<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
- -- 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999.
- -- TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
COMMISSION FILE NUMBER: 0-16601 (FORMERLY 33-16164-LA)
FMG RITA RANCH LIMITED PARTNERSHIP
(Name of issuer in its charter)
DELAWARE 23-2466343
(State of incorporation or (IRS Employer Identification
organization) Number)
250 King of Prussia Road, Radnor, Pennsylvania 19087
(Address of principal executive offices) (Zip Code)
Issuer's telephone no., including area code: (610) 964-7234
Securities registered pursuant to Section 12(b) of the Act.
<TABLE>
<CAPTION>
Name of each exchange
Title of each Class on which registered
------------------- -------------------
<S> <C>
None Not Applicable
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units $1,000 Per Unit
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
--- ---
Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
is not contained in this form, and no disclosure will be contained, to the best
of 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. X
---
<PAGE> 2
FMG RITA RANCH LIMITED PARTNERSHIP
FORM 10-K
TABLE OF CONTENTS
ITEM
PART I
<TABLE>
<S> <C> <C>
Item 1. Business
Background............................................................... 4
Material Recent Developments............................................. 4
Competition.............................................................. 4
Employees................................................................ 5
Trademarks and Patents................................................... 5
Item 2. Property.......................................................................... 5
Item 3. Legal Proceedings................................................................. 6
Item 4. Submission of Matters to a Vote of Security
Holders........................................................................... 6
PART II
Item 5. Market for the Partnership's Units of Limited
Partnership Interest and Related Security
Holder Matters.................................................................... 6
Item 6. Selected Financial Data........................................................... 7
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Background............................................................... 8
Results of Operations.................................................... 8
Liquidity and Capital Resources.......................................... 8
Impact of Year 2000...,,,,,,,,,,,,,,..................................... 9
Item 7A. Quantitative and Qualitative Disclosures About Market Risk....................... 9
Item 8. Financial Statements and Supplementary Data...................................... 10
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure........................................... 10
</TABLE>
2
<PAGE> 3
PART III
<TABLE>
<S> <C> <C>
Item 10. Directors and Executive Officers of the
Partnership...................................................................... 10
Item 11. Executive Compensation........................................................... 11
Item 12. Security Ownership of Certain Beneficial
Owners and Management
(a) Security Ownership of Certain
Beneficial owners.............................................. 11
(b) Security Ownership of Management.............................. 12
(c) Changes in Control............................................. 12
Item 13. Certain Relationships and Related Transactions.................................. 12
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K.............................................................. 13
SIGNATURES......................................................................................... 16
</TABLE>
3
<PAGE> 4
PART I
ITEM 1. BUSINESS
Background
FMG Rita Ranch Limited Partnership (the "Partnership") was
formed on January 30, 1987, as a Delaware limited partnership with FMG Western
Region Acquisitions, Inc. (the "General Partner") as its sole general partner.
On March 19, 1987, the Partnership acquired 118 acres of unimproved land (the
"Property") in Tucson, Arizona. The Partnership's primary business objectives is
to realize appreciation in the value of the Property by holding the Property for
investment and eventual sale, although there is no assurance that this will be
attained.
The Partnership's public offering of 6,707 Units of limited
partnership interest ("Units") commenced on October 29, 1987 and continued until
June 10, 1988. On June 10, 1988, 6,707 Units had been sold for $6,281,295 to 105
investors, including an affiliate of the General Partner that acquired 5,008.3
Units.
The General Partner has no plans to develop the Property.
There can be no assurance that necessary funds would be available should it be
desirable 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. Class "A" Business Park lots dominate the industrial land
sales market. Sale prices range from $15,000 to $30,000 per developed acre and
undeveloped raw land (little of which is being sold) is selling for less than
$5,000 an acre. There have been few bulk sale transactions since the RTC was
disposing of it's properties. 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
significantly higher than the current market value. Thus, it is extremely
unlikely that the Property would ever be sold for a price which approximates the
original price paid by the Partnership for the Property.
