SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Under Section 13 or 15(d)
of The Securities Exchange Act of 1934
For the Quarter Ended: March 31, 1999
Commission file number: 0-23778
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
(Exact Name of Small Business Issuer as Specified in its Charter)
State of Minnesota 41-1729121
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(651) 227-7333
(Issuer's telephone number)
Not Applicable
(Former name, former address and former fiscal year, if changed
since last report)
Check whether the issuer (1) 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.
Yes [X] No
Transitional Small Business Disclosure Format:
Yes No [X]
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
INDEX
PART I. Financial Information
Item 1. Balance Sheet as of March 31, 1999 and December 31, 1998
Statements for the Periods ended March 31, 1999 and 1998:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
Item 2. Management's Discussion and Analysis
PART II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
BALANCE SHEET
MARCH 31, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
1999 1998
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,030,255 $ 1,407,691
Receivables 74,918 47,792
----------- -----------
Total Current Assets 1,105,173 1,455,483
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 7,175,132 7,175,132
Buildings and Equipment 10,649,400 10,649,400
Construction in Progress 1,017,723 654,272
Property Acquisition Costs 60,502 58,511
Accumulated Depreciation (1,412,889) (1,320,192)
----------- -----------
Net Investments in Real Estate 17,489,868 17,217,123
----------- -----------
Total Assets $18,595,041 $18,672,606
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 68,146 $ 84,669
Distributions Payable 424,410 424,509
Unearned Rent 27,457 0
----------- -----------
Total Current Liabilities 520,013 509,178
----------- -----------
PARTNERS' CAPITAL (DEFICIT):
General Partners (26,191) (25,306)
Limited Partners, $1,000 Unit Value;
24,000 Units authorized and issued;
23,385 Units outstanding 18,101,219 18,188,734
----------- -----------
Total Partners' Capital 18,075,028 18,163,428
----------- -----------
Total Liabilities and Partners' Capital $18,595,041 $18,672,606
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
1999 1998
INCOME:
Rent $ 502,478 $ 472,916
Investment Income 31,330 36,261
----------- -----------
Total Income 533,808 509,177
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 66,112 71,145
Partnership Administration and Property
Management - Unrelated Parties 24,042 32,837
Depreciation 92,697 92,847
----------- -----------
Total Expenses 182,851 196,829
----------- -----------
OPERATING INCOME 350,957 312,348
GAIN ON SALE OF REAL ESTATE 0 134,164
----------- -----------
NET INCOME $ 350,957 $ 446,512
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 3,509 $ 4,465
Limited Partners 347,448 442,047
----------- -----------
$ 350,957 $ 446,512
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(23,385 weighted average Units
outstanding in 1999 and 1998) $ 14.86 $ 18.90
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 350,957 $ 446,512
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 92,697 92,847
Gain on Sale of Real Estate 0 (134,164)
(Increase) Decrease in Receivables (27,126) 54,835
Decrease in Payable to
AEI Fund Management, Inc. (16,523) (17,498)
Increase in Unearned Rent 27,457 41,060
----------- -----------
Total Adjustments 76,505 37,080
----------- -----------
Net Cash Provided By
Operating Activities 427,462 483,592
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (365,442) (23,709)
Proceeds from Sale of Real Estate 0 438,215
----------- -----------
Net Cash Provided By (Used For)
Investing Activities (365,442) 414,506
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in Distributions Payable (99) 229,426
Distributions to Partners (439,357) (439,395)
----------- -----------
Net Cash Used For
Financing Activities (439,456) (209,969)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (377,436) 688,129
CASH AND CASH EQUIVALENTS, beginning of period 1,407,691 2,112,414
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 1,030,255 $ 2,800,543
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE PERIODS ENDED MARCH 31
(Unaudited)
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1997 $ (22,210) $18,495,289 $18,473,079 23,385.09
Distributions (4,394) (435,001) (439,395)
Net Income 4,465 442,047 446,512
--------- ----------- ----------- -----------
BALANCE, March 31, 1998 $ (22,139) $18,502,335 $18,480,196 23,385.09
========= =========== =========== ===========
BALANCE, December 31, 1998 $ (25,306) $18,188,734 $18,163,428 23,385.09
Distributions (4,394) (434,963) (439,357)
Net Income 3,509 347,448 350,957
--------- ----------- ----------- -----------
BALANCE, March 31, 1999 $ (26,191) $18,101,219 $18,075,028 23,385.09
========= =========== =========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(Unaudited)
(1) The condensed statements included herein have been prepared
by the Partnership, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Partnership
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
Partnership's latest annual report on Form 10-KSB.
