-----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, TqitRKuzrHm764xGuHufO1G1Th2ETpCRY5fqqM9qEUncuYxWWkbG3yILF1n2dA42 FzlxwC6or2hNdjPtDV8y2Q== 0000313499-95-000001.txt : 19951109 0000313499-95-000001.hdr.sgml : 19951109 ACCESSION NUMBER: 0000313499-95-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951108 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS IX CENTRAL INDEX KEY: 0000313499 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 953417136 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09704 FILM NUMBER: 95588174 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 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 REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) 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 September 30, 1995 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-9704 ANGELES PARTNERS IX (Exact name of small business issuer as specified in its charter) California 95-3417137 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (803) 239-1000 Check whether the issuer (1) 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) ANGELES PARTNERS IX CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 1995 Assets Cash: Unrestricted $ 444,226 Restricted--tenant security deposits 173,546 Investments 25,147 Accounts receivable 29,529 Escrow for taxes and insurance 389,010 Restricted escrows 510,998 Other assets 636,420 Investment properties: Land $ 3,082,586 Buildings and related personal property 31,630,320 34,712,906 Less accumulated depreciation (18,777,743) 15,935,163 $18,144,039 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 147,256 Tenant security deposits 173,862 Accrued taxes 359,774 Other liabilities 273,088 Mortgage notes payable 19,222,014 Partners' Capital (Deficit) General partners $ (195,352) Limited partners (19,975 units issued and outstanding) (1,836,603) (2,031,955) $18,144,039
[FN] See Accompanying Notes to Financial Statements b) ANGELES PARTNERS IX CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Revenues: Rental income $1,695,780 $1,641,359 $5,047,904 $4,910,479 Other income 109,301 109,243 277,972 251,758 Total revenues 1,805,081 1,750,602 5,325,876 5,162,237 Expenses: Operating 580,497 530,533 1,706,275 1,570,035 General and administrative 50,285 43,037 155,298 116,917 Property management fees 88,927 85,385 264,207 255,063 Maintenance 317,832 359,494 809,243 834,705 Depreciation 397,428 361,188 1,166,038 1,054,509 Interest 458,412 462,296 1,381,662 1,383,112 Property taxes 105,947 102,018 314,271 291,155 Total expenses 1,999,328 1,943,951 5,796,994 5,505,496 Gain on disposal of property -- 10,864 -- 10,429 Net loss $ (194,247) $ (182,485) $ (471,118) $ (332,830) Net loss allocated to general partners (1%) $ (1,942) $ (1,825) $ (4,711) $ (3,328) Net loss allocated to limited partners (99%) (192,305) (180,660) (466,407) (329,502) $ (194,247) $ (182,485) $ (471,118) $ (332,830) Net loss per limited partnership unit $ (9.63) $ (9.03) $ (23.35) $ (16.48)
[FN] See Accompanying Notes to Financial Statements c) ANGELES PARTNERS IX CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 20,000 $ 1,000 $20,000,000 $20,001,000 Partners' deficit at December 31, 1994 19,975 $(190,641) $(1,370,196) $(1,560,837) Net loss for the nine months ended September 30, 1995 -- (4,711) (466,407) (471,118) Partners' deficit at September 30, 1995 19,975 $(195,352) $(1,836,603) $(2,031,955)
[FN] See Accompanying Notes to Financial Statements d) ANGELES PARTNERS IX CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net loss $ (471,118) $ (332,830) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 1,166,038 1,054,509 Amortization of discounts and loan costs 105,910 98,499 Gain on disposal of property -- (10,429) Change in accounts: Restricted cash (3,182) (6,417) Accounts receivable 4,550 48,049 Escrows for taxes and insurance (41,486) (230,465) Other assets (4,523) 6,041 Accounts payable (228,856) (44,399) Tenant security deposit liabilities 5,921 (4,422) Accrued taxes 92,612 177,341 Other liabilities (2,583) 21,466 Net cash provided by operating activities 623,283 776,943 Cash flows from investing activities: Property improvements and replacements (568,031) (1,061,224) Cash invested in short-term investments (25,147) -- Deposits to restricted escrows (22,910) (116,965) Receipts from restricted escrows 307,444 584,222 Insurance proceeds from casualty -- 75,948 Net cash used in investing activities (308,644) (518,019) Cash flows from financing activities: Payments on mortgage notes payable (175,964) (161,223) Payments of loan costs -- (57,992) Net cash used in financing activities (175,964) (219,215) Net increase in cash 138,675 39,709 Cash at beginning of period 305,551 272,754 Cash at end of period $ 444,226 $ 312,463 Supplemental disclosure of cash Cash paid for interest $1,276,904 $ 1,291,646
