<PAGE> 1
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 March 31, 1997.
---------------
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)
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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 March 31, 1997 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 first quarter of 1997 consisted of
interest income of $2. Expenses for the first quarter of 1997 consisted of
general and administrative costs of $1,255, management fees of $3,750, insurance
of $27 and real estate taxes of $2,367.
The Partnership's revenues for fiscal year 1996 consisted of interest
income of $7 and partnership transfer fees of $175. Expenses for 1996 consisted
primarily of general and administrative costs of $8,715, insurance of $131, real
estate taxes of $9,466 and management fees of $15,000.
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 General Partner has no plans to develop the Property, except for
activities including land planning, market surveys and other activities
necessary to prepare the Property for sale.
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There can be no assurance that necessary funds would be available should it be
disirable for the Partnership to improve the Property to facilitate its sale.
Because of the lack of demand for industrial and commercial land in the
Tucson area and the resulting decline in the Property's value, the Partnership
was required to reduce its carrying value on the Property in 1990 and again in
1992. The General Partner believes that it would be necessary for the
Partnership to hold the property for several years, possibly decades, before the
Partnership may be able to sell the Property at a price which approximates the
price paid by the Partnership for the Property. Thus, it is unlikely that the
Property will be sold for a price which approximates the original price paid by
the Partnership for the Property.
Liquidity and Capital Resources
The Partnership has no cash reserve remaining at March 31, 1997. 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 $281,939 at March
31, 1997. 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.
During 1992 and 1990, the Partnership recorded writedowns of $830,000
and $6,261,041 respectively.
The weak conditions in both the real estate and industrial sectors of
Tucson are responsible for nearly halting sales of undeveloped industrial land.
These unfavorable conditions have contributed to the substantial decrease in the
value of the Partnership's land.
While the 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
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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 and the stock of the
majority Limited Partner is vested in the Insurance Commissioner pursuant to the
Order.
Item 2 - Changes in Securities
There was no change in the partnership's securities during the first
quarter of 1997.
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 first
quarter of 1997.
Item 5 - Other Information
None
Item 6 - Exhibits and Reports on Form 8-K
Reports on Form 8-K
None
Exhibits (numbered in accordance with Item 601 of Regulation S-K)
<TABLE>
<CAPTION>
Exhibit Numbers Description Page Number
- --------------- ----------- -----------
<S> <C> <C>
3.1(a) Certificate of Limited *
Partnership
</TABLE>
4
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<TABLE>
<S> <C> <C>
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
</TABLE>
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*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.
Signature Title Date
- --------- ----- ----
/s/ Arthur W. Mullin
- --------------------------- President, May 12, 1997
Arthur W. Mullin Treasurer,
Director of
FMG Western
Region
Acquisitions,
Inc.
/s/ James W. Kelican, Jr.
- --------------------------- Vice President, May 12, 1997
James W. Kelican, Jr. Director of
FMG Western
Region
Acquisitions,
Inc.
6
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EXHIBIT A
FMG RITA RANCH LIMITED PARTNERSHIP
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31,
1997 DECEMBER 31,
(UNAUDITED) 1996
----------- ------------
<S> <C> <C>
ASSETS
LAND $350,000 $350,000
CASH AND CASH EQUIVALENTS 238 267
PREPAID INSURANCE 54 --
-------- --------
$350,292 $350,267
======== ========
LIABILITIES AND PARTNERS' EQUITY
ACCRUED EXPENSES $ 12,075 $ 9,661
DUE TO AFFILIATES -- 3750
PARTNERS' EQUITY 338,217 336,856
-------- --------
$350,292 $350,267
======== ========
</TABLE>
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FMG RITA RANCH LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS AND PARTNER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
---------------------------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
REVENUES:
INTEREST INCOME $ 2 $ 2 $ 2
OTHER INCOME -- 75 --
--------- --------- ---------
2 77 2
========= ========= =========
EXPENSES:
REAL ESTATE TAXES 2,367 2,604 3,282
MANAGEMENT FEES 3,750 3,750 3,750
GENERAL AND ADMINISTRATIVE 1,255 1,430 1,557
INSURANCE 27 35 31
--------- --------- ---------
7,399 7,819 8,620
--------- --------- ---------
NET LOSS $ (7,397) $ (7,742) $ (8,618)
PARTNERS' EQUITY,
BEGINNING OF PERIOD 336,856 336,613 339,196
CAPITAL CONTRIBUTIONS 8,758 8,738 4,025
--------- --------- ---------
PARTNERS' EQUITY,
END OF PERIOD $ 338,217 $ 337,609 $ 334,603
========= ========= =========
WEIGHTED AVERAGE NUMBER OF
LIMITED PARTNERSHIP UNITS
OUTSTANDING 6,707 6,707 6,707
========= ========= =========
LOSS FROM OPERATIONS PER
LIMITED PARTNERSHIP
INTEREST $ (1.09) $ (1.14) $ (1.27)
========= ========= =========
</TABLE>
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FMG RITA RANCH LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31
---------------------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME (LOSS) $(7,397) $(7,742) $(8,618)
ADJUSTMENTS TO RECONCILE NET
INCOME (LOSS) TO NET CASH
USED IN OPERATING ACTIVITIES:
INCREASE IN GENERAL PARTNER'S
CAPITAL 8,758 8,738 4,025
INCREASE (DECREASE) IN
ACCRUED EXPENSES 2,414 2,870 4,627
(INCREASE) IN PREPAID EXPENSES (54) (69) (62)
INCREASE (DECREASE) IN DUE TO
AFFILIATE (3,750) (3,750) --
------- ------- -------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ (29) $ 47 $ (28)
------- ------- -------
CASH, BEGINNING OF PERIOD 267 205 292
------- ------- -------
CASH, END OF PERIOD $ 238 $ 252 $ 264
======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 238
<SECURITIES> 0
<RECEIVABLES> 54
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 292
<PP&E> 350,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 350,292
<CURRENT-LIABILITIES> 12,075
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 338,217
<TOTAL-LIABILITY-AND-EQUITY> 350,292
<SALES> 2
<TOTAL-REVENUES> 2
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,399
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,397)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,397)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
