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 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: 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.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
(Unaudited)
ASSETS
<S> <C> <C>
CASH & CASH EQUIVALENTS $ 176,756 $ 181,359
ACCOUNTS RECEIVABLE 1,454 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 (406,262) (359,494)
TOTAL PROPERTY 4,030,607 4,077,375
OTHER ASSETS:
Organization costs, net of accumulated amortization
of $235,609 and $211,352, respectively 6,967 31,223
Syndication costs, net of accumulated amortization
of $549,758 and $493,157, respectively 16,244 72,845
TOTAL OTHER ASSETS 23,211 104,068
TOTAL ASSETS 4,232,028 4,363,852
LIABILITIES & PARTNERSHIP EQUITY
LIABILITIES
Accounts payable 16,969 20,487
TOTAL LIABILITIES 16,969 20,487
PARTNERSHIP EQUITY
General partners (5,065) (4,588)
Limited partners 4,220,124 4,347,953
TOTAL PARTNERSHIP EQUITY 4,215,059 4,343,365
TOTAL LIABILITIES & PARTNERSHIP EQUITY $ 4,232,028 $ 4,363,852
See Notes to Financial Statements.
</TABLE>
<TABLE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
(Unaudited)
<CAPTION>
Quarter Year to Date
1996 1995 1996 1995
<S> <C> <C> <C> <C>
INCOME
Rental income $ 123,575 $ 123,575 $ 247,150 $ 247,150
TOTAL INCOME 123,575 123,575 247,150 247,150
EXPENSES
Administrative expenses 4,050 5,700 8,100 11,400
Accounting fees 1,517 2,831 6,410 6,381
Amortization 40,429 40,429 80,858 80,858
Depreciation 23,384 23,384 46,768 46,768
Filing fees 0 0 250 250
Legal and professional fees 2,464 3,562 4,074 5,316
Other 1,054 78 1,153 219
TOTAL EXPENSES 72,898 75,984 147,613 151,192
INCOME FROM OPERATIONS 50,677 47,591 99,537 95,958
OTHER INCOME
Interest income 1,401 1,842 2,753 3,903
TOTAL OTHER INCOME 1,401 1,842 2,753 3,903
NET INCOME $ 52,078 $ 49,433 $ 102,290 $ 99,861
ALLOCATION OF NET INCOME
General partners $ 521 $ 494 $ 1,023 $ 998
Limited partners 51,557 48,939 101,267 98,863
$ 52,078 $ 49,433 $ 102,290 $ 99,861
NET INCOME PER UNIT $ 9.66 $ 9.17 $ 18.98 $ 18.52
UNITS OUTSTANDING 5,390.5 5,390.5 5,390.5 5,390.5
See Notes to Financial Statements.
</TABLE>
<TABLE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENT OF PARTNERSHIP EQUITY
FOR THE SIX MONTHS ENDED JUNE 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
See Notes to Financial Statements.
</TABLE>
<TABLE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND JUNE 30, 1995
(Unaudited)
<CAPTION>
Quarter Year to Date
1996 1995 1996 1995
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 52,078 $ 49,433 $ 102,290 $ 99,861
Adjustments to reconcile net income to
net cash from operating activities:
Amortization 40,429 40,429 80,858 80,858
Depreciation 23,384 23,384 46,768 46,768
Increase in accounts receivable (404) 0 (404) 0
Increase (decrease) in accounts payable (17,373) 1,555 (3,519) (2,649)
NET CASH FLOWS FROM
OPERATING ACTIVITIES 98,114 114,801 225,993 224,838
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions (115,298) (115,298) (230,596) (230,596)
NET CASH FLOWS FROM FINANCING
ACTIVITIES (115,298) (115,298) (230,596) (230,596)
NET INCREASE (DECREASE) IN CASH
and CASH EQUIVALENTS (17,184) (497) (4,603) (5,758)
CASH and CASH EQUIVALENTS
at Beginning of Period 193,940 172,050 181,359 177,311
CASH and CASH EQUIVALENTS
at End of Period $ 176,756 $ 171,553 $ 176,756 $ 171,553
See Notes to Financial Statements.
