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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
JUNE 30, 1996.
______ 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: 0-16601 (formerly 33-16164-LA)
FMG RITA RANCH LIMITED PARTNERSHIP
(Exact name of registrant)
Delaware 23-2466343
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
250 King of Prussia Road, Radnor, PA 19087
(Address of Principal Executive Offices)
Issuer's Telephone Number: (610 964-7234)
Indicate by check mark whether the registrant (a) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes x No _____
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PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
The unaudited financial statements of FMG Rita Ranch Limited
partnership (the "Partnership") at June 30, 1996 are attached hereto as
Exhibit A.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Background
The Partnership is a Delaware limited partnership. The
Partnership was formed on January 30, 1987 by FMG Western Region Acquisitions,
Inc. (the "General Partner") and the initial limited partner, FM Initial, Inc.,
with an initial contribution of $25,000 by the General Partner. The General
Partner is an indirect wholly-owned subsidiary of The Fidelity Mutual Life
Insurance Company (in Rehabilitation) ("Fidelity Mutual"). In accordance with
the Amended and Restated Limited partnership Agreement dated December 17, 1987
(the "Partnership Agreement"), FM Initial, Inc. withdrew from the partnership
upon admittance of new limited partners. The Partnership was formed to acquire
and realize appreciation in a certain 118 acre parcel of undeveloped land near
Tucson, Arizona (the "Property") by holding it for investment and eventual
sale, although there is no assurance that this will be attained.
Results of Operations
The Partnership's revenues for the second quarter of fiscal year 1996
consisted of interest income of $2 and partnership transfer fees of $25.
Expenses for the second quarter of 1996 consisted of general and administrative
costs of $1,875, management fees of $3,750, insurance of $34 and real estate
taxes of $2,604.
The Partnership's revenues for the first quarter of fiscal year 1996
consisted of interest income of $2 and partnership transfer fees of $75.
Expenses for the first quarter of 1996 consisted of general and administrative
costs of $1,430, management fees of $3,750, insurance of $35 and real estate
taxes of $2,604.
The Partnership's revenues for fiscal year 1995 consisted of interest
income of $89 and partnership transfer fees of $25. Expenses for 1995
consisted primarily of general and administrative costs of $7,051, management
fees of $15,000, insurance of $127 and real estate taxes of $10,415.
The Partnership's revenues for fiscal year 1994 consisted of interest
income of $8 and partnership transfer fees of $250. Expenses for 1994
consisted primarily of general and administrative costs of $4,481, insurance of
$1,801 and real estate taxes of $13,597.
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The current real estate forecast for Rita Ranch is that there will
continue to be an absorption of vacant land in other Tucson submarkets, and
improvements in the immediate area, in particular the residential sector which
is one of the fastest growing in Tucson, Arizona. Unfortunately, the
commercial and industrial market growth has been limited.
Liquidity and Capital Resources
The Partnership has no cash reserve remaining at June 30, 1996. As
shown in the accompanying financial statements, the Partnership has incurred
substantial operating losses in each of the past three years. Such losses will
continue until the Partnership begins to sell land parcels. In the partnership
agreement, the General Partner has committed to contribute up to $600,000 to
the capital of the Partnership as the need for additional working capital
arises. Cumulative amounts funded by the General Partner amounted to $258,198
at June 30, 1996. Realization of the partnership's assets is dependent upon
the continued funding of operating deficits by the General Partner and its
affiliate. There can be no assurance, however, that the General Partner or its
affiliate will continue to fund operating deficits.
The weak conditions in both the real estate and industrial sectors of
Tucson are responsible for nearly halting sales of undeveloped industrial land
for parcels greater than 25 acres. These unfavorable conditions have
contributed to the substantial decrease in the value of the Partnership's land.
While growth in the Rita Ranch Planned Community is encouraging, we
continue to believe that the property should be held until the demand for
industrial land and corresponding values rebound.
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
The Partnership is not a direct party to, nor is the Partnership's
property directly the subject of, any material legal proceedings. However, on
November 6, 1992, the Commonwealth Court of Pennsylvania issued an order
placing The Fidelity Mutual Life Insurance Company ("Fidelity Mutual"), the
indirect parent of the General Partner of the Partnership, into rehabilitation
under the control and authority of the Pennsylvania Insurance Commissioner
pursuant to the provisions of the Pennsylvania Insurance Department Act, 40
P.S. Section 221.1 et seq. The Partnership is not a direct party to the order,
but ownership of the stock of the General Partner is vested in the Insurance
Commissioner pursuant to the Order.
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Item 2 - Changes in Securities
There was no change in the partnership's securities during the second
quarter of 1996.
Item 3 - Defaults Upon Senior Securities
There was no default in the payment of principal, interest, a sinking
or purchase fund installment or any other default with respect to any
indebtedness of the Partnership. The Partnership has issued no preferred
stock; accordingly, there has been no arrearages or delinquencies with respect
to any such preferred stock.
