-----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, UfB4YZ62+x22DZIHQoWEaOXSlGqCouxIDSVKIMXv72hMsYApJaQXyEhAd1XxdthU TlBdRcnvR4pohHR53bsdjw== 0000317900-96-000007.txt : 19960809 0000317900-96-000007.hdr.sgml : 19960809 ACCESSION NUMBER: 0000317900-96-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960808 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARTNERS X CENTRAL INDEX KEY: 0000317900 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953557899 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10304 FILM NUMBER: 96605954 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 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 June 30, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-10304 ANGELES PARTNERS X (Exact name of small business issuer as specified in its charter) California 95-3557899 (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) (Zip Code) Issuer's telephone number (864) 239-1000 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 X CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1996 Assets Cash and cash equivalents: Unrestricted $ 486 Restricted--tenant security deposits 65 Accounts receivable 29 Escrows for taxes and insurance 300 Restricted escrows 206 Other assets 491 Investment properties: Land $ 1,386 Buildings and related personal property 18,329 19,715 Less accumulated depreciation (11,443) 8,272 $ 9,849 Liabilities and Partners' Deficit Liabilities Accounts payable $ 115 Tenant security deposits 65 Accrued taxes 146 Due to affiliate 466 Other liabilities 596 Mortgage notes payable 18,522 Partners' Deficit General partners $ (267) Limited partners (18,645 units issued and outstanding) (9,794) (10,061) $ 9,849 See Accompanying Notes to Consolidated Financial Statements b) ANGELES PARTNERS X CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1996 1995 1996 1995 Revenues: Rental income $ 1,091 $ 1,055 $ 2,131 $ 2,073 Other income 70 59 126 108 Total revenues 1,161 1,114 2,257 2,181 Expenses: Operating 387 380 739 709 General and administrative 53 45 101 91 Maintenance 118 118 195 214 Depreciation 225 217 448 431 Interest 483 480 949 958 Property taxes 98 97 197 197 Total expenses 1,364 1,337 2,629 2,600 Loss before extraordinary item (203) (223) (372) (419) Extraordinary item-gain on extinguishment of debt 352 -- 352 -- Net income (loss) $ 149 $ (223) $ (20) $ (419) Net income (loss) allocated to general partners (1%) $ 1 $ (2) $ -- $ (4) Net income (loss) allocated to limited partners (99%) 148 (221) (20) (415) Net income (loss) $ 149 $ (223) $ (20) $ (419) Per limited partnership unit: Loss before extraordinary item $(10.78) $(11.85) $(19.75) $(22.26) Extraordinary item 18.69 -- 18.69 -- Net income (loss) $ 7.91 $(11.85) $ (1.06) $(22.26) See Accompanying Notes to Consolidated Financial Statements
c) ANGELES PARTNERS X CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 18,714 $ 1 $ 18,714 $ 18,715 Partners' deficit at December 31, 1995 18,645 $ (267) $ (9,774) $(10,041) Net loss for the six months ended June 30, 1996 -- -- (20) (20) Partners' deficit at June 30, 1996 18,645 $ (267) $ (9,794) $(10,061) See Accompanying Notes to Consolidated Financial Statements
d) ANGELES PARTNERS X CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1996 1995 Cash flows from operating activities: Net loss $ (20) $ (419) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 448 431 Amortization of discounts and loan costs 62 48 Extraordinary gain on extinguishment of debt (352) -- Change in accounts: Restricted cash 4 (2) Accounts receivable (10) 4 Escrows for taxes and insurance 117 15 Other assets (31) (24) Accounts payable 21 (5) Tenant security deposit liabilities (5) 4 Accrued taxes (48) (44) Due to affiliates 65 60 Other liabilities 180 219 Net cash provided by operating activities 431 287 Cash flows from investing activities: Property improvements and replacements (125) (218) Deposits to restricted escrows (39) (63) Receipts from restricted escrows 28 78 Net cash used in investing activities (136) (203) Cash flows from financing activities: Payments on mortgage notes payable (92) (65) Loan costs (14) -- Net cash used in financing activities (106) (65) Net increase in cash 189 19 Cash and cash equivalents at beginning of period 297 383 Cash and cash equivalents at end of period $ 486 $ 402 Supplemental disclosure of cash flow information: Cash paid for interest $ 705 $ 707 Supplemental disclosure of non-cash financing and investing activities: Interest on notes transferred to notes payable $ 434 $ -- Accrued interest waived and mortgage discount resulting from AMIT note modification $ 352 $ -- Property improvements and replacements included in accounts payable $ 22 $ -- See Accompanying Notes to Consolidated Financial Statements
e) ANGELES PARTNERS X NOTES TO CONSOLIDATED 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 and six month periods ended June 30, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in Angeles Partners X's (the "Partnership") annual report on Form 10-KSB for the fiscal year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - 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. The following amounts were paid or accrued to the General Partner and affiliates for the six months ended June 30, 1996 and 1995: 1996 1995 (in thousands) Property management fees $111 $ 108 Reimbursement for services of affiliates including $466,000 accrued at June 30, 1996 68 62 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 payment 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. Note B - Transactions with Affiliated Parties (continued) Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, has provided unsecured loans totalling $3,568,000 at June 30, 1996. Interest expense for these loans was $202,000 and $197,000 for the six months ended June 30, 1996 and 1995, respectively. Two of these loans totaling $2,500,000 were previously secured by two investment properties; however, the second mortgages were released in 1992 as part of the terms and conditions for refinancing the first mortgages. Multifamily riders were executed between the Partnership and the first mortgage holders for Carriage APX and Vista APX, stating that any subordinated debt must be non-foreclosable and maturity dates not less than 2 years beyond the maturity of the refinanced first mortgages; the agreement also provided for interest to be paid based on available cash flow. In June 1996, but effective March 31, 1996, these loans were modified (see "Note C"), adding non-default accrued interest payable to the loan balances and waiving accrued, but unpaid, default interest and late charges. The modified $1,404,000 Carriage APX note matures in September 2000 and provides for interest at 12% on the original $1,200,000 note amount. The modified $1,530,000 Vista APX note matures in September 2002 and provides for interest at 12.5% on the original $1,300,000 note amount. As part of the modifications, AMIT was granted a first priority lien on the Partnership's 99% limited partnership interests in the Vista APX and Carriage APX lower-tier partnerships which own Vista Hills Apartments and Carriage Hills Apartments, respectively. 