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 September 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
SEPTEMBER 30, 1997
(Unaudited)
ASSETS
CASH & CASH EQUIVALENTS $ 181,318
PROPERTY:
Land 1,490,494
Building 2,946,375
4,436,869
Accumulated depreciation (523,181)
TOTAL PROPERTY 3,913,688
OTHER ASSETS:
Accrued rental income 1,765
TOTAL ASSETS $ 4,096,771
LIABILITIES & PARTNERSHIP EQUITY
LIABILITIES
Accounts payable $ 10,431
TOTAL LIABILITIES 10,431
PARTNERSHIP EQUITY (DEFICIT)
General partners (4,319)
Limited partners 4,090,659
TOTAL PARTNERSHIP EQUITY 4,086,340
TOTAL LIABILITIES & PARTNERSHIP EQUITY $ 4,096,771
LIMITED PARTNERSHIP UNITS OUTSTANDING 5,390.5
See Notes to Financial Statements.
2
<TABLE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
Quarter Year to Date
1997 1996 1997 1996
<S> <C> <C> <C> <C>
INCOME
Rental income $ 129,720 $ 123,575 $ 376,870 $ 370,724
TOTAL INCOME 129,720 123,575 376,870 370,724
EXPENSES
Administrative expenses 5,100 4,050 13,175 12,150
Accounting fees 1,000 400 7,450 6,810
Amortization - 23,211 - 104,069
Depreciation 23,384 23,384 70,152 70,152
Legal and professional fees 3,910 1,292 8,446 5,366
Other 48 53 84 1,455
TOTAL EXPENSES 33,442 52,390 99,307 200,002
INCOME FROM OPERATIONS 96,278 71,185 277,563 170,722
OTHER INCOME
Interest income 1,236 1,012 4,185 3,765
TOTAL OTHER INCOME 1,236 1,012 4,185 3,765
NET INCOME $ 97,514 $ 72,197 $ 281,748 $ 174,487
ALLOCATION OF NET INCOME
General partners $ 975 $ 722 $ 2,817 $ 1,745
Limited partners 96,539 71,475 278,931 172,742
$ 97,514 $ 72,197 $ 281,748 $ 174,487
NET INCOME PER UNIT $ 18.09 $ 13.39 $ 52.27 $ 32.37
UNITS OUTSTANDING 5,390.5 5,390.5 5,390.5 5,390.5
See Notes to Financial Statements.
</TABLE>
3
<TABLE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
(Unaudited)
<CAPTION>
Quarter Year to Date
1997 1996 1997 1996
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 97,514 $ 72,197 $ 281,748 $ 174,487
Adjustments to reconcile net income to
net cash from operating activities:
Amortization - 23,211 - 104,069
Depreciation 23,384 23,384 70,152 70,152
Decrease in accounts receivable 1,050 404 1,050 -
Increase in accrued rental income (1,765) - (1,765) -
Increase (decrease) in accounts payable 2,133 4,063 (2,523) 544
NET CASH FLOWS FROM
OPERATING ACTIVITIES 122,316 123,259 348,662 349,252
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions (115,973) (115,298) (347,486) (345,894)
NET CASH FLOWS FROM FINANCING
ACTIVITIES (115,973) (115,298) (347,486) (345,894)
NET INCREASE IN CASH and
CASH EQUIVALENTS 6,343 7,961 1,176 3,358
CASH and CASH EQUIVALENTS
at Beginning of Period 174,975 176,756 180,142 181,359
CASH and CASH EQUIVALENTS
at End of Period $ 181,318 $ 184,717 $ 181,318 $ 184,717
See Notes to Financial Statements.
</TABLE>
4
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 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 nine month periods ended
September 30, 1997 and September 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, $4,050 and $12,125 was incurred and paid to AAA
for the three and nine months ended September 30, 1997, respectively and
$4,050 and $12,150 was paid for the three and nine months ended
September 30, 1996, respectively.
4. MAJOR LESSEES
The following schedule summarizes total rental income by lessee for the
three and nine months ended September 30, 1997 and September 30, 1996:
<TABLE>
<CAPTION>
Quarter Year to Date
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Foodmaker, Inc. $17,094 $15,934 $ 48,962 $ 47,801
Tandy Corporation 27,474 41,211 109,896 123,633
Payless Shoe Source 19,833 18,500 56,833 55,500
Golden Corral Corporation 47,930 47,930 143,790 143,790
Baptist Memorial Health Services 17,389 -0- 17,389 -0-
</TABLE>
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 September 30, 1997, revenues totaled $130,956
which was comprised of $129,720 of rental income and $1,236 of interest
income. Rental income increased from the rental income recorded in the
third quarter of 1996 primarily as a result of negotiating a lease on one
property with a new tenant at a higher rental rate. In addition, the
rental income from another property increased based upon a specified
measure of the increase in the consumer price index. Interest income
increased slightly as a result of the increase in interest rates over those
of the third quarter of 1996. Expenses declined by $18,948 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 third quarter of 1997 of $97,514 as compared to
net income of $72,197 for the third quarter of 1996.
For the nine months ended September 30, 1997, revenues totaled $381,055
which was comprised of $376,870 of rental income and $4,185 of interest
income. Rental income increased from the rental income recorded in the
same period in 1996 due to the same reasons stated above. Interest income
increased slightly as a result of the increase in interest rates over those
of the first nine months of 1996. Expenses declined by $100,695 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 nine months of 1997 of $281,748 as
compared to net income of $174,487 for the first nine months of 1996.
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.
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)
November 14, 1997 /s/ H. Kerr Taylor
Date H. Kerr Taylor, President of General Partner
November 14, 1997 /s/ L. Larry Mangum
Date L. Larry Mangum (Principal Accounting Officer)
9
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 181,318
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 181,318
<PP&E> 4,436,869
<DEPRECIATION> 523,181
<TOTAL-ASSETS> 4,096,771
<CURRENT-LIABILITIES> 10,431
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 4,086,340
<TOTAL-LIABILITY-AND-EQUITY> 4,096,771
<SALES> 376,870
<TOTAL-REVENUES> 381,055
<CGS> 0
<TOTAL-COSTS> 99,307
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 281,748
<INCOME-TAX> 0
<INCOME-CONTINUING> 281,748
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 281,748
<EPS-PRIMARY> 52.27
<EPS-DILUTED> 0
</TABLE>