</TABLE>
AAA NET REALTY FUND IX, LTD.
( A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 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. Rental income is recorded
ratably over the life of the lease.
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 six month periods
ended June 30, 1996 and June 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.
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 $8,100 was incurred and paid to AAA
for the three and six months ended June 30, 1996, respectively
and $5,700 and $11,400 was paid for the three and six months ended
June 30, 1995, respectively.
4. MAJOR LESSEES
The following schedule summarizes total rental income by lessee
for the three and six months ended June 30, 1996 and June 30, 1995:
Quarter Year to Date
1996 1995 1996 1995
Foodmaker, Inc. $15,934 $15,934 $31,868 $31,868
Tandy Corporation $41,211 $41,211 $82,422 $82,422
Payless Shoe Source $18,500 $18,500 $37,000 $37,000
Golden Corral Corporation $47,930 $47,930 $95,860 $95,860
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 June 30, 1996, revenues totaled $124,976 which
was comprised of $123,575 of rental income and $1,401 of interest income.
Rental income remained unchanged from the rental income recorded in the
second quarter of 1995. Interest income declined slightly as a result of
the decline in interest rates over those of the second quarter of 1995.
Expenses declined by $3,086 primarily from reductions in administrative
fees paid to an affiliate of the general partner, accounting fees, and
legal and professional fees. The Partnership recorded net income for the
second quarter of 1996 of $52,078 as compared to net income of $49,433 for
the second quarter of 1995.
For the six months ended June 30, 1996, revenues totaled $249,903 which
was comprised of $247,150 of rental income and $2,753 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 six months of 1995.
Expenses declined by $3,579 primarily from reductions in administrative
fees paid to an affiliate of the general partner and legal and professional
fees. The Partnership recorded net income for the first six months of 1996
of $102,290 as compared to net income of $99,861 for the first six months
of 1995.
For the three months ended June 30, 1995, revenues totaled $125,417 which
was comprised of $123,575 of rental income and $ 1,842 of interest income.
The Partnership's total revenue increased $1,935 over the three months
ended June 30, 1994 as a result of an increase in the rental income from
one property and an increase in interest income. Expenses increased by
$3,556 primarily from increases in accounting fees and legal and
professional fees. The Partnership recorded a corresponding decrease in
net income for this period from $51,054 to $49,433.
For the six months ended June 30, 1995, revenues totaled $251,053 which
was comprised of $247,150 of rental income and $3,903 of interest income.
The Partnership's total revenue increased $4,299 over the six months ended
June 30, 1994 as a result of an increase in the rental income from one
property and an increase in interest income. Expenses increased by $2,616
primarily from increases in legal and professional fees. The Partnership
recorded a corresponding increase in net income for this period from $98,178
to $99,861.
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
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)
August 14, 1996 H. Kerr Taylor
Date H. Kerr Taylor, President of General Partner
August 14, 1996 H. Kerr Taylor
Date H. Kerr Taylor, Chief Financial Officer of
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 176,756
<SECURITIES> 0
<RECEIVABLES> 1,454
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 178,210
<PP&E> 4,436,869
<DEPRECIATION> 406,262
<TOTAL-ASSETS> 4,232,028
<CURRENT-LIABILITIES> 16,969
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,215,059
<TOTAL-LIABILITY-AND-EQUITY> 4,232,028
<SALES> 247,150
<TOTAL-REVENUES> 249,903
<CGS> 0
<TOTAL-COSTS> 147,613
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 102,290
<INCOME-TAX> 0
<INCOME-CONTINUING> 102,290
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 102,290
<EPS-PRIMARY> 18.98
<EPS-DILUTED> 0
</TABLE>
