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 June 30, 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 0-27888
WELLS REAL ESTATE FUND VIII, L.P.
(Exact name of registrant as specified in its charter)
| Georgia | 58-2126618 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |
| 6200 The Corners Pkwy., Norcross, Georgia |
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 VIII, L.P.
(A Georgia Public Limited Partnership)
TABLE OF CONTENTS
| Page No. | ||||||
| PART I. |
||||||
| Item 1. |
Financial Statements | |||||
| Balance Sheets—June 30, 2003 (unaudited) and December 31, 2002 |
3 | |||||
| 4 | ||||||
| 5 | ||||||
| Statements of Cash Flows for the Six Months Ended June 30, 2003 (unaudited) 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 VIII, L.P.
(A Georgia Public Limited Partnership)
BALANCE SHEETS
| (unaudited) | ||||||
| June 30, 2003 |
December 31, 2002 | |||||
| ASSETS: |
||||||
| Investments in Joint Ventures |
$ | 19,605,085 | $ | 20,317,188 | ||
| Due from Joint Ventures |
770,068 | 899,332 | ||||
| Cash and cash equivalents |
222,585 | 53,894 | ||||
| Total assets |
$ | 20,597,738 | $ | 21,270,414 | ||
| LIABILITIES AND PARTNERS’ CAPITAL: |
||||||
| Liabilities: |
||||||
| Partnership distributions payable |
$ | 682,317 | $ | 679,812 | ||
| Accounts payable |
10,439 | 14,735 | ||||
| Total liabilities |
692,756 | 694,547 | ||||
| Partners’ capital: |
||||||
| Limited partners: |
||||||
| Class A—2,872,915 units and 2,862,365 units as of June 30, 2003 and December 31, 2002, respectively |
19,904,982 | 20,575,867 | ||||
| Class B—330,354 units and 340,904 units as of June 30, 2003 and December 31, 2002, respectively |
0 | 0 | ||||
| Total partners’ capital |
19,904,982 | 20,575,867 | ||||
| Total liabilities and partners’ capital |
$ | 20,597,738 | $ | 21,270,414 | ||
See accompanying notes
3
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF INCOME
| (unaudited) Three Months Ended |
(unaudited) Six Months Ended | |||||||||||
| June 30, 2003 |
June 30, 2002 |
June 30, 2003 |
June 30, 2002 | |||||||||
| REVENUES: |
||||||||||||
| Equity earnings of Joint Ventures |
$ | 387,278 | $ | 303,792 | $ | 750,540 | $ | 617,024 | ||||
| Other income |
425 | 0 | 867 | 1,076 | ||||||||
| 387,703 | 303,792 | 751,407 | 618,100 | |||||||||
| EXPENSES: |
||||||||||||
| Legal and accounting |
4,636 | 2,923 | 8,079 | 10,823 | ||||||||
| Partnership administration |
24,878 | 18,257 | 44,432 | 33,975 | ||||||||
| Other general and administrative |
4,883 | 1,930 | 6,336 | 4,194 | ||||||||
| 34,397 | 23,110 | 58,847 | 48,992 | |||||||||
| NET INCOME |
$ | 353,306 | $ | 280,682 | $ | 692,560 | $ | 569,108 | ||||
| NET INCOME ALLOCATED TO CLASS A LIMITED PARTNERS |
$ | 353,306 | $ | 280,682 | $ | 692,560 | $ | 569,108 | ||||
| NET LOSS ALLOCATED TO CLASS B LIMITED PARTNERS |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||
| NET INCOME PER WEIGHTED AVERAGE CLASS A LIMITED PARTNER UNIT |
$ | 0.12 | $ | 0.10 | $ | 0.24 | $ | 0.20 | ||||
| NET LOSS PER WEIGHTED AVERAGE CLASS B LIMITED PARTNER UNIT |
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||
| CASH DISTRIBUTION PER CLASS A LIMITED PARTNER UNIT |
$ | 0.24 | $ | 0.24 | $ | 0.47 | $ | 0.47 | ||||
| WEIGHTED AVERAGE LIMITED PARTNER UNITS OUTSTANDING: |
||||||||||||
| CLASS A |
2,872,915 | 2,815,468 | 2,870,415 | 2,813,508 | ||||||||
| CLASS B |
330,354 | 387,801 | 332,854 | 389,761 | ||||||||
See accompanying notes
4
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF PARTNERS’ CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2002
AND THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
| Limited Partners |
Total Partners’ Capital |
|||||||||||||||
| Class A |
Class B |
|||||||||||||||
| Units |
Amounts |
Units |
Amounts |
|||||||||||||
| BALANCE, December 31, 2001 |
2,806,519 | $ | 22,003,302 | 396,750 | $ | 0 | $ | 22,003,302 | ||||||||
| Net income |
0 | 1,265,197 | 0 | 0 | 1,265,197 | |||||||||||
| Partnership distributions |
0 | (2,692,632 | ) | 0 | 0 | (2,692,632 | ) | |||||||||
| Class B conversion elections |
55,846 | 0 | (55,846 | ) | 0 | 0 | ||||||||||
| BALANCE, December 31, 2002 |
2,862,365 | 20,575,867 | 340,904 | 0 | 20,575,867 | |||||||||||
| Net income |
0 | 692,560 | 0 | 0 | 692,560 | |||||||||||
| Partnership distributions |
0 | (1,363,445 | ) | 0 | 0 | (1,363,445 | ) | |||||||||
| Class B conversion elections |
10,550 | 0 | (10,550 | ) | 0 | 0 | ||||||||||
| BALANCE, June 30, 2003 (unaudited) |