(2) Organization -
AEI Net Lease Income & Growth Fund XX Limited Partnership
(Partnership) was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XX, Inc.
(AFM), the Managing General Partner of the Partnership.
Robert P. Johnson, the President and sole shareholder of
AFM, serves as the Individual General Partner of the
Partnership. An affiliate of AFM, AEI Fund Management,
Inc., performs the administrative and operating functions
for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on June 30, 1993 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. On January 19, 1995, the
Partnership's offering terminated when the maximum
subscription limit of 24,000 Limited Partnership Units
($24,000,000) was reached.
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$24,000,000 and $1,000, respectively. During the operation
of the Partnership, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of the Partnership's properties which the General
Partners determine to distribute will, after provisions for
debts and reserves, be paid in the following manner: (i)
first, 99% to the Limited Partners and 1% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 12% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) any
remaining balance will be distributed 90% to the Limited
Partners and 10% to the General Partners. Distributions to
the Limited Partners will be made pro rata by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's
property, will be allocated first in the same ratio in
which, and to the extent, Net Cash Flow is distributed to
the Partners for such year. Any additional profits will be
allocated in the same ratio as the last dollar of Net Cash
Flow is distributed. Net losses from operations will be
allocated 99% to the Limited Partners and 1% to the General
Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's property will be
allocated in accordance with the Partnership Agreement as
follows: (i) first, to those partners with deficit balances
in their capital accounts in an amount equal to the sum of
such deficit balances; (ii) second, 99% to the Limited
Partners and 1% to the General Partners until the aggregate
balance in the Limited Partners' capital accounts equals the
sum of the Limited Partners' Adjusted Capital Contributions
plus an amount equal to 12% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, the
balance of any remaining gain will then be allocated 90% to
the Limited Partners and 10% to the General Partners.
Losses will be allocated 98% to the Limited Partners and 2%
to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(3) Investments in Real Estate -
On December 21, 1995, the Partnership purchased a 33.0%
interest in a Media Play retail store in Apple Valley,
Minnesota for $1,422,701. The property was leased to The
Musicland Group, Inc. (MGI) under a Lease Agreement with a
primary term of 18 years and annual rental payments of
$135,482.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
In December, 1996, the Partnership and MGI reached an
agreement in which MGI would buy out and terminate the Lease
Agreement by making a payment of $800,000, which was equal
to approximately two years' rent. The Partnership's share
of such payment was $264,000. A specialist in commercial
property leasing has been retained to locate a new tenant
for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and
other costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of
the Partnership's interest in the Media Play was
approximately $726,000. In the fourth quarter of 1997, a
charge to operations for real estate impairment of $626,800
was recognized, which is the difference between the book
value at December 31, 1997 of $1,352,800 and the estimated
market value of $726,000. The charge was recorded against
the cost of the land, building and equipment.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Lafayette, Louisiana,
filed for reorganization. GCR is continuing to make the
lease payments to the Partnership under the supervision of
the bankruptcy court while they develop a reorganization
plan. If the Lease is assumed, GCR must comply with all
Lease terms and any unpaid rent must be paid. If the Lease
is rejected, GCR will be required to return possession of
the property to the Partnership and past due amounts will be
dismissed and the Partnership will be responsible for re-
leasing the property. At March 31, 1999, GCR owed $26,781
for rent due prior to the date of the filing for
reorganization. An analysis of the operating statements of
this property indicate that it is generating profits and it
is management's belief that the Lease will be assumed by
GCR.
