State of Minnesota
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41-1789725
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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30 East 7th Street, Suite 1300
St. Paul, Minnesota 55101
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(651) 227-7333
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(Address of principal executive offices)
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(Registrant’s telephone number)
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Not Applicable
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(Former name, former address and former fiscal year, if changed since last report)
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o Large accelerated filer
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o Accelerated filer
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o Non-accelerated filer
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x Smaller reporting company
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Page
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||||
Part I – Financial Information
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||||
Item 1.
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Financial Statements (unaudited):
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|||
Balance Sheet as of September 30, 2013 and December 31, 2012
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3
|
|||
Statements for the Periods ended September 30, 2013 and 2012:
|
||||
Income
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4
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|||
Cash Flows
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5
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|||
Changes in Partners’ Capital
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6
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|||
Notes to Financial Statements
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7 - 10
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|||
Item 2.
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Management's Discussion and Analysis of Financial
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|||
Condition and Results of Operations
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10 - 14
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|||
Item 3.
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Quantitative and Qualitative Disclosures About Market Risk
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14
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||
Item 4.
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Controls and Procedures
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14
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||
Part II – Other Information
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||||
Item 1.
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Legal Proceedings
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14
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||
Item 1A.
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Risk Factors
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14
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||
Item 2.
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Unregistered Sales of Equity Securities and Use of Proceeds
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15
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||
Item 3.
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Defaults Upon Senior Securities
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15
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||
Item 4.
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Mine Safety Disclosures
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15
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||
Item 5.
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Other Information
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15
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||
Item 6.
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Exhibits
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15
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||
Signatures
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16
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September 30,
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December 31,
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|||
2013
|
2012
|
|||
Current Assets:
|
||||
Cash
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$
|
6,061,006
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$
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2,259,911
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Real Estate Held for Investment:
|
||||
Land
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3,681,363
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4,403,667
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||
Buildings and Equipment
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9,879,315
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12,273,366
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||
Accumulated Depreciation
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(2,811,196)
|
(2,930,639)
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||
Real Estate Held for Investment, Net
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10,749,482
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13,746,394
|
||
Total Assets
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$
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16,810,488
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$
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16,006,305
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Current Liabilities:
|
||||
Payable to AEI Fund Management, Inc.
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$
|
126,744
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$
|
41,189
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Distributions Payable
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594,952
|
293,940
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||
Unearned Rent
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33,331
|
12,120
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||
Total Current Liabilities
|
755,027
|
347,249
|
||
Partners’ Capital:
|
||||
General Partners
|
11,221
|
686
|
||
Limited Partners – 24,000 Units authorized;
22,653 Units issued and outstanding
|
16,044,240
|
15,658,370
|
||
Total Partners' Capital
|
16,055,461
|
15,659,056
|
||
Total Liabilities and Partners' Capital
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$
|
16,810,488
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$
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16,006,305
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Three Months Ended September 30
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Nine Months Ended September 30
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|||||||
2013
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2012
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2013
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2012
|
|||||
Rental Income
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$
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278,308
|
$
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272,545
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$
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829,686
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$
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811,024
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Expenses:
|
||||||||
Partnership Administration – Affiliates
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50,650
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53,588
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152,129
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163,845
|
||||
Partnership Administration and Property
Management – Unrelated Parties
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17,181
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7,148
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42,398
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34,794
|
||||
Depreciation
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98,794
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98,794
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296,382
|
296,382
|
||||
Total Expenses
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166,625
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159,530
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490,909
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495,021
|
||||
Operating Income
|
111,683
|
113,015
|
338,777
|
316,003
|
||||
Other Income:
|
||||||||
Interest Income
|
3,126
|
1,859
|
6,277
|
6,085
|
||||
Income from Continuing Operations
|
114,809
|
114,874
|
345,054
|
322,088
|
||||
Income from Discontinued Operations
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1,157,138
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64,707
|
1,234,181
|
181,357
|
||||
Net Income
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$
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1,271,947
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$
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179,581
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$
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1,579,235
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$
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503,445
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Net Income Allocated:
|
||||||||
General Partners
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$
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19,290
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$
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1,795
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$
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22,363
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$
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5,034
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Limited Partners
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1,252,657
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177,786
|
1,556,872
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498,411
|
||||
Total
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$
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1,271,947
|
$
|
179,581
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$
|
1,579,235
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$
|
503,445
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Income per Limited Partnership Unit:
|
||||||||
Continuing Operations
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$
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5.02
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$
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5.02
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$
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15.08
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$
|
14.07
|
Discontinued Operations
|
50.28
|
2.82
|
53.65
|
7.92
|
||||
Total – Basic and Diluted
|
$
|
55.30
|
$
|
7.84
|
$
|
68.73
|
$
|
21.99
|
Weighted Average Units Outstanding –
Basic and Diluted
|
22,653
|
22,663
|
22,653
|
22,663
|
||||
Nine Months Ended September 30
|
||||
2013
|
2012
|
|||
Cash Flows from Operating Activities:
|
||||
Net Income
|
$
|
1,579,235
|
$
|
503,445
|
Adjustments to Reconcile Net Income
To Net Cash Provided by Operating Activities:
|
||||
Depreciation
|
344,262
|
368,202
|
||
Gain on Sale of Real Estate
|
(1,128,749)
|
(46,795)
|
||
Increase (Decrease) in Payable to
AEI Fund Management, Inc.
