SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended March 31, 2003
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 0-22039
WELLS REAL ESTATE FUND IX, L.P.
(Exact name of registrant as specified in its charter)
| Georgia |
58-2126622 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) | |
| 6200 The Corners Pkwy., |
30092 | |
| (Address of principal executive offices) |
(Zip Code) | |
| Registrant’s telephone number, including area code |
(770) 449-7800 |
(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 ¨
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
INDEX
| Page No. | ||||||
| PART I. |
FINANCIAL INFORMATION |
|||||
| Item 1. |
Financial Statements |
|||||
| Balance Sheets—March 31, 2003 (unaudited) and December 31, 2002 |
3 | |||||
| Statements of Income for the Three Months Ended March 31, 2003 and 2002 (unaudited) |
4 | |||||
| 5 | ||||||
| Statements of Cash Flows for the Three Months Ended March 31, 2003 and 2002 (unaudited) |
6 | |||||
| 7 | ||||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
12 | ||||
| Item 3. |
16 | |||||
| Item 4. |
16 | |||||
| PART II. |
17 | |||||
2
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
| (unaudited) March 31, 2003 |
December 31, 2002 | |||||
| ASSETS: |
||||||
| Investments in Joint Ventures |
$ |
23,494,132 |
$ |
23,831,037 | ||
| Cash and cash equivalents |
|
16,794 |
|
121,265 | ||
| Due from joint ventures |
|
695,257 |
|
612,483 | ||
| Deferred project costs |
|
1,291 |
|
1,291 | ||
| Total assets |
$ |
24,207,474 |
$ |
24,566,076 | ||
| LIABILITIES AND PARTNERS’ CAPITAL: |
||||||
| Liabilities: |
||||||
| Accounts payable |
$ |
24,080 |
$ |
14,831 | ||
| Partnership distribution payable |
|
654,531 |
|
712,257 | ||
| Total liabilities |
|
678,611 |
|
727,088 | ||
| Partners’ capital: |
||||||
| Limited partners: |
||||||
| Class A—3,173,483 units and 3,165,583 units as of March 31, 2003 and December 31, 2002, respectively |
|
23,528,863 |
|
23,838,988 | ||
| Class B—326,517 units and 334,417 units as of March 31, 2003 and December 31, 2002, respectively |
|
0 |
|
0 | ||
| Total partners’ capital |
|
23,528,863 |
|
23,838,988 | ||
| Total liabilities and partners’ capital |
$ |
24,207,474 |
$ |
24,566,076 | ||
See accompanying notes.
3
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
| (unaudited) Three Months Ended | ||||||
| March 31, 2003 |
March 31, 2002 | |||||
| REVENUES: |
||||||
| Equity in income of Joint Ventures |
$ |
373,952 |
$ |
386,872 | ||
| Interest income |
|
679 |
|
1,277 | ||
|
|
374,631 |
|
388,149 | |||
| EXPENSES: |
||||||
| Partnership administration |
|
25,169 |
|
10,396 | ||
| Legal and accounting fees |
|
3,618 |
|
10,521 | ||
| Other general and administrative |
|
1,438 |
|
2,194 | ||
|
|
30,225 |
|
23,111 | |||
| NET INCOME |
$ |
344,406 |
$ |
365,038 | ||
| NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS |
$ |
344,406 |
$ |
365,038 | ||
| NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS |
$ |
0 |
$ |
0 | ||
| NET INCOME PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT |
$ |
0.11 |
$ |
0.12 | ||
| NET LOSS PER WEIGHTED AVERAGE CLASS B LIMITED PARTNER UNIT |
$ |
0.00 |
$ |
0.00 | ||
| CASH DISTRIBUTION PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT |
$ |
0.21 |
$ |
0.23 | ||
| WEIGHTED AVERAGE LIMITED PARTNER UNITS OUTSTANDING: |
||||||
| CLASS A |
|
3,173,483 |
|
3,139,929 | ||
| CLASS B |
|
326,517 |
|
360,071 | ||
See accompanying notes.
