-----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, VtEp5Rwqndb7dbTtcw+FyfA6t5MJIWEgZ+PaiXG281mjyem/PJY/QCYpSt6nDEO3 abKMflbiNWJj7C0Gh6GTZQ== 0000830051-97-000004.txt : 19970515 0000830051-97-000004.hdr.sgml : 19970515 ACCESSION NUMBER: 0000830051-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INCOME GROWTH PARTNERS LTD X CENTRAL INDEX KEY: 0000830051 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 330294177 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-18528 FILM NUMBER: 97605406 BUSINESS ADDRESS: STREET 1: 11300 SORRENTO VALLEY RD STE 108 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 6194572750 MAIL ADDRESS: STREET 1: 11300 SORRENTO VALLEY ROAD STREET 2: SUITE 108 CITY: SAN DIEGO STATE: CA ZIP: 92121 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from______to______ Commission File Number 0-18528 INCOME GROWTH PARTNERS, LTD. X (Exact name of registrant as specified in its charter) CALIFORNIA 33-0294177 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11300 Sorrento Valley Road, Suite 108, San Diego, California 92121 (Address of principal executive offices) (Zip Code) (619) 457-2750 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has 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 filing requirements for the past 90 days. Yes [X] No [ ] The number of the registrant's Original Limited Partnership Units outstanding as of May 5, 1997 was 18,826.5. The number of the registrant's Class A Units outstanding as of May 5, 1997 was 8,100. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) CONSOLIDATED BALANCE SHEETS
March 31, December 31, 1997 1996 ___________ ___________ (Unaudited) ASSETS Land and buildings: Land $ 7,778,365 $ 7,778,365 Buildings and improvements 23,497,886 23,455,047 ___________ ___________ 31,276,251 31,233,412 Less accumulated depreciation and impairments (10,758,340) (10,545,531) ___________ ___________ 20,517,911 20,687,881 Other assets: Cash and cash equivalents 298,396 244,582 Prepaid expenses and other assets 596,657 544,455 ___________ ___________ 895,053 789,037 ___________ ___________ $21,412,964 $21,476,918 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Mortgage loans payable $19,740,754 $19,788,869 Other liabilities: Accounts payable and accrued liabilities 191,513 81,473 Accrued interest payable 123,392 123,392 Security deposits 189,803 184,355 Loan payable to affiliate 43,000 55,300 ___________ ___________ 20,288,462 20,233,389 Commitments Partners' capital 1,134,502 1,253,529 Note receivable from general partner (10,000) (10,000) ___________ ___________ $21,412,964 $21,476,918 =========== =========== The accompanying notes are an integral part of the financial statements.
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the three months ended: Mar 31, 1997 Mar 31, 1996 _____________ _____________ Revenues: Rents $ 886,959 $ 844,827 Other 39,625 35,343 _____________ _____________ Total revenues 926,584 880,170 _____________ _____________ Expenses: Interest 379,392 395,031 Operating expenses (excluding depreciation and amortization) 443,328 524,915 Depreciation and amortization 222,892 212,544 _____________ _____________ Total expenses 1,045,612 1,132,490 _____________ _____________ Net loss (119,028) (252,320) ============= ============= Net loss per limited partnership unit $ (4.42) $ (9.37) ============= ============= Weighted average limited partnership units outstanding 26,926 26,926 ============= ============= The accompanying notes are an integral part of the financial statements.
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended March 31 (UNAUDITED)
1997 1996 ___________ ___________ Cash flows from operating activities: Net loss $(119,028) $ (252,320) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 222,892 212,544 Increase in prepaid expenses and other assets (62,283) (69,477) Increase in: Accounts payable and accrued liabilities 110,039 135,826 Security deposits 5,448 3,878 Accrued interest payable - 65,600 ___________ ___________ Net cash provided by operating activities 157,068 96,051 ___________ ___________ Cash flows from investing activities: Capital expenditures (42,839) (1,072) ___________ ___________ Net cash used in investing activities (42,839) (1,072) ___________ ___________ Cash flows from financing activities: Principal payments under mortgage debt (48,115) - Principal payments to affiliate (12,300) (14,416) ___________ ___________ Net cash used by financing activities (60,415) (14,416) ___________ ___________ Net increase in cash and cash equivalents 53,814 80,563 Cash and cash equivalents at beginning of period 244,582 153,735 ___________ ___________ Cash and cash equivalents at end of period $ 298,396 $ 234,298 =========== =========== The accompanying notes are an integral part of the financial statements.