On August 11, 1998, the Partnership purchased a 60.0%
interest in a parcel of land in Columbus, Ohio for $621,600.
The land is leased to Americana Dining Corporation (ADC)
under a Lease Agreement with a primary term of 20 years and
annual rental payments of $43,512. Effective February 6,
1999, the annual rent was increased to $65,268.
Simultaneously with the purchase of the land, the
Partnership entered into a Development Financing Agreement
under which the Partnership advanced funds to ADC for the
construction of a Champps Americana restaurant on the site.
Through March 31, 1999, the Partnership had advanced
$1,017,723 for the construction of the property and was
charging interest on the advances at a rate of 7.0%.
Effective February 6, 1999, the interest rate was increased
to 10.5%. On April 16, 1999, after the development was
completed, the Lease Agreement was amended to require annual
rental payments of $209,661. The Partnership's share of the
total purchase price, including the cost of the land, was
approximately $2,037,000. The remaining interest in the
property is owned by Net Lease Income & Growth Fund 84-A
Limited Partnership.
Through December 31, 1998, the Partnership sold 88.04128% of
its interest in the Applebee's restaurant in Middletown,
Ohio, in six separate transactions to unrelated third
parties. The Partnership received total net sale proceeds
of $1,322,934 which resulted in a total net gain of
$389,903. The total cost and related accumulated
depreciation of the interests sold was $1,026,857 and
$93,826, respectively. For the three months ended March 31,
1998, the net gain was $78,734.
AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
(Continued)
(3) Investments in Real Estate - (Continued)
On January 27, 1998, the Partnership sold 5.50031% of its
interest in the Champps Americana restaurant in Lyndhurst,
Ohio to an unrelated third party. The Partnership received
net sale proceeds of $184,032 which resulted in a net gain
of $41,140. At the time of the sale, the cost and related
accumulated depreciation of the interest sold was $149,183
and $6,291, respectively.
In May, 1997, the Partnership sold 3,739 square feet of land
from the Red Robin property on Jamboree Drive in Colorado
Springs, Colorado, pursuant to a Right of Way Agreement with
the state of Colorado Department of Transportation. The
Partnership received net proceeds of $37,052 which, in 1997,
resulted in a net loss of $36,025. The original cost of the
parcel of land was $73,077. The Partnership believed the
state of Colorado undervalued the land and successfully
negotiated to receive additional net proceeds of $14,290,
which was recognized as a gain in the first quarter of 1998.
During the first three months of 1998, the Partnership
distributed net sale proceeds of $34,200 to the Limited and
General Partners as part of their regular quarterly
distributions which represented a return of capital of $1.45
per Limited Partnership Unit. The remaining net sale
proceeds will either be re-invested in additional properties
or distributed to the Partners in the future.
The Partnership has incurred net costs of $803,803 relating
to the review of potential property acquisitions. Of these
costs, $743,301 have been capitalized and allocated to land,
building and equipment. The remaining costs of $60,502 have
been capitalized and will be allocated to property
acquisitions in future periods.
(4) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Partnership. The payable to AEI
Fund Management represents the balance due for those
services. This balance is non-interest bearing and
unsecured and is to be paid in the normal course of
business.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS
Results of Operations
For the three months ended March 31, 1999 and 1998, the
Partnership recognized rental income of $502,478 and $472,916,
respectively. During the same periods, the Partnership earned
investment income of $31,330 and $36,261, respectively. In 1999,
rental income increased mainly as a result of additional rent
received from the Champps Americana restaurant in Columbus, Ohio
and rent increases on five properties.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Musicland Group, Inc. (MGI), the lessee of the Media Play
retail store in Apple Valley, Minnesota experienced financial
difficulties and was aggressively restructuring its organization.