[FN] See Accompanying Notes to Financial Statements e) ANGELES PARTNERS IX 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 the General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 1995, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended December 31, 1994. Certain reclassifications have been made to the 1994 information to conform to the 1995 presentation. Note B - Angeles Acceptance Pool, Angeles Mortgage Investment Trust Angeles Mortgage Investment Trust, ("AMIT"), a real estate investment trust, has provided a second trust deed loan which is secured by the Partnership's real property known as Panorama Terrace. Total interest expense for this loan was $14,063 for the nine months ended September 30, 1994, and September 30, 1995. MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted its shares at the annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. However, MAE GP may choose to vote these shares as it deems appropriate in the future. As part of the above described settlement, MAE GP granted to AMIT an option to acquire the Class B shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement), have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote Class B shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B shares instructing such trustees to vote said Class B shares in accordance with the vote of the majority of the Class A shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited partnership was organized to acquire and hold the obligations evidencing the working capital loan previously provided to the Partnership by Angeles Capital Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited partner of AAP and Angeles Acceptance Directives, Inc. ("AAD"), an affiliate of the General Partner, was, until April 14, 1995, the 1% general partner of AAP. On April 14, 1995, as part of a settlement of claims between affiliates of the General Partner and Angeles, AAD resigned as general partner of AAP and simultaneously received a 1/2% limited partner interest in AAP. An affiliate of Angeles now serves as the general partner of AAP. The Partnership has filed a Proof of Claim in the bankruptcy proceeding of Angeles Corporation concerning the Partnership's indebtedness to AAP. The Proof of Claim alleges that instead of causing the Partnership to pay AAP on account of such debt, Angeles either itself or through an affiliate, caused the Partnership to make payment to another Angeles affiliate. To the extent that such action results in the Partnership not receiving credit for the payments so made, the Partnership would have been damaged in an amount equal to the misappropriated payments. On August 9, 1995, AAP acknowledged constructive receipt of such payment and, therefore, the General Partner withdrew the Partnership's claim. Note C - Transactions with Affiliated Parties 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 Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. (See Note B for additional discussion concerning transactions with AMIT and AAP, affiliates of the General Partner.) Note C - Transactions with Affiliated Parties - continued The following transactions with the General Partner and affiliates for the nine months ended September 30, 1995 and 1994 are as follows: 1995 1994 Property management fees $264,207 $255,063 Reimbursement of services of affiliates 105,210 55,879 The Partnership insures its properties under a master policy through an agency and 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 current year's master policy. The current agent assumed the financial obligations to the affiliate of the General Partner, who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of five apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 1995 and 1994: Average Occupancy Property 1995 1994 The Pines of Northwest Crossing Apartments Houston, Texas 87% 94% Panorama Terrace Apartments Birmingham, Alabama 97% 95% Forest River Apartments Gadsden, Alabama 96% 95% Village Green Apartments Montgomery, Alabama 95% 96% The Greens Apartments San Antonio, Texas 89% 89% In an attempt to address the occupancy decline at The Pines, the General Partner has instructed the property manager to offer concessions, such as discounts on rents based on the size of the leased units and length of lease, as well as reduced required security deposits. In addition, the General Partner is in the process of upgrading the interiors of the units as cash reserves allow. The Partnership's net loss for the nine months ended September 30, 1995, was $471,118 with the third quarter having a loss of $194,247. The Partnership had losses of $332,830 and $182,485 for the corresponding periods of 1994. The increased loss is primarily attributable to increased operating expense. Operating expenses increased due to increases in resident concessions, resident relations costs, training and travel expense and insurance expense. Concessions, as discussed previously, increased in an attempt to increase occupancy at The Greens and The Pines. Resident relations costs, which are special items provided to tenants, such as greeting baskets and free video rentals, increased in an attempt to retain tenants. Training and travel expense increased due to participation in various training courses and seminars by several properties' personnel. Finally, insurance expense increased