-----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, RIrdl6UBMVkEpjX2u9sYMPH7sYt/dFKXOnR8RkQTC7YeN1wPJNgLC7UPhJotHGsb Z0giMG5PnxNi8ab8+craow== 0000936392-98-000805.txt : 19980515 0000936392-98-000805.hdr.sgml : 19980515 ACCESSION NUMBER: 0000936392-98-000805 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980514 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: SEC FILE NUMBER: 000-18528 FILM NUMBER: 98619714 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 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, 1998 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 registration (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 14, 1998 was 18,826.5. The number of the registrant's Class A Units outstanding as of May 14, 1998 was 8,100. 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) CONSOLIDATED BALANCE SHEETS MARCH 31, 1998 AND DECEMBER 31, 1997 (UNAUDITED) ----------
MARCH 31, DECEMBER 31, 1998 1997 ------------ ------------ ASSETS Rental properties: Land $ 7,078,365 $ 7,078,365 Buildings and improvements 21,660,540 21,607,078 ------------ ------------ 28,738,905 28,685,443 Less accumulated depreciation (8,795,303) (8,582,492) ------------ ------------ 19,943,602 20,102,951 Other assets: Cash and cash equivalents 194,687 282,293 Deferred loan fees, net of accumulated amortization of $90,893 and $80,873, respectively 686,290 689,294 Prepaid expenses and other assets 279,689 151,181 ------------ ------------ 1,160,666 1,122,768 ------------ ------------ $ 21,104,268 $ 21,225,719 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Mortgage loans payable $ 19,718,058 $ 19,765,202 Other liabilities: Loan payable to affiliate 109,708 113,000 Accounts payable and accrued liabilities 222,403 148,501 Accrued interest payable 125,699 125,623 Security deposits 200,059 201,250 ------------ ------------ 20,375,927 20,353,576 Commitments Partners' capital 738,341 882,143 Note receivable from general partner (10,000) (10,000) ------------ ------------ $ 21,104,268 $ 21,225,719 ============ ============
The accompanying notes are an integral part of the financial statements. 1 3 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) ----------
FOR THE THREE MONTHS ENDED MARCH 31, ------------------------------ 1998 1997 ----------- ----------- Revenues: Rents $ 984,642 $ 886,959 Other 40,542 39,625 ----------- ----------- Total revenues 1,025,184 926,584 ----------- ----------- Expenses: Operating expenses 454,052 443,328 Depreciation and amortization 222,831 222,892 Interest and penalties 392,103 379,392 ----------- ----------- Total expenses 1,068,986 1,045,612 ----------- ----------- Net loss $ (43,802) $ (119,028) =========== =========== Basic and diluted per limited partnership unit data: Net loss per limited partnership unit $ (1.63) $ (4.42) =========== =========== Weighted average limited partnership units outstanding 26,926 26,926 =========== ===========
The accompanying notes are an integral part of the financial statements. 2 4 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997 (UNAUDITED) ----------
FOR THE THREE MONTHS ENDED MARCH 31, -------------------------- 1998 1997 --------- --------- Cash flows from operating activities: Net loss $ (43,802) $(119,028) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 222,831 222,892 (Increase) in: Deferred loan fees (7,016) -- Prepaid expenses and other assets (128,508) (62,283) Increase (decrease) in: Accounts payable and accrued liabilities 73,978 110,039 Security deposits (1,191) 5,448 --------- --------- Net cash provided by operating activities 116,292 157,068 --------- --------- Cash flows from investing activities: Capital expenditures (53,462) (42,839) --------- --------- Net cash used in investing activities (53,462) (42,839) --------- --------- Cash flows from financing activities: Principal payments under mortgage debt (47,144) (48,115) Principal payments to affiliate (3,292) (12,300) Distributions to Investors (100,000) -- --------- --------- Net cash used by financing activities (150,436) (60,415) --------- --------- Net increase (decrease) in cash and cash equivalents (87,606) 53,814 Cash and cash equivalents at beginning of period 282,293 244,582 --------- --------- Cash and cash equivalents at end of period $ 194,687 $ 298,396 ========= =========
The accompanying notes are an integral part of the financial statements. 3 5 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ---------- 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, 1997 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 the 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 AUTHORITATIVE PRONOUNCEMENTS: In June 1997, the FASB issued SFAS No. 130, Reporting Comprehensive Income. SFAS No. 130 establishes requirements for disclosure of comprehensive income and becomes effective for the Partnership from the beginning of the fiscal year ending December 31, 1998. Comprehensive income includes such items as foreign currency translation adjustments and unrealized holding gains and losses on available for sale securities that are currently being presented by the Company as a component of stockholders' equity (deficit). The Partnership has adopted this standard for the interim financial statements, however, the Partnership has no comprehensive income items at March 31, 1998. 