As part of the restructuring, the Partnership and MGI reached an
agreement in December, 1996 in which MGI would buy out and
terminate the Lease Agreement by making a payment of $800,000,
which is equal to approximately two years' rent. The
Partnership's share of such payment was $264,000. A specialist
in commercial property leasing has been retained to locate a new
tenant for the property. While the property is vacant, the
Partnership is responsible for the real estate taxes and other
costs required to maintain the property.
As of December 31, 1997, based on an analysis of market
conditions in the area, it was determined the fair value of the
Partnership's interest in the Media Play was approximately
$726,000. In the fourth quarter of 1997, a charge to operations
for real estate impairment of $626,800 was recognized, which is
the difference between the book value at December 31, 1997 of
$1,352,800 and the estimated market value of $726,000. The
charge was recorded against the cost of the land, building and
equipment.
In December, 1998, Gulf Coast Restaurants, Inc. (GCR), the
lessee of the Applebee's restaurant in Lafayette, Louisiana,
filed for reorganization. GCR is continuing to make the lease
payments to the Partnership under the supervision of the
bankruptcy court while they develop a reorganization plan. If
the Lease is assumed, GCR must comply with all Lease terms and
any unpaid rent must be paid. If the Lease is rejected, GCR will
be required to return possession of the property to the
Partnership and past due amounts will be dismissed and the
Partnership will be responsible for re-leasing the property. At
March 31, 1999, GCR owed $26,781 for rent due prior to the date
of the filing for reorganization. An analysis of the operating
statements of this property indicate that it is generating
profits and it is management's belief that the Lease will be
assumed by GCR.
During the three months ended March 31, 1999 and 1998, the
Partnership paid Partnership administration expenses to
affiliated parties of $66,112 and $71,145, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $24,042 and $32,837, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The decrease
in these expenses in 1999, when compared to 1998, is the result
of expenses incurred in 1998 related to the Media Play situation
discussed above.
As of March 31, 1999, the Partnership's cash distribution
rate was 7.25% on an annualized basis. Distributions of Net Cash
Flow to the General Partners were subordinated to the Limited
Partners as required in the Partnership Agreement. As a result,
99% of distributions and income were allocated to Limited
Partners and 1% to the General Partners.
Inflation has had a minimal effect on income from
operations. The Leases contain cost of living increases which
will result in an increase in rental income over the term of the
Leases. Inflation also may cause the Partnership's real estate
to appreciate in value. However, inflation and changing prices
may also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
The Year 2000 issue is the result of computer systems that
use two digits rather than four to define the applicable year,
which may prevent such systems from accurately processing dates
ending in the Year 2000 and beyond. This could result in
computer system failures or disruption of operations, including,
but not limited to, an inability to process transactions, to send
or receive electronic data, or to engage in routine business
activities.
AEI Fund Management, Inc. (AEI) performs all management
services for the Partnership. In 1998, AEI completed an
assessment of its computer hardware and software systems and has
replaced or upgraded certain computer hardware and software using
the assistance of outside vendors. AEI has received written
assurance from the equipment and software manufacturers as to
Year 2000 compliance. The costs associated with Year 2000
compliance have not been, and are not expected to be, material.
The Partnership intends to monitor and communicate with
tenants regarding Year 2000 compliance, although there can be no
assurance that the systems of the various tenants will be Year
2000 compliant.
Liquidity and Capital Resources
During the three months ended March 31, 1999, the
Partnership's cash balances decreased $377,436 mainly as a result
of cash used to purchase additional properties. Net cash
provided by operating activities decreased from $483,592 in 1998
to $427,462 in 1999 mainly as the result of net timing
differences in the collection of payments from the lessees and
the payment of expenses, which were partially offset by an
increase in income and a decrease in expenses in 1999.
The major components of the Partnership's cash flow from
investing activities are investments in real estate and proceeds
from the sale of real estate. During the three months ended
March 31, 1999 and 1998, the Partnership generated cash flow from
the sale of real estate of $-0- and $438,215, respectively.