|
85,555
|
(2,434)
|
||
Increase (Decrease) in Unearned Rent
|
21,211
|
2,044
|
||
Total Adjustments
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(677,721)
|
321,017
|
||
Net Cash Provided By
Operating Activities
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901,514
|
824,462
|
||
Cash Flows from Investing Activities:
|
||||
Proceeds from Sale of Real Estate
|
3,781,399
|
277,275
|
||
Cash Flows from Financing Activities:
|
||||
Distributions Paid to Partners
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(881,818)
|
(881,806)
|
||
Net Increase (Decrease) in Cash
|
3,801,095
|
219,931
|
||
Cash, beginning of period
|
2,259,911
|
1,934,854
|
||
Cash, end of period
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$
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6,061,006
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$
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2,154,785
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General Partners
|
Limited Partners
|
Total
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Limited Partnership Units Outstanding
|
|||||
Balance, December 31, 2011
|
$
|
4,646
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$
|
16,170,124
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$
|
16,174,770
|
22,663.11
|
|
Distributions Declared
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(8,818)
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(872,988)
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(881,806)
|
|||||
Net Income
|
5,034
|
498,411
|
503,445
|
|||||
Balance, September 30, 2012
|
$
|
862
|
$
|
15,795,547
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$
|
15,796,409
|
22,663.11
|
|
Balance, December 31, 2012
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$
|
686
|
$
|
15,658,370
|
$
|
15,659,056
|
22,653.11
|
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Distributions Declared
|
(11,828)
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(1,171,002)
|
(1,182,830)
|
|||||
Net Income
|
22,363
|
1,556,872
|
1,579,235
|
|||||
Balance, September 30, 2013
|
$
|
11,221
|
$
|
16,044,240
|
$
|
16,055,461
|
22,653.11
|
|
Three Months Ended September 30
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Nine Months Ended September 30
|
|||||||
2013
|
2012
|
2013
|
2012
|
|||||
Rental Income
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$
|
28,567
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$
|
66,271
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$
|
153,847
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$
|
208,021
|
Property Management Expenses
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(178)
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(943)
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(535)
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(1,639)
|
||||
Depreciation
|
0
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(23,940)
|
(47,880)
|
(71,820)
|
||||
Gain on Disposal of Real Estate
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1,128,749
|
23,319
|
1,128,749
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46,795
|
||||
Income from Discontinued Operations
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$
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1,157,138
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$
|
64,707
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$
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1,234,181
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$
|
181,357
|
|
—
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Market and economic conditions which affect the value of the properties the Partnership owns and the cash from rental income such properties generate;
|
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—
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the federal income tax consequences of rental income, deductions, gain on sales and other items and the effects of these consequences for the Partners;
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|
—
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resolution by the General Partners of conflicts with which they may be confronted;
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—
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the success of the General Partners of locating properties with favorable risk return characteristics;
|
|
—
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the effect of tenant defaults; and
|
|
—
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the condition of the industries in which the tenants of properties owned by the Partnership operate.
