Attached files
UNITED STATES
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: March 31, 2011
Commission File Number: 000-49653
AEI INCOME & GROWTH FUND 24 LLC
(Exact name of registrant as specified in its charter)
State of Delaware 41-1990952
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
(Address of principal executive offices)
(651) 227-7333
(Registrant's telephone number)
Not Applicable
(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. [X] Yes [ ] No
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (232.405 of this chapter)
during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files).
Yes [ ] No [ ]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act). [ ] Yes [X] No
AEI INCOME & GROWTH FUND 24 LLC
INDEX
Part I - Financial Information
Item 1. Financial Statements (unaudited):
Balance Sheet as of March 31, 2011 and December 31, 2010
Statements for the Three Months ended March 31, 2011 and 2010:
Income
Cash Flows
Changes in Members' Equity (Deficit)
Notes to Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 5. Other Information
Item 6. Exhibits
Signatures
AEI INCOME & GROWTH FUND 24 LLC
BALANCE SHEET
MARCH 31, 2011 AND DECEMBER 31, 2010
ASSETS
2011 2010
CURRENT ASSETS:
Cash $ 542,846 $ 504,676
Receivables 10,978 11,138
----------- -----------
Total Current Assets 553,824 515,814
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 6,607,755 6,607,755
Buildings and Equipment 12,104,344 12,104,344
Accumulated Depreciation (2,078,278) (1,957,234)
----------- -----------
Net Investments in Real Estate 16,633,821 16,754,865
----------- -----------
NOTE RECEIVABLE 1,361,730 1,361,730
----------- -----------
Total Assets $18,549,375 $18,632,409
=========== ===========
LIABILITIES AND MEMBERS' EQUITY
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 23,915 $ 19,146
Distributions Payable 309,278 309,278
Unearned Rent 58,077 37,752
----------- -----------
Total Current Liabilities 391,270 366,176
----------- -----------
MEMBERS' EQUITY (DEFICIT):
Managing Members (8,668) (5,424)
Limited Members, $1,000 per Unit;
50,000 Units authorized; 24,831 Units issued;
24,430 Units outstanding 18,166,773 18,271,657
----------- -----------
Total Members' Equity 18,158,105 18,266,233
----------- -----------
Total Liabilities and Members' Equity $18,549,375 $18,632,409
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 24 LLC
STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED MARCH 31
2011 2010
RENTAL INCOME $ 364,200 $ 347,441
EXPENSES:
LLC Administration - Affiliates 54,106 54,676
LLC Administration and Property
Management - Unrelated Parties 12,454 12,607
Depreciation 121,044 115,110
----------- -----------
Total Expenses 187,604 182,393
----------- -----------
OPERATING INCOME 176,596 165,048
OTHER INCOME:
Interest Income 24,554 824
----------- -----------
INCOME FROM CONTINUING OPERATIONS 201,150 165,872
Income From Discontinued Operations 0 28,892
----------- -----------
NET INCOME $ 201,150 $ 194,764
=========== ===========
NET INCOME ALLOCATED:
Managing Members $ 6,035 $ 5,843
Limited Members 195,115 188,921
----------- -----------
$ 201,150 $ 194,764
=========== ===========
INCOME PER LLC UNIT:
Continuing Operations $ 7.99 $ 6.58
Discontinued Operations .00 1.15
----------- -----------
Total $ 7.99 $ 7.73
=========== ===========
Weighted Average Units Outstanding - Basic and Diluted
24,430 24,430
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 24 LLC
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 201,150 $ 194,764
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 121,044 115,110
Decrease in Receivables 160 0
Increase (Decrease) in Payable to
AEI Fund Management, Inc. 4,769 (15,064)
Increase in Unearned Rent 20,325 7,206
----------- -----------
Total Adjustments 146,298 107,252
----------- -----------
Net Cash Provided By
Operating Activities 347,448 302,016
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions Paid to Members (309,278) (309,277)
----------- -----------
NET INCREASE (DECREASE) IN CASH 38,170 (7,261)
CASH, beginning of period 504,676 484,591
----------- -----------
CASH, end of period $ 542,846 $ 477,330
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 24 LLC
STATEMENT OF CHANGES IN MEMBERS' EQUITY (DEFICIT)
FOR THE THREE MONTHS ENDED MARCH 31
Limited
Member
Managing Limited Units
Members Members Total Outstanding
BALANCE, December 31, 2009 $ (21,742) $18,458,483 $18,436,741 24,430.20
Distributions Declared (9,279) (299,999) (309,278)
Net Income 5,843 188,921 194,764
--------- ----------- ----------- ----------
BALANCE, March 31, 2010 $ (25,178) $18,347,405 $18,322,227 24,430.20
========= =========== =========== ==========
BALANCE, December 31, 2010 $ (5,424) $18,271,657 $18,266,233 24,430.20
Distributions Declared (9,279) (299,999) (309,278)
Net Income 6,035 195,115 201,150
--------- ----------- ----------- ----------
BALANCE, March 31, 2011 $ (8,668) $18,166,773 $18,158,105 24,430.20
========= =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI INCOME & GROWTH FUND 24 LLC
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2011
(1) The condensed statements included herein have been prepared
by the registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission, and
reflect all adjustments which are, in the opinion of
management, necessary to a fair statement of the results of
operations for the interim period, on a basis consistent with
the annual audited statements. The adjustments made to these
condensed statements consist only of normal recurring
adjustments. Certain information, accounting policies, and
footnote disclosures normally included in financial
statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the registrant
believes that the disclosures are adequate to make the
information presented not misleading. It is suggested that
these condensed financial statements be read in conjunction
with the financial statements and the summary of significant
accounting policies and notes thereto included in the
registrant's latest annual report on Form 10-K.