During the same periods, the Partnership expended $365,442 and
$23,709, respectively, to invest in real properties (inclusive of
acquisition expenses), as the Partnership continued to reinvest
the cash generated from the property sales.
On August 11, 1998, the Partnership purchased a 60.0%
interest in a parcel of land in Columbus, Ohio for $621,600. The
land is leased to Americana Dining Corporation (ADC) under a
Lease Agreement with a primary term of 20 years and annual rental
payments of $43,512. Effective February 6, 1999, the annual rent
was increased to $65,268. Simultaneously with the purchase of
the land, the Partnership entered into a Development Financing
Agreement under which the Partnership advanced funds to ADC for
the construction of a Champps Americana restaurant on the site.
Through March 31, 1999, the Partnership had advanced $1,017,723
for the construction of the property and was charging interest on
the advances at a rate of 7.0%. Effective February 6, 1999, the
interest rate was increased to 10.5%. On April 16, 1999, after
the development was completed, the Lease Agreement was amended to
require annual rental payments of $209,661. The Partnership's
share of the total purchase price, including the cost of the
land, was approximately $2,037,000. The remaining interest in
the property is owned by Net Lease Income & Growth Fund 84-A
Limited Partnership.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Through December 31, 1998, the Partnership sold 88.04128%
of its interest in the Applebee's restaurant in Middletown, Ohio,
in six separate transactions to unrelated third parties. The
Partnership received total net sale proceeds of $1,322,934 which
resulted in a total net gain of $389,903. The total cost and
related accumulated depreciation of the interests sold was
$1,026,857 and $93,826, respectively. For the three months ended
March 31, 1998, the net gain was $78,734.
On January 27, 1998, the Partnership sold 5.50031% of its
interest in the Champps Americana restaurant in Lyndhurst, Ohio
to an unrelated third party. The Partnership received net sale
proceeds of $184,032 which resulted in a net gain of $41,140. At
the time of the sale, the cost and related accumulated
depreciation of the interest sold was $149,183 and $6,291,
respectively.
In May, 1997, the Partnership sold 3,739 square feet of
land from the Red Robin property on Jamboree Drive in Colorado
Springs, Colorado, pursuant to a Right of Way Agreement with the
state of Colorado Department of Transportation. The Partnership
received net proceeds of $37,052 which, in 1997, resulted in a
net loss of $36,025. The original cost of the parcel of land was
$73,077. The Partnership believed the state of Colorado
undervalued the land and successfully negotiated to receive
additional net proceeds of $14,290, which was recognized as a
gain in the first quarter of 1998.
During the first three months of 1998, the Partnership
distributed net sale proceeds of $34,200 to the Limited and
General Partners as part of their regular quarterly distributions
which represented a return of capital of $1.45 per Limited
Partnership Unit. The remaining net sale proceeds will either be
re-invested in additional properties or distributed to the
Partners in the future.
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year. The redemption payments generally are funded with cash
that would normally be paid as part of the regular quarterly
distributions. As a result, total distributions and
distributions payable fluctuate from year to year due to cash
used to fund redemption payments.
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year. In no event shall the
Partnership be obligated to purchase Units if, in the sole
discretion of the Managing General Partner, such purchase would
impair the capital or operation of the Partnership.
During 1999 and 1998, the Partnership did not redeem any
Units from the Limited Partners. In prior years, a total of
thirty-seven Limited Partners redeemed 614.9 Partnership Units
for $541,983 in accordance with the Partnership Agreement. The
redemptions increase the remaining Limited Partners' ownership
interest in the Partnership.