due to new premiums at higher rates with additional coverage. In addition, depreciation expense increased due to the addition of approximately $1,000,000 in fixed assets in 1994 resulting from property improvement activity as required by refinancing agreements and other efforts to improve the overall interior and exterior appearance of the apartment complexes. Also contributing to the overall increase in net loss was increased general and administrative expenses resulting from increased cost reimbursements for the General Partner. Offsetting these increased expenses was an increase in rental revenue due to increased rental rates at all of the properties. In addition, other income increased primarily due to the stricter enforcement of various tenant charges, such as legal fees, cleaning and damage charges, application fees and late charges. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. At September 30, 1995, the Partnership had unrestricted cash of $444,226 compared to $312,463 at September 30, 1994. Net cash provided by operating activities decreased primarily as a result of the decrease in accounts payable due to the payment of amounts relating to property improvements at The Greens Apartments which were accrued at December 31, 1994. Also contributing to this change was the increase in net loss as discussed above. In addition, accrued taxes decreased resulting from the timing of property tax payments for The Pines of Northwest Crossing. This change is offset by an increase in receipts of cash from escrows for taxes and insurance to fund the tax payments. The change in accounts receivable decreased between the first nine months of 1994 and the first nine months of 1995 due to the return of Forest River's tax escrow held by the previous mortgage company in January 1994. Net cash used in investing activities decreased primarily due to the decrease in property improvements, many of which were required by refinancing agreements in 1994. Offsetting this decrease in cash used in investing activities is a reduction in funds received from the restricted escrows to cover improvements at the properties. Also in 1994, insurance proceeds of $75,948 were received relating to hail damage to the roofs at The Greens. There were no such proceeds in 1995. Net cash used in financing activities decreased due to the payment of loan costs in 1994 relating to the refinancing of three of the investment properties. 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 various properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $19,222,014, net of discount, is amortized over varying periods with required balloon payments ranging from May 1997 to October 15, 2003, at which time the properties will either be refinanced or sold. Future cash distributions will depend on the levels of cash generated from operations, property sales and the availability of cash reserves. Distributions may also be restricted by the requirement to deposit net operating income (as defined in the mortgage notes) into the Reserve Account until the $400 per apartment unit is funded for each respective property. No cash distributions were paid during fiscal 1994 or during the first nine months of fiscal 1995. At this time, the General Partner does not anticipate a cash distribution during 1995. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Partnership has filed a Proof of Claim in the bankruptcy proceeding of Angeles Corporation concerning the Partnership's indebtedness to Angeles Acceptance Pool, L.P. ("AAP"). The Proof of Claim alleges that, instead of causing the Partnership to pay AAP on account of such debt, Angeles, either itself or through an affiliate, caused the Partnership to make payment to another Angeles affiliate. To the extent that such action results in the Partnership not receiving credit for the payments so made, the Partnership would have been damaged in an amount equal to the misappropriated payments. On August 9, 1995, AAP acknowledged constructive receipt of such payment and, therefore, the General Partner withdrew the Partnership's claim. The Registrant is unaware of any pending or outstanding litigation that is not of a routine nature except as noted above. The General Partner of the Registrant believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. 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 September 30, 1995. 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 IX By: Angeles Realty Corporation General Partner By:/s/ Carroll D. Vinson Carroll D. Vinson President By:/s/ Robert D. Long, Jr. Robert D. Long, Jr. Controller and Principal Accounting Officer Date: November 8, 1995 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners IX 1995 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB. 0000313499 ANGELES PARTNERS IX 1 9-MOS DEC-31-1995 SEP-30-1995 444,226 25,147 29,529 0 0 1,061,458 34,712,906 18,777,743 18,144,039 953,980 19,222,014 0 0 0 (2,031,955) 18,144,039 0 5,325,876 0 0 5,796,994 0 1,381,662 (471,118) 0 (471,118) 0 0 0 (471,118) (23.35) 0
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