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31.1
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Certification of Chief Executive Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
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31.2
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Certification of Chief Financial Officer of General Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
Certification of Chief Executive Officer and Chief Financial Officer of General Partner pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
Dated: November 13, 2013
|
AEI Income & Growth Fund XXI
|
|
Limited Partnership
|
||
By:
|
AEI Fund Management XXI, Inc.
|
|
Its:
|
Managing General Partner
|
|
By:
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/s/ ROBERT P JOHNSON
|
|
Robert P. Johnson
|
||
President
|
||
(Principal Executive Officer)
|
||
By:
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/s/ PATRICK W KEENE
|
|
Patrick W. Keene
|
||
Chief Financial Officer
|
||
(Principal Accounting Officer)
|
Date: November 13, 2013
|
/s/ ROBERT P JOHNSON
|
Robert P. Johnson, President
|
|
AEI Fund Management XXI, Inc.
|
|
Managing General Partner
|
Date: November 13, 2013
|
/s/ PATRICK W KEENE
|
Patrick W. Keene, Chief Financial Officer
|
|
AEI Fund Management XXI, Inc.
|
|
Managing General Partner
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.
|
/s/ ROBERT P JOHNSON
|
||
Robert P. Johnson, President
|
||
AEI Fund Management XXI, Inc.
|
||
Managing General Partner
|
||
November 13, 2013
|
||
/s/ PATRICK W KEENE
|
||
Patrick W. Keene, Chief Financial Officer
|
||
AEI Fund Management XXI, Inc.
|
||
Managing General Partner
|
||
November 13, 2013
|
Discontinued Operations (Details) - Discontinued Operations (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
Discontinued Operations [Abstract] | ||||
Rental Income | $ 28,567 | $ 66,271 | $ 153,847 | $ 208,021 |
Property Management Expenses | 178 | 943 | 535 | 1,639 |
Depreciation | 0 | 23,940 | 47,880 | 71,820 |
Gain on Disposal of Real Estate | 1,128,749 | 23,319 | 1,128,749 | 46,795 |
Income from Discontinued Operations | $ 1,157,138 | $ 64,707 | $ 1,234,181 | $ 181,357 |
Statement of Income (USD $)
|
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2013
|
Sep. 30, 2012
|
Sep. 30, 2013
|
Sep. 30, 2012
|
|
Rental Income | $ 278,308 | $ 272,545 | $ 829,686 | $ 811,024 |
Expenses: | ||||
Partnership Administration – Affiliates | 50,650 | 53,588 | 152,129 | 163,845 |
Partnership Administration and Property Management – Unrelated Parties | 17,181 | 7,148 | 42,398 | 34,794 |
Depreciation | 98,794 | 98,794 | 296,382 | 296,382 |
Total Expenses | 166,625 | 159,530 | 490,909 | 495,021 |
Operating Income | 111,683 | 113,015 | 338,777 | 316,003 |
Other Income: | ||||
Interest Income | 3,126 | 1,859 | 6,277 | 6,085 |
Income from Continuing Operations | 114,809 | 114,874 | 345,054 | 322,088 |
Income from Discontinued Operations | 1,157,138 | 64,707 | 1,234,181 | 181,357 |
Net Income | 1,271,947 | 179,581 | 1,579,235 | 503,445 |
Net Income Allocated: | ||||
General Partners | 19,290 | 1,795 | 22,363 | 5,034 |
Limited Partners | $ 1,252,657 | $ 177,786 | $ 1,556,872 | $ 498,411 |
Income per Limited Partnership Unit: | ||||
Continuing Operations (in Dollars per share) | $ 5.02 | $ 5.02 | $ 15.08 | $ 14.07 |
Discontinued Operations (in Dollars per share) | $ 50.28 | $ 2.82 | $ 53.65 | $ 7.92 |
Total – Basic and Diluted (in Dollars per share) | $ 55.30 | $ 7.84 | $ 68.73 | $ 21.99 |
Weighted Average Units Outstanding – Basic and Diluted (in Shares) | 22,653 | 22,663 | 22,653 | 22,663 |
Payable to AEI Fund Management, Inc.
|
9 Months Ended |
---|---|
Sep. 30, 2013
|
|
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] |
(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.