Material Recent Developments
The Partnership entered into an Agreement of Sale
("Agreement") with Diamond Ventures, Inc. ("Diamond") on August 10, 1999, which
was subsequently amended on September 3, 1999; October 4, 1999; and October 12,
1999.The Agreement, as amended, stated that the Partnership would sell all 118
acres of the Partnership's land to Diamond for $450,000. The sale was
conditioned upon the approval by the holders of a majority of the Limited
Partnership units. Equity Products Corporation, an affiliate of the General
Partner, currently owns 75% of the Limited Partnership Units and has agreed to
vote in favor of the sale after it
4
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received the approval of the Court handling the rehabilitation proceedings in
which its ultimate parent, Fidelity Mutual Life Insurance Company (In
Rehabilitation), is currently engaged.
Equity Products Corporation received approval from the Court and on November 30,
1999, the Limited Partners approved the sale of the entire property to Diamond
for $450,000. The sale was consummated on January 11, 2000.
After paying closing costs the Partnership received net sales proceeds of
$421,274. The sales proceeds along with the remaining cash of $644 less
Partnership liabilities of $4,713 left $417,205 to be distributed to the
Partners. This amount was distributed to Partners in accordance with Section 4.2
of the Partnership Agreement.
Competition
Rita Ranch is a 2,700 acre master planned development of which
approximately 1,200 acres are designated for industrial use. Properties within
Rita Ranch are subject to conditions, covenants, restrictions and a
master-planned layout which affects zoning and land use patterns. To date, there
are only four improved industrial properties utilizing approximately 50 acres
situated within the Rita Ranch community. While Rita Ranch contains
predominately residential land uses with areas designated for commercial and
industrial development, the majority of the neighborhood is either in use or
designated for industrial related purposes, and is largely unoccupied.
The subject property is located in Tucson's southeastern
outskirts. Development in virtually all market sectors can be expected to
increase as Tucson expands. The residential market continues to show marked
signs of improvement, including Rita Ranch. Limited commercial growth serving
residents staple needs is anticipated for the Rita Ranch area but significant
retail or office demand will likely continue to be served from eastside commerce
centers until the residential population reaches levels to support pre-leased
development. Additionally, the remote location of Rita Ranch, restrictive
conditions, covenants, and vast amounts of available and affordable industrially
zoned land throughout metropolitan Tucson discourages an optimistic prediction
of demand for industrial uses at the present time.
Employees
The Partnership has no employees. The General Partner manages
and controls the affairs of the Partnership. (See Part III, Item 10, Directors
and Executive Officers of the Partnership).
Trademarks and Patents
The Partnership has no trademarks or patents.
5
<PAGE> 6
ITEM 2. PROPERTY
The Partnership owns 118 acres of undeveloped land situated
at the southwest corner of Old Vail and Houghton Roads in the Rita Ranch
subdivision of Tucson, Arizona. It is comprised of two contiguous parcels, one
of which is 110 acres and is zoned industrial (the "Industrial Parcel") and the
other of which is eight acres and is zoned commercial (the "Commercial Parcel").
In October 1996, an appraisal was ordered on the subject
property. A summary of the site data indicates that the visibility of the site
from Houghton Road and the location near an entrance to Rita Ranch are both
positive. In addition, the fact that eight acres are zoned commercial at the
corner of Old Vail and Houghton Road could be an advantage in the future. The
property provides rail access, but the topography of the site would require an
estimated 15 foot ballast height and substantial engineering/grading to make
this a reality. The presence of the gas pipeline easement and the below grade
nature along Houghton Road are negative characteristics for future development.
Also, all future site development is subject to restrictions which could lead to
significant screening and landscaping costs relevant to most industrial and
commercial uses.
In 1997, marketing proposals were solicited from area
brokerage firms. A brokerage firm was selected and the property was listed in
1998. A potential purchaser made an offer during 1998 for approximately $5,000
an acre but subsequently withdrew it upon further investigation.
In 1999, the Partnership entered into an agreement of sale
with Diamond Venture, Inc. by which the Partnership agreed to sell the entire
118 acres to Diamond Venture, Inc. for $450,000.