4 6 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ---------- 2. RECENT AUTHORITATIVE PRONOUNCEMENTS, CONTINUED: In June 1997, the FASB issued SFAS No. 131, Disclosures About Segments of an Enterprise and Related Information. SFAS No. 131 establishes standards for disclosure about operating segments in annual financial statements and selected information in interim financial reports. It also establishes standards for related disclosures about products and services, geographic areas and major customers. This statement supersedes SFAS No. 14, Financial Reporting for Segments of a Business Enterprise. The new standard becomes effective for the Partnership for the year ending December 31, 1998, and requires that comparative information from earlier periods be restated to conform to the requirements of this standard, however, the new standard has no effect on the Partnership's financial statement presentation. 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: Since inception, the Partnership's operating and debt service obligations have been financed through the sale of Partnership Units, cash provided by operating activities, and 1995 debt restructuring activities. During the three months ended March 31, 1998, all of the Partnership's operating and debt service cash requirements have been met through cash generated from operations. As of March 31, 1998, the Partnership's properties, Shadowridge Meadows and Mission Park, remain highly leveraged. The Mission Park mortgage was refinanced in December 1995 at a fixed interest rate of 7.76%. The Shadowridge Meadows mortgage was refinanced in October 1997 at a fixed interest rate of 7.49%. 5 7 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ---------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED: Despite the refinancings, 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, 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. Net cash provided by operating activities for the three months ended March 31, 1998 was approximately $116,000 compared to approximately $157,000 for the same period in 1997. The principal reason for this decrease was an increase in prepaids and other expenses of approximately $67,000 which was related to increases in the tax impound accounts due to continued payments to lenders on mortgage debt. Net cash used in investing activities for the three months ended March 31, 1998 was approximately $53,000 compared to approximately $43,000 for the same period in 1997. The increase related to building improvements made possible by increased rental revenues. Net cash used in financing activities for the three months ended March 31, 1998 was approximately $150,000 compared to approximately $60,000 for the same period in 1997. The increase is primarily due to payments on the principal amounts of debt and distributions to partners or investors of $100,000. There were no such distributions in the same period of 1997. 6 8 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ---------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, CONTINUED: b. Results of Operations: COMPARISON OF THREE MONTHS ENDED MARCH 31, 1998 TO THE THREE MONTHS ENDED MARCH 31, 1997. Rental revenue for the three months ended March 31, 1998 was approximately $985,000, an increase of 11% over rents of approximately $887,000 for the comparable period in 1997. The increase is primarily attributable to an increase in monthly tenant rental rates and steady average occupancy rates which were 98% at March 31, 1998 and 1997. Interest expense for the three months ended March 31, 1998 was approximately $392,000, an increase of 4% over interest expense of approximately $380,000 for the comparable period in 1997. The increase is attributable to amortization of loan fees related to the refinancing of the Shadowridge Meadows property, which began amortizing in the fourth quarter of 1997. Operating expenses for the three months ended March 31, 1998 were approximately $454,000, an increase of 3% over operating expenses of approximately $443,000 for the comparable period in 1997. The increase was driven by payments made for property related expenses and supplies during the year. Depreciation and amortization expenses for the three months ended March 31, 1998 and 1997 were approximately $223,000. Depreciation and amortization expenses have remained constant as there have been few material additions to buildings and improvements in the period. 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. 7 9 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED ---------- 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 8 10 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, 1998 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 9 EX-27 2 FINANCIAL DATA SCHEDULE
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, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1998 MAR-31-1998 194,687 0 0 0 0 279,689 28,738,905 8,795,303 21,104,268 348,102 19,718,058 0 0 0 728,341 21,104,268 984,642 1,025,184 454,052 454,052 222,831 0 392,103 (43,802) 0 0 0 0 0 (43,802) (1.63) (1.63)
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