10QSB

FORM 10-QSB
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 June 30, 2002

OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

     Commission File Number      0-18528

INCOME GROWTH PARTNERS, LTD. X
(Exact name of registrant as specified in its charter)

CALIFORNIA
(State or other jurisdiction of
incorporation or organization) 33-0294177
(I.R.S. Employer
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 August 12, 2002 was 18,826.5. The number of the registrant’s Class A Units outstanding as of August 12, 2002 was 8,100.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION
	ITEM 1. FINANCIAL STATEMENTS
		CONSOLIDATED BALANCE SHEETS
		CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED
		CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED
		NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 2002 AND 2001
	ITEM 1. BASIS OF FINANCIAL STATEMENT PRESENTATION:
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PART II — OTHER INFORMATION
	ITEM 1. LEGAL PROCEEDINGS:
	ITEM 2. CHANGES IN SECURITIES:
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES:
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
	ITEM 5. OTHER INFORMATION:
	ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
SIGNATURES
EXHIBIT INDEX
EXHIBIT 99.1
EXHIBIT 99.2

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
(A California Limited Partnership)
CONSOLIDATED BALANCE SHEETS

				June 30,			December 31,
				2002			2001
				(unaudited)
			ASSETS
Rental properties
	Land			$	7,078,365		$	7,078,365
	Buildings and improvements				22,773,544			22,447,049
					29,851,909			29,525,414
	Less accumulated depreciation				(12,458,730	)		(12,033,933	)
					17,393,179			17,491,481
Cash and cash equivalents					403,449			429,729
Deferred loan fees, net of accumulated amortization of $370,423 and $325,275, respectively					406,760			451,908
Prepaids and other assets					130,795			186,181
				$	18,334,183		$	18,559,299
		LIABILITIES AND PARTNERS’ CAPITAL (DEFICIT)
Mortgage loans payable				$	18,816,174		$	18,939,550
Other liabilities
	Loan payable to affiliates				—			8,000
	Accounts payable and accrued liabilities				217,533			241,171
	Accrued interest payable				122,317			122,317
	Security deposits				221,680			226,029
					19,377,704			19,537,067
Commitments and contingencies
Partners’ capital (deficit)					(1,033,521	)		(967,768	)
Note receivable from general partner					(10,000	)		(10,000	)
				$	18,334,183		$	18,559,299

The accompanying notes are an integral part of these financial statements.

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INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
(A California Limited Partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS — UNAUDITED

			FOR THE THREE MONTHS				FOR THE SIX MONTHS
			ENDED JUNE 30,				ENDED JUNE 30,
			2002		2001		2002		2001
REVENUES
	Rents		$	1,327,787	$	1,246,696	$	2,608,907	$	2,468,589
	Other			62,911		100,806		133,634		211,938
		Total revenues		1,390,698		1,347,502		2,742,541		2,680,527
EXPENSES
	Operating expenses			599,351		533,012		1,220,203		1,210,081
	Depreciation and amortization			235,601		223,554		469,945		448,288
	Interest			363,396		367,970		724,131		733,150
Total expenses				1,198,348		1,124,536		2,414,279		2,391,519
Net income			$	192,350	$	222,966	$	328,262	$	289,008
BASIC AND DILUTED PER LIMITED PARTNERSHIP UNIT DATA
	Net income per limited partnership unit		$	6.07	$	7.04	$	10.36	$	9.12
	Distributions per Class A limited unit holder		$	23.68	$	31.08	$	48.64	$	62.08
Weighted average limited partnership units				26,926		26,926		26,926		26,926

The accompanying notes are an integral part of these financial statements.

-3-

INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
(A California Limited Partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS — UNAUDITED

					FOR THE SIX MONTHS
					ENDED JUNE 30,
					2002			2001
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income				$	328,262		$	289,008
	Adjustments to reconcile net income to net cash provided by operating activities
		Depreciation and amortization				469,945			448,288
			Decrease /(Increase) in Prepaid expenses and other assets			55,386			(4,540	)
			(Decrease) in Accounts payable, accrued liabilities and accrued interest payable			(23,638	)		(77,968	)
			(Decrease) in Security deposits			(4,349	)		(2,793	)
				Net cash provided by operating activities		825,606			651,995
CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures					(326,495	)		(223,892	)
				Net cash used in investing activities		(326,495	)		(223,892	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Principal payments under mortgage debt					(123,376	)		(114,358	)
	Principal payments to affiliate					(8,000	)		(7,000	)
	Distributions to Investors					(394,015	)		(502,810	)
				Net cash used in financing activities		(525,391	)		(624,168	)
				Net (decrease) in cash and cash equivalents		(26,280	)		(196,065	)
Cash and cash equivalents at beginning of period						429,729			599,660
				Cash and cash equivalents at end of period	$	403,449		$	403,595

The accompanying notes are an integral part of these financial statements

-4-

INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
(A California Limited Partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 2002 AND 2001

ITEM 1. BASIS OF FINANCIAL STATEMENT PRESENTATION:

The accompanying unaudited consolidated financial statements of Income Growth Partners, Ltd. X, a California limited partnership, and subsidiaries (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, 2001, filed on Form 10-KSB.