ITEM 3. 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
Fidelity, the indirect parent of the General Partner, 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 and the stock of the majority Limited
Partner is vested in the Insurance Commissioner pursuant to the order.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On November 9, 1999, NOTICE was given to the Limited Partners of FMG
Rita Ranch Limited Partnership by FMG Western Region Acquistions, Inc., general
partner of FMG Rita Ranch Limited Partnership, that a special meeting of the
limited partners of the Partnership
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would be held on November 30, 1999 at 10:a.m. Eastern Standard Time, at the
offices of the General Partner at 250 King of Prussia Road, Radnor, PA
19087-5297, for the following purposes:
- To consider and vote upon a proposal to approve an Agreement
of Sale (as amended by a First Amendment to Agreement of Sale,
a Second Amendment to Agreement of Sale and a Third Amendment
to Agreement of Sale) under which substantially all of the
property of the Partnership would be sold to Diamond Venture,
Inc., an Arizona corporation (or its assignee) for a
consideration of $450,000;
- To consider and vote upon the dissolution and liquidation of
the Partnership
- To consider and transact such other business as may properly
come before the meeting or any adjournment or postponement
thereof.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S UNITS OF LIMITED PARTNERSHIP
INTEREST AND RELATED SECURITY HOLDER MATTERS
There is no established public trading market for the Units
and it is not anticipated that any will develop in the future. The Partnership
commenced an offering to the public on October 29, 1987 of 6,707 Units of
limited partnership interests. The offering continued until June 10, 1988 when
all 6,707 Units had been sold to 105 investors, including an affiliate of the
General Partner which acquired 5,008.3 Units.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the Year For the Year For the Year For the Year For the Year
Ended Ended Ended Ended Ended
December 31 December 31 December 31 December 31 December 31
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating
Revenues $100 $ 25 $ 303 $ 182 $ 33
Net Income
(Loss) $(31,478) $(46,568) $(29,852) $(33,130) $(32,560)
Net Income
(Loss) per Unit
of Limited Interest $ (4.69) $ (6.94) $ (4.45) $ (4.94) $ (4.85)
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
For The Year For The Year For The Year For The Year For The Year
Ended Ended Ended Ended Ended
December 31 December 31 December 31 December 31 December 31
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Total Assets $350,644 $350,544 $350,519 $350,267 $350,205
Long Term
Obligations -0- -0- -0- -0- -0-
Cash Distributions
Declared per Unit
of Limited
Partnership
Interest None None None None None
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Background
The Partnership was formed to acquire and realize appreciation
in the Property by holding it for investment and eventual sale. However, there
can be no assurance that the Partnership's objectives will be realized.
Results of operations
The Partnership's revenues for fiscal year 1999 consisted of
partnership transfer fees of $100.00. Expenses for 1999 consisted primarily of
general and administrative costs of $14,077, insurance of $148, real estate
taxes of $9,353 and management fees of $8,000.
The Partnership's revenues for fiscal year 1998 consisted of
partnership transfer fees of $25. Expenses for 1998 consisted primarily of
general and administrative costs of $22,034, insurance of $126, real estate
taxes of $9,433 and management fees of $15,000.
8
<PAGE> 9
The Partnership's revenues for fiscal year 1997 consisted of
interest income of $3 and partnership transfer fees of $300. Expenses for 1997
consisted primarily of general and administrative costs of $6,090, insurance of
$111, real estate taxes of $8,954 and management fees of $15,000.
Liquidity and Capital Resources
The Partnership has no cash reserve remaining at December 31,
1999. As shown in the accompanying financial statements, the Partnership has
incurred substantial operating losses in each of the past three years. 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
$390,154 at December 31, 1999. Realization of the Partnership's assets is
dependent upon the continued funding of operating deficits by the General
Partner and its affiliate.
During 1992 and 1990, the Partnership recorded writedowns of
$830,000 and $6,261,041 respectively.
Impact of Year 2000
In prior periods, the Partnership discussed the nature and progress of
its plans to become Year 2000 ready. In 1999, the Partnership completed it
remediation and testing of systems. As a result of those planning and
implementation efforts, the Partnership experienced no significant disruptions
in mission critical information technology and non-information technology
systems and believes those systems successfully responded in the Year 2000 date
change. The Partnership incurred no expenses during 1999 in connection with
remediating its systems. The Partnership is not aware of any material problems
resulting from Year 2000 issues, either with its internal systems, or the
services of third parties. The Partnership will continue to monitor its mission
critical computer applications and those of its suppliers and vendors throughout
the year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
The Partnership's primary market risk exposure relates to
general economic trends effecting the overall real estate market as it relates
to the holding of land for investment purposes (see Item 2).