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1997 (UNAUDITED) 1. Basis of Financial Statement Presentation The accompanying unaudited consolidated financial statements of Income Growth Partners, Ltd. X, a California Limited Partnership, and Subsidiary (the "Partnership") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Partnership believes that the disclosures made are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Partnership's latest audited financial statements for the year ended December 31, 1996 filed on Form 10K. The accompanying consolidated financial statements have not been audited by independent public accountants, but include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of the general partners, necessary for a fair presentation of the financial condition, results of operations and cash flows for periods presented. However, these results are not necessarily indicative of results for a full year. Certain prior period amounts have been reclassified to conform with the current period presentation. 2. Recent Accounting Pronouncements In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 128, Earnings per Share ("SFAS No. 128"). SFAS No. 128 requires dual presentation of newly defined basic and diluted earnings per share on the face of the Income statement for all entities with complex capital structures. The accounting standard is effective for fiscal years ending after December 15, 1997, including interim periods. The effect of SFAS No. 128 is not expected to have a material effect on the financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Financial Statements and Notes thereto filed herewith. a. Liquidity and Capital Resources Historically, the Limited Partnership was dependent upon proceeds from the sale of Original Units to meet its operating obligations, including debt service requirements. Since 1992, however, the Limited Partnership's primary source of liquidity has been from cash generated from operations. The Partnership has been able to generate sufficient cash flow to cover its expenses and continue rebuilding cash reserves during 1997 due to the $2 million in capital raised in 1995, the $476,000 debt paydown on Shadowridge Meadows, and the $2 million debt reduction resulting from the refinancing of Mission Park. Although the Partnership successfully refinanced the Mission Park mortgage at a fixed annual interest rate of 7.76%, it remains sensitive to interest rates because the Shadowridge Meadows property remains highly leveraged and subject to a variable interest rate. If interest rates increase more rapidly than market rents, the Partnership may have to fund shortfalls from cash reserves. Furthermore the loan on Shadowridge Meadows matures in July 1998. If the Partnership is unable to refinance by that time, the Partnership may have to restructure the existing loan, file another bankruptcy petition, sell the property, or risk losing the property to foreclosure. Mortgage indebtedness on the properties remains high, which may make it difficult for the properties to service their debt through Partnership operations. In the event that one or more of the properties is unable to support its debt service and the Partnership is unable to cover operational shortfalls from cash reserves, the Partnership may have to take one or more alternative courses of action. The general partners would then determine, based on their analysis of relevant economic conditions and the status of the properties, a course of action intended to be consistent with the best interests of the Partnership. Possible courses of action might include, the sacrifice of one or more of the properties to reduce negative cash flow, the sale or refinancing of one or more of the properties, the entry into one or more joint venture partnerships with other entities, or the filing of another bankruptcy petition. The Partnership changed its method of reporting cash flows from the direct method to the indirect method in 1996. Prior period amounts have been reclassified to conform with the current year presentation. Net cash provided by operating activities for the three month period ended March 31, 1997 was $157,068 compared to net cash provided by operating activities of $96,051 for the same period in 1996. The principal reason for this difference is increased income due to a recovery in the rental market. b. Results of Operations On March 31, 1997 the Shadowridge Meadows Apartments and Mission Park Apartments reflected occupancy rates of 96% and 100%, respectively, compared to 94% and 98%, respectively, on March 31, 1996, and 99% and 96%, respectively, on December 31, 1996. Total revenues for the three month period ended March 31, 1997 increased approximately $46,414 compared to the same period in 1996 due to a recovery in the rental market. Operating expenses, excluding depreciation and amortization, for the three month period ended March 31, 1997 decreased approximately $81,587 compared to the same period in 1996 primarily due to reduced refurbishment expenses. Interest expense decreased approximately $15,639 for the three month period ended March 31, 1997 compared to the same period in 1996 primarily due to a decrease in the 11th District Cost of Funds index used to calculate the interest rate on the Shadowridge Meadows mortgage. Depreciation and amortization expense increased by $10,348 for the three month period ended March 31, 1997 compared to the same period in 1996 due to fixed asset additions. In the past the Partnership experienced losses from operations primarily due to the high degree of debt service on its mortgage loans. Management estimates that the Partnership may experience continued operating losses in the future from its Shadowridge Meadows property unless debt service can be restructured or reduced. PART II - OTHER INFORMATION Item 1. Legal Proceedings There are no pending legal proceedings which may have a material adverse effect on the Partnership. However, the Partnership is involved in small claims court proceedings against certain present or former tenants of its apartment complexes with regard to landlord-tenant matters, all of which are considered to be in the ordinary course of its business. Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K None INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: May 14, 1997 INCOME GROWTH PARTNERS, LTD. X, a California Limited Partnership By: Income Growth Management, Inc. General Partner By: /s/ Timothy C. Maurer _______________________________ Timothy C. Maurer Principal Financial Officer AND Duly Authorized Officer of the Registrant EXHIBIT INDEX Exhibit No. Description Location ___________ ___________________________________________________ ________ 27.7 Financial Data Schedule Attached EX-27 2
5 This schedule contains summary financial information extracted from the Financial Statements filed with the Registrant's Form 10-Q for the quarter ended March 31, 1997 and is qualified in its entirety by reference to such Financial Statements. 3-MOS DEC-31-1997 MAR-31-1997 298,396 0 0 0 0 895,053 31,276,251 (10,758,340) 21,412,964 547,708 19,740,754 0 0 0 1,124,502 21,412,964 0 926,584 0 443,328 222,892 0 379,392 (119,028) 0 0 0 0 0 (119,028) (4.42) 0
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