-----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, PpdeLLK1QZuJ9ixETvmj5cLDhFd2b5p4pbLC4GfdZWsRhgNXuMmogiNjFgoQnr+G PBoAayv0hA+8/DA7uxgHbw== 0000944209-97-001512.txt : 19971114 0000944209-97-001512.hdr.sgml : 19971114 ACCESSION NUMBER: 0000944209-97-001512 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DE ANZA PROPERTIES X CENTRAL INDEX KEY: 0000215628 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 953005938 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-08942 FILM NUMBER: 97713514 BUSINESS ADDRESS: STREET 1: 9171 WILSHIRE BLVD STE 627 CITY: BEVERLY HILLS STATE: CA ZIP: 90210 BUSINESS PHONE: 3105501111 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q --------- [X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1997 [ ] 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 0-8942 DE ANZA PROPERTIES - X (Exact name of registrant as specified in its charter) CALIFORNIA 95-3005938 (State or other jurisdiction of (IRS Employer Iden- incorporation or organization) tification Number) 9171 WILSHIRE BOULEVARD, SUITE 627 BEVERLY HILLS, CALIFORNIA 90210 (Address of principal executive offices, including zip code) (310) 550-1111 (The registrant's telephone number, including area code) NO CHANGE (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 --- --- Pursuant to the Securities Exchange Act of 1934 Release 15502 and Rule 240.0-3(b) (17 CFR 240.0-3(b)), the pages of this document have been numbered sequentially. The total number of pages contained herein is 15. 1 TABLE OF CONTENTS ----------------- PART I. FINANCIAL INFORMATION - ------ --------------------- ITEM 1. FINANCIAL STATEMENTS Balance Sheets 3 Statements of Income 5 Statements of Changes in Partners' Capital (Deficit) 7 Statements of Cash Flows 8 Notes to Financial Statements 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 13 PART II. OTHER INFORMATION 14 - ------- -----------------
2 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DE ANZA PROPERTIES - X (A Limited Partnership) Balance Sheets (Unaudited)
September 30, December 31, 1997 1996 ------------- ------------ ASSETS CASH AND CASH EQUIVALENTS - including restricted deposits of $700,558 at December 31, 1996 - Note 1 $1,004,097 $ 1,401,497 ACCOUNTS RECEIVABLE 2,165 11,122 PREPAID EXPENSES - 70,995 ---------- ----------- 1,006,262 1,483,614 ---------- ----------- PROPERTY AND EQUIPMENT - Notes 1, 2 and 6 Land - 2,989,265 Land improvements - 4,793,220 Buildings and improvements - 11,448,171 Furniture and equipment - 647,412 ---------- ----------- - 19,878,068 Less accumulated depreciation - 10,208,135 ---------- ----------- - 9,669,933 ---------- ----------- OTHER ASSETS Loan costs - less accumulated amortization of $56,564 at December 31, 1996 - Note 2 - 51,251 Prepaid sale costs - Notes 1 and 6 - 69,994 Other 20,000 20,000 ---------- ----------- 20,000 141,245 ---------- ----------- $1,026,262 $11,294,792 ========== ===========
See accompanying notes to financial statements. 3 DE ANZA PROPERTIES - X (A Limited Partnership) Balance Sheets (Continued) (Unaudited)
September 30, December 31, 1997 1996 ------------- ------------ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) ACCOUNTS PAYABLE AND ACCRUED EXPENSES - including $1,085 and $19,020 due to related party at September 30, 1997 and December 31, 1996, respectively $ 14,973 $ 158,809 DEPOSITS AND ADVANCE RENTALS - 139,900 DEFERRED GAIN ON SALE - Note 5 - 700,558 SECURED NOTE PAYABLE - Notes 2 and 6 - 4,658,315 ---------- ----------- 14,973 5,657,582 ---------- ----------- PARTNERS' CAPITAL (DEFICIT) General partners 239,490 (3,453,230) Cash general partners, 228.5 units issued and outstanding 7,334 78,420 Limited partners, 22,640.5 units issued and outstanding 764,465 9,012,020 ---------- ----------- 1,011,289 5,637,210 ---------- ----------- $1,026,262 $11,294,792 ========== ===========
4 DE ANZA PROPERTIES - X (A Limited Partnership) Statements of Income (Unaudited)