9
<PAGE> 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Partnership's financial statements for the years ended
December 31, 1999 and 1998 together with the report of the Partnership's
independent auditors, Ernst & Young LLP, is included in this Form 10-K.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Partnership does not have any directors or officers. The
General Partner manages and controls the affairs of the Partnership and has
responsibility for all aspects of the Partnership's operations. The current
executive officers and directors of the General Partner are identified and
described below. Officers and directors serve until their successors have been
elected.
Arthur W. Mullin is a Director, President and Treasurer of the
General Partner. Mr. Mullin is also an officer and director of various other
subsidiaries of Fidelity Mutual. Mr. Mullin was appointed senior vice President
and Director of Real Estate for Fidelity Mutual in June 1993 and served in that
capacity until January 31, 1995. He is currently President of KMR Management,
Inc., a management advisory firm that provides advice to corporations and
institutions regarding corporate, financial and real estate matters. Before
joining Fidelity Mutual, Mr. Mullin served as President of KMR Management, Inc.
Mr. Mullin received a B.S. in Political Science and a M.S. in Education from St.
Joseph's University, Philadelphia, Pennsylvania.
William S. Taylor is Director and Vice President of the
General Partner. Mr. Taylor is also an officer and director of various other
subsidiaries of Fidelity Mutual. Mr. Taylor is the Deputy Insurance Commissioner
for Liquidation's, Rehabilitation's and Special Funds for the Commonwealth of
Pennsylvania. Mr. Taylor has a bachelor's degree in Economics from Elizabethtown
College and a masters degree in Governmental Administration from the University
of Pennsylvania.
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<PAGE> 11
Robert Bixler is Secretary of the General Partner. Mr. Bixler
is also the Secretary of various other subsidiaries of Fidelity Mutual. Mr.
Bixler is a Vice President and Associate Counsel of Fidelity Mutual. Mr. Bixler
received his A.B. degree in Economics from Temple University, and his J.D.
degree from Temple University Law School, Philadelphia, PA. He is a member of
the American Bar Association and the Philadelphia Bar Association.
Margaret Tamasitis is Assistant Secretary of the General
Partner. Ms. Tamasitis is also Assistant Secretary of various other
subsidiaries. Ms. Tamasitis is a Vice President of Fidelity Mutual in the
Controller's office and has been with Fidelity Mutual for 29 years. Ms.
Tamasitis received her B.S. degree in Accounting from Temple University,
Philadelphia, PA.
ITEM 11. EXECUTIVE COMPENSATION
As of December 31, 1999 the Partnership did not pay
remuneration to any officers of the General Partner. Fees which have been paid
or are payable to the General Partner and affiliates are set forth in Item 13 of
this report, "Certain Relationships and Related Transactions".
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
<TABLE>
<CAPTION>
Name and Amount and
Address of Nature of
Beneficial Beneficial Percent
Title of Class Owner Ownership of Class
-------------- ----- --------- --------
<S> <C> <C> <C>
(1) Units of Limited Equity 5,008.3 74.67
Partnership Products Units
Interest Corp.
250 King
of Prussia
Road,
Radnor, PA
19087
</TABLE>
11
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Equity Products Corp., an affiliate of the General Partner,
purchased 5,008.3 General Partnership Units for $4,582,560. The General
Partnership Units are more fully described in the Partnership Agreement. Equity
Products Corp. purchased these units for $915 per Unit, which amount is net of
selling commissions.
As of December 31, 1999, no other person or "group" (as that
term is used in Section 13(d) (3) of the Securities Exchange Act of 1934) was
known by the Partnership to beneficially own more than five percent of the units
of the Partnership.
- --------------------------------------------------------------------------------
(1) Units of limited partnership interest owned by Equity Products Corp.
are designated in the Partnership Agreement as General Partnership
Units.
(b) Security Ownership of Management
The General Partner does not own any of the Partnership's
outstanding limited partnership interests.
No individual director or officer of the General Partner nor
such directors or officers as a group, owns any of the Partnership's outstanding
securities. The General Partner owns a general partnership interest which
enables it to receive 1% of cash distributions until the Limited Partners have
received a return of their Capital Contributions plus cumulative distributions
equal to 9% non-compounded Cumulative Annual Return of their Adjusted Capital
Contributions as those terms are defined in the Partnership Agreement.
Thereafter, the General Partner will receive a 9% return on any portion of its
$600,000 capital contribution and the balance, 80% to the limited partners and
20% to the General Partner. The General Partner will share in taxable income to
reflect cash distributions, or to the extent there are losses, 1% of such
losses.
