-----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, RxNqcnaPdR13toQ7VEy7p7baSNIzTBXXOR1iWstCeIeHPwtFcUeMlyM+NhqK3L+g 99RW+NBBs/Rw//1h74XwCg== 0000317969-96-000004.txt : 19961111 0000317969-96-000004.hdr.sgml : 19961111 ACCESSION NUMBER: 0000317969-96-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961108 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES PARK COMMUNITIES LTD CENTRAL INDEX KEY: 0000317969 STANDARD INDUSTRIAL CLASSIFICATION: LAND SUBDIVIDERS & DEVELOPERS (NO CEMETERIES) [6552] IRS NUMBER: 953558497 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10199 FILM NUMBER: 96656680 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: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29603 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, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-10199 ANGELES PARK COMMUNITIES, LTD. (Exact name of small business issuer as specified in its charter) California 95-3558497 (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 PARK COMMUNITIES, LTD. CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 1996 Assets Cash and cash equivalents: Unrestricted $ 209 Restricted--tenant security deposits 14 Accounts receivable, less allowance of $1 8 Escrow for taxes 165 Other assets 249 Investment properties: Land $ 1,043 Buildings and related personal property 4,829 5,872 Less accumulated depreciation (4,465) 1,407 $ 2,052 Liabilities and Partners' Deficit Liabilities Accounts payable $ 24 Tenant security deposits 14 Other liabilities 285 Mortgage note payable 4,923 Partners' Deficit General partners' $ (164) Limited partners' (15,093 units issued and outstanding) (3,030) (3,194) $ 2,052 See Accompanying Notes to Consolidated Financial Statements b) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Nine Months Ended September 30, September 30, 1996 1995 1996 1995 Revenues: Rental income $ 474 $ 400 $ 1,452 $ 1,359 Other income 10 29 32 126 Total revenues 484 429 1,484 1,485 Expenses: Operating 164 177 531 528 General and administrative 49 36 139 119 Maintenance 57 48 123 111 Depreciation 82 80 243 237 Interest 124 131 374 438 Property taxes 51 40 158 123 Bad debt (recovery) expense, net (4) 6 (9) (744) Total expenses 523 518 1,559 812 Net (loss) income $ (39) $ (89) $ (75) $ 673 Net (loss) income allocated to general partners (1%) $ (1) $ (1) $ (1) $ 7 Net (loss) income allocated to limited partners (99%) (38) (88) (74) 666 Net (loss) income $ (39) $ (89) $ (75) $ 673 Net (loss) income per limited partnership unit $ (2.52) $ (5.83) $ (4.91) $ 44.13 See Accompanying Notes to Consolidated Financial Statements
c) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 15,112 $ 1 $15,112 $15,113 Partners' deficit at December 31, 1995 15,093 $ (163) $(2,956) $(3,119) Net loss for the nine months ended September 30, 1996 -- (1) (74) (75) Partners' deficit at September 30, 1996 15,093 $ (164) $(3,030) $(3,194) See Accompanying Notes to Consolidated Financial Statements
d) ANGELES PARK COMMUNITIES, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Nine Months Ended September 30, 1996 1995 Cash flows from operating activities: Net (loss) income $ (75) $ 673 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 243 237 Amortization of loan costs 37 50 Bad debt (recovery) expense (9) 6 Change in accounts: Restricted cash (12) (14) Accounts receivable 9 172 Escrows for taxes (134) (159) Other assets -- (749) Accounts payable (12) 6 Tenant security deposit liabilities 12 12 Other liabilities 71 (87) Net cash provided by operating activities 130 147 Cash flows from investing activities: Property improvements and replacements (74) (35) Proceeds from AMIT investment -- 750 Net cash (used in) provided by investing activities (74) 715 Cash flows used in financing activities: Payments on mortgage notes payable (28) (938) Net increase (decrease) in cash 28 (76) Cash and cash equivalents at beginning of period 181 149 Cash and cash equivalents at end of period $ 209 $ 73 Supplemental disclosure of cash flow information: Cash paid for interest $ 337 $ 392 See Accompanying Notes to Consolidated Financial Statements e) ANGELES PARK COMMUNITIES, LTD. 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 "Managing 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, 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 Park Communities, Ltd.'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 Managing 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 to the Managing General Partner and affiliates during the nine month periods ended September 30, 1996 and 1995: 1996 1995 Property management fees (included in operating expenses) $74,000 $70,000 Reimbursement for services of affiliates (included in general and administrative expenses) 98,000 71,000 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing 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 Managing 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 Managing General Partner by virtue of the agent's obligations is not significant. In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, formerly affiliated with Angeles Corporation ("Angeles"), initiated litigation against the Partnership and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which was $750,000 plus accrued interest from March 1993 ("AMIT Obligation"). This amount was fully reserved in 1993. On November 9, 1994, the Partnership executed a definitive Settlement Agreement to settle the dispute with respect to the AMIT Obligation. The actual closing of the Settlement occurred April 14, 1995. The Partnership's claim was satisfied by a cash payment to the Partnership by AMIT totaling $827,000 (the "Settlement Amount") at closing, of which $750,000 was payment of the obligation mentioned above and $77,000 was previously unrecognized interest income. MAE GP Corporation ("MAE GP"), an affiliate of the Managing 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. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, currently owns 87,700 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 2% of the total shares. The number of Class A Shares of AMIT owned by LAC increased from 63,200 shares on September 30, 1996, to 87,700 shares as of October 22, 1996. The voting percentage also increased from 1.5% to 2% over the same time period. 