-----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, VFUwo3aL6VycGslvwSOO6sJfylyQ2Mmz74Nztb57U8AQ2MRkQJOzbPBYTP86Vw+H WZMGt/XPLdXlLQxjCcwKfQ== 0000830051-96-000011.txt : 19961120 0000830051-96-000011.hdr.sgml : 19961120 ACCESSION NUMBER: 0000830051-96-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961115 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: 96666941 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 September 30, 1996 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 November 1, 1996 was 18,826.5. The number of the registrant's Class A Units outstanding as of November 1, 1996 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
September 30, December 31, 1996 1995 ___________ ___________ (Unaudited) ASSETS Land and buildings: Land $ 7,778,365 $ 7,778,365 Buildings and improvements 23,436,161 23,410,664 ___________ ___________ 31,214,526 31,189,029 Less accumulated depreciation and impairments (10,373,914) (9,735,490) ___________ ___________ 20,840,612 21,453,539 Other assets: Cash and cash equivalents 225,566 153,735 Prepaid expenses and other assets 627,085 546,594 ___________ ___________ 852,651 700,329 ___________ ___________ $21,693,263 $22,153,868 =========== =========== LIABILITIES AND PARTNERS' CAPITAL Mortgage loans payable $19,836,970 $19,966,935 Other liabilities: Accounts payable and accrued liabilities 147,953 131,169 Accrued interest payable 126,380 58,506 Security deposits 184,717 165,201 Loan payable to affiliate 55,300 102,000 ___________ ___________ 20,351,320 20,423,811 Commitments Partners' capital 1,351,943 1,740,057 Note receivable from general partner (10,000) (10,000) ___________ ___________ $21,693,263 $22,153,868 =========== =========== 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: For the nine months ended: Sept 30, 1996 Sept 30, 1995 Sept 30, 1996 Sept 30, 1995 _____________ _____________ _____________ _____________ Revenues: Rents $ 867,611 $ 790,318 $2,559,785 $2,856,179 Other 38,025 63,209 113,438 189,877 _____________ _____________ _____________ _____________ Total revenues 905,636 853,527 2,673,223 3,046,056 _____________ _____________ _____________ _____________ Expenses: Interest 330,307 181,690 1,120,354 1,166,120 Operating expenses (excluding depreciation and amortization) 416,969 469,605 1,275,261 1,574,919 Depreciation and amortization 240,106 240,616 665,722 833,077 _____________ _____________ _____________ _____________ Total expenses 987,382 891,911 3,061,337 3,574,116 _____________ _____________ _____________ _____________ Loss before extraordinary items (81,746) (38,384) (388,114) (528,060) _____________ _____________ _____________ _____________ Extraordinary gain: Disqualified interest - - - 1,472,841 Debt forgiveness - 999,146 - 999,146 _____________ _____________ _____________ _____________ Net income (loss) $ (81,746) $ 960,762 (388,114) $1,943,927 ============= ============= ============= ============= Net loss per limited partnership unit before extraordinary gain $ (3.04) $ (1.65) $ (14.41) $ (22.72) _____________ _____________ _____________ _____________ Income per limited partnership unit from extraordinary gain $ - $ 42.98 $ - $ 106.34 _____________ _____________ _____________ _____________ Net income (loss) per limited partnership unit $ (3.04) $ 41.33 $ (14.41) $ 83.63 ============= ============= ============= ============= Weighted average limited partnership units outstanding 26,926 23,245 26,926 23,245 ============= ============= ============= ============= 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 Nine Months Ended September 30 (UNAUDITED)
1996 1995 ___________ ___________ Cash flows from operating activities: Net tenant revenues $2,673,223 $3,046,056 Security deposits retained (refunded) 19,516 (39,963) Cash paid to suppliers and employees (1,366,265) (2,479,202) Interest paid (1,052,480) (1,418,215) ___________ ___________ Net cash provided by (used in) operating activities 273,994 (891,324) ___________ ___________ Cash flows from investing activities: Purchase(s) of building & improvements and equipment (25,498) - ___________ ___________ Net cash used in investing activities (25,498) - ___________ ___________ Cash flows from financing activities: Sale of Partnership Class A Units - 2,019,241 Principal payments under mortgage debt (129,965) (461,847) Amounts due to affiliates, net (46,700) (17,028) ___________ ___________ Net cash (used in) provided by financing activities (176,665) 1,540,366 ___________ ___________ Net increase in cash 71,831 649,042 Cash and cash equivalents at beginning of period 153,735 180,696 ___________ ___________ Cash and cash equivalents at end of period $ 225,566 $ 829,738 =========== =========== Reconciliation of net (loss) income to net cash provided by operating activities: Net (loss) income $ (388,114) $ 1,943,927 Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: Depreciation and amortization 664,084 833,077 Extraordinary gains - (2,471,987) Other, primarily changes in other assets and liabilities (1,976) (1,196,341) ___________ ___________ Net cash provided by (used in) operating activities $ 273,994 $ (891,324) =========== =========== 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 September 30, 1996 (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, 1995 filed on Form 10K. The accompanying consolidated financial statements 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. The accompanying financial statements have been prepared on a going concern basis which assumes continuity of operations and realization of assets and liquidation of liabilities in the ordinary course of business. As a result of the Partnership's continuing high levels of mortgage indebtedness, there are significant uncertainties relating to the ability of the Partnership to continue as a going concern. The financial statements do not include any adjustments that might be necessary as a result of the outcome of the uncertainties discussed herein. 