(c) Changes in Control
There are no arrangements known to the Partnership that would
at any subsequent date result in a change in control of the Partnership.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
12
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During 1999, a management fee of $8,000 was paid to the
General Partner. This fee is computed as .2% of the cost of the land. The
cumulative amount of such fee may not exceed $128,000, and cumulative fees
charged since inception amounted to $128,000 at December 31, 1999. However, if
the Partnership's reserves are exhausted, the unpaid portion of this fee will be
paid, without interest from the proceeds of the sale of the Property after the
Limited Partners have received distributions equal to their Capital
Contributions and Unpaid Cumulative Return.
The General Partner will also receive 1% of cash distributions
until the Limited Partners have received (i) a return of their Capital
Contributions plus (ii) cumulative distributions equal to a 9% Annual Return on
their Adjusted Capital Contributions (as those terms are defined in the Limited
Partnership Agreement). Thereafter, the General Partner will receive a 9% return
on any portion of its $600,000 capital contribution and the balance, 80% to the
limited partners and 20% to the General Partner. During 1999, 1998 and 1997, the
General Partner received no cash distributions.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
(a) Index to Financial Statements Page
----------------------------- ----
<S> <C>
Report of Independent Auditors 1
Balance Sheet at December 31, 1999 and 1998 2
Statements of Operations 3
Statements of Partners' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6
</TABLE>
Schedules have been omitted because they are inappropriate, not required, or the
information is included elsewhere in the financial statements or notes thereto.
(b) Reports on Form 8-K
1. None
13
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(c) Exhibits Incorporated by Reference (numbered in accordance with Item 601 of
Regulation S-K
<TABLE>
<CAPTION>
Exhibit Numbers Description
- --------------- -----------
<S> <C>
3.1 Certificate of Limited Partnership and First
Amended Limited Partnership Certificate.(2)
3.2 & 4 Amended and Restated Limited Partnership Agreement.(3)
9 not applicable
10.1(a) First Deed of Trust and Assignment of Rents dated December
31, 1985, from South Rita Associates to Pima Service Corporation, as
amended, March 16, 1987, securing a $3,088,680 obligation.(2)
</TABLE>
- --------------------------------------------------------------------------------
(2) Incorporated by reference to Exhibits 3.1, 10.1(a) and (b), and 10.2(a)
and (b) respectively filed as part of the Exhibits to the Partnership's
Registration Statement on Form S-18, Registration No. 33-16164-LA.
(3) 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.
<TABLE>
<CAPTION>
Exhibit Numbers Description
- --------------- -----------
<S> <C>
10.1(b) $3,088,680 Promissory Note, dated July 24, 1987, from South Rita
Associates to Pima Service Corporation.(2)
10.2(a) First Deed of Trust and Assignment of Rents dated December 31, 1985,
from South Rita Associates to Pima Service Corporation, as amended,
March 16, 1987, securing a $221,200 obligation.(2)
10.2(b) $221,200 Promissory Note, dated July 24, 1987, from South Rita Associates
to Pima service Corporation.(2)
11 not applicable
12 not applicable
13 not applicable
16 not applicable
18 not applicable
</TABLE>
14
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<TABLE>
<S> <C>
19 not applicable
22 not applicable
23 not applicable
24 not applicable
25 not applicable
29 not applicable
</TABLE>
- --------------------------------------------------------------------------------
(2) Incorporated by reference to Exhibits 3.1, 10.1(a) and (b), and 10.2(a)
and (b) respectively filed as part of the Exhibits to the Partnership's
Registration Statement on Form S-18, Registration No. 33-16164-LA.
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SIGNATURES
Pursuant to the requirements of Section 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.
FMG RITA RANCH LIMITED PARTNERSHIP, a Delaware limited
partnership
By: FMG WESTERN REGION ACQUISITIONS, INC., General
Partner
Dated: By:/s/ Arthur W. Mullin
----------------- ------------------------------------
Arthur W. Mullin
President
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/ Arthur W. Mullin President, 3/24 , 2000
- ----------------------- Treasurer, ------
Arthur W. Mullin Director of
FMG Western
Region
Acquisitions, Inc.
/s/ William S. Taylor
- ------------------------ Vice President, 3/24 , 2000
William S. Taylor Director of -------
FMG Western
Region
Acquisitions, Inc.
