-----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, WhY0QOvcxMdUNfHcJWYq3SBF9Yhy2SNmbjxVR4iIhOpkttOxfZsnOteMC54GAr6E SKSxlAjTPvI6w8QD2LOzMQ== 0000721673-97-000001.txt : 19970804 0000721673-97-000001.hdr.sgml : 19970804 ACCESSION NUMBER: 0000721673-97-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970801 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES OPPORTUNITY PROPERTIES LTD CENTRAL INDEX KEY: 0000789282 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 954052473 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16116 FILM NUMBER: 97650315 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 UNITED STATES 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, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT For the transition period.........to......... Commission file number 0-16116 ANGELES OPPORTUNITY PROPERTIES, LTD. (Exact name of small business issuer as specified in its charter) California 95-4052473 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza 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 OPPORTUNITY PROPERTIES, LTD. CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1997 Assets Cash and cash equivalents: Unrestricted $1,207 Restricted--tenant security deposits 32 Accounts receivable 6 Escrow for taxes 113 Restricted escrows 234 Other assets 191 Investment in joint venture 41 Investment properties: Land $ 956 Buildings and related personal property 7,248 8,204 Less accumulated depreciation (1,768) 6,436 $8,260 Liabilities and Partners' Capital Liabilities Accounts payable $ 22 Tenant security deposits 33 Accrued taxes 106 Other liabilities 66 Mortgage notes payable 5,441 Partners' (Deficit) Capital General partner $ (90) Limited partners (12,425 units issued and outstanding) 2,682 2,592 $8,260 See Accompanying Notes to Consolidated Financial Statements b) ANGELES OPPORTUNITY PROPERTIES, LTD. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Revenues: Rental income $ 552 $ 516 $1,106 $1,009 Interest income 16 9 36 23 Other income 20 17 39 31 Total revenues 588 542 1,181 1,063 Expenses: Operating 183 181 365 360 General and administrative 24 53 69 92 Maintenance 78 116 128 172 Depreciation 72 65 141 130 Interest 110 108 220 218 Bad debt recovery -- (789) -- (789) Property taxes 53 53 104 104 Total expenses 520 (213) 1,027 287 Income before equity in income of joint venture 68 755 154 776 Equity in income of joint venture 6 1 6 1 Net income $ 74 $ 756 $ 160 $ 777 Net income allocated to general partner (1%) $ 1 $ 8 $ 2 $ 8 Net income allocated to limited partners (99%) 73 748 158 769 Net income $ 74 $ 756 $ 160 $ 777 Net income per limited partnership unit $ 5.91 $60.20 $12.75 $61.89 See Accompanying Notes to Consolidated Financial Statements c) ANGELES OPPORTUNITY PROPERTIES, LTD. CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data) Limited Partnership General Limited Units Partner Partners Total Original capital contributions 12,425 $ 1 $12,425 $12,426 Partners' (deficit) capital at December 31, 1996 12,425 $ (70) $ 3,712 $ 3,642 Distributions to partners -- (22) (1,188) (1,210) Net income for the six months ended June 30, 1997 -- 2 158 160 Partners' (deficit) capital at June 30, 1997 12,425 $ (90) $ 2,682 $ 2,592 See Accompanying Notes to Consolidated Financial Statements d) ANGELES OPPORTUNITY PROPERTIES, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net income $ 160 $ 777 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Equity in income from joint venture 6 (1) Depreciation 141 130 Amortization of loan costs and discounts 15 15 Bad debt recovery -- (789) Change in accounts: Restricted cash 5 1 Accounts receivable 12 1 Escrows for taxes (31) 105 Other assets (13) (33) Accounts payable (11) (165) Tenant security deposit liabilities (4) (1) Accrued taxes 19 (95) Other liabilities 11 (13) Net cash provided by (used in) operating activities 298 (68) Cash flows from investing activities: Property improvements and replacements (132) (18) Proceeds from sale of joint venture property 459 -- Deposits to restricted escrows (34) (23) Withdrawals from restricted escrows -- 155 Net cash provided by investing activities 293 114 Cash flows from financing activities: Payments on mortgage notes payable (10) (65) Distributions to partners (1,210) (300) Net cash used in financing activities (1,220) (365) Net decrease in cash and cash equivalents (629) (319) Cash and cash equivalents at beginning of period 1,836 1,080 Cash and cash equivalents at end of period $ 1,207 $ 761 Supplemental disclosure of cash flow information: Cash paid for interest $ 205 $ 204 See Accompanying Notes to Consolidated Financial Statements e) ANGELES OPPORTUNITY PROPERTIES, LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Angeles Opportunity Properties, Ltd. (the "Partnership") 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 II (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, 1997, are not necessarily indicative of the results that may be expected for the fiscal 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-KSB for the fiscal year ended December 31, 1996. 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 payments were made to the General Partner and affiliates during the six months ended June 30, 1997 and 1996 (in thousands): Six Months Ended June 30, 1997 1996 Property management fees (included in operating expenses) $ 57 $ 52 Reimbursement for services of affiliates, including approximately $1,000 and $15,000 of construction services reimbursements for the six months ended June 30, 1997 and 1996 (included in general and administrative and maintenance expenses) 34 67 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 C - INVESTMENT IN JOINT VENTURE The Partnership has a 42.82% interest in a property owned jointly by the Partnership and an affiliate of Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust (the "Joint Venture"). The Joint Venture is the result of the June 6, 1996, foreclosure of an approximate 8,000 square foot retail strip shopping center and over 150 acres of undeveloped land. Prior to the foreclosure, the Partnership and an affiliate of AMIT held a note receivable collateralized by the foreclosed property. On June 24, 1997, the Joint Venture sold its sole investment property to an unaffiliated third party. MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. The terms of the Class B Shares provide that they are convertible, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares (however, in connection with the settlement agreement described in the following paragraph, MAE GP has agreed not to convert the Class B Shares so long as AMIT's option is outstanding). These Class B Shares entitle MAE GP to receive 1% of the distributions of net cash distributed by AMIT (however, in connection with the settlement agreement described in the following paragraph, MAE