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 March 31, 2000
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 issuer (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 issuer was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. X Yes No
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
BALANCE SHEET
MARCH 31, 2000
(Unaudited)
ASSETS
Cash and cash equivalents $ 248,701
Property:
Land 1,490,494
Buildings 2,946,375
------------
4,436,869
Accumulated depreciation (757,020)
------------
Total property, net 3,679,849
------------
Other assets:
Accrued rental income 54,715
------------
TOTAL ASSETS $ 3,983,265
============
LIABILITIES AND PARTNERSHIP EQUITY
Liabilities:
Accounts payable $ 4,759
------------
TOTAL LIABILITIES 4,759
------------
Partnership equity (deficit):
General partners (1,493)
Limited partners 3,979,999
------------
TOTAL PARTNERSHIP EQUITY 3,978,506
------------
TOTAL LIABILITIES AND PARTNERSHIP EQUITY $ 3,983,265
============
See Notes to Financial Statements.
2
<PAGE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
2000 1999
---- ----
Revenues:
Rental income $ 137,963 $ 140,646
Interest income 2,426 1,852
----------- -----------
Total revenues 140,389 142,498
----------- -----------
Expenses:
Advisory fees to related party 13,476 9,960
Depreciation 23,384 23,384
Professional fees 6,665 5,392
----------- -----------
Total expenses 43,525 38,736
----------- -----------
Net income $ 96,864 $ 103,762
=========== ===========
Allocation of net income:
General partners $ 969 $ 1,038
Limited partners 95,895 102,724
----------- -----------
$ 96,864 $ 103,762
=========== ===========
Net income per unit $ 17.97 $ 19.25
=========== ===========
Weighted average units outstanding 5,390.5 5,390.5
=========== ===========
See Notes to Financial Statements.
3
<PAGE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(Unaudited)
2000 1999
---- ----
Cash flows from operating activities:
Net income $ 96,864 $ 103,762
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 23,384 23,384
Increase in accrued rental income (5,295) (5,295)
Decrease in accounts payable (9,658) (6,882)
---------- ----------
Net cash provided by operating activities 105,295 114,969
---------- ----------
Cash flows from financing activities:
Distributions paid to partners (90,771) (116,754)
---------- ----------
Net cash used in financing activities (90,771) (116,754)
---------- ----------
Net increase (decrease) in cash and cash equivalents 14,524 (1,785)
Cash and cash equivalents at beginning of period 234,177 216,302
---------- ----------
Cash and cash equivalents at end of period $ 248,701 $ 214,517
========== ==========
See Notes to Financial Statements.
4
<PAGE>
AAA NET REALTY FUND IX, LTD.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(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 Partnership was formed to acquire commercial properties for cash, own,
lease, operate, manage and eventually sell the properties. Prior to June 5,
1998, the supervision of the operations of the properties was managed by
American Asset Advisers Realty Corporation, ("AAA"), a related party.
Beginning June 5, 1998, the supervision of the operations of the properties
is managed by AmREIT Realty Investment Corporation, ("ARIC"), 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 2000 or 1999.
Properties are leased on a triple-net basis. Revenue is recognized on a
straight-line basis over the terms of the individual leases. Percentage
rents are recognized when received.
Land and buildings are stated at cost. Buildings are depreciated on a
straight-line basis over an estimated useful life of 31.5 years.
The final property acquisition was completed as a joint venture. The
Partnership's interest in the joint venture is 4.8%. At March 31, 2000, the
net book value of this property comprised 1.6% of total assets, the rental
income of $2,295 comprised 1.7% of total rental income and 2.4% of net
income. Because of the immateriality of these amounts to the financial
statements as a whole, the initial purchase and the subsequent rental
income and depreciation have been accounted for on the proportionate
consolidation method.
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 preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
The accompanying unaudited financial statements have been prepared in
accordance with the instructions to Form 10-QSB and 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 month period ended March 31, 2000 and March 31, 1999.
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-KSB for the year ended December 31,
1999.
5
<PAGE>
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, $13,476 and
$9,960 was incurred and paid to ARIC and AAA for the three months ended
March 31, 2000 and 1999, respectively.
4. MAJOR LESSEES
The following schedule summarizes total rental income by lessee for the
three months ended March 31, 2000 and 1999, respectively:
2000 1999
---- ----
Foodmaker, Inc. (Texas) $ 17,249 $ 17,249
Baptist Memorial Health
Services, Inc. (Tennessee) 52,170 52,170
Payless Shoe Source/WaldenBooks (Texas) 20,500 20,500
Golden Corral Corporation (Texas) 48,044 50,727
--------- ---------
Total $137,963 $140,646
========= =========
6
<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 leasethese 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 Partnership's overall investment objectives are to acquire properties that
offer investors the potential for (i) preservation and protection of the
Partnership's capital; (ii) partially tax-deferred cash distributions from
operations; and (iii) long-term capital gains through appreciation in value of
the Partnership's properties realized upon sale.
7
<PAGE>
RESULTS OF OPERATIONS
For the three months ended March 31, 2000, revenues totaled $140,389, which was
comprised of $137,963 of rental income and $2,426 of interest income. Rental
income decreased from the rental income recorded in the first quarter of 1999
due to less percentage rent collected from Golden Corral Corporation. Expenses
increased by $4,789 primarily from an increase in advisory fees paid for the
administrative services necessary for the operation of the partnership. The
Partnership recorded net income for the first quarter of 2000 of $96,864 as
compared to net income of $103,762 for the first quarter of 1999.
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.
(Issuer)
May 11, 2000 /s/ H. Kerr Taylor
- ------------ ------------------
Date H. Kerr Taylor, President of General Partner
May 11, 2000 /s/ Chad C. Braun
- ------------ -------------------
Date Chad C. Braun (Principal Accounting Officer)
10
<PAGE>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 248,701
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 248,701
<PP&E> 4,436,869
<DEPRECIATION> 757,020
<TOTAL-ASSETS> 3,983,265
<CURRENT-LIABILITIES> 4,759
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 3,978,506
<TOTAL-LIABILITY-AND-EQUITY> 3,983,265
<SALES> 137,963
<TOTAL-REVENUES> 140,389
<CGS> 0
<TOTAL-COSTS> 43,525
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 96,864
<INCOME-TAX> 0
<INCOME-CONTINUING> 96,864
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 96,864
<EPS-BASIC> 17.97
<EPS-DILUTED> 17.97
</TABLE>