/s/ Margaret M. Tamasitis
- -------------------------- Assistant Secretary, 3/24 , 2000
Margaret M. Tamasitis of FMG Western -------
Region
Acquisitions, Inc.
</TABLE>
16
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Financial Statements
FMG Rita Ranch Limited Partnership
Years ended December 31, 1999 and 1998
with Report of Independent Auditors
<PAGE> 18
Financial Statements
FMG Rita Ranch Limited Partnership
Years ended December 31, 1999 and 1998
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors........................ 1
Audited Financial Statements
Balance Sheets........................................ 2
Statements of Operations.............................. 3
Statements of Partners' Equity........................ 4
Statements of Cash Flows.............................. 5
Notes to Financial Statements......................... 6
</TABLE>
<PAGE> 19
Report of Independent Auditors
To the Partners of
FMG Rita Ranch Limited Partnership
We have audited the accompanying balance sheets of FMG Rita Ranch Limited
Partnership (a Delaware Limited Partnership) as of December 31, 1999 and 1998,
and the related statements of operations, partners' equity, and cash flows for
each of the three years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. 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 FMG Rita Ranch Limited
Partnership as of December 31, 1999 and 1998, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.
/s/ Ernst & Young LLP
March 7, 2000
1
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FMG Rita Ranch Limited Partnership
Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31
1999 1998
--------------------------------
ASSETS
<S> <C> <C>
Land held for sale, net $ 350,000 $ 350,000
Cash 644 544
--------------------------------
$ 350,644 $ 350,544
================================
LIABILITIES AND PARTNERS' EQUITY
Accrued expenses $ 4,713 $ 20,002
Due to affiliates - 3,750
Partners' equity:
General partner 228,147 177,845
Limited partners (6,707 units authorized, issued,
and outstanding) 117,784 148,947
--------------------------------
$ 350,644 $ 350,544
================================
</TABLE>
See accompanying notes.
2
<PAGE> 21
FMG Rita Ranch Limited Partnership
Statements of Operations
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997
--------------------------------------
<S> <C> <C> <C>
Revenues $ 100 $ 25 $ 303
Expenses:
Real estate taxes 9,353 9,433 8,954
General and administrative 14,077 22,034 6,090
Management fee 8,000 15,000 15,000
Insurance 148 126 111
--------------------------------------
31,578 46,593 30,155
--------------------------------------
Net loss:
Allocated to General Partner (315) (466) (299)
Allocated to Limited Partners (31,163) (46,102) (29,553)
--------------------------------------
$(31,478) $(46,568) $(29,852)
======================================
Net loss per limited partnership unit $ (4.69) $ (6.94) $ (4.45)
======================================
</TABLE>
See accompanying notes.
3
<PAGE> 22
FMG Rita Ranch Limited Partnership
Statements of Partners' Equity
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
-----------------------------------------------
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1997 $ 112,254 $ 224,602 $ 336,856
Capital contributions 29,859 - 29,859
Net loss (299) (29,553) (29,852)
-----------------------------------------------
BALANCE, DECEMBER 31, 1997 141,814 195,049 336,863
Capital contributions 36,497 - 36,497
Net loss (466) (46,102) (46,568)
-----------------------------------------------
BALANCE, DECEMBER 31, 1998 177,845 148,947 326,792
Capital contributions 50,617 - 50,617
Net loss (315) (31,163) (31,478)
-----------------------------------------------
BALANCE, DECEMBER 31, 1999 $ 228,147 $ 117,784 $ 345,931
===============================================
</TABLE>
See accompanying notes.
4
<PAGE> 23
FMG Rita Ranch Limited Partnership
Statements of Cash Flows
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1999 1998 1997
-------------------------------------------------
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net loss $ (31,478) $ (46,568) $ (29,852)
Adjustments to reconcile net loss to net cash used
in operating activities:
Changes in operating assets and liabilities:
Due to affiliates (3,750) - -
Accrued expenses (15,289) 10,096 245
-----------------------------------------------
Net cash used in operating activities (50,517) (36,472) (29,607)
FINANCING ACTIVITIES
Cash contributions from general partner 50,617 36,497 29,859
-----------------------------------------------
Net cash provided by financing activities 50,617 36,497 29,859
-----------------------------------------------
Net increase in cash 100 25 252
Cash, beginning of year 544 519 267
-----------------------------------------------
Cash, end of year $ 644 $ 544 $ 519
===============================================
</TABLE>
See accompanying notes.
