-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TgOHke/zd0wsnAeCNSiUmvPwJUZOyGsR+3YtCTTkiZSZhL4cb9CbEGelHOZLbzJa tOP5tt9VnBCqUq8gGZLLgA== 0000950148-97-002943.txt : 19971120 0000950148-97-002943.hdr.sgml : 19971120 ACCESSION NUMBER: 0000950148-97-002943 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971119 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REAL AMERICAN PROPERTIES CENTRAL INDEX KEY: 0000758479 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953906164 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20205 FILM NUMBER: 97724108 BUSINESS ADDRESS: STREET 1: 9090 WILSHIRE BLVD STE 201 CITY: BEVERLY HILLS STATE: CA ZIP: 90211 BUSINESS PHONE: 3102782191 MAIL ADDRESS: STREET 2: 9090 WILSHIRE BLVD SUITE 201 CITY: BEVERLY HILLS STATE: CA ZIP: 90211 FORMER COMPANY: FORMER CONFORMED NAME: HUTTON REAL AMERICAN PROPERTIES DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended SEPTEMBER 30, 1997 Commission File Number 2-94725 REAL AMERICAN PROPERTIES (A California Limited Partnership) I.R.S. Employer Identification No. 95-3906164 9090 WILSHIRE BLVD., SUITE 201 BEVERLY HILLS, CALIF. 90211 Registrant's Telephone Number, Including Area Code (310) 278-2191 Indicate by check mark whether the registrant (1) has filed all documents and reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve 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 [ ] 2 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) INDEX TO FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1997
PART I. FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets, September 30, 1997 and December 31, 1996..........1 Statements of Operations, Nine and Three Months Ended September 30, 1997 and 1996........2 Statement of Partners' Equity (Deficiency), Nine Months Ended September 30, 1997...........................3 Statements of Cash Flows Nine Months Ended September 30, 1997 and 1996..................4 Notes to Financial Statements.....................................5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ..........................11 PART II. OTHER INFORMATION Item 1. Legal Proceedings................................................12 Item 6. Exhibits and Reports on Form 8-K ................................12 Signatures................................................................13
3 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEETS SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
ASSETS 1997 1996 (Unaudited) (Audited) ---------- -------- ASSETS (Note 1) $ -- $ -- ========== ======== LIABILITIES AND PARTNERS' EQUITY ---------- -------- LIABILITIES -- -- ---------- -------- COMMITMENTS AND CONTINGENCIES (Note 3) PARTNERS' EQUITY -- -- ---------- -------- TOTAL LIABILITIES AND PARTNERS' EQUITY $ -- $ -- ========== ========
The accompanying notes are an integral part of these financial statements. 1 4 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF OPERATIONS NINE AND THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
Nine months Three months Nine months Three months ended ended ended ended Sept. 30, 1997 Sept. 30, 1997 Sept. 30, 1996 Sept. 30, 1996 -------------- -------------- -------------- -------------- RENTAL OPERATIONS: Revenues Rental income $ -- $ -- $ 246,417 $ -- Other income -- -- 7,050 -- -------------- -------------- -------------- -------------- -- -- 253,467 -- -------------- -------------- -------------- -------------- Expenses Operating expenses -- -- 178,621 -- Management fees -- -- 8,871 -- Depreciation -- -- 34,872 -- General and administrative expenses -- -- 12,180 -- Interest expense -- -- 360,093 -- -------------- -------------- -------------- -------------- -- -- 594,637 -- -------------- -------------- -------------- -------------- Loss from rental operations -- -- (341,170) -- -------------- -------------- -------------- -------------- PARTNERSHIPS OPERATIONS: Interest income -- -- 160,123 40,298 -------------- -------------- -------------- -------------- Expenses General and administrative expenses -- -- 20,696 8,587 Professional fees -- -- 107,966 8,600 -------------- -------------- -------------- -------------- -- -- 128,662 17,187 -------------- -------------- -------------- -------------- Income from partnership operations -- -- 31,461 23,111 -------------- -------------- -------------- -------------- GAIN ON SALE OF RENTAL PROPERTIES -- -- 2,239,360 (41,623) -------------- -------------- -------------- -------------- NET INCOME $ -- $ -- $ 1,929,651 $ (18,512) ============== ============== ============== ============== NET INCOME PER LIMITED PARTNERSHIP INTEREST (Note 1) $ -- $ -- $ 90 $ (1) ============== ============== ============== ==============
The accompanying notes are an integral part of these financial statements. 2 5 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENT OF PARTNERS' EQUITY (DEFICIENCY) NINE MONTHS ENDED SEPTEMBER 30, 1997 (Unaudited)
General Limited Partners Partners Total --------- -------- ------ EQUITY (DEFICIENCY), January 1, 1996 $ -- $ -- $ -- Net loss for the nine months ended September 30, 1997 -- -- -- --------- -------- ------ EQUITY (DEFICIENCY), September 30, 1997 $ -- $ -- $ -- ========= ======== ======
The accompanying notes are an integral part of these financial statements. 3 6 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