4
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS’ CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2002
AND THE THREE MONTHS ENDED MARCH 31, 2003 (UNAUDITED)
| Limited Partners |
Total Partners’ Capital |
|||||||||||||||
| Class A |
Class B |
|||||||||||||||
| Units |
Amounts |
Units |
Amounts |
|||||||||||||
| BALANCE, December 31, 2001 |
3,136,429 |
$ |
25,121,831 |
|
363,571 |
|
$ |
0 |
$ |
25,121,831 |
| |||||
| Net income |
0 |
|
1,535,132 |
|
0 |
|
|
0 |
|
1,535,132 |
| |||||
| Partnership distributions |
0 |
|
(2,817,975 |
) |
0 |
|
|
0 |
|
(2,817,975 |
) | |||||
| Class B conversion elections |
29,154 |
|
0 |
|
(29,154 |
) |
|
0 |
|
0 |
| |||||
| BALANCE, December 31, 2002 |
3,165,583 |
|
23,838,988 |
|
334,417 |
|
|
0 |
|
23,838,988 |
| |||||
| Net income |
0 |
|
344,406 |
|
0 |
|
|
0 |
|
344,406 |
| |||||
| Partnership distributions |
0 |
|
(654,531 |
) |
0 |
|
|
0 |
|
(654,531 |
) | |||||
| Class B conversion elections |
7,900 |
|
0 |
|
(7,900 |
) |
|
0 |
|
0 |
| |||||
| BALANCE, March 31, 2003 (unaudited) |
3,173,483 |
$ |
23,528,863 |
|
326,517 |
|
|
0 |
$ |
23,528,863 |
| |||||
See accompanying notes.
5
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
| (unaudited) Three Months Ended |
||||||||
| March 31, 2003 |
March 31, 2002 |
|||||||
| CASH FLOW FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ |
344,406 |
|
$ |
365,038 |
| ||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Equity in income of Joint Ventures |
|
(373,952 |
) |
|
(386,872 |
) | ||
| Changes in assets and liabilities: |
||||||||
| Accounts payable |
|
9,249 |
|
|
416 |
| ||
| Net cash used in operating activities |
|
(20,297 |
) |
|
(21,418 |
) | ||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Distributions received from Joint Ventures |
|
628,083 |
|
|
792,318 |
| ||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Distributions to partners |
|
(712,257 |
) |
|
(744,902 |
) | ||
| NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
(104,471 |
) |
|
25,998 |
| ||
| CASH AND CASH EQUIVALENTS, beginning of period |
|
121,265 |
|
|
95,263 |
| ||
| CASH AND CASH EQUIVALENTS, end of period |
$ |
16,794 |
|
$ |
121,261 |
| ||
| SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: |
||||||||
| Joint venture distributions receivable |
$ |
695,257 |
|
$ |
684,395 |
| ||
| Partnership distributions payable |
$ |
654,531 |
|
$ |
706,487 |
| ||
See accompanying notes.
6
WELLS REAL ESTATE FUND IX, L.P.
(A Georgia Public Limited Partnership)
CONDENSED NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2003 (UNAUDITED)
| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(a) Organization and Business
Wells Real Estate Fund IX, L.P. (the “Partnership”) is a Georgia public limited partnership with Leo F. Wells, III and Wells Partners, L.P. (“Wells Partners”), a Georgia nonpublic limited partnership, serving as the General Partners. The Partnership was formed on August 15, 1994 for the purpose of acquiring, developing, constructing, owning, operating, improving, leasing, and otherwise managing income-producing commercial properties for investment purposes. Upon subscription, limited partners elect to have their units treat their units as Class A units or Class B units. Limited partners shall have the right to change their prior elections to have some or all of their units treated as Class A or Class B units one time during each quarterly accounting period. Limited partners may vote to, among other things, (a) amend the partnership agreement, subject to certain limitations, (b) change the business purpose or investment objectives of the Partnership, and (c) add or remove a general partner. A majority vote on any of the above described matters will bind the Partnership without the concurrence of the General Partners. Each limited partnership unit has equal voting rights regardless of class.
On January 5, 1996, the Partnership commenced a public offering of up to $35,000,000 of limited partnership units pursuant to a Registration Statement filed on Form S-11 filed under the Securities Act of 1933. The Partnership commenced active operations on February 12, 1996 upon receiving and accepting subscriptions for 125,000 units and collecting aggregate gross offering proceeds of $2,500,000, thus allowing for the admission of New York and Pennsylvania investors in the Partnership. The offer terminated on December 30, 1996 at which time approximately 2,935,931 Class A units and 564,069 Class B units had been sold to 1,841 and 257 Class A and Class B Limited Partners, respectively, for total limited partner capital contributions of $35,000,000. As of March 31, 2003, the Partnership had paid a total of $1,400,000 in acquisition and advisory fees and acquisition expenses, and $5,254,700 in selling commissions and organization and offering expenses, and invested $13,289,359 in Fund VIII-IX Associates and invested $15,030,434 in Fund IX-X-XI-REIT Associates. The Partnership held net offering proceeds of $25,507 as of March 31, 2003, which is available for investment in properties.
(THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
7
The Partnership owns interests in all of its real estate assets through joint ventures with other Wells Real Estate Funds. As of March 31, 2003, the Partnership owned interests in the following 9 properties through the affiliated joint ventures listed below:
| Joint Venture |