5
<PAGE> 24
FMG Rita Ranch Limited Partnership
Notes to Financial Statements
December 31, 1999
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
FMG Rita Ranch Limited Partnership is a Delaware Limited Partnership. The
General Partner (FMG Western Region Acquisitions, Inc.) is an indirect wholly
owned subsidiary of The Fidelity Mutual Life Insurance Company (in
Rehabilitation). There are 6,707 limited partnership units outstanding at
December 31, 1999. On November 30, 1999, the Limited Partners approved the sale
of all of the property of the Partnership and authorized the dissolution and
liquidation of the Partnership.
The Partnership owned approximately 118 acres of unimproved land in Tucson,
Arizona. The Property was being marketed for sale and was sold January 11, 2000
to a third party for $450,000. Subsequent to the sale, the Partnership commenced
the dissolution and liquidation of the Partnership. In conjunction with the sale
transaction and the liquidation, the General Partner paid certain expenses of
the Partnership for which it will not seek reimbursement. The net sales proceeds
of $421,274 along with the remaining cash of $644 less Partnership liabilities
of $4,713 resulted in a distribution of $189,070 to the Limited Partners and
$228,135 to the General Partner.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The Partnership maintains its accounting records on the accrual basis of
accounting.
LAND HELD FOR SALE
Land is carried at the lower of cost or fair value. The carrying value of land,
as disclosed on the balance sheet, is shown net of write-downs of $7,091,041
taken in prior years.
INCOME TAXES
In conformity with the Internal Revenue Code and applicable state and local tax
statutes, taxable income or loss of the Partnership is required to be reported
in the tax returns of the partners in accordance with the terms of the
Partnership Agreement. Accordingly, no provision has been made in the
accompanying financial statements for any federal, state, or local income taxes.
6
<PAGE> 25
FMG Rita Ranch Limited Partnership
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect various amounts reported in the financial statements and accompanying
notes. Actual results could differ from those estimates.
3. RELATED PARTY TRANSACTIONS
In 1998 and 1997, the Partnership was charged an annual management fee of
$15,000 by the General Partner. In 1999, the Partnership was charged a fee of
$8,000 since the cumulative amount of such fee may not exceed $128,000, and
cumulative fees charged since inception amounted to $120,000 at December 31,
1998.
4. PARTNERS' EQUITY
In prior years, the Partnership received cash equity contributions totaling
$6,281,294 through the sale of limited partnership units, of which $4,583,560
was contributed by an affiliate of the General Partner.
CASH DISTRIBUTIONS
Except for distributable proceeds from capital transactions and refinancings, as
defined in the partnership agreement, and upon liquidation of the Partnership,
cash distributions, if any, will be made 99% to the limited partners and 1% to
the General Partner. Distributions in connection with the sale of all or
substantially all of the Partnership's assets or the Partnership's liquidation
will be made in accordance with the positive balances in the partners' Capital
Accounts.
7
<PAGE> 26
FMG RITA RANCH LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. PARTNERS' EQUITY (CONTINUED)
PROFITS AND LOSSES
Profits from capital transactions will be allocated in the following order: (i)
to those partners having negative capital accounts, pro rata, to the extent of
their negative capital accounts; and (ii) the balance in those proportions as
will produce capital account balances, which would result in distributions of
distributable proceeds from capital transactions as described above. Profits
which arise other than from capital transactions will, to the extent of cash
distributions (other than those which represent proceeds from capital
transactions), be allocated to reflect cash distributions and to the extent
those profits exceed those cash distributions, the excess will be allocated as
if it was profit from a capital transaction. Generally, losses will be allocated
99% to the limited partners in proportion to their units and 1% to the General
Partner to reduce any positive balances in the partners' capital accounts. In no
event will the General Partner be allocated less than 1% of profit or loss for
any year.
8
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000820047
<NAME> FMG RITA RANCH LIMITED PARTNERSHIP
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 644
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 350,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 350,644
<CURRENT-LIABILITIES> 4,713
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 345,931
<TOTAL-LIABILITY-AND-EQUITY> 350,644
<SALES> 100
<TOTAL-REVENUES> 100
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 31,578
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (31,478)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (31,478)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