Nine Months Nine Months Ended Ended September 30, September 30, 1997 1996 ------------- ------------- INCOME Rent - Note 6 $ 510,481 $2,757,941 Interest and dividends 69,599 49,556 Other 19,358 100,505 Gain on sale of property and equipment - Notes 5 and 6 19,875,060 143,366 ----------- ---------- 20,474,498 3,051,368 ----------- ---------- EXPENSES Interest 102,067 354,939 Salaries - including $10,736 and $15,046 paid to related party in 1997 and 1996, respectively - Note 3 104,914 210,264 Maintenance, repairs and supplies 66,654 262,663 Other 63,506 236,350 Depreciation and amortization - Note 1 51,251 284,581 Professional fees and services - including $14,222 and $75,075 paid to related party in 1997 and 1996, respectively - Note 3 52,397 183,530 Utilities 36,789 153,754 Real estate taxes 27,705 156,614 Management fees paid to related party - Note 3 26,526 142,623 Payroll taxes and employee benefits 18,751 42,801 Insurance 16,615 78,852 ----------- ---------- 567,175 2,106,971 ----------- ---------- NET INCOME $19,907,323 $ 944,397 =========== ========== NET INCOME GENERAL PARTNERS $ 9,502,585 $ 223,648 =========== ========== CASH GENERAL AND LIMITED PARTNERS $10,404,738 $ 720,749 =========== ========== INCOME PER 1% GENERAL PARTNER INTEREST - Note 4 $ 95,025.85 $ 2,236.48 =========== ========== INCOME PER CASH GENERAL AND LIMITED PARTNERSHIP UNIT - Note 4 $ 454.97 $ 31.52 =========== ==========
See accompanying notes to financial statements. 5 DE ANZA PROPERTIES - X (A Limited Partnership) Statements of Income (Unaudited)
Three Months Three Months Ended Ended September 30, September 30, 1997 1996 ------------- ------------- INCOME Rent - Note 6 - $ 932,470 Interest and dividends $ 11,767 16,837 Other 75 37,657 Gain on sale of property and equipment - Notes 5 and 6 700,558 143,366 --------- ---------- 712,400 1,130,330 --------- ---------- EXPENSES Interest - 118,264 Salaries - including $3,262 and $4,974 paid to related party in 1997 and 1996, respectively - Note 3 3,262 70,873 Maintenance, repairs and supplies 381 81,642 Other 4,252 78,188 Depreciation and amortization - Note 1 - 770 Professional fees and services - including $23,385 paid to related party in 1996 - Note 3 1,866 30,085 Utilities 10 50,872 Real estate taxes - 51,594 Management fees paid to related party - Note 3 116 48,553 Payroll taxes and employee benefits - 13,393 Insurance (641) 25,977 --------- ---------- 9,246 570,211 --------- ---------- NET INCOME $ 703,154 $ 560,119 ========= ========== NET INCOME GENERAL PARTNERS $ 166,518 $ 132,645 ========= ========== CASH GENERAL AND LIMITED PARTNERS $ 536,636 $ 427,474 ========= ========== INCOME PER 1% GENERAL PARTNER INTEREST - Note 4 $1,665.18 $ 1,326.45 ========= ========== INCOME PER CASH GENERAL AND LIMITED PARTNERSHIP UNIT - Note 4 $ 23.46 $ 18.69 ========= ==========
See accompanying notes to financial statements. 6 DE ANZA PROPERTIES - X (A Limited Partnership) Statements of Changes in Partners' Capital (Deficit) (Unaudited) For the Nine Months Ended September 30, 1997 and For the Year Ended December 31, 1996
Cash General General Limited Total Partners Partners Partners ------------- ------------ ---------- ------------- BALANCE - January 1, 1996 $ 5,541,046 $(3,476,003) $ 77,686 $ 8,939,363 DISTRIBUTIONS TO PARTNERS (1,250,582) (296,158) (9,536) (944,888) NET INCOME - for the year ended December 31, 1996 1,346,746 318,931 10,270 1,017,545 ------------ ----------- --------- ------------ BALANCE - December 31, 1996 5,637,210 (3,453,230) 78,420 9,012,020 DISTRIBUTIONS TO PARTNERS (24,533,244) (5,809,865) (187,078) (18,536,301) NET INCOME - for the nine months ended September 30, 1997 19,907,323 9,502,585 115,992 10,288,746 ------------ ----------- --------- ------------ BALANCE - September 30, 1997 $ 1,011,289 $ 239,490 $ 7,334 $ 764,465 ============ =========== ========= ============
See accompanying notes to financial statements. 7 DE ANZA PROPERTIES - X (A Limited Partnership) Statements of Cash Flows (Unaudited)
