UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 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 September 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: 033-33504
AAA NET REALTY FUND IX, LTD.
NEBRASKA LIMITED PARTNERSHIP IRS IDENTIFICATION
NO. 76-0318157
8 GREENWAY PLAZA, SUITE 824 HOUSTON, TX 77046
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. X Yes No
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTION H (1) (a) AND (b) OF FORM 10-Q AND IS, THEREFORE,
FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
(Unaudited)
ASSETS
<S> <C> <C>
CASH & CASH EQUIVALENTS $ 184,717 $ 181,359
ACCOUNTS RECEIVABLE 1,050 1,050
PROPERTY:
Land 1,490,494 1,490,494
Building 2,946,375 2,946,375
4,436,869 4,436,869
Accumulated depreciation (429,646) (359,494)
TOTAL PROPERTY 4,007,223 4,077,375
OTHER ASSETS:
Organization costs, net of accumulated amortization
of $242,576 and $211,352, respectively 31,223
Syndication costs, net of accumulated amortization
of $566,002 and $493,157, respectively 72,845
TOTAL OTHER ASSETS 104,068
TOTAL ASSETS 4,192,990 4,363,852
LIABILITIES & PARTNERSHIP EQUITY
LIABILITIES
Accounts payable 21,032 20,487
TOTAL LIABILITIES 21,032 20,487
PARTNERSHIP EQUITY
General partners (5,093) (4,588)
Limited partners 4,177,051 4,347,953
TOTAL PARTNERSHIP EQUITY 4,171,958 4,343,365
TOTAL LIABILITIES & PARTNERSHIP EQUITY $ 4,192,990 $ 4,363,852
LIMITED PARTNERSHIP UNITS OUTSTANDING 5,390.5 5,390.5
See Notes to Financial Statements.
2
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AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
(Unaudited)
<CAPTION>
Quarter Year to Date
1996 1995 1996 1995
INCOME
<S> <C> <C> <C> <C>
Rental income $ 123,575 $ 123,575 $ 370,724 $ 370,724
TOTAL INCOME 123,575 123,575 370,724 370,724
EXPENSES
Administrative expenses 4,050 5,700 12,150 17,100
Accounting fees 400 750 6,810 7,131
Amortization 23,211 40,429 104,069 121,286
Depreciation 23,384 23,384 70,152 70,152
Filing fees 250 250
Legal and professional fees 1,292 1,536 5,366 6,852
Other 53 16 1,205 235
TOTAL EXPENSES 52,390 71,815 200,002 223,006
INCOME FROM OPERATIONS 71,185 51,760 170,722 147,718
OTHER INCOME
Interest income 1,012 1,264 3,765 5,168
TOTAL OTHER INCOME 1,012 1,264 3,765 5,168
NET INCOME $ 72,197 $ 53,024 $ 174,487 $ 152,886
ALLOCATION OF NET INCOME
General partners $ 722 $ 530 $ 1,745 $ 1,529
Limited partners 71,475 52,494 172,742 151,357
$ 72,197 $ 53,024 $ 174,487 $ 152,886
NET INCOME PER UNIT $ 13.39 $ 9.84 $ 32.37 $ 28.36
UNITS OUTSTANDING 5,390.5 5,390.5 5,390.5 5,390.5
See Notes to Financial Statements.
3
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AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENT OF PARTNERSHIP EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
GENERAL LIMITED
PARTNERS PARTNERS TOTAL
<S> <C> <C> <C>
PARTNERSHIP EQUITY (DEFICIT) AT
DECEMBER 31, 1995 $ (4,588) $ 4,347,953 $ 4,343,365
DISTRIBUTIONS (750) (114,548) (115,298)
NET INCOME 502 49,710 50,212
PARTNERSHIP EQUITY (DEFICIT) AT
MARCH 31, 1996 (4,836) 4,283,115 4,278,279
DISTRIBUTIONS (750) (114,548) (115,298)
NET INCOME 521 51,557 52,078
PARTNERSHIP EQUITY (DEFICIT) AT
JUNE 30, 1996 (5,065) 4,220,124 4,215,059
DISTRIBUTIONS (750) (114,548) (115,298)
NET INCOME 722 71,475 72,197
PARTNERSHIP EQUITY (DEFICIT) AT
SEPTEMBER 30, 1996 $ (5,093) $ 4,177,051 $ 4,171,958
See Notes to Financial Statements.
