-----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, Ty4udMF9ehpPMucMCkmXUO4kAdx6S9VDDvyO4ruKF1M7+Nc223fm2ay0BnsSJ3hu ZUO5+wlSqpAUc3pf0VZy0g== 0000785791-96-000024.txt : 19961115 0000785791-96-000024.hdr.sgml : 19961115 ACCESSION NUMBER: 0000785791-96-000024 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASSOCIATED PLANNERS REALTY FUND CENTRAL INDEX KEY: 0000785791 STANDARD INDUSTRIAL CLASSIFICATION: LESSORS OF REAL PROPERTY, NEC [6519] IRS NUMBER: 954036980 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16805 FILM NUMBER: 96661751 BUSINESS ADDRESS: STREET 1: 5933 W CENTURY BLVD STREET 2: 9TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90045-5454 BUSINESS PHONE: 3106700800 MAIL ADDRESS: STREET 1: 5933 W CENTURY BLVD STREET 2: 9TH FLOOR CITY: LOS ANGELES STATE: CA ZIP: 90045-5454 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 1996 OR [ ] 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 0-16805 ASSOCIATED PLANNERS REALTY FUND (Exact name of registrant as specified in its charter) CALIFORNIA 95-4036980 (State or other Jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5933 W. CENTURY BLVD., SUITE 900 LOS ANGELES, CALIFORNIA 90045 (Address of principal executive offices) (Zip Code) (310) 670-0800 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) 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. Yes X No ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 1. FINANCIAL STATEMENTS In the opinion of the General Partner of Associated Planners Realty Fund (the "Partnership"), all adjustments necessary for a fair presentation of the Partnership's results for the three and nine months ended September 30, 1996 and 1995, have been made in the following financial statements which are of normal recurring entries in nature. However, such financial statements are unaudited and are subject to any year-end adjustments that may be necessary. BALANCE SHEETS SEPTEMBER 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
SEPTEMBER 30, DECEMBER 31, 1996 1995 ASSETS RENTAL REAL ESTATE, net of accumulated depreciation (Note 2) $5,748,155 $5,843,681 CASH 115,396 103,300 OTHER ASSETS 28,640 64,089 $5,892,191 $6,011,070 LIABILITIES AND PARTNERS' EQUITY CONSTRUCTION LOAN PAYABLE $1,218,792 $1,225,950 ACCOUNTS PAYABLE 3,680 29,036 SECURITY DEPOSITS AND PREPAID RENT 49,726 44,848 TOTAL LIABILITIES 1,272,198 1,299,834 MINORITY INTEREST (Note 1) 216,535 232,968 COMMITMENTS AND CONTINGENCIES (Note 5) PARTNERS' EQUITY Limited Partner: $1,000 stated value per unit; authorized 7,500 units; issued - 7,499 4,363,504 4,133,882 General Partner: 39,954 344,386 TOTAL PARTNERS EQUITY 4,403,458 4,478,268 $5,892,191 $6,011,070
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF PARTNERS' EQUITY NINE MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
LIMITED PARTNERS GENERAL TOTAL UNITS AMOUNT PARTNER BALANCE, DECEMBER 31, 1995 $4,478,268 7,499 $4,133,882 $344,386 Net income 120,498 --- 99,851 20,647 Distributions to limited partners (175,777) --- (175,777) --- Distribution to General Partner (19,531) --- --- (19,531) Reallocation of balances prior to January 1, 1996 (Note 7) --- --- 305,548 (305,548) BALANCE, SEPTEMBER 30, 1996 $4,403,458 7,499 $4,363,504 $39,954 NINE MONTHS ENDED SEPTEMBER 30, 1995 (UNAUDITED) LIMITED PARTNERS GENERAL TOTAL UNITS AMOUNT PARTNER BALANCE, DECEMBER 31, 1994 $5,985,898 7,499 $5,653,977 $331,921 Net income 251,516 --- 217,851 33,665 Distributions to limited partners (1,657,040) --- (1,657,040) --- Distribution to General Partner (15,222) --- --- (15,222) BALANCE, SEPTEMBER 30, 1995 $4,565,152 7,499 $4,214,788 $350,364
[FN] See accompanying notes to financial statements ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF INCOME THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED)
THREE THREE NINE NINE MONTHS MONTHS MONTHS MONTHS ENDED ENDED ENDED ENDED SEPTEMBER SEPTEMBER SEPTEMBER SEPTEMBER 30, 30, 30, 30, 1996 1995 1996 1995 REVENUES: Rental $183,995 $131,182 $536,092 $472,953 Gain on sale of property --- --- --- 116,749 Interest 3,028 3,794 6,730 14,516 187,023 134,976 542,822 604,218 COST AND EXPENSES: Operating 48,609 36,960 140,115 119,380 Property taxes 7,965 7,274 23,561 32,197 Property management fees-Note 3(c) 9,226 5,544 26,536 22,337 General and administrative 15,338 27,159 42,013 83,230 Depreciation 31,842 27,771 95,526 94,594 Interest expense 36,962 --- 78,139 --- 149,942 104,708 405,890 351,678 LESS MINORITY INTEREST IN NET (INCOME) LOSS OF JOINT VENTURE (1,619) 2,507 16,434 1,024 NET INCOME $38,700 $27,761 $120,498 $215,516 NET INCOME PER LIMITED PARTNERSHIP UNIT $4.26 $3.00 $13.32 $29.05