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 1.2% 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 1.2% 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 1995 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. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an option to acquire the Class B Shares. 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. Note B - Transactions with Affiliated Parties (continued) 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 the 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 loans 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. These working capital loans funded the Partnership's operating deficits in prior years. Total indebtedness, which is included as a note payable, was $651,000 at June 30, 1996, and June 30, 1995, with monthly interest only payments at prime and prime plus 2%. Principal is to be paid the earlier of i) the availability of funds, ii) the sale of one or more properties owned by the Partnership, or iii) November 25, 1997. Total interest expense for this loan was $29,000 and $31,000 for the six months ended June 30, 1996 and 1995, respectively. Note C - Refinancings In June 1996, but effective March 31, 1996, the General Partner negotiated a refinance of two loans payable to AMIT totalling $2,500,000. The terms of the refinance included adding non-default accrued interest payable to the loan balances and waiving accrued, but unpaid, default interest and late charges. The modified $1,404,000 Carriage APX note matures in September 2000 and provides for interest at 12% on the original $1,200,000 note amount. The modified $1,530,000 Vista APX note matures in September 2002 and provides for interest at 12.5% on the original $1,300,000 note amount. As part of the modifications, AMIT was granted a first priority lien on the Partnership's 99% limited partnership interests in the Vista APX and Carriage APX lower-tier partnerships which own Vista Hills Apartments and Carriage Hills Apartments, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of four apartment complexes. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1996, and June 30, 1995: Average Occupancy Property 1996 1995 Cardinal Woods Apartments Cary, North Carolina 97% 97% Greentree Apartments Mobile, Alabama 97% 98% Carriage Hills Apartments East Lansing, Michigan 93% 95% Vista Hills Apartments (1) El Paso, Texas 81% 80% (1) The low occupancy at Vista Hills Apartments is due to the transfer of military and civilian jobs out of, as well as a high unemployment rate in the El Paso, Texas area. As a result of this market change, the property has increased advertising and offered rent concessions to increase occupancy. The Partnership realized a net loss for the six month period ended June 30, 1996 and June 30, 1995, of $20,000 and $419,000, respectively. The Partnership realized net income of $149,000 for the three months ended June 30, 1996, versus a net loss of $223,000 for the three months ended June 30, 1995. The decrease in net loss is mainly attributable to a gain on the extinguishment of debt recognized in the three months ended June 30, 1996 (see discussion below). The increase in rental income and decrease in maintenance expenses is partially offset by an increase in operating expense. The increase in rental income is primarily the result of an increase in rental rates at Cardinal Woods Apartments. The increase in operating expenses is due primarily to salary and utility expense increases at the properties. Maintenance expense decreased primarily due to the completion of exterior painting at Greentree Apartments in 1995. In June 1996, but effective March 31, 1996, two of the Partnership's AMIT notes were modified. Previously accrued interest of $434,000 was added to the principal balance of existing debt. The modifications provided for the additional debt to be non-interest bearing and to be secured by a first priority lien on the Partnership's limited partnership interests in Vista APX and Carriage APX. Interest was imputed on the non-interest bearing component of the notes. The amount of the note discounts, along with the waived default interest and late charges, which amounted to $292,000 and $60,000, respectively, were recognized as gain (total $352,000) from extinguishment of debt resulting from the modifications, in the three months ended June 30, 1996. 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 June 30, 1996, the Partnership had unrestricted cash of $486,000 compared to $402,000 at June 30, 1995. Net cash provided by operating activities increased as a result of a decreased net loss and a decrease in the escrow for taxes and insurance. Net cash used in investing activities decreased primarily as a result of reduced expenditures for property improvements. Net cash used in financing activities increased due to an increase in principal payments on mortgage notes payable and the payment of loan costs to AMIT in order to refinance the aforementioned indebtedness. 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 near-term needs of the Partnership. The outstanding indebtedness of $18,522,000 (net of discount) has maturity dates of November 1997 to December 2003, at which time $17,879,000 of balloon payments are due. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales and the availability of cash reserves. There were no distributions made during the six months ended June 30, 1996, or the six months ended June 30, 1995. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Registrant is unaware of any pending or outstanding litigation that is not of a routine nature. 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. b) Reports on Form 8-K: None filed during the quarter ended June 30, 1996. 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 X LIMITED PARTNERSHIP 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. Vice President/CAO Date: August 8, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Partners X 1996 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000317900 ANGELES PARTNERS X 1,000 6-MOS DEC-31-1996 JUN-30-1996 486 0 29 0 0 0 19,715 11,443 9,849 0 18,522 0 0 0 (10,061) 9,849 0 2,257 0 0 2,629 0 949 (372) 0 (372) 0 352 0 (20) (1.06) 0 The Registrant has an unclassified balance sheet. Multiplier is 1.
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