The continuing rent payments from the properties, together
with cash generated from the property sales, should be adequate
to fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS (Continued)
Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995
The foregoing Management's Discussion and Analysis
contains various "forward looking statements" within the meaning
of federal securities laws which represent management's
expectations or beliefs concerning future events, including
statements regarding anticipated application of cash, expected
returns from rental income, growth in revenue, taxation levels,
the sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward
looking statements made by the Partnership, must be evaluated in
the context of a number of factors that may affect the
Partnership's financial condition and results of operations,
including the following:
<BULLET> Market and economic conditions which affect
the value of the properties the Partnership owns and
the cash from rental income such properties generate;
<BULLET> the federal income tax consequences of rental
income, deductions, gain on sales and other items and
the affects of these consequences for investors;
<BULLET> resolution by the General Partners of
conflicts with which they may be confronted;
<BULLET> the success of the General Partners of
locating properties with favorable risk return
characteristics;
<BULLET> the effect of tenant defaults; and
<BULLET> the condition of the industries in which the
tenants of properties owned by the Partnership operate.
PART II - OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
There are no material pending legal proceedings to which
the Partnership is a party or of which the Partnership's
property is subject.
ITEM 2.CHANGES IN SECURITIES
None.
ITEM 3.DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5.OTHER INFORMATION
None.
PART II - OTHER INFORMATION
(Continued)
ITEM 6.EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits -
Description
10.1 First Amendment to Net Lease
Agreement dated April 16, 1999 between
the Partnership, Net Lease Income &
Growth Fund 84-A Limited Partnership and
Americana Dining Corporation relating to
the property at 3993 Morse Crossing,
Columbus, Ohio.
27 Financial Data Schedule for period
ended March 31, 1999.
b. Reports filed on Form 8-K - None.
SIGNATURES
In accordance with the requirements of the Exchange Act,
the Registrant has caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: May 7, 1999 AEI Net Lease Income & Growth Fund XX
Limited Partnership
By: AEI Fund Management XX, Inc.
Its: Managing General Partner
By: /s/ Robert P. Johnson
Robert P. Johnson
President
(Principal Executive Officer)
By: /s/ Mark E. Larson
Mark E. Larson
Chief Financial Officer
(Principal Accounting Officer)
FIRST AMENDMENT TO NET LEASE AGREEMENT
THIS AMENDMENT TO NET LEASE AGREEMENT, made and entered
into effective as of the 16th day of April, 1999, by and between
Net Lease Income and Growth Fund 84-A Limited Partnership ("Fund
84-A") and AEI Net Lease Income and Growth Fund XX Limited
Partnership ("Fund XX"), two Minnesota limited partnerships whose
corporate general partners are Net Lease Management 84-A, Inc.
and AEI Fund Management XX, Inc. respectively both Minnesota
corporations, whose principal business address is 1300 Minnesota
World Trade Center, 30 East Seventh Street, St. Paul, Minnesota
55101 (hereinafter collectively referred to as "Lessor"), and
Americana Dining Corp. (hereinafter referred to as "Lessee"),
whose principal business address is One Corporate Place, 55
Ferncroft Road, Danvers, MA 01923;
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of real
property and improvements located at Franklin County, Columbus,
Ohio, and legally described in Exhibit "A", which is attached to
the Lease(as defined below) and incorporated herein by reference;
and
WHEREAS, Lessee has constructed the building and
improvements (together the "Building") on the real property
described in the Lease Exhibit "A", which Building is described
in the plans and specifications heretofore submitted to Lessor;
and
WHEREAS, Lessee and Lessor Fund 84-A and Fund XX have
entered into that certain Net Lease Agreement dated August 11,
1998 (the "Lease") providing for the lease of said real property
and Building (said real property and Building hereinafter
referred to as the "Leased Premises"), from Lessor upon the terms
and conditions therein provided in the Lease;
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described to be
paid, kept, and performed by Lessee, including the completion of
the Building and other improvements constituting the Leased
Premises, Lessee and Lessor do hereby agree to amend the Lease as
follows:
1. Article 2(A) and (B) of the Lease shall henceforth read as
follows:
ARTICLE 2. TERM
(A) The term of this Lease ("Term") shall be Twenty (20)
consecutive "Lease Years", as hereinafter defined, commencing
April , 1999, plus the period commencing August 11, 1998
("Occupancy Date") through April 30, 1999 with the contemplated
initial term hereof ending on April 30, 2019.