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED)
NINE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, 1996 1995 Cash flows from operating activities: Net income $120,498 $251,516 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation 95,526 94,594 Proceeds from sale of investment in government securities account --- 55,898 Unrealized loss - (gain) Investment in government securities --- (344) Minority interest in net (income) (16,434) (1,024) Gain on sale of property --- (116,749) Increase (decrease) from changes in: Other assets 35,450 79,280 Accounts payable (25,356) (2,536) Security deposits 4,878 23,471 Net cash provided by operating activities 214,562 384,106 Cash flows used in investing activities: Furniture & Fixture additions --- (11,746) Construction in progress --- (1,114,226) Proceeds from sale of property --- 1,517,819 Net cash provided by investing activities --- 391,847 Cash flows used in financing activities: Repayment on construction loan (7,158) --- Construction loan proceeds --- 1,033,363 Distribution to general partner (19,531) (15,221) Distribution to limited partners (175,777) (1,657,040) Net cash (used in) financing activities (202,466) (638,898) Net increase in cash and cash equivalents 12,096 137,055 Cash & cash equivalents at beginning of period 103,300 36,227 CASH AND CASH EQUIVALENTS AT END OF PERIOD $115,396 $173,282
[FN] See accompanying notes to financial statements. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) SUMMARY OF ACCOUNTING POLICIES BUSINESS Associated Planners Realty Fund (the "Partnership"), a California limited partnership, was formed on November 19, 1985 under the Revised Limited Partnership Act of the State of California. The Partnership was formed to acquire income-producing real property throughout the United States with emphasis on properties located in California. The Partnership purchased such properties on an all cash basis and intended to own and operate such properties for investment over an anticipated holding period of approximately five to ten years. BASIS OF PRESENTATION The consolidated financial statements do not give effect to any assets that the partners may have outside of their interest in the partnership, nor to any personal obligations, including income taxes, of the partners. The consolidated financial statements include the accounts of Associated Planners Realty Fund and all joint ventures in which it has a majority interest. RENTAL REAL ESTATE AND DEPRECIATION Assets are stated at cost. Depreciation is computed using the straight-line method over estimated useful lives ranging from five to 35 years. In the event that facts and circumstances indicate that the cost of an asset may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the carrying amount to determine if a write-down to market value is required. RENTAL INCOME Rental revenue is recognized on a straight-line basis to the extent that rental revenue is deemed collectible. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) SUMMARY OF ACCOUNTING POLICIES STATEMENTS OF CASH FLOWS For the purpose of the statements of cash flows, the Partnership considers cash in the bank and all highly liquid investments purchased with original maturities of three months or less, to be cash and cash equivalents. 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 the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. RECLASSIFICATIONS For comparative purposes, certain prior year amounts have been reclassified to conform to the current year presentation. NEW ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" (SFAS No. 121) issued by the Financial Accounting Standards Board is effective for financial statements for fiscal years beginning after December 15, 1995. The new standard establishes new guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The Partnership elected adoption of SFAS No. 121 on January 1, 1996. This adoption had no effect on the statement of income for the nine months ended September 30, 1996 as there were no impairment amounts recorded during the period. