-----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, NCRM2uKkuuufafODSqVA5XPBfEgQP+0p3d/HBrilsJk6dyrzTXqRmQSTUilANypc 6/A0H8c6Xf5Z6PYe7112MQ== 0000795757-98-000002.txt : 19980504 0000795757-98-000002.hdr.sgml : 19980504 ACCESSION NUMBER: 0000795757-98-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980501 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS VII CENTRAL INDEX KEY: 0000310303 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 953215214 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-08851 FILM NUMBER: 98608423 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391513 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P.O. BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB.--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-8851 ANGELES PARTNERS VII (Exact name of small business issuer as specified in its charter) California 95-3215214 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 Issuer's telephone number Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) ANGELES PARTNERS VII BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1998 Assets Cash and cash equivalents $ 486 Receivables and deposits 61 Other assets 7 Investment properties: Land $ 366 Buildings and related personal property 5,341 5,707 Less accumulated depreciation (3,960) 1,747 $ 2,301 Liabilities and Partners' Deficit Liabilities Accounts payable $ 16 Tenant security deposit liabilities 31 Accrued property taxes 11 Other liabilities 32 Mortgage note payable 2,309 Partners' Capital (Deficit) General partner $ 293 Limited partners' (8,669 units issued and outstanding) (391) (98) $ 2,301 See Accompanying Notes to Financial Statements b) ANGELES PARTNERS VII STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1998 1997 Revenues: Rental income $ 299 $ 283 Other income 21 16 Total revenues 320 299 Expenses: Operating 127 124 General and administrative 19 21 Depreciation 69 67 Interest 53 56 Property taxes 11 10 Total expenses 279 278 Net income $ 41 $ 21 Net income allocated to general partner (1%) $ -- $ -- Net income allocated to limited partners (99%) 41 21 Net income $ 41 $ 21 Net income per limited partnership unit $ 4.73 $ 2.42 See Accompanying Notes to Financial Statements c) ANGELES PARTNERS VII STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 8,674 $ 88 $ 8,674 $ 8,762 Partners' capital (deficit) at December 31, 1997 8,669 $ 293 $ (432) $ (139) Net income for the three months ended March 31, 1998 -- -- 41 41 Partners' capital (deficit) at March 31, 1998 8,669 $ 293 $ (391) $ (98) See Accompanying Notes to Financial Statements
d) ANGELES PARTNERS VII STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1998 1997 Cash flows from operating activities: Net income $ 41 $ 21 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 69 67 Change in accounts: Receivable and deposits 26 43 Other assets 4 -- Accounts payable (3) (15) Tenant security deposit liabilities -- 1 Accrued property taxes (29) (30) Other liabilities (1) 3 Net cash provided by operating activities 107 90 Cash flows used in investing activities: Property improvements and replacements (7) (20) Cash flows used in financing activities: Payments on mortgage notes payable (30) (27) Net increase in cash and cash equivalents 70 43 Cash and cash equivalents at beginning of period 416 239 Cash and cash equivalents at end of period $ 486 $ 282 Supplemental disclosure of cash flow information: Cash paid for interest $ 53 $ 56 See Accompanying Notes to Financial Statements
e) ANGELES PARTNERS VII NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. 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 Angeles Realty Corporation (the "General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1998. For further information, refer to the financial statements and footnotes thereto included in Angeles Partners VII's (the "Partnership") annual report on Form 10-KSB for the fiscal year ended December 31, 1997. Certain reclassifications have been made to the 1997 information to conform to the 1998 presentation. NOTE B - TRANSACTIONS WITH AFFILIATES The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all Partnership activities. The General Partner is wholly-owned by Insignia Properties Trust ("IPT"), an affiliate of Insignia Financial Group, Inc. ("Insignia"). The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following amounts were paid to the General Partner and affiliates during the three months ended March 31, 1998 and 1997: 1998 1997 (in thousands) Property management fees (included in $ 16 $ 14 operating expenses) Reimbursement for services of affiliates 12 15 (included in general and administrative expenses) For the period from January 1, 1997, to August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the General Partner with an insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the master policy. The agent assumed the financial obligations to the affiliate of the General Partner which receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums that accrued to the benefit of the affiliate of the General Partner by virtue of the agent's obligations was not significant. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the General Partner of the Partnership. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment property consists of one apartment complex. The following table sets forth the average occupancy of the property for the three months ended March 31, 1998 and 1997: Average Occupancy Property 1998 1997 Cedarwood Apartments Gretna, Louisiana 97% 96% The Partnership reported net income for the three months ended March 31, 1998, of $41,000 as compared to net income of approximately $21,000 for the three months ended March 31, 1997. The increase in net income is primarily due to an increase in rental income. Rental income increased due to rental rate increases at Cedarwood Apartments. An increase in other income also contributed to the increase in net income for the year due to an increase in interest income. Interest income increased due to higher average cash balances for the three months ended March 31, 1998 as compared to March 31, 1997. The General Partner continues to monitor the rental market environment at its apartment property to assess the feasibility of increasing rents, to maintain or increase the occupancy level and to protect the Partnership from increases in expense. The General Partner expects to be able, at a minimum, to continue protecting the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, rental concessions and rental rate reductions needed to offset softening market conditions could affect the ability to sustain this plan. At March 31, 1998, the Partnership had cash and cash equivalents of approximately $486,000 compared to approximately $282,000 for the corresponding period of 1997. The net increase in cash and cash equivalents for the three months ended March 31, 1998 and 1997 was $70,000 and $43,000, respectively. Net cash provided by operating activities increased due to the increases in net income as discussed above. Net cash used in investing activities decreased due to a decrease in property improvements and replacements in 1998 as compared to 1997. Net cash used in financing activities in 1998 was comparable to 1997. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any short-term needs of the Partnership. The mortgage indebtedness of $2,309,000 is being amortized over 28 years with a maturity date of May 2007, at which time the property will be refinanced or sold. No cash distributions were made during the three months ended March 31, 1998. Future distributions will depend on the levels of net cash generated from operations, refinancings, property sale and the availability of cash reserves. The General Partner is evaluating the feasibility of making a cash distribution during May 1998. Year 2000 The Partnership is dependent upon the General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed not later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Partnership. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates of revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia and its affiliates of interests in certain general partner entities, past tender offers by Insignia affiliates to acquire limited partnership units, the management of partnerships by Insignia affiliates as well as a recently announced agreement between Insignia and Apartment Investment and Management Company. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. The General Partner was only recently served with the complaint which it believes to be without merit, and intends to vigorously defend the action. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed during the quarter ended March 31, 1998. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES PARTNERS VII By: Angeles Realty Corporation General Partner and Director By: /s/Carroll D. Vinson Carroll D. Vinson President By: /s/Robert D. Long Robert D. Long Vice President and Principal Accounting Officer Date: May 1, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners VII 1998 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000310303 ANGELES PARTNERS VII 1,000 3-MOS DEC-31-1998 MAR-31-1998 486 0 61 0 0 0 5,707 3,960 2,301 0 2,309 0 0 0 (98) 2,301 0 320 0 0 279 0 53 0 0 0 0 0 0 41 4.73 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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