(2) Organization -
AEI Income & Growth Fund 24 LLC ("Company"), a Limited
Liability Company, was formed on November 21, 2000 to
acquire and lease commercial properties to operating
tenants. The Company's operations are managed by AEI Fund
Management XXI, Inc. ("AFM"), the Managing Member. Robert
P. Johnson, the President and sole director of AFM, serves
as the Special Managing Member. 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 Company.
The terms of the offering called for a subscription price of
$1,000 per LLC Unit, payable on acceptance of the offer.
The Company commenced operations on October 31, 2001 when
minimum subscriptions of 1,500 LLC Units ($1,500,000) were
accepted. The offering terminated May 17, 2003 when the
extended offering period expired. The Company received
subscriptions for 24,831.283 Units. Under the terms of the
Operating Agreement, the Limited Members and Managing
Members contributed funds of $24,831,283 and $1,000,
respectively. The Company shall continue until December 31,
2051, unless dissolved, terminated and liquidated prior to
that date.
During operations, any Net Cash Flow, as defined, which the
Managing Members determine to distribute will be distributed
97% to the Limited Members and 3% to the Managing Members.
Distributions to Limited Members will be made pro rata by
Units.
AEI INCOME & GROWTH FUND 24 LLC
NOTES TO FINANCIAL STATEMENTS
(Continued)
(2) Organization - (Continued)
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the Managing Members determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Members and 1% to the Managing Members until the
Limited Members receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to 7%
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 Members and 10% to the
Managing Members. Distributions to the Limited Members 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 97% to the Limited Members and 3% to the Managing
Members. Net losses from operations will be allocated 99%
to the Limited Members and 1% to the Managing Members.
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Operating Agreement as follows: (i)
first, to those Members with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Members
and 1% to the Managing Members until the aggregate balance
in the Limited Members' capital accounts equals the sum of
the Limited Members' Adjusted Capital Contributions plus an
amount equal to 7% 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
Members and 10% to the Managing Members. Losses will be
allocated 99% to the Limited Members and 1% to the Managing
Members.
The Managing Members are not required to currently fund a
deficit capital balance. Upon liquidation of the Company or
withdrawal by a Managing Member, the Managing Members will
contribute to the Company an amount equal to the lesser of
the deficit balances in their capital accounts or 1.01% of
the total capital contributions of the Limited Members over
the amount previously contributed by the Managing Members.
(3) Investments in Real Estate -
On July 23, 2010, the Company purchased a 31% interest in a
Fresenius Medical Center in Hiram, Georgia for $717,359.
The Company incurred $13,958 of acquisition expenses related
to the purchase that were expensed. The property is leased
to Fresenius Medical Care-Paulding Dialysis Partners, LLC, a
subsidiary of Fresenius Medical Care Holdings, Inc., under a
Lease Agreement with a remaining primary term of 11.8 years
(as of the date of purchase) and initial annual rent of
$61,369 for the interest purchased. The remaining interest
in the property was purchased by AEI Income & Growth Fund 27
LLC, an affiliate of the Company.
AEI INCOME & GROWTH FUND 24 LLC
NOTES TO FINANCIAL STATEMENTS
(Continued)
(4) Note Receivable -
On May 19, 2010, as a result of the sale of the Johnny
Carino's restaurant in Littleton, Colorado, the Company
received a Note with a principal balance of $1,361,730 as a
lease settlement payment from Fired Up, Inc., the parent
company of the tenant and guarantor of the Lease. The Note
bears interest at a 7% rate. The Note requires interest
only quarterly payments of $23,830 for two years and monthly
payments of principal and interest of $12,242 for the next
three years. A balloon payment for the outstanding principal
is due on May 19, 2015.