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1995 NOTE 1- NATURE OF PARTNERSHIP The Partnership began accepting subscriptions in March 1986 and completed its funding in December 1987. Under the terms of the partnership agreement, the General Partner, West Coast Realty Advisors, is entitled to cash distributions ranging from 10% to 15%. The General Partner is also entitled to net income or loss allocations varying from 1% to 15% and 1% depreciation and amortization allocations in accordance with the partnership agreement. NOTE 2- RENTAL REAL ESTATE The Partnership currently has interests in the following four rental real estate properties. Two are wholly-owned and two are jointly owned by the Partnership (81.2%) and an affiliate (18.8%): Location (Property Name) Date Purchased Original Acquisition Cost Encinitas, California (179 Calle Magdalena) December 31, 1986 $ 555,743 Encinitas, California (187 Calle Magdalena) December 31, 1986 639,697 Clovis, California January 23, 1987 1,208,990 Simi Valley, California November 12, 1987 2,620,217 The major categories of property are: September 30, 1996 December 31, 1995 Land $2,361,894 $2,361,894 Building and Improvements 4,404,947 4,404,947 Furniture and Fixtures 46,660 46,660 6,813,501 6,813,501 Less accumulated depreciation 1,065,346 969,820 Net rental real estate $5,748,155 $5,843,681 ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1995 NOTE 2- RENTAL REAL ESTATE (CONTINUED) A significant portion of the Partnership's rental revenue was earned from a tenant whose individual rent represented more than 10% of total rental revenue. Specifically: One tenant accounted for 38% in 1996; One tenant accounted for 38% in 1995; NOTE 3 - RELATED PARTY TRANSACTIONS (a) For Partnership management services rendered to the Partnership, the General Partner is entitled to receive 10% of all distributions of cash from operations. These amounts totaled $6,791 for the quarter ended September 30, 1996 and $6,791 for the quarter ended September 30, 1995, and $19,531 for the nine months ended September 30, 1996 and $24,455 for the nine months ended September 30, 1995. The amounts paid to the general partner in 1995 were treated as an expense of the Partnership, while the amounts paid in 1996 were treated as distributions to the general partner (See Note 7). (b) For administrative services provided to the Partnership, the General Partner is entitled to reimbursement for the cost of certain personnel and relevant expenses. These amounts totaled $3,000 for the three months ended September 30, 1996 and September 30, 1995, and $9,000 for the nine months ended September 30, 1996 and 1995. (c) Property management fees incurred, in accordance with the Partnership Agreement, to West Coast Realty Management, Inc., an affiliate of the corporate General Partner, totaled $9,226 for the quarter ended September 30, 1996, and $5,544 for the quarter ended September 30, 1995, and $26,536 for the nine months ended September 30, 1996 and $22,337 for the nine months ended September 30, 1995. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1995 (continued) NOTE 4- CONSTRUCTION IN PROGRESS AND CONSTRUCTION LOAN PAYABLE In January 1995, the Partnership closed escrow on a parcel of land adjacent to the Shaw Villa Shopping Center. The purchase price of the land was $206,749, including a $13,102 acquisition fee paid to the Advisor. The purchase was financed using $23,602 in cash, and the remainder by a one year construction loan from Valliwide Bank of Fresno. The loan bears interest at 2% over the bank's prime rate (8.25% at September 30, 1996). The total construction loan commitment is for $1,365,000 which matures on October 5, 1996. Borrowings on the construction loan totaled $1,225,950 as of December 31, 1995 and $1,218,792 as of September 30, 1996. The construction loan amortization is interest only with payments of $78,139 paid during the nine months ended September 30, 1996. The construction was completed during 1995 and total construction costs of $1,372,900 was allocated to land, building and improvements. Included in construction costs is $87,838 in construction loan interest that was capitalized. The carrying amount of the loan is a reasonable estimate of fair value of the construction loan payable because the interest rates approximate the borrowing rates currently available for mortgage loans with similar terms and average maturities. NOTE 5- COMMITMENTS In October 1996, the Partnership obtained permanent financing from a major insurance company to replace the construction loan with a twenty year loan. The terms of the loan are as follows: Principal - $1,500,000; Interest Rate of 9.1% fixed for five years then may be adjusted to the weekly average of the five-year Treasury Note yield for the seventh week prior to the Adjustment Date (5th anniversary date) plus 250 basis points, but in no event less than the existing rate, nor to exceed the maximum rate allowed by law; Amortized over 20 years; due November 1, 2006; and current monthly payments of principal and interest of $13,593. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1995 NOTE 6- NET INCOME AND CASH DISTRIBUTIONS PER LIMITED PARTNERSHIP LIST The Net Income per Limited Partnership Unit was computed in accordance with the partnership agreement using the weighted average number of outstanding limited partnership units of 7,499 for 1996 and 1995. The Limited Partner cash distributions, computed in accordance with the Partnership Agreement, were as follows: Record Outstanding Amount Total Date Units Per Unit Distribution 6/30/1996 7,499 $8.15 61,117 3/31/1996 7,499 8.15 61,117 12/31/1995 7,499 7.14 53,543 Total $175,777 6/30/1995 7,499 $182.60 to 207.69 $1,506,960 3/31/1995 7,499 10.00 75,040 12/31/1994 7,499 10.00 75,040 Total $1,657,040 Distributions were paid in the fiscal quarter following the record date. NOTE 7 - REALLOCATION OF PARTNER BALANCES Per the provisions of Section 11.1 (V)(ii) of the Partnership Agreement, the General Partner determined that action was necessary to "cure the ambiguities" caused by the Agreement itself. The ambiguity involved the treatment of the partnership management fee, being paid to the General Partner, as an expense of the Partnership, when in fact, it should have been treated as a general partner withdrawal of capital. In order to properly reflect this inception to date correction, a transfer of $305,548 was made from the General Partner's capital account to the Limited Partners capital account during the quarter ended March 31, 1996. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1995 NOTE 8 - NEW ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" (SFAS No. 121) issued by the Financial Accounting Standards Board is effective for financial statements for fiscal years beginning after December 15, 1995. The new standard establishes new guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The Partnership elected adoption of SFAS No. 121 on January 1, 1996. This adoption had no effect on the statement of income for the nine months ended September 30, 1996 as there were no impairment amounts recorded during the period. NOTE 9 - SUBSEQUENT EVENTS The Partnership distributed $61,117 ($8.15 per unit) on November 5, 1996 to Limited Partners of record as of September 30, 1996. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS INTRODUCTION Associated Planners Realty Fund (the "Partnership") was organized in November 1985, under the California Revised Limited Partnership Act. The Partnership began offering units for sale on March 28, 1986. As of December 27, 1987, the Partnership had raised $7,499,000 in gross capital contributions. The Partnership netted approximately $6,720,000 after sales commissions and syndication costs. The Partnership was organized for the purpose of investing in, holding, and managing improved, leveraged income-producing property, such as residential property, office buildings, commercial buildings, industrial properties, and shopping centers. The Partnership intends to own and operate such properties for investment over an anticipated holding period of approximately five to ten years. The Partnership's principal investment objectives are to invest in rental real estate properties which will: (1) Preserve and protect the Partnership's invested capital; (2) Provide for cash distributions from operations; (3) Provide gains through potential appreciation; and (4) Generate Federal income tax deductions so that during the early years of property operations, a portion of cash distributions may be treated as a return of capital for tax purposes and, therefore, may not represent taxable income to the limited partners. The ownership and operation of any income-producing real estate is subject to those risks inherent in all real estate investments, including national and local economic conditions, the supply and demand for similar types of properties, competitive marketing conditions, zoning changes, possible casualty losses, increases in real estate taxes, assessments, and operating expenses, as well as others. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) The Partnership is operated by the General Partner subject to the terms of the Amended and Restated Agreement of Limited Partnership. The Partnership has no employees, and all administrative services are provided by West Coast Realty Advisors, Inc., the General Partner. RESULTS OF OPERATIONS Operations for the quarter ended September 30, 1996, reflect an entire period of operations for the Partnership's properties. Rental revenue for the three and nine months ended September 30, 1996 increased from that for the three and nine months ended September 30, 1995 by $52,813 and $63,139, respectively, due to increased occupancy of the single tenant Santa Fe Business Park Building, offset by the sale of the Shurgard Mini-Warehouse facility on May 15, 1995. Costs and expenses related to the properties operation increased for the three and nine months ended September 30, 1996 compared to the three and nine months ended September 30, 1995 by $54,212 and $45,234, respectively, primarily due to interest expense of $36,962 for the three months ended September 30, 1996 and $78,139 for the nine months ended September 30, 1996. This interest pertained to the construction loan related to the Clovis, California property. These interest charges were incurred after the completion of construction. In addition to the increase in interest expense, property management fees increased due to increased occupancy at the Santa Fe Business Park Building and operating costs increased due to higher property insurance costs, consulting fees, general repairs and maintenance costs and an adjustment to the 1995 minority interest account balance. This increases were offset by lower property taxes, accounting and legal costs and partnership operating costs. The Partnership generated $216,024 in income from operations before depreciation of $95,526 for the nine months ended September 30, 1996 compared to $346,110 in income from operations before depreciation of $94,594 for the nine months ended September 30, 1995. This decrease in income from operations is primarily attributable to the gain of $116,749 recognized during the nine months ended September 30, 1995 relating to the sale of the Puyallup, Washington mini-warehouse building to Shurgard Storage Centers, Inc. on May 15, 1995. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES During the nine months ended September 30, 1996, $214,562 in cash was provided by operating activities. This resulted primarily from net cash basis income of $216,024 from operations (net income plus depreciation expense) plus a $35,450 decrease in other assets (primarily attributable to a decrease in prepaid insurance and miscellaneous receivable balances). These additions to operating activities were offset by a $25,356 decrease in trade accounts payable, and a $16,434 adjustment to the minority interest account balance for the Encinitas properties. In contrast, during the nine months ended September 30, 1995, $384,106 was provided by operating activities. This resulted primarily from cash basis income of $229,361 (net income plus depreciation expense less gain on sale of property), plus $55,898 in proceeds received from the liquidation of the government securities account, plus $79,280 decrease in other assets (primarily due to the reclassification of deposits used in construction in progress of the Shaw Villa property and a $23,471 increase in security deposits and prepaid rents (due to prepaid rents received prior to September 1995 which were not received prior to December 31, 1994), less a $2,536 decrease in accounts payable (attributable to normal decrease in trade payable). There were no investing activities for the nine months ended September 30, 1996. In contrast, $391,847 in cash was provided by investing activities for the nine months ended September 30, 1995. This resulted from $1,517,819 in gross proceeds received in connection with the sale of the Puyallup, Washington mini-warehouse, offset by $1,114,226 in construction in progress costs associated with the Shaw Villa property and $11,746 in restaurant equipment purchased for a Shaw Villa property tenant. Cash used in financing activities for the nine months ended September 30, 1996 totaled $202,466, of which $175,777 were distributions paid to the limited partners and $19,531 paid to the general partners and $7,158 in repayments on the construction loan payable. In contrast, $638,898 was used by financing activities for the nine months ended September 30, 1995. This resulted from $1,657,040 in distributions paid to the limited partners and $15,221 paid to the general partners offset by $1,033,363 in proceeds received from a lender in connection with the construction in progress of the Shaw Villa property. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) LIQUIDITY AND CAPITAL RESOURCES (CONT.) In January 1995, the Partnership closed escrow on a parcel of land adjacent to the Shaw Villa Shopping Center. The purchase price of the land was $206,749, including a $13,102 acquisition fee paid to the Advisor. The purchase was financed using $23,602 in cash, and the remainder by a one year construction loan from Valliwide Bank of Fresno, that was subsequently extended to October 5, 1996. The loan bears interest at 2% over the bank's prime rate (8.25% at September 30, 1996). The total construction loan commitment is for $1,365,000 which matures on October 5, 1996. Borrowings on the construction loan totaled $1,225,950. The construction loan amortization is interest only with payments of $78,139 paid during the nine months ended September 30, 1996. The construction was completed during 1995 and total construction costs of $1,372,900 was allocated to land, building and improvements. Included in construction costs is $87,838 in construction loan interest that was capitalized. In October 1996, the Partnership obtained permanent financing from a major insurance company to replace the construction loan with a twenty year loan. The terms of the loan are as follows: Principal - $1,500,000; Interest Rate of 9.1% fixed for five years then may be adjusted to the weekly average of the five-year Treasury Note yield for the seventh week prior to the Adjustment Date (5th anniversary date) plus 250 basis points, but in no event less than the existing rate, nor to exceed the maximum rate allowed by law; Amortized over 20 years; due November 1, 2006; and current monthly payments of principal and interest of $13,593. The carrying amount is a reasonable estimate of fair value of the construction loan payable because the interest rates approximate the borrowing rates currently available for mortgage loans with similar terms and average maturities. Net income per limited partner unit decreased from $29.05 for the nine months ended September 30, 1995 to $13.32 for the nine months ended September 30, 1996, primarily due to the $116,749 gain on sale of the Shurgard Mini-warehouse facility on May 15, 1995. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) NEW ACCOUNTING PRONOUNCEMENTS Statement of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of" (SFAS No. 121) issued by the Financial Accounting Standards Board is effective for financial statements for fiscal years beginning after December 15, 1995. The new standard establishes new guidelines regarding when impairment losses on long-lived assets, which include plant and equipment, and certain identifiable intangible assets, should be recognized and how impairment losses should be measured. The Partnership elected adoption of SFAS No. 121 on January 1, 1996. This adoption had no effect on the statement of income for the nine months ended September 30, 1996 as there were no impairment amounts recorded during the period. ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) PART II O T H E R I N F O R M A T I O N ITEM 1.LEGAL PROCEEDINGS None 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 ITEM 6.EXHIBIT AND REPORTS ON FORM 8-K (a) Information required under this section has been included in the financial statements. (b) Reports on Form 8-K None ASSOCIATED PLANNERS REALTY FUND (A CALIFORNIA LIMITED PARTNERSHIP) S I G N A T U R E S 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. ASSOCIATED PLANNERS REALTY FUND A California Limited Partnership (Registrant) November 13, 1996 By: WEST COAST REALTY ADVISORS, INC. A California Corporation, General Partner Neal E. Nakagiri Vice President/Secretary November 13, 1996 Michael G. Clark Vice President/Treasurer EX-27 2
5 0000785791 ASSOCIATED PLANNERS REALTY FUND 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 115,396 0 0 0 19,761 139,593 6,813,501 (1,065,346) 5,892,191 53,406 1,218,792 0 0 0 4,403,458 5,892,191 536,092 542,822 344,185 344,185 0 0 78,139 120,498 0 0 0 0 0 120,498 13.32 13.32
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