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 on 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 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. The Partnership filed a Proof of Claim in the bankruptcy proceeding of Angeles concerning the Partnership's indebtedness to Angeles Acceptance Pool, L.P. ("AAP"). Angeles is the 99% limited partner of AAP and Angeles Acceptance Directives, an affiliate of the Managing General Partner was, until April 14, 1995, the 1% general partner of AAP. The Proof of Claim alleged 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 resulted 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 Managing General Partner withdrew this claim. Finally, the Managing General Partner of the Partnership has been informed by representatives of Angeles that, in connection with certain sales of properties in prior years, the Partnership paid an incentive fee of $840,000 to Angeles Real Estate Corporation ("ARECO"), a wholly owned subsidiary of Angeles. The last incentive fee, which was paid to ARECO without the knowledge of the current management of the Managing General Partner in January 1993, was equal to 4% of the sales price of the properties sold in 1992, or $167,000. The Managing General Partner originally believed that the incentive fees previously paid were not in accordance with the Partnership Agreement. As a result, the Partnership filed a claim against Angeles for the total fees, or $1,007,000. After investigating this matter further, it appears that the incentive fees may have been paid in accordance with the terms of the Partnership Agreement or that the matter in which they were paid may not give rise to a sustainable claim on behalf of the Partnership. However, it is possible that a claim for repayment of some or all of these fees could arise at some point in the future if sufficient distributions are not made to the partners to result in their receiving their original capital investment plus a cumulative return of 6%. In light of all of the facts and circumstances known, the Managing General Partner determined that the likelihood of success and significant recovery resulting from pursuit of a claim would not be sufficient to warrant the costs which the Partnership would incur to pursue the claim. Therefore, the Managing General Partner withdrew this claim on August 9, 1995. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of one mobile home park and one recreational vehicle park. The following table sets forth the average occupancy of the properties for each of the nine month periods ended September 30, 1996 and 1995: Average Occupancy Property 1996 1995 Cloverleaf Farms, Mobile Home Park 99% 99% Brooksville, Florida Cloverleaf Forest, Recreational 73% 68% Vehicle Park Brooksville, Florida (1) (1) This is a normal average occupancy for this property for this time of the year due to many tenants returning to their summer homes which are located in cooler climates. Occupancy should increase again in the fall and winter months. For the three and nine months ended September 30, 1996, the Partnership generated a net loss of $39,000 and $75,000 versus net loss and income of $89,000 and $673,000 for the three and nine months ended September 30, 1995. The Partnership did not experience significant changes in total revenues or total expenses, exclusive of the recovery, in 1995, of an amount previously written off as bad debt, during the three and nine months ended September 30, 1996, as compared to the three and nine months ended September 30, 1995. The Partnership experienced an increase in rental income primarily due to an increase in rental rates at the mobile home park. In April 1995, the Partnership received $827,000 from AMIT in satisfaction of a $750,000 note receivable that the Partnership had from AMIT. Of the $827,000 received, $77,000 was interest, resulting in increased other income in 1995 as compared to 1996 (see Part I, Item 1, "Note B-Transactions with Affiliated Parties" for further discussion). The increases in general and administrative, maintenance, and property tax expense were substantially offset by a decrease in interest expense. The increase in general and administrative expense was due primarily to an increase in reimbursements for expenses incurred by affiliates on behalf of the Partnership (see Part I, Item 1, "Note B-Transactions with Affiliated Parties). Additionally, maintenance expense increased due to parking lot repairs made to the Cloverleaf Forest property during 1996. Property taxes increased due to an increase in the assessed value of the properties. Interest expense decreased due to the Partnership paying off the second mortgage debt in late 1995. Also contributing to this decrease was a decrease in loan cost amortization related to the pay off of the second mortgage debt. As part of the ongoing business plan of the Partnership, the Managing 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 expense. As part of this plan, the Managing General Partner attempts to protect the Partnership from 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 Managing General Partner will be able to sustain such a plan. On September 30, 1996, the Partnership had unrestricted cash of $209,000 versus $73,000 at September 30, 1995. The decrease in cash provided by operating activities results from reduced cash generated from operations, a settlement of a receivable in early 1995 from the tenants of an investment property that the Partnership sold in 1987 which did not recur in 1996, offset, in part, by an increase in other liabilities during the nine months ended September 30, 1996. The increase in cash used in investing activities is attributable to an increase in spending on paving projects and the proceeds received in 1995 on the AMIT investment which did not recur in 1996. Cash used in financing activities decreased due to lower mortgage principal payments attributable to the pay off of the second mortgage debt in late 1995. 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 properties to adequately maintain the physical assets and other operating needs of the Partnership. The mortgage indebtedness of $4,923,000 is being amortized over 30 years with a balloon payment of $4,692,000 due in July 2001, at which time the properties will either be refinanced or sold. Subsequent to September 30, 1996, the Partnership has received a purchase offer from the tenants of Cloverleaf Farms, Mobile Home Park. The Managing General Partner is currently evaluating the purchase offer and expects to extend a counteroffer or reject the original offer during the fourth quarter of 1996. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. There were no cash distributions during the nine months ended September 30, 1996 and 1995. PART II - OTHER INFORMATION 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 September 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 PARK COMMUNITIES, LTD. By: Angeles Realty Corporation Managing General Partner By: /s/Carroll D. Vinson Carroll D. Vinson President, Director By: /s/Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: November 8, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Park Communities, Ltd. Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000317969 ANGELES PARK COMMUNITIES, LTD. 1,000 9-MOS DEC-31-1996 SEP-30-1996 209 0 0 0 0 0 5,872 4,465 2,052 0 4,923 0 0 0 (3,194) 2,052 0 1,484 0 0 1,559 0 374 (75) 0 (75) 0 0 0 (75) (4.91) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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