4
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AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
(Unaudited)
<CAPTION>
Quarter Year to Date
1996 1995 1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income $ 72,197 $ 53,024 $ 174,487 $ 152,886
Adjustments to reconcile net income to
net cash from operating activities:
Amortization 23,211 40,429 104,069 121,286
Depreciation 23,384 23,384 70,152 70,152
Decrease (increase) in accounts receivable 404 (2,150) (2,150)
Increase in accounts payable 4,063 3,323 544 674
NET CASH FLOWS FROM
OPERATING ACTIVITIES 123,259 118,010 349,252 342,848
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions (115,298) (115,298) (345,894) (345,894)
NET CASH FLOWS FROM FINANCING
ACTIVITIES (115,298) (115,298) (345,894) (345,894)
NET INCREASE (DECREASE) IN CASH
and CASH EQUIVALENTS 7,961 2,712 3,358 (3,046)
CASH and CASH EQUIVALENTS
at Beginning of Period 176,756 171,553 181,359 177,311
CASH and CASH EQUIVALENTS
at End of Period $ 184,717 $ 174,265 $ 184,717 $ 174,265
See Notes to Financial Statements.
5
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AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,1996 AND 1995
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
AAA Net Realty Fund IX, Ltd. ("the Partnership"), is a limited
partnership formed February 1, 1990 under the laws of the State
of Nebraska. American Asset Advisers Management Corporation IX
(a Nebraska corporation) is the managing general partner and H.
Kerr Taylor is the individual general partner. The Partnership
commenced operations as of June 6, 1990. The offering period for
subscriptions terminated June 5, 1992 with a total of 5,390.5
units having been subscribed at an offering price of $1,000 per
unit.
The Partnership was formed to acquire commercial properties for
cash. The Partnership will own, lease, operate, manage and
eventually sell the properties. The supervision of the
operations of the properties is managed by American Asset
Advisers Realty Corporation, ("AAA"), a related party.
The financial records of the Partnership are maintained on the
accrual basis of accounting whereby revenues are recognized when
earned and expenses are reflected when incurred.
For purposes of the statement of cash flows the Partnership
considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents. There
has been no cash paid for income taxes or interest during 1996 or
1995.
Land and buildings are stated at cost. Buildings are depreciated
on a straight-line basis over an estimated useful life of 31.5
years.
Organization costs and syndication costs are amortized on a
straight line basis over five years.
All income and expense items flow through to the partners for tax
purposes. Consequently, no provision for federal or state income
taxes is provided in the accompanying financial statements.
The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-Q and do
not include all of the disclosures required by generally accepted
accounting principles. The financial statements reflect all
normal and recurring adjustments which are, in the opinion of
management, necessary to present a fair statement of results for
the three and nine month periods ended September 30, 1996 and
September 30, 1995.
The financial statements of AAA Net Realty Fund IX, Ltd.
contained herein should be read in conjunction with the financial
statements included in the Partnership's annual report on Form
10-K for the year ended December 31, 1995.
6
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2. PARTNERSHIP EQUITY
The managing general partner, American Asset Advisers Management
Corporation IX, and the individual general partner, H. Kerr
Taylor, have made capital contributions in the amounts of $990
and $10, respectively. The general partners shall not be
obligated to make any other contributions to the Partnership,
except that, in the event that the general partners have negative
balances in their capital accounts after dissolution and winding
up of, or withdrawal from, the Partnership, the general partners
will contribute to the Partnership an amount equal to the lesser
of the deficit balances in their capital accounts or 1.01% of the
total capital contributions of the limited partners' over the
amount previously contributed by the general partners.
3. RELATED PARTY TRANSACTIONS
The Partnership Agreement provides for the reimbursement for
administrative services necessary for the prudent operation of
the Partnership and its assets with the exception that no
reimbursement is permitted for rent, utilities, capital
equipment, salaries, fringe benefits or travel expenses allocated
to the individual general partner or to any controlling persons
of the managing general partner. In connection therewith, $4,050
and $12,150 was incurred and paid to AAA for the three and nine
months ended September 30, 1996, respectively and $5,700 and
$17,100 was paid for the three and nine months ended September
30, 1995, respectively.