(B) The first full Lease Year shall commence on the date of
this First Amendment and continue through April 30, 2000.
2. Article 4(A) of the Lease shall henceforth read as follows:
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable for the first and second Lease
Years: Lessee shall pay to Lessor an annual Base Rent of
$349,434.11, which amount shall be payable in advance on the
first day of each month in equal monthly installments of
$11,647.80 to Fund 84-A, and $17,471.71 to Fund XX. If the first
day of the first full Lease Year of the Lease Term is not the
first day of a calendar month, then the monthly Rent payable for
that partial month shall be a prorated portion of the equal
monthly installment of Base Rent.
Article 35 is hereby deleted in its entirety; Lessor and Lessee
agree that the referenced Development Financing Agreement is
terminated in accordance with its terms. All other terms and
conditions of the Lease shall remain in full force and effect.
Lessee has accepted delivery of the Leased Premises and has
entered into occupancy thereof.
Lessee has fully inspected the Premises and found the same to be
as required by the Lease, in good order and repair, and all
conditions under the Lease to be performed by the Lessor have
been satisfied.
As of this date, the Lessor is not in default under any of the
terms, conditions, provisions or agreements of the Lease and the
undersigned has no offsets, claims or defenses against the Lessor
with respect to the Lease.
This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original and all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, Lessor and Lessee have respectively signed
and sealed this Lease as of the day and year first above written.
LESSEE: Americana Dining Corp.,
By: /s/ Donna Deporian
Its: Secretary & VP
Attest
/s/ Janice Lane
Janice Lane
Print Name
Attest
/s/ Cheryl M Carver
Cheryl M Carver
Print Name
STATE OF MASSACHUSETTS)
)SS.
COUNTY OF ESSEX)
The foregoing instrument was acknowledged before me this
14tg day of April, 1999, by Donna Deporian, as Secretary & VP of
Americana Dining Corp. on behalf of said company.
/s/ Donna M Luciano [notary seal]
Notary Public
[Remainder of page intentionally left blank]
LESSOR: NET LEASE INCOME & GROWTH FUND 84-A
LIMITED PARTNERSHIP
By: Net Lease Management 84-A, Inc.
Attest
/s/ Michael B Daugherty By: /s/ Robert P Johnson
Michael B Daugherty Robert P. Johnson, President
Print Name
Attest
/s/ Barbara J Kochevar
Barbara J Kochevar
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the 16th
day of April, 1999, by Robert P Johnson, the President of Lease
Management Fund 84-A, Inc., a Minnesota corporation, corporate
general partner of Net Lease Income & Growth Fund 84-A Limited
Partnership, on behalf of said limited partnership.
/s/ Stacey R.E. Jones
Notary Public
[notary seal]
[Remainder of page intentionally left blank]
AEI NET LEASE INCOME AND GROWTH FUND XX
LIMITED PARTNERSHIP
By: AEI Fund Management XX, Inc.
Attest
/s/ Michael B Daugherty By: /s/ Robert P Johnson
Michael B Daugherty Robert P. Johnson, President
Print Name
Attest
/s/ Barbara J Kochevar
Barbara J Kochevar
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
The foregoing instrument was acknowledged before me the 16th
day of April, 1999, by Robert P Johnson, the President of AEI
Fund Management XX, Inc., a Minnesota corporation, corporate
general partner of AEI Net Lease Income & Growth Fund XX Limited
Partnership, on behalf of said limited partnership.
/s/ Stacey R. E. Jones
[notary seal]
[Remainder of page intentionally left blank]
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000894245
<NAME> AEI NET LEASE INCOME & GROWTH FUND XX LIMITED PARTNERSHIP
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
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0
0
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