56,848 in cash from operating
activities due primarily to $69,199 in cash basis net income. During 1998,
$118,907 was distributed to the limited and general partners as noted in a large
use of cash under financing activities. This continues the Partnership's trend
of paying virtually all the cash basis income out to partners in the form of
semi-annual distributions. In contrast, 1997's cash used for financing
activities was $56,622 due to distributions to the limited and general partners.
There were no investing activities during the three months ended March 31, 1998
or 1997.
<PAGE> 18
ASSOCIATED PLANNERS REALTY INCOME FUND
(A CALIFORNIA LIMITED PARTNERSHIP)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT.)
IMPACT OF YEAR 2000
Many existing computer systems and applications, and other control devices, use
only two digits to identify a year in the date field, without considering the
impact of the upcoming change in the century. As a result, such systems and
applications could fail or create erroneous results unless corrected so that
they can process data related to the year 2000. The General Partner relies on
its systems, applications and devices in operating and monitoring all major
aspects of its business, including financial systems (such as general ledger,
accounts receivable, accounts payable and shareholder servicing), and embedded
computer chips, networks and telecommunications equipment and end products. The
General Partner also relies, directly and indirectly, on external systems of
business enterprises such as its advisor, lessees, suppliers, creditors,
financial organizations, and of governmental entities for accurate exchange of
data. The General Partner's current estimate is that the costs associated with
the year 2000 issue will not have a material adverse effect on the results of
operations or financial position of the General Partner. However, despite the
General Partner's efforts to address the year 2000 impact on its internal
systems, the General Partner may not have fully identified such impact or
whether it can resolve it without disruption of its business and without
incurring significant expense. In addition, even if the internal systems of the
General Partner are not materially affected by the year 2000 issue, the General
Partner could be affected through disruption in the operations of the
enterprises with which the General Partner interacts.
<PAGE> 19
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> 20
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)
/s/ W. THOMAS MAUDLIN, JR.
May 17, 1999 --------------------------------
W. Thomas Maudlin, Jr.
A General Partner
By: WEST COAST REALTY ADVISORS, INC.
A California Corporation,
A General Partner
/s/ JOHN R. LINDSEY
May 17, 1999 --------------------------------
John R. Lindsey
Vice President/Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000808420
<NAME> ASSOCIATED PLANNERS REALTY INCOME
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 2,698,334
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,704,265
<PP&E> 1,537,354
<DEPRECIATION> (394,090)
<TOTAL-ASSETS> 3,854,114
<CURRENT-LIABILITIES> 18,462
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,835,652
<TOTAL-LIABILITY-AND-EQUITY> 3,854,114
<SALES> 47,226
<TOTAL-REVENUES> 251,445
<CGS> 73,212
<TOTAL-COSTS> 73,212
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 178,233
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 178,233
<EPS-PRIMARY> 31.05
<EPS-DILUTED> 31.05
</TABLE>