|
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Statement of Changes in Partners' Capital (USD $)
|
General Partner [Member]
|
Limited Partner [Member]
|
Total
|
---|---|---|---|
Balance at Dec. 31, 2011 | $ 4,646 | $ 16,170,124 | $ 16,174,770 |
Balance (in Shares) at Dec. 31, 2011 | 22,663.11 | ||
Distributions Declared | 8,818 | 872,988 | 881,806 |
Net Income | 5,034 | 498,411 | 503,445 |
Balance at Sep. 30, 2012 | 862 | 15,795,547 | 15,796,409 |
Balance (in Shares) at Sep. 30, 2012 | 22,663.11 | ||
Balance at Dec. 31, 2012 | 686 | 15,658,370 | 15,659,056 |
Balance (in Shares) at Dec. 31, 2012 | 22,653 | ||
Distributions Declared | 11,828 | 1,171,002 | 1,182,830 |
Net Income | 22,363 | 1,556,872 | 1,579,235 |
Balance at Sep. 30, 2013 | $ 11,221 | $ 16,044,240 | $ 16,055,461 |
Balance (in Shares) at Sep. 30, 2013 | 22,653 |
Organization
|
9 Months Ended |
---|---|
Sep. 30, 2013
|
|
Accounting Policies [Abstract] | |
Organization, Consolidation, Basis of Presentation, Business Description and Accounting Policies [Text Block] |
(2) Organization –
AEI Income & Growth Fund XXI Limited Partnership (“Partnership”) was formed to acquire and lease commercial properties to operating tenants. The Partnership's operations are managed by AEI Fund Management XXI, Inc. (“AFM”), the Managing General Partner. Robert P. Johnson, the President and sole director of AFM, serves as the Individual General Partner. AFM is a wholly owned subsidiary of AEI Capital Corporation of which Mr. Johnson is the majority shareholder. AEI Fund Management, Inc. (“AEI”), an affiliate of AFM, performs the administrative and operating functions for the Partnership.
The terms of the Partnership offering called for a subscription price of $1,000 per Limited Partnership Unit, payable on acceptance of the offer. The Partnership commenced operations on April 14, 1995 when minimum subscriptions of 1,500 Limited Partnership Units ($1,500,000) were accepted. On January 31, 1997, the offering terminated when the maximum subscription limit of 24,000 Limited Partnership Units 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 operations, 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.
Any Net Proceeds of Sale, as defined, from the sale or financing of 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 10% 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 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 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 10% 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.
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Discontinued Operations
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9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2013
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] |
(5) Discontinued Operations –
On February 3, 2012, the Partnership sold its remaining 2.6811% interest in the Arby’s restaurant in Montgomery, Alabama to an unrelated third party. The Partnership received net sale proceeds of $16,200, which resulted in a net gain of $1,788. The cost and related accumulated depreciation of the interest sold was $23,049 and $8,637, respectively.
During 2012, the Partnership sold its remaining 8.8038% interest in the Winn-Dixie store in Panama City, Florida, in three separate transactions, to unrelated third parties. The Partnership received total net sale proceeds of $406,884, which resulted in a net gain of $68,108. The cost and related accumulated depreciation of the interests sold was $408,060 and $69,284, respectively. For the nine months ended September 30, 2012, the net gain was $45,007.
On August 2, 2013, the Partnership sold its 39% interest in the Scott & White Clinic in College Station, Texas to an unrelated third party. The Partnership received net sale proceeds of $1,822,494, which resulted in a net gain of $512,842. At the time of sale, the cost and related accumulated depreciation was $1,433,468 and $123,816, respectively.
In June 2013, the Partnership entered into an agreement to sell its 62% interest in the Applebee’s restaurant in Johnstown, Pennsylvania to an unrelated third party. On August 23, 2013, the sale closed with the Partnership receiving net sale proceeds of $1,958,905, which resulted in a net gain of $615,907. At the time of sale, the cost and related accumulated depreciation was $1,682,887 and $339,889, respectively.
During the first nine months of 2013 and 2012, the Partnership distributed net sale proceeds of $388,083 and $56,955 to the Limited and General Partners as part of their quarterly distributions, which represented a return of capital of $16.96 and $2.49 per Limited Partnership Unit, respectively.
The financial results for these properties are reflected as Discontinued Operations in the accompanying financial statements. The following are the results of discontinued operations:
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Reclassification
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9 Months Ended |
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Sep. 30, 2013
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Disclosure Text Block [Abstract] | |
Reclassifications [Text Block] |
(3) Reclassification –
Certain items related to discontinued operations in the prior year’s financial statements have been reclassified to conform to 2013 presentation. These reclassifications had no effect on Partners’ capital, net income or cash flows.
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