UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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: 033-33504
AAA NET REALTY FUND IX, LTD.
NEBRASKA LIMITED PARTNERSHIP IRS IDENTIFICATION
NO. 76-0318157
8 GREENWAY PLAZA, SUITE 824 HOUSTON, TX 77046
(713) 850-1400
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
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEET
JUNE 30, 1997
(Unaudited)
ASSETS
CASH & CASH EQUIVALENTS $ 174,975
ACCOUNTS RECEIVABLE 1,050
PROPERTY:
Land 1,490,494
Building 2,946,375
4,436,869
Accumulated depreciation (499,797)
TOTAL PROPERTY 3,937,072
TOTAL ASSETS $ 4,113,097
LIABILITIES & PARTNERSHIP EQUITY
LIABILITIES
Accounts payable $ 8,298
TOTAL LIABILITIES 8,298
PARTNERSHIP EQUITY (DEFICIT)
General partners (4,544)
Limited partners 4,109,343
TOTAL PARTNERSHIP EQUITY 4,104,799
TOTAL LIABILITIES & PARTNERSHIP EQUITY $ 4,113,097
LIMITED PARTNERSHIP UNITS OUTSTANDING 5,390.5
See Notes to Financial Statements.
2
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
Quarter Year to Date
1997 1996 1997 1996
INCOME
Rental income $ 123,575 $ 123,575 $ 247,150 $ 247,150
TOTAL INCOME 123,575 123,575 247,150 247,150
EXPENSES
Administrative expenses 4,025 4,050 8,075 8,100
Accounting fees 800 1,517 6,450 6,410
Amortization - 40,429 - 80,858
Depreciation 23,384 23,384 46,768 46,768
Legal and professional fees 2,260 2,464 4,536 4,074
Other 2 1,054 36 1,403
TOTAL EXPENSES 30,471 72,898 65,865 147,613
INCOME FROM OPERATIONS 93,104 50,677 181,285 99,537
OTHER INCOME
Interest income 1,494 1,401 2,949 2,753
TOTAL OTHER INCOME 1,494 1,401 2,949 2,753
NET INCOME $ 94,598 $ 52,078 $ 184,234 $ 102,290
ALLOCATION OF NET INCOME
General partners $ 946 $ 521 $ 1,842 $ 1,023
Limited partners 93,652 51,557 182,392 101,267
$ 94,598 $ 52,078 $ 184,234 $ 102,290
NET INCOME PER UNIT $ 17.55 $ 9.66 $ 34.18 $ 18.98
UNITS OUTSTANDING 5,390.5 5,390.5 5,390.5 5,390.5
See Notes to Financial Statements.
3
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
(Unaudited)
Quarter Year to Date
1997 1996 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 94,598 $ 52,078 $ 184,234 $ 102,290
Adjustments to reconcile net income to
net cash from operating activities:
Amortization - 40,429 - 80,858
Depreciation 23,384 23,384 46,768 46,768
Increase in accounts receivable - (404) - (404)
Decrease in accounts payable (364) (17,373) (4,656) (3,519)
NET CASH FLOWS FROM
OPERATING ACTIVITIES 117,618 98,114 226,346 225,993
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions (115,838) (115,298) (231,513) (230,596)
NET CASH FLOWS FROM FINANCING
ACTIVITIES (115,838) (115,298) (231,513) (230,596)
NET INCREASE (DECREASE) IN CASH
and CASH EQUIVALENTS 1,780 (17,184) (5,167) (4,603)
CASH and CASH EQUIVALENTS
at Beginning of Period 173,195 193,940 180,142 181,359
CASH and CASH EQUIVALENTS
at End of Period $ 174,975 $ 176,756 $ 174,975 $ 176,756
See Notes to Financial Statements.
4
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(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 1997 or
1996.
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-QSB 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, 1997 and June 30,
1996.
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, 1996.
5
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, $4,025
and $8,075 was incurred and paid to AAA for the three and six
months ended June 30, 1997, respectively and $4,050 and $8,100
was paid for the three and six months ended June 30, 1996,
respectively.
4. MAJOR LESSEES
The following schedule summarizes total rental income by lessee
for the three and six months ended June 30, 1997 and June 30,
1996:
Quarter Year to Date
1997 1996 1997 1996
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
6
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, 1997, revenues totaled
$125,069 which was comprised of $123,575 of rental income and
$1,494 of interest income. Rental income remained unchanged from
the rental income recorded in the second quarter of 1996.
Interest income remained essentially unchanged from the interest
income recorded in the second quarter of 1996. Expenses declined
by $42,427 primarily from a decrease in amortization as the
Partnership's organization and syndication costs were fully
amortized in late 1996. The Partnership recorded net income for
the second quarter of 1997 of $94,598 as compared to net income
of $52,078 for the second quarter of 1996.
For the six months ended June 30, 1997, revenues totaled $250,099
which was comprised of $247,150 of rental income and $2,949 of
interest income. Rental income remained unchanged from the
rental income recorded in the same period in 1996. Interest
income increased slightly as a result of the increase in interest
rates over those of the first six months of 1996. Expenses
declined by $81,748 primarily from a decrease in amortization as
the Partnership's organization and syndication costs were fully
amortized in late 1996. The Partnership recorded net income for
the first six months of 1997 of $184,234 as compared to net
income of $102,290 for the first six months of 1996.
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.
7
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
8
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, 1997 /s/ H. Kerr Taylor
Date H. Kerr Taylor, President of General Partner
August 14, 1997 /s/ L. Larry Mangum
Date L. Larry Mangum (Principal Accounting Officer)
9
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 174,975
<SECURITIES> 0
<RECEIVABLES> 1,050
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 176,025
<PP&E> 4,436,869
<DEPRECIATION> 499,797
<TOTAL-ASSETS> 4,113,097
<CURRENT-LIABILITIES> 8,298
<BONDS> 0
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0
<COMMON> 0
<OTHER-SE> 4,104,799
<TOTAL-LIABILITY-AND-EQUITY> 4,113,097
<SALES> 247,150
<TOTAL-REVENUES> 250,099
<CGS> 0
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<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 184,234
<INCOME-TAX> 0
<INCOME-CONTINUING> 184,234
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<EXTRAORDINARY> 0
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<NET-INCOME> 184,234
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