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.

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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. Critical Accounting Standards

Rental revenues are recognized at the beginning of each month based on the current occupancy of the apartments. Tenant leases are generally for a minimum term of six months with an option to rent on a month-to-month basis.

Land, buildings, and improvements are recorded at cost. Buildings and improvements are depreciated using the straight-line method over the estimated useful lives of 27.5 and 5 to 15 years, respectively. Expenditures for maintenance and repairs are charged to expense as incurred. Significant renovations are capitalized and depreciated over the remaining life of the property. The Partnership assesses its property for impairment whenever events or changes in circumstances indicate that the carrying amount of the property may not be recoverable. Recoverability of property to be held and used is measured by a comparison of the carrying amount of the property to future undiscounted net cash flows expected to be generated by the property. If the property is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property exceeds the fair value of the property. The cost and related accumulated depreciation of real estate are removed from the accounts upon disposition. Gains and losses arising from the dispositions are reported as income or expense.

b. 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 six months ended June 30, 2002, all of the Partnership’s operating and debt service cash requirements have been met through cash generated from operations.

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%.

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 six months ended June 30, 2002 was approximately $826,000 compared to approximately $652,000 for the same period in 2001. The principal reasons for this increase can be attributed to an increase in net income, a decrease in accounts payable, accrued liabilities, and a decrease in prepaid expenses for the period.

Net cash used in investing activities for the six months ended June 30, 2002 was approximately $326,000 compared to approximately $224,000 for the same period in 2001. The reason for this increase was an increase in capital expenditures.

Net cash used in financing activities for the six months ended June 30, 2002 was approximately $525,000 compared to approximately $624,000 for the same period in 2001. The principal reason for this decrease was a decrease in distributions to investors.

In October 2001, the FASB issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 establishes a single accounting model, based on the framework established in SFAS No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of ”, for long-lived assets to be disposed of by sale, and resolves significant implementation issues related to SFAS No. 121. The adoption of this statement had no material impact on our financial statements.

-6-

c. Results of Operations:

COMPARISON OF THREE MONTHS ENDED JUNE 30, 2002 TO THE THREE MONTHS ENDED JUNE 30, 2001

Rental revenue for the three months ended June 30, 2002 was approximately $1,328,000, an increase of 6.50% over rents of approximately $1,247,000 for the comparable period in 2001. The increase is primarily attributable to an increase in monthly tenant rental rates and steady average occupancy rates.

Operating expenses for the three months ended June 30, 2002 were approximately $599,000, an increase of 12.38% over operating expenses of approximately $533,000 for the comparable period in 2001. The increase is primarily attributable to an increase in property and administrative expenses.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2002 TO THE SIX MONTHS ENDED JUNE 30, 2001.

Rental revenue for the six months ended June 30, 2002 was approximately $2,609,000, an increase of 5.67% over rents of approximately $2,469,000 for the comparable period in 2001. The increase is primarily attributable to an increase in monthly tenant rental rates and steady average occupancy rates.

Operating expenses for the six months ended June 30, 2002 were approximately $1,220,000, an increase of 0.83% over operating expenses of approximately $1,210,000 for the comparable period in 2001. The increase is primarily attributable to an increase in property and administrative expenses.

-7-

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:

99.1 and 99.2

-8-

INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
(A California Limited Partnership)

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: August 12, 2002

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-

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
99.1	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 — CEO
99.2	CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 — CFO

EX-99.1 3 a83472exv99w1.txt EXHIBIT 99.1 EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of INCOME GROWTH PARTNERS, LTD. X (the "Company") on Form 10-QSB for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, David W. Maurer, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ David W. Maurer David W. Maurer Chief Executive Officer August 7, 2002 EX-99.2 4 a83472exv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of INCOME GROWTH PARTNERS, LTD. X (the "Company") on Form 10-QSB for the period ending June 30, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Timothy C. Maurer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. /s/ Timothy C. Maurer Timothy C. Maurer Chief Financial Officer August 7, 2002 -----END PRIVACY-ENHANCED MESSAGE-----

EX-99.1

                                                                    EXHIBIT 99.1



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of INCOME GROWTH PARTNERS, LTD. X (the
"Company") on Form 10-QSB for the period ending June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, David
W. Maurer, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

        (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

        (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.



/s/ David W. Maurer


David W. Maurer
Chief Executive Officer
August 7, 2002

EX-99.2

                                                                    EXHIBIT 99.2



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of INCOME GROWTH PARTNERS, LTD. X (the
"Company") on Form 10-QSB for the period ending June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Timothy
C. Maurer, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

        (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

        (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.



/s/ Timothy C. Maurer


Timothy C. Maurer
Chief Financial Officer
August 7, 2002