Nine Months Nine Months Ended Ended September 30, September 30, 1997 1996 -------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Gross rents received from real estate operations $ 378,555 $2,761,672 Cash paid to suppliers and employees - including $73,737 and $254,893 paid to related party in 1997 and 1996, respectively (486,698) (1,405,611) Interest paid (102,067) (354,939) Interest and other income received 89,940 152,224 ----------- ----------- Net cash (used in) provided by operating activities (120,270) 1,153,346 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property and equipment (53,022) (78,389) Sale of property and equipment 29,433,000 - Sales costs (349,507) (26,115) ------------ ----------- Net cash provided by (used in) investing activities 29,030,471 (104,504) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on secured notes payable (4,658,315) (69,700) Prepayment penalty (116,042) - Partner distributions (24,533,244) (937,936) ------------ ----------- Net cash used in financing activities (29,307,601) (1,007,636) ------------ ----------- NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (397,400) 41,206 CASH AND CASH EQUIVALENTS: BALANCE AT BEGINNING OF PERIOD 1,401,497 1,388,279 ------------- ------------- BALANCE AT END OF PERIOD $ 1,004,097 $1,429,485 ============= =============
See accompanying notes to financial statememts. 8 DE ANZA PROPERTIES - X (A Limited Partnership) Statements of Cash Flows (Continued) (Unaudited)
Nine Months Nine Months Ended Ended September 30, September 30, 1997 1996 -------------- ------------- RECONCILIATION OF NET INCOME TO NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES Net income $19,907,323 $944,397 Adjustments to reconcile net income to net cash (used in) provided by operating activities Depreciation and amortization 51,251 284,581 Gain on sale of property and equipment (19,875,060) (143,366) Changes in operating assets and Liabilities Decrease in accounts receivable 8,957 2,544 Decrease in prepaid expenses 70,995 (21,359) Decrease in other assets - 656 (Decrease) increase in accounts payable and accrued expenses (143,836) 83,132 (Decrease) increase in deposits and advance rentals (139,900) 2,761 ------------ ---------- Net cash (used in) provided by operating activities $ (120,270) $1,153,346 =========== ==========
SUPPLEMENTAL DISCLOSURE - ----------------------- During the nine months ended September 30, 1996, $143,366 of the Independent Committee cash reserve was released from restricted cash and the Partnership recognized a gain on that portion of the 1994 sale proceeds. During the nine months ended September 30, 1997, the remaining $143,366 of the Independent Committee cash reserve and the entire $557,192 of the General Reserve, were released from restricted cash and the Partnership recognized a gain on that portion of the 1994 sale proceeds. See accompanying notes to financial statements. 9 DE ANZA PROPERTIES - X (A Limited Partnership) Notes to Financial Statements (Unaudited) September 30, 1997 and December 31, 1996 and For the Nine and Three Months Ended September 30, 1997 and 1996 NOTE 1 - BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) have been included. Operating results during the nine and three months ended September 30, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1996. Cash and Cash Equivalents ------------------------- The Partnership invests its cash not needed for working capital in highly liquid short-term investments consisting primarily of money market funds and certificates of deposit, with original maturities ranging generally from one to three months. The Partnership considers all such items to be cash equivalents. Depreciation ------------ Pursuant to generally accepted accounting principles the Partnership ceased to depreciate Woodbridge Meadows Apartments ("Woodbridge") from the time it determined to sell the property (see Note 6). NOTE 2 - SECURED NOTE PAYABLE Secured note payable at September 30, 1997 and December 31, 1996 consisted of: September 30, December 31, 1997 1996 ------------- ------------ Note collateralized by first trust deed, payable in monthly installments of $47,093, including interest at 10%, maturing in 2014. The note was repaid February 19, 1997 upon sale of Woodbridge (see Note 6). $ - $4,658,315 ============ =========== NOTE 3 - TRANSACTIONS WITH RELATED PARTIES Pursuant to a former management agreement dated October 1, 1985, De Anza Assets, Inc., a former affiliate of the operating general partner (OGP), was paid a management fee in the amount of 5% of the annual gross receipts 10 DE ANZA PROPERTIES - X (A Limited Partnership) Notes to Financial Statements (Continued) (Unaudited) September 30, 1997 and December 31, 1996 and For the Nine and Three Months Ended September 30, 1997 and 1996 NOTE 3 - TRANSACTIONS WITH RELATED PARTIES (Continued) from