4. MAJOR LESSEES
The following schedule summarizes total rental income by lessee
for the three and nine months ended September 30, 1996 and
September 30, 1995:
Quarter Year to Date
1996 1995 1996 1995
Foodmaker, Inc. $15,934 $15,934 $47,801 $47,801
Tandy Corporation 41,211 41,211 123,633 123,633
Payless Shoe Source 18,500 18,500 55,500 55,500
Golden Corral Corporation 47,930 47,930 143,790 143,790
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
AAA Net Realty Fund IX, Ltd., a Nebraska limited partnership, was
formed February 1, 1990 to acquire on a debt-free basis, existing
and newly constructed commercial properties located in the
continental United States and particularly in the Southwest, to
lease these properties to tenants under generally "triple net"
leases, to hold the properties with the expectation of equity
appreciation and eventually to resell the properties. The
Offering for 15,000 limited partnership units was effective June
6, 1990 and terminated June 5, 1992 with 5,390.5 units
($5,390,500) having been subscribed. In addition, the general
partners had previously made $1,000 of contributions.
RESULTS OF OPERATION
For the three months ended September 30, 1996, revenues totaled
$124,587 which was comprised of $123,575 of rental income and
$1,012 of interest income. Rental income remained essentially
unchanged from the rental income recorded in the third quarter of
1995. Interest income declined slightly as a result of the
decline in interest rates over those of the third quarter of
1995. Expenses declined by $19,425 primarily from reductions in
administrative fees paid to an affiliate of the general partner
and amortization expenses. The Partnership recorded net income
for the third quarter of 1996 of $72,197 as compared to net
income of $53,024 for the third quarter of 1995.
For the nine months ended September 30, 1996, revenues totaled
$374,489 which was comprised of $370,724 of rental income and
$3,765 of interest income. Rental income remained unchanged from
the rental income recorded in the same period in 1995. Interest
income declined slightly as a result of the decline in interest
rates over those of the first nine months of 1995. Expenses
declined by $23,004 primarily from reductions in administrative
fees paid to an affiliate of the general partner and amortization
expenses. The Partnership recorded net income for the first nine
months of 1996 of $174,487 as compared to net income of $152,886
for the first nine months of 1995.
For the three months ended September 30, 1995, revenues totaled
$124,839 which was comprised of $123,575 of rental income and
$1,264 of interest income. The Partnership's total revenue
increased $295 over the three months ended September 30, 1994 as
a result of an increase in the rental income from one property
and an increase in interest income. Expenses decreased by $884
primarily from a one-time property expense that was incurred in
1994. The Partnership recorded a corresponding increase in net
income for this period from $51,845 to $53,024.
For the nine months ended September 30, 1995, revenues totaled
$375,892 which was comprised of $370,724 of rental income and
$5,168 of interest income. The Partnership's total revenue
increased $4,595 over the nine months ended September 30, 1994 as
a result of an increase in the rental income from one property
and an increase in interest income. Expenses increased by $1,732
primarily from increases in legal and professional fees. The
Partnership recorded a corresponding increase in net income for
this period from $150,023 to $152,886.
8
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
NONE
Item 5. Other Information
NONE
Item 6. Exhibits and Reports on Form 8-K
Exhibit 27 - Financial Data Schedule
9
<PAGE>
SIGNATURES
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.
AAA Net Realty Fund IX, Ltd.
(Registrant)
November 14, 1996 H. Kerr Taylor
Date H. Kerr Taylor, President of
General Partner
November 14, 1996 H. Kerr Taylor
Date H. Kerr Taylor, Chief Financial
Officer of General Partner
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 184,717
<SECURITIES> 0
<RECEIVABLES> 1,050
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 185,767
<PP&E> 4,436,869
<DEPRECIATION> 429,646
<TOTAL-ASSETS> 4,192,990
<CURRENT-LIABILITIES> 21,032
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,171,958
<TOTAL-LIABILITY-AND-EQUITY> 4,192,990
<SALES> 370,724
<TOTAL-REVENUES> 374,489
<CGS> 0
<TOTAL-COSTS> 200,002
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 174,487
<INCOME-TAX> 0
<INCOME-CONTINUING> 174,487
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 174,487
<EPS-PRIMARY> 32.37
<EPS-DILUTED> 0
</TABLE>