1997 1996 ------------ ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ -- $ 1,929,651 Adjustments to reconcile net loss to net cash used in operating activities: Depreciation -- 34,872 Gain on sale of rental properties -- (2,239,360) Changes in operating assets and liabilities: Decrease in: Due from affiliated rental agent -- 114,728 Other receivables and prepaid expenses -- 9,790 Decrease in: Accounts payable and accrued expenses -- (405,491) Accrued interest payable -- (1,226,835) Tenant security deposit -- (31,028) ------------ ------------ Net cash used in operating activities -- (1,813,673) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Decrease in restricted cash -- 5,236,780 Decrease in liability for earthquake loss -- (5,363,547) Proceeds from sale of rental properties -- 13,139,613 ------------ ------------ Net cash provided by investing activities -- 13,012,846 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on mortgage notes -- (9,649,180) ------------ ------------ NET INCREASE IN CASH AND CASH EQUIVALENTS -- 1,549,993 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD -- 442,803 ------------ ------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $ -- $ 1,992,796 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the year for interest $ -- $ 360,093 ============ ============
The accompanying notes are an integral part of these financial statements. 4 7 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL The information contained in the following notes to the financial statements is condensed from that which would appear in the annual audited financial statements; accordingly, the financial statements included herein should be reviewed in conjunction with the financial statements and related notes thereto contained in the annual report for the year ended December 31, 1996 of REAL American Properties (the "Partnership"). Accounting measurements at interim dates inherently involve greater reliance on estimates than at year end. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. In the opinion of National Partnership Investments Corp. ("NAPICO"), a California corporation, the accompanying unaudited financial statements contain all adjustments (consisting primarily of normal recurring accruals) necessary to present fairly the financial position of the Partnership as of September 30, 1997, and the results of operations for the nine and three months then ended and changes in cash flows for the nine months then ended. ORGANIZATION The Partnership was formed under the California Limited Partnership Act on March 9, 1984. The general partners are NAPICO, and Real Estate Services XIII Inc. ("RES XIII"), a Delaware corporation. Casden Investment Corporation owns 100 percent of NAPICO's stock. LB I Group Inc. owns 100 percent of the stock of RES XIII. The Partnership was formed to invest in a diversified portfolio of apartment complexes. The Partnership offered 45,000 limited partnership interests ("Units") at $1,000 each, of which 21,500 were sold through a public offering. The terms of the Partnership's Amended and Restated Certificate and Agreement of Limited Partnership (the "Partnership Agreement") provide, among other things, for allocation to the partners of profits, losses and any special allocations with respect thereto. Under the terms of the Partnership Agreement, cash available for distribution is allocated 90 percent to the limited partners as a group and 10 percent to the general partners. The Partnership originally invested in five apartment buildings. Two of such buildings were contributed to a separate limited partnership in exchange for a subordinated limited partner interest therein, which, in turn, exchanged the buildings for an interest in a publicly traded Real Estate Investment Trust ("REIT"). The Partnership sold the REIT stock it received as a result of that exchange in November 1996 for $890,371. One building was foreclosed upon by the lender in June 1993 and one building was substantially destroyed in the January 17, 1994 earthquake in the Los Angeles area and was sold in May 1996. The other building was sold in April 1996. Distributions of $2,823,700 were paid to the limited partners during 1996. Accordingly, since the Partnership's primary assets at December 31, 1996 consisted of cash of approximately $345,000 and certain short-term receivables and other claims, the Partnership was dissolved effective December 31, 1996. 5 8 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 1997 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) NAPICO was appointed the liquidation agent for the Partnership pursuant to a Liquidation Agreement, made as of December 1, 1996, among the Partnership, NAPICO, and RES XIII. Under the terms of the Liquidation Agreement, the liquidation agent will pursue collection of the Partnership's outstanding receivables and other non-liquid assets and, subject to the approval of RES XIII, cause the Partnership's final tax returns and reports to be filed. Upon collection and liquidation of the Partnership's remaining assets, the liquidation agent will cause the final distribution(s) to be paid to the partners in accordance with the terms of the Amended and Restated Agreement of Limited Partnership of the Partnership. The liquidation agent shall be entitled to (a) utilize its reasonable discretion in liquidating the Partnership's remaining assets and (b) reimbursement for all reasonable costs and expenses incurred in conforming its duties under the Liquidation Agreement. As of December 31, 1996, the Partnership's remaining assets consisted of cash of approximately $345,000 and certain short-term receivables and other claims, and its remaining liabilities consisted of approximately $112,000 of accounts payable. The Partnership's remaining assets and liabilities were assigned to NAPICO as the liquidation agent under the Liquidation Agreement, and were reflected as a net distribution of approximately $233,000 to the limited partners, which is due from NAPICO, subject to the payment of costs and expenses of the liquidation. During the nine months ended September 30, 1997, NAPICO incurred net expenses of $67,426 on behalf of the Partnership. USE OF ESTIMATES 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 reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RENTAL PROPERTY AND DEPRECIATION There are no remaining rental properties owned by the Partnership, therefore no rental property cost and accumulated depreciation are included in the September 30, 1997 and December 31, 1996 financial statements. NET INCOME PER LIMITED PARTNERSHIP INTEREST Net income per limited partnership interest was computed by dividing the limited partners' share of net income by 21,500, the number of limited partnership interests outstanding for the periods presented. 6 9 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS (CONTINUED) SEPTEMBER 30, 1997 NOTE 2 - INCOME TAXES No provision has been made for income taxes in the accompanying financial statements as such taxes, if any, are the liability of the individual partners. NOTE 3 - CONTINGENCIES NAPICO is involved in various lawsuits arising from transactions in the ordinary course of business. In the opinion of NAPICO, the claims will not result in any material liability to the Partnership. 7 10 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) SEPTEMBER 30, 1997 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS CAPITAL RESOURCES AND LIQUIDITY The Partnership received a total of $10,750,000 in subscriptions for units of limited partnership interests (at $1,000 per unit) during the period September 12, 1985 to February 28, 1986, pursuant to a registration statement on Form S-11. $10,750,000 in subscriptions were received pursuant to the exercise of warrants and the sale of additional limited partnership interests from April 1, 1986 to May 31, 1986. The Partnership's primary sources of funds are income from rental operations and interest income on money market funds and certificates of deposit. The Partnership acquired five apartment complexes since inception, one of which was foreclosed by the lender in 1993. In 1992, two of the Partnership's properties (the "Del Coronado Properties") were contributed to 843 South Longmore Limited Partnership, an unaffiliated limited partnership, and such buildings were thereafter sold by said partnership for REIT shares in August of 1995. The remaining two apartment complexes of West Colonial and Northridge were sold in 1996, In August 1995, the Del Coronado Properties were sold by 843 South Longmore Limited Partnership to a publicly held Real Estate Investment Trust ("REIT"). The net proceeds of $5,682,262 paid to 843 South Longmore Limited Partnership was in the form of limited partnership interests in the operating partnership controlled by the REIT. Of the net proceeds, the Partnership received an allocation equivalent to 23,524 shares, which were converted to REIT stock. The Partnership sold the REIT stock in November 1996 for $891,000 and recognized a gain in that amount because the investment was being carried at a zero balance. RESULTS OF OPERATIONS Rental operations consisted primarily of rental income and depreciation expense, debt service, and normal operating expenses to maintain the properties. Depreciation was provided on the straight-line method over the estimated useful lives of the buildings and equipment. Substantially all of the rental units were leased on a month-to-month basis. Partnership operations consisted primarily of interest income earned on certificates of deposit and other temporary investment of funds. Operating expenses of the Partnership consist substantially of recurring general and administrative expenses and professional fees for services rendered to the Partnership. 8 11 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) SEPTEMBER 30, 1997 PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS: NAPICO is involved in various lawsuits. None of these suits were related to the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) No exhibits are required per the provision of item 601 of regulation S-K 9 12 REAL AMERICAN PROPERTIES (A CALIFORNIA LIMITED PARTNERSHIP) SEPTEMBER 30, 1997 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. REAL AMERICAN PROPERTIES (a California limited partnership) By: National Partnership Investments Corp. a General Partner ---------------------------------------------- Bruce Nelson President Date: --------------------------------------------- ---------------------------------------------- Charles H. Boxenbaum Chief Executive Officer Date: --------------------------------------------- 10 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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