(5) Payable to AEI Fund Management, Inc. -
AEI Fund Management, Inc. performs the administrative and
operating functions for the Company. 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.
(6) Discontinued Operations -
In November 2007, Kona Restaurant Group, Inc. (KRG), the
tenant of the Johnny Carino's restaurant in Littleton,
Colorado, informed the Company that it was closing the
restaurant due to lower than expected sales and operating
losses. In March 2008, the Company and KRG entered into an
agreement to amend the Lease to reduce the annual rent for
the property by 50% to $116,288. As part of the agreement,
Fired Up, Inc., the parent company of KRG and guarantor of
the Lease, agreed to provide a Note to the Company with a
principal balance equal to the difference between the net
proceeds from a sale of the property and the Company's
original cost of the property.
In February 2010, the Company entered into an agreement to
sell the Johnny Carino's restaurant to an unrelated third
party. On May 19, 2010, the sale closed with the Company
receiving net proceeds of $833,631, which resulted in a net
loss of $1,071,661. At the time of sale, the cost and
related accumulated depreciation was $2,223,755 and
$318,463, respectively. As a result of the sale, the
Company received a Note with a principal balance of
$1,361,730 as a lease settlement payment from Fired Up, Inc.
The financial results for this property are reflected as
Discontinued Operations in the accompanying financial
statements. The following are the results of discontinued
operations for the three months ended March 31:
2011 2010
Rental Income $ 0 $ 29,072
Property Management Expenses 0 (180)
--------- ---------
Income from Discontinued Operations $ 0 $ 28,892
========= =========
AEI INCOME & GROWTH FUND 24 LLC
NOTES TO FINANCIAL STATEMENTS
(Continued)
(7) Fair Value Measurements -
As of March 31, 2011, the Company had no assets or
liabilities measured at fair value on a recurring basis or
nonrecurring basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
This section contains "forward-looking statements" which
represent management's expectations or beliefs concerning future
events, including statements regarding anticipated application of
cash, expected returns from rental income, growth in revenue, the
sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward-
looking statements, should be evaluated in the context of a
number of factors that may affect the Company's financial
condition and results of operations, including the following:
Market and economic conditions which affect the value
of the properties the Company owns and the cash from
rental income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
effects of these consequences for Members;
resolution by the Managing Members of conflicts with
which they may be confronted;
the success of the Managing Members of locating
properties with favorable risk return characteristics;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the Company operate.
Application of Critical Accounting Policies
The preparation of the Company's financial statements
requires management to make estimates and assumptions that may
affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities. Management evaluates these estimates on an ongoing
basis, including those related to the carrying value of
investments in real estate, the net realizable value of the note
receivable and the allocation by AEI Fund Management, Inc. of
expenses to the Company as opposed to other funds they manage.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Company purchases properties and records them in the
financial statements at cost (not including acquisition
expenses). The Company tests long-lived assets for
recoverability when events or changes in circumstances indicate
that the carrying value may not be recoverable. For properties
the Company will hold and operate, management determines whether
impairment has occurred by comparing the property's probability-
weighted future undiscounted cash flows to its current carrying
value. For properties held for sale, management determines
whether impairment has occurred by comparing the property's
estimated fair value less cost to sell to its current carrying
value. If the carrying value is greater than the net realizable
value, an impairment loss is recorded to reduce the carrying
value of the property to its net realizable value. Changes in
these assumptions or analysis may cause material changes in the
carrying value of the properties.
The Company evaluates the collectability of the note
receivable that it received as a lease settlement payment from a
prior tenant. As part of this process, the Company monitors the
financial condition of the note issuer. As of the date of this
filing, the Company believes it will collect all interest and
principal related to this note. Changes in the note issuer's
financial condition may cause a material change in the carrying
value of this note.
AEI Fund Management, Inc. allocates expenses to each of
the funds they manage primarily on the basis of the number of
hours devoted by their employees to each fund's affairs. They
also allocate expenses at the end of each month that are not
directly related to a fund's operations based upon the number of
investors in the fund and the fund's capitalization relative to
other funds they manage. The Company reimburses these expenses
subject to detailed limitations contained in the Operating
Agreement.
Management of the Company has discussed the development
and selection of the above accounting estimates and the
management discussion and analysis disclosures regarding them
with the managing member of the Company.