the operations of the Partnership's properties. The payment of this fee is subordinated to the priority distributions to the cash general and limited partners of 6% of their adjusted capital contributions each year and is noncumulative, except in the case of a sale, refinancing or other disposition of the Partnership's properties. In that case, the difference between the management fee actually paid and the management fee that would have been paid if it were not subordinated, is payable out of proceeds from the sale, refinancing or other disposition after payment of the limited partners' priority return and capital contribution and the general partners' incentive interest. On August 18, 1994, subsequent to the sale of Colonies of Margate and the property management business of De Anza Group, Inc. (DAG), as discussed in Note 5, the property management of Woodbridge was assumed by Terra Vista Management, Inc. (Terra Vista). Terra Vista is wholly owned by Michael D. Gelfand, president of the OGP and the son of Herbert M. Gelfand. Herbert M. Gelfand, together with Beverly Gelfand, is the sole shareholder of the OGP and an individual general partner. Terra Vista was paid $26,526 and $142,623 for management fees during the nine months ended September 30, 1997 and 1996, respectively. Of the $26,526, none was attributable to the three months ended September 30, 1997 (compared to $48,553 paid for the three months ended September 30, 1996). In addition, Terra Vista was paid $47,211 and $112,270 during the nine months ended September 30, 1997 and 1996, respectively, for performing bookkeeping, regional management, computer, disposition and investor relations services necessary for the operation of the Partnership and its properties. Of the $47,211, ($3,206) is attributable to the three months ended September 30, 1997 (compared to $46,191 paid for the three months ended September 30, 1996). NOTE 4 - INCOME PER 1% GENERAL PARTNER INTEREST AND CASH GENERAL AND LIMITED PARTNERSHIP UNIT Income per cash general and limited partnership unit was computed based on the cash general and limited partners' share of net income as reflected on the Statements of Income and Changes in Partners' Capital (Deficit) and the number of units outstanding (22,869 units). The general partners' share of net income has not been included in this computation. Income per 1% general partner interest was computed based on the general partners' share of net income as reflected on the Statements of Income and Changes in Partners' Capital (Deficit). NOTE 5 - SALE OF COLONIES OF MARGATE On August 18, 1994, the Partnership sold Colonies of Margate to an affiliate of Manufactured Home Communities, Inc. (MHC), a real estate investment trust, as part of an overall transaction for the sale of the related property management business of DAG and other mobile home communities affiliated with DAG. 11 DE ANZA PROPERTIES - X (A Limited Partnership) Notes to Financial Statements (Continued) (Unaudited) September 30, 1997 and December 31, 1996 and For the Nine and Three Months Ended September 30, 1997 and 1996 NOTE 5 - SALE OF COLONIES OF MARGATE (Continued) In connection with the sale, the Partnership established various reserves totaling $1,024,923. The $1,024,923 was used to establish the following reserves: MHC Reserve $181,000 General Reserve 557,192 Independent Committee Reserve 286,731
The MHC Reserve was required by MHC. It was released in 1995, at which time the gain on sale was recognized. The General Reserve and Independent Committee Reserve were established to fund contingent liabilities that may arise out of the MHC transaction. In August 1996, $143,366 of the Independent Committee Reserve was released and the gain on sale was recognized and included in net income. On March 4, 1997, the Partnership distributed the $143,366 to the cash general and limited and general partners. In August 1997, the remaining balance of the Independent Committee Reserve, $143,366, and the General Reserve of $557,192, were released and the gain on sale was recognized and included in net income. Pursuant to the guidelines of Financial Accounting Standards No. 66 "Accounting for Sales of Real Estate", the Partnership deferred in 1994 the recognition of gain on that portion