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 has been dependent upon proceeds from the sale of Original Partnership Units to meet its obligations, including debt service requirements. In 1992 the Limited Partnership discontinued sales of Original Partnership Units, and since then the Limited Partnership's primary source of liquidity has been from cash generated from operations. In May 1995, the Partnership's Plan of Reorganization became effective and the Partnership received approximately $2,025,000 in capital from Class A Unit sales to fund the Plan. Although the Partnership successfully refinanced its Mission Park property at a fixed annual interest rate of 7.76%, its Shadowridge Meadows property remains highly leveraged and sensitive to interest rate fluctuations since its debt service is adjusted monthly based upon the 11th District Cost of Funds Index. Between May 1994 and November 1996, increases in the 11th District Cost of Funds Index totaling 1.205% have been announced. If the 11th District Cost of Funds index continues to increase more rapidly than projected, and the Partnership is unable to raise rents at Shadowridge Meadows to cover the increased debt service payments, the Partnership may have to fund shortfalls from reserves. Furthermore the existing loan on Shadowridge Meadows is currently scheduled to expire in July 1998. If the real estate and financing markets have not improved sufficiently for the Partnership to refinance this property 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, despite the Partnership's success at curing and reinstating the loans, disqualifying penalty interest and fees, making principal reduction payments, and obtaining debt forgiveness from refinancing. If occupancy or rental income drops significantly, or if operating expenses or interest rates increase, current levels and terms of mortgage indebtedness could 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. b. Results of Operations The Partnership had been operating the Shadowridge Meadows Apartments and Mission Park Apartments for approximately 94 months and 85 months respectively at September 30, 1996. The Shadowridge Meadows Apartments and Mission Park Apartments reflected occupancy rates of 97% and 98% respectively as of September 30, 1996, compared to 96% and 92% respectively as of September 30, 1995. This is consistent with a recent, general increase in occupancy rates throughout San Diego county. Total revenues for the three month period ended September 30, 1996 increased approximately $52,109 compared to the same period in 1995 primarily due to increased occupancy and rental rates during 1996. Total revenues for the nine month period ended September 30, 1996 decreased approximately $372,833 compared to the same period in 1995 due to the foreclosure of the Margarita Summit property during the third quarter of 1995. Operating expenses, excluding depreciation and amortization, for the three and nine month periods ended September 30, 1996 decreased approximately $52,636 and $299,658 respectively, compared to the same periods in 1995, primarily due to the foreclosure of the Margarita Summit property and the elimination of related operating expenses. Interest expense for the three month period ended September 30, 1996 increased approximately $148,617 compared to the same period in 1995, despite some adjustments made during the third quarter of 1996 to allocate some previously expensed mortgage interest to mortgage principal reduction on the Shadowridge Meadows loan, primarily due to adjustments made during the third quarter of 1995 related to the foreclosure of Margarita Summit. Interest expense for the nine month period ended September 30, 1996 decreased approximately $45,766 primarily due to decreased debt service in 1996 resulting from lower mortgage loan balances and lower interest rates after the Chapter 11 Reorganization and the subsequent refinancing of Mission Park. Depreciation and amortization expense for the three month period ended September 30, 1996 changed very little compared to the same period in 1995, because the 27,807 decrease in depreciation expense due to the loss of Margarita Summit was offset by a 27,297 increase in amortization expense on Mission Park to amortize loan refinancing fees. Depreciation and amortization expense for the nine month period ended September 30, 1996 decreased approximately $167,355 compared to the same period in 1995, primarily due to the foreclosure of Margarita Summit. 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: November 14, 1996 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 ___________ ___________________________________________________ ________ 27.5 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 September 30, 1996 and is qualified in its entirety by reference to such Financial Statements. 9-MOS DEC-31-1996 SEP-30-1996 225,566 0 0 0 0 852,651 31,214,526 (10,373,914) 21,693,263 514,350 19,836,970 0 0 0 1,341,943 21,693,263 0 2,673,223 0 1,275,261 665,722 0 1,120,354 (388,114) 0 0 0 0 0 (388,114) (14.41) 0
-----END PRIVACY-ENHANCED MESSAGE-----