Results of Operations
For the three months ended March 31, 2011 and 2010, the
Company recognized rental income from continuing operations of
$364,200 and $347,441, respectively. In 2011, rental income
increased due to additional rent received from one property
acquisition in 2010 and a rent increase on one property. Based
on the scheduled rent for the properties owned as of April 30,
2011, the Company expects to recognize rental income from
continuing operations of approximately $1,461,000 in 2011.
For the three months ended March 31, 2011 and 2010, the
Company incurred LLC administration expenses from affiliated
parties of $54,106 and $54,676, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and communicating with the Limited Members. During
the same periods, the Company incurred LLC administration and
property management expenses from unrelated parties of $12,454
and $12,607, respectively. These expenses represent direct
payments to third parties for legal and filing fees, direct
administrative costs, outside audit costs, taxes, insurance and
other property costs.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
For the three months ended March 31, 2011 and 2010, the
Company recognized interest income of $24,554 and $824,
respectively. In 2011, interest income increased mainly due to
interest earned on the note receivable discussed below.
Upon complete disposal of a property or classification of
a property as Real Estate Held for Sale, the Company includes the
operating results and sale of the property in discontinued
operations. In addition, the Company reclassifies the prior
periods' operating results of the property to discontinued
operations. For the three months ended March 31, 2010, the
Company recognized income from discontinued operations of
$28,892, representing rental income less property management
expenses.
In November 2007, Kona Restaurant Group, Inc. (KRG), the
tenant of the Johnny Carino's restaurant in Littleton, Colorado,
informed the Company that it was closing the restaurant due to
lower than expected sales and operating losses. In March 2008,
the Company and KRG entered into an agreement to amend the Lease
to reduce the annual rent for the property by 50% to $116,288.
As part of the agreement, Fired Up, Inc., the parent company of
KRG and guarantor of the Lease, agreed to provide a Note to the
Company with a principal balance equal to the difference between
the net proceeds from a sale of the property and the Company's
original cost of the property.
In February 2010, the Company entered into an agreement to
sell the Johnny Carino's restaurant to an unrelated third party.
On May 19, 2010, the sale closed with the Company receiving net
proceeds of $833,631, which resulted in a net loss of $1,071,661.
At the time of sale, the cost and related accumulated
depreciation was $2,223,755 and $318,463, respectively. As a
result of the sale, the Company received a Note with a principal
balance of $1,361,730 as a lease settlement payment from Fired
Up, Inc. The Note bears interest at a 7% rate. The Note
requires interest only quarterly payments of $23,830 for two
years and monthly payments of principal and interest of $12,242
for the next three years. A balloon payment for the outstanding
principal is due on May 19, 2015.
Management believes inflation has not significantly
affected income from operations. Leases may contain rent
increases, based on the increase in the Consumer Price Index over
a specified period, which will result in an increase in rental
income over the term of the leases. Inflation also may cause the
real estate to appreciate in value. However, inflation and
changing prices may have an adverse impact on the operating
margins of the properties' tenants, which could impair their
ability to pay rent and subsequently reduce the Net Cash Flow
available for distributions.
Liquidity and Capital Resources
During the three months ended March 31, 2011, the
Company's cash balances increased $38,170 as a result of cash
generated from operating activities in excess of distributions
paid to the Members. During the three months ended March 31,
2010, the Company's cash balances decreased $7,261 as a result of
distributions paid to the Members in excess of cash generated
from operating activities.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Net cash provided by operating activities increased from
$302,016 in 2010 to $347,448 in 2011 as a result of an increase
in total rental and interest income in 2011, a decrease in LLC
administration and property management expenses in 2011, and net
timing differences in the collection of payments from the tenants
and the payment of expenses.
On July 23, 2010, the Company purchased a 31% interest in
a Fresenius Medical Center in Hiram, Georgia for $717,359. The
property is leased to Fresenius Medical Care-Paulding Dialysis
Partners, LLC, a subsidiary of Fresenius Medical Care Holdings,
Inc., under a Lease Agreement with a remaining primary term of
11.8 years (as of the date of purchase) and initial annual rent
of $61,369 for the interest purchased. The remaining interest in
the property was purchased by AEI Income & Growth Fund 27 LLC, an
affiliate of the Company.
The Company's primary use of cash flow, other than
investment in real estate, is distribution and redemption
payments to Members. The Company declares its regular quarterly
distributions before the end of each quarter and pays the
distribution in the first week after the end of each quarter.
The Company attempts to maintain a stable distribution rate from
quarter to quarter. Redemption payments are paid to redeeming
Members on a semi-annual basis.
For the three months ended March 31, 2011 and 2010, the
Company declared distributions of $309,278 for each period.