of the sales proceeds represented by the MHC Reserve, Independent Committee Reserve and General Reserve, totaling $1,024,923. As these reserves were released or expended, gain on sale was recognized. At December 31, 1996, $700,558 of sale proceeds have been deferred and are included in deferred gain on sale, as reflected in the balance sheets while at September 30, 1997, all reserves were released with no deferred gain on sale reflected in the balance sheets. NOTE 6 - SALE OF WOODBRIDGE MEADOWS APARTMENTS On February 19, 1997, the Partnership sold its sole remaining property, Woodbridge, to Heritage Square Apartments, a general partnership, as to a 90% interest and Arroyo Grande Investment Company, a limited liability company, as to a 10% interest, as tenants in common, for consideration of $29,433,000, all cash. The Buyers are affiliates of J.F. Shea Co., Inc. and are not affiliated with the Partnership. Net sale proceeds, after repayment of mortgage debt of $4,757,740 (including a prepayment penalty of $116,042), broker's commission of $261,330 and transaction costs of $158,171, totaled $24,255,759. Net proceeds of $24,249,532 were distributed to the cash general and limited and general partners on March 4, 1997. With the release of the remaining Colonies of Margate sale reserves, the Partnership will cease operations, commence liquidation and dissolve. 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - ------------------------------- The Partnership's quick ratio increased to 67.1:1 from 1.7:1, including unrestricted cash balances of $1,004,097 and $700,939 at September 30, 1997 and December 31, 1996, respectively. The increase is due to the reduction of Partnership liabilities as a result of the Woodbridge sale, the release of restricted cash balances and the maintenance of cash reserves to pay for Partnership expenses until the Partnership can be dissolved. The Partnership's cash balance is its only remaining source of liquidity. On February 19, 1997, the Partnership sold Woodbridge, as discussed in Note 6 to the financial statements, and expects to wind up its operations in 1997 and dissolve. Since the Partnership no longer has real estate operations its sole liquidity source is its cash balance. The Partnership expects to distribute these funds, net of any future operating expenditures and contingencies, if any, as part of its dissolution. Other than as described elsewhere, there are no known trends, demands, commitments, events or uncertainties known to the Partnership which are reasonably likely to materially affect the Partnership's liquidity. Results of Operations - --------------------- A comparison of results of operations for the nine and three months ended September 30, 1997 and 1996 is not meaningful since the Partnership sold Woodbridge, its sole remaining property, on February 19, 1997. As described in Liquidity and Capital Resources above, the Partnership expects to dissolve upon the release of the Colonies of Margate sale reserves. Other than as described above, there are no known trends or uncertainties which have had or can be reasonably expected to have a material effect on continuing operations. 13 PART II. OTHER INFORMATION ITEM NUMBER - ----------- 1. LEGAL PROCEEDINGS No new material legal proceedings were commenced during the three months ended September 30, 1997 and there are none pending. 2. CHANGES IN SECURITIES None. 3. DEFAULTS UPON SENIOR SECURITIES None. 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. 5. OTHER INFORMATION None. 6. EXHIBITS AND REPORTS ON FORM 8-K None. 14 PART II. OTHER INFORMATION (Continued) 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. DE ANZA PROPERTIES - X (Registrant) By DE ANZA CORPORATION A California Corporation Operating General Partner Date: November 12, 1997 By /s/ Michael D. Gelfand ----------------------- Michael D. Gelfand President and Chief Financial Officer 15 EX-27 2 FINANCIAL DATA SCHEDULE
5 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 1,004,097 0 2,165 0 0 1,006,262 0 0 1,026,262 14,973 0 0 0 0 1,011,289 1,026,262 510,481 20,474,498 0 413,857 51,251 0 102,067 19,907,323 0 19,907,323 0 0 0 19,907,323 454.97 454.97 EPS is per limited partnership unit
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