Item 4 - Submission of Matters to a Vote of Security Holders
No matters were submitted to the Partners for a vote during the second
quarter of 1996.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Reports on Form 8-K
None
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Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
3.1(a) Certificate of Limited *
Partnership
3.1(b) & (4) Restated Limited Partnership **
Agreement
9 not applicable
11 not applicable
12 not applicable
13 not applicable
16 not applicable
18 not applicable
19 not applicable
22 not applicable
23 not applicable
24 not applicable
25 not applicable
28 not applicable
29 not applicable
________________________________________________________________________________
* Incorporated by reference to Exhibit 3.1 filed as part of the Exhibits
to the Partnership's Registration Statement on Form S-18, Registration No.
33-16164-LA.
** Incorporated by reference to Exhibit 3.2 filed as part of the
partnership's Registration Statement on Form S-18, Registration No. 33-
16164-LA.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ JAMES W. KELICAN, JR. Vice President, August 9, 1996
- --------------------------- Director of
James W. Kelican, Jr. FMG Western
Region
Acquisitions,
Inc.
/s/ MARGARET TAMASITIS Assistant August 9, 1996
- --------------------------- Secretary of
Margaret Tamasitis FMG Western
Region
Acquisitions,
Inc.
</TABLE>
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EXHIBIT A
FMG RITA RANCH LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
-------------- --------------
<S> <C> <C>
ASSETS
Land $ 350,000 $ 350,000
Cash and cash equivalents 248 205
Prepaid Insurance 35 -
$ 350,283 $ 350,205
-------------- --------------
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 11,258 $ 9,842
Due to affiliates - 3750
Partners' Equity 339,025 336,613
-------------- --------------
$ 350,283 $ 350,205
============== ==============
</TABLE>
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F M G RITA RANCH LIMITED PARTNERSHIP
STATEMENTS OF OPERATIONS AND PARTNERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Three months Three months Six months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
1996 1995 1996 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES:
Interest income $ 2 $ 2 $ 4 $ 4
Other income 25 - 100 -
------------- ------------- ------------- -------------
27 2 104 4
============= ============= ============= =============
EXPENSES:
Real estate taxes 2,604 3,283 5,208 6,565
Management fees 3,750 3,750 7,500 7,500
General and administrative 1,875 1,470 3,305 3,027
Insurance 34 31 69 62
------------- ------------- ------------- -------------
8,263 8,534 16,082 17,154
------------- ------------- ------------- -------------
NET LOSS $ (8,236) $ (8,532) $ (15,978) $ (17,150)
Partners' equity,
Beginning of period 337,609 334,603 336,613 339,196
Captial Contributions 9,652 6,881 18,390 10,906
------------- ------------- ------------- -------------
Partners' equity,
End of period $ 339,025 $ 332,952 $ 339,025 $ 332,952
============= ============= ============= =============
Weighted Average Number of
Limited Partnership Units
Outstanding 6,707 6,707 6,707 6,707
============= ============= ============= =============
Loss from Operations per
Limited Partnership
Interest $(1.22) $(1.26) $(2.36) $(2.53)
============= ============= ============= =============
</TABLE>
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F M G RITA RANCH LIMITED
STATEMENTS OF OPERATIONS AND PARTNER'S EQUITY
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30
----------------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
REVENUES:
Interest income $ 4 $ 4 $ 5
Other income 100 - 100
------------- ------------- -------------
104 4 105
------------- ------------- -------------
EXPENSES:
Real estate taxes 5,208 6,565 7,475
Management fees 7,500 7,500 -
General and administrative 3,305 3,027 2,621
Insurance 69 62 1,180
------------- ------------- -------------
16,082 17,154 11,276
------------- ------------- -------------
NET LOSS $ (15,978) $ (17,150) $ (11,171)
Partners' equity,
Beginning of period 336,613 339,196 330,009
Capital Contributions 18,390 10,906 22,243
------------- ------------- -------------
Partners' equity,
End of period $ 339,025 $ 332,952 $ 341,081
============= ============= =============
Weighted Average Number of
Limited Partnership Units
Outstanding 6,707 6,707 6,707
============= ============= =============
Loss from Operations per
Limited Partnership Interest $ (2.36) $ (2.53) $ (1.65)
============= ============= =============
</TABLE>
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F M G RITA RANCH LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30
-----------------------------------------------
1996 1995 1994
------------- ------------- -------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (15,978) $ (17,150) $ (11,171)
Adjustments to reconcile net
income (loss) to net cash
used in operating activities:
Increase in General Partner's
capital 18,390 10,906 22,243
(Increase) in prepaid expenses (35) (31) (590)
Increase (decrease) in
accrued expenses 1,416 6,219 (10,898)
Increase (decrease) in
due to affiliate (3,750) - -
------------- ------------- -------------
Net cash provided by (used in)
operating activities $ 16,021 $ 17,094 $ 10,755
------------- ------------- -------------
Net increase (decrease) in cash 43 (56) (416)
Cash, Beginning of period 205 292 615
------------- ------------- -------------
Cash, End of period $ 248 $ 236 $ 199
============= ============= =============
</TABLE>
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 283
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 283
<PP&E> 350,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 350,283
<CURRENT-LIABILITIES> 11,258
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 339,025
<TOTAL-LIABILITY-AND-EQUITY> 350,283
<SALES> 104
<TOTAL-REVENUES> 104
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,082
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (15,978)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (15,978)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