Pursuant to the Operating Agreement, distributions of Net Cash
Flow were allocated 97% to the Limited Members and 3% to the
Managing Members. Distributions of Net Proceeds of Sale were
allocated 99% to the Limited Members and 1% to the Managing
Members. The Limited Members received distributions of $299,999
and the Managing Members received distributions of $9,279 for
each period.
The Company may acquire Units from Limited Members who
have tendered their Units to the Company. Such Units may be
acquired at a discount. The Company will not be obligated to
purchase in any year any number of Units that, when aggregated
with all other transfers of Units that have occurred since the
beginning of the same calendar year (excluding Permitted
Transfers as defined in the Operating Agreement), would exceed 2%
of the total number of Units outstanding on January 1 of such
year. In no event shall the Company be obligated to purchase
Units if, in the sole discretion of the Managing Member, such
purchase would impair the capital or operation of the Company.
During 2011 and 2010, the Company did not redeem any Units from
the Limited Members. In prior years, a total of 16 Limited
Members redeemed 401.08 Units for $314,561. The redemptions
increase the remaining Limited Members' ownership interest in the
Company.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Company obligations
on both a short-term and long-term basis.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Economy and Market Conditions
The impact of conditions in the current economy, including
the turmoil in the credit markets, has adversely affected many
real estate investment funds. However, the absence of mortgage
financing on the Company's properties eliminates the risks of
foreclosure and debt-refinancing that can negatively impact the
value and distributions of leveraged real estate investment
funds. Nevertheless, a prolonged economic downturn may adversely
affect the operations of the Company's tenants and their cash
flows. If a tenant were to default on its lease obligations, the
Company's income would decrease, its distributions would likely
be reduced and the value of its properties might decline.
Historically, the Company has sold properties at a gain
and distributed the gain proceeds as part of its regular
quarterly distributions, and to make special distributions on
occasion. The remaining sales proceeds were reinvested in
additional properties. Beginning in the fourth quarter of 2008,
general economic conditions caused the volume of property sales
to slow dramatically for all real estate sellers. Until such
time as economic conditions allow the Company to begin selling
properties at attractive prices, quarterly distributions will
reflect the distribution of net core rental income and capital
reserves, if any. Distribution rates in 2011 are expected to be
consistent with distribution rates in 2010.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for a smaller reporting company.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures.
Under the supervision and with the participation of
management, including its President and Chief Financial Officer,
the Managing Member of the Company evaluated the effectiveness of
the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934 (the "Exchange Act")). Based upon that
evaluation, the President and Chief Financial Officer of the
Managing Member concluded that, as of the end of the period
covered by this report, our disclosure controls and procedures
were effective in ensuring that information required to be
disclosed by us in the reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported
within the time periods specified in applicable rules and forms
and that such information is accumulated and communicated to
management, including the President and Chief Financial Officer
of the Managing Member, in a manner that allows timely decisions
regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting.
During the most recent period covered by this report,
there has been no change in our internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act)
that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
There are no material pending legal proceedings to which
the Company is a party or of which the Company's property is
subject.
ITEM 1A. RISK FACTORS.
Not required for a smaller reporting company.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
(a) None.
(b) Not applicable.
(c) Pursuant to Section 7.7 of the Operating Agreement,
each Limited Member has the right to present Units to the Company
for purchase by submitting notice to the Managing Member during
January or July of each year. The purchase price of the Units is
equal to 80% of the net asset value per Unit, as of the first
business day of January or July of each year, as determined by
the Managing Member in accordance with the provisions of the
Operating Agreement. Units tendered to the Company during
January and July are redeemed on April 1st and October 1st,
respectively, of each year subject to the following limitations.
The Company will not be obligated to purchase in any year any
number of Units that, when aggregated with all other transfers of
Units that have occurred since the beginning of the same calendar
year (excluding Permitted Transfers as defined in the Operating
Agreement), would exceed 2% of the total number of Units
outstanding on January 1 of such year. In no event shall the
Company be obligated to purchase Units if, in the sole discretion
of the Managing Member, such purchase would impair the capital or
operation of the Company. During the period covered by this
report, the Company did not purchase any Units.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None.
ITEM 5. OTHER INFORMATION.
None.
ITEM 6. EXHIBITS.
31.1 Certification of Chief Executive Officer of Managing
Member pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer of Managing
Member 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 Managing Member pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
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.
Dated: May 12, 2011 AEI Income & Growth Fund 24 LLC
By: AEI Fund Management XXI, Inc.
Its: Managing Member
By: /S/ ROBERT P JOHNSON
Robert P. Johnson
President
(Principal Executive Officer)
By: /S/ PATRICK W KEENE
Patrick W. Keene
Chief Financial Officer
(Principal Accounting Officer