2,872,915 | $ | 19,904,982 | 330,354 | $ | 0 | $ | 19,904,982 | ||||||||
See accompanying notes
5
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
STATEMENTS OF CASH FLOWS
| (unaudited) | ||||||||
| Six Months Ended |
||||||||
| June 30, 2003 |
June 30, 2002 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net income |
$ | 692,560 | $ | 569,108 | ||||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Equity in income of Joint Ventures |
(750,540 | ) | (617,024 | ) | ||||
| Change in assets and liabilities: |
||||||||
| Accounts payable |
(4,296 | ) | (4,143 | ) | ||||
| Net cash used in operating activities |
(62,276 | ) | (52,059 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Distributions received from Joint Ventures |
1,591,907 | 1,445,436 | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Distributions to partners from accumulated earnings |
(1,360,940 | ) | (1,351,835 | ) | ||||
| NET INCREASE IN CASH AND CASH EQUIVALENTS |
168,691 | 41,542 | ||||||
| CASH AND CASH EQUIVALENTS, beginning of period |
53,894 | 28,901 | ||||||
| CASH AND CASH EQUIVALENTS, end of period |
$ | 222,585 | $ | 70,443 | ||||
| SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: |
||||||||
| Due from Joint Ventures |
$ | 770,068 | $ | 647,572 | ||||
| Partnership distributions payable |
$ | 682,317 | $ | 668,673 | ||||
See accompanying notes
6
WELLS REAL ESTATE FUND VIII, L.P.
(A Georgia Public Limited Partnership)
CONDENSED NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003 (UNAUDITED)
| 1. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
(a) Organization and Business
Wells Real Estate Fund VIII, L.P. (the “Partnership”) is a public limited partnership organized on August 15, 1994 under the laws of the state of Georgia. The general partners are Leo F. Wells, III and Wells Partners L.P. (“Wells Partners”), a Georgia nonpublic limited partnership (the “General Partners”). Upon subscription, limited partners elect to have their units treated as either Class A units or Class B units. Limited partners have the right to change their prior elections to have some or all of their units treated as Class A units 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) 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 6, 1995, the Partnership commenced a public offering of up to $35,000,000 of Class A or Class B limited partnership units pursuant to a Registration Statement filed on Form S-11 under the Securities Act of 1933. The Partnership commenced active operations on February 24, 1995 upon receiving and accepting subscriptions for 125,000 units. The Partnership terminated this offering on January 4, 1996 upon receiving gross proceeds of $32,042,689, representing subscriptions for approximately 2,613,534 Class A units and 590,735 Class B units held by 1,939 and 302 limited partners, respectively. In March 1997, the Partnership repurchased 1,000 limited partners units.
The Partnership owns interests in all of its real estate assets through joint ventures with other Wells Real Estate Funds. As of June 30, 2003, the Partnership owned interests in the following eight properties through the affiliated joint ventures (the “Joint Ventures”) listed below:
| Joint Venture | Joint Venture Partners | Properties | ||
| Fund VI, Fund VII and Fund VIII Associates (“Fund VI-VII-VIII Associates”) |
— Wells Real Estate Fund VI, L.P. — Wells Real Estate Fund VII, L.P. — Wells Real Estate Fund VIII, L.P. |
1. BellSouth Building A four-story office building located in Jacksonville, Florida
2. Tanglewood Commons A retail center in Clemmons, North Carolina | ||
| Fund VII and Fund VIII Associates (“Fund VII-Fund VIII Associates”) |
— Wells Real Estate Fund VII, L.P. — Wells Real Estate Fund VIII, L.P. |
3. Hannover Center A retail center located in Stockbridge, Georgia
4. CH2M Hill at Gainesville Property An office building located in Gainesville, Florida | ||
7
| Joint Venture | Joint Venture Partners | Properties | ||
| Fund VIII and Fund IX Associates (“Fund VIII-Fund IX Associates”) |
— Wells Real Estate Fund VIII, L.P. — Wells Real Estate Fund IX, L.P. |
5. US Cellular Building A four-story office building located in Madison, Wisconsin
6. AT&T-TX Building A one-story office building located in Boulder County, Colorado
7. Cirrus Logic Building A two-story office building located in Boulder County, Colorado | ||
| Fund VIII-IX-REIT Joint Venture (“Fund VIII-IX-REIT Associates”) |
— Fund VIII and Fund IX Associates. — Wells Operating Partnership, L.P.* |
8. Quest Building | ||