GP has agreed to waive its right to receive dividends and distributions so long as AMIT's option is outstanding). These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares, providing MAE GP with approximately 39% of the total voting power of AMIT (unless and until converted to Class A Shares, in which case the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.3% 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 and 1996 annual meetings 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 L.L.C., an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc. ("Insignia"), which provides property management and partnership administration services to the Partnership, owns 96,800 Class A Shares of AMIT at June 30, 1997. These Class A Shares represent approximately 2.2% of the total voting power of AMIT. As part of a settlement of certain disputes with AMIT, 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. In connection with such settlement, AMIT delivered to MAE GP cash in the sum of $250,000 at closing (which occurred April 14, 1995) as payment for the option. If and when the option is exercised, AMIT will be required to remit to MAE GP an additional $94,000. Simultaneously with the execution of the option and as part of the settlement, MAE GP executed an irrevocable proxy in favor of AMIT, the result of which is that MAE GP is permitted 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 is obligated to deliver 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). On April 3, 1997, Insignia and AMIT entered into a non-binding agreement in principle contemplating, among other things, a business combination of AMIT and Insignia Properties Trust, an entity owned 98% by Insignia and its affiliates ("IPT"). On July 18, 1997, IPT, Insignia, MAE GP entered into a definitive merger agreement pursuant to which (subject to shareholder approval and certain other conditions, including the receipt by AMIT of a fairness opinion from its investment bankers) AMIT would be merged with and into IPT, with each Class A Share and Class B Share being converted into 1.625 and 0.0332 Common Shares of IPT, respectively. The foregoing exchange ratios are subject to adjustment to account for dividends paid by AMIT from January 1, 1997, through the closing date of the merger. It is anticipated that Insignia (and its affiliates) and MAE GP (and its affiliates) would own approximately 55% and 2.4%, respectively, of post-merger IPT when this transaction is consummated. The balance sheet of the Joint Venture is summarized as follows (in thousands): June 30, 1997 Assets Cash $ 96 Other assets 2 Total $ 98 Liabilities and Partners' Capital Partners' capital 98 Total $ 98 The statement of operations of the Joint Venture is summarized as follows (in thousands): Six Months Ended June 30, 1997 Revenue $ 34 Costs and expenses (31) Income before loss on sale of investment property 3 Gain on sale of investment property 11 Net income $ 14 The Partnership's equity interest in income of the Joint Venture for the period ended June 30, 1997, was approximately $6,000. The Joint Venture's sole investment property was sold on June 24, 1997 for approximately $1,175,000. Upon the sale of the Joint Venture property, the proceeds were distributed to the owners. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1997 and 1996: Average Occupancy Property 1997 1996 Lake Meadows Apartments Garland, Texas 96% 94% Lakewood Apartments Tomball, Texas 98% 92% The General Partner attributes the increase in occupancy at the Partnership's properties to exterior rehabilitation projects, including exterior painting, being completed in 1996 and to effective marketing by property management. The Partner's net income for the six months ended June 30, 1997, was approximately $160,000 versus net income of approximately $777,000 for the six months ended June 30, 1996. The Partnership's net income for the three months ended June 30, 1997, was approximately $74,000 versus net income of approximately $756,000 for the three months ended June 30, 1996. The decrease in net income for the three and six months ended June 30, 1997 is primarily attributed to decreases in general and administrative expenses, maintenance, and a bad debt recovery recorded by the Partnership in 1996 as result of the foreclosure of the property owned by Rolling Greens Communities, Ltd. General and administrative expenses decreased as result of a decrease in reimbursements to the General Partner. Maintenance expense decreased as result of an exterior painting project in 1996 at Lakewood Apartments property in order to enhance the appearance of the property. 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, 1997, the Partnership had unrestricted cash of approximately $1,207,000 compared to approximately $761,000 at June 30, 1996. Net cash provided by operating activities increased primarily due to the decrease in the change of accounts payable and accrued taxes related to the timing of payments. Net cash provided by investing activities increased primarily due to proceeds from the sale of the Joint Venture property. Net cash used in financing activities increased primarily due to increased distributions to the partners in 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 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 approximately $5,441,000, net of discount, is interest only or is being amortized over 343 months with balloon payments due at the maturity dates of October 2003 and November 2003, at which time the properties will either be refinanced or sold. During the six months ended June 30, 1997, the Partnership distributed approximately $1,188,000 to the limited partners and approximately $22,000 to the General Partner. Cash distributed in 1997 was from cash generated by the refinancing of Lakewood Apartments. During the six months ended June 30, 1996, the Partnership distributed approximately $297,000 to the limited partners and approximately $3,000 to the General Partner. Cash distributed in 1996 was from cash generated by operations. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales, and the availability of cash reserves. PART II - OTHER INFORMATION 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 June 30, 1997. 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 OPPORTUNITY PROPERTIES, LTD. By: Angeles Realty Corporation II 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 1, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Angeles Opportunity Properties Ltd. 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000789282 ANGELES OPPORTUNITY PROPERTIES LTD. 1,000 6-MOS DEC-31-1997 JUN-30-1997 1,207 0 6 0 0 0 8,204 (1,768) 8,260 0 5,441 0 0 0 2,592 8,260 0 1,181 0 0 1,027 0 220 0 0 0 0 0 0 160 12.75 0 Registrant has an unclassified balance sheet. Multiplier is 1.
-----END PRIVACY-ENHANCED MESSAGE-----