-----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, O7nBkQya5cSNLktH7RaRHOjbHa+kFS56O2/RaLV2N3I1fDMPga189Yd87Qzw1wtk FX5MxQkjo79rILDOplHkpw== 0000936392-99-000577.txt : 19990517 0000936392-99-000577.hdr.sgml : 19990517 ACCESSION NUMBER: 0000936392-99-000577 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 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: 99622218 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, 1999 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, 1999 was 18,826.5. The number of the registrant's Class A Units outstanding as of May 14, 1999 was 8,100. 2 PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS 3 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) CONSOLIDATED BALANCE SHEETS
MARCH 31, DECEMBER 31, 1999 1998 ------------ ------------ ASSETS Rental properties: Land $ 7,078,365 $ 7,078,365 Buildings and improvements 21,802,878 21,763,241 ------------ ------------ 28,881,243 28,841,606 Less accumulated depreciation 9,663,036 9,445,320 ------------ ------------ 19,218,207 19,396,286 Cash and cash equivalents 532,918 441,909 Deferred loan fees, net of accumulated amortization of $146,223 and $132,140, respectively 630,960 645,044 Prepaid expenses and other assets 28,666 30,742 ------------ ------------ 1,192,544 1,117,695 ------------ ------------ $ 20,410,752 $ 20,513,981 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Mortgage loans payable $ 19,535,060 $ 19,579,523 Other liabilities: Loan payable to affiliate 72,640 72,640 Accounts payable and accrued liabilities 242,938 170,177 Accrued interest payable 125,699 125,699 Security deposits 202,077 199,177 ------------ ------------ 20,178,415 20,147,216 Commitments Partners' capital 242,337 376,765 Note receivable from general partner (10,000) (10,000) ------------ ------------ $ 20,410,752 $ 20,513,981 ============ ============
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 OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, --------------------------------- 1999 1998 ----------- ----------- Revenues: Rents $ 1,033,563 $ 984,642 Other 57,063 40,542 ----------- ----------- Total revenues 1,090,627 1,025,184 ----------- ----------- Expenses: Operating expenses 535,123 454,052 Depreciation 231,798 222,831 Interest 379,292 392,103 ----------- ----------- Total expenses 1,146,213 1,068,986 ----------- ----------- Net income (loss) $ (55,586) $ (43,802) =========== =========== Basic and diluted per limited partnership unit data Net loss per limited partnership unit $ 2.06 $ 1.63 =========== =========== Weighted average limited partnership units outstanding 26,926 26,926 =========== ===========
The accompanying notes are an integral part of the financial statements. 3 5 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, ----------------------------- 1999 1998 --------- --------- Cash flows from operating activities: Net loss $ (55,586) $ (43,802) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and Amortization 231,798 222,831 (Increase) in: Prepaid expenses and other assets 2,076 (128,508) Deferred Loan Fees -- (7,016) Increase in: Accounts payable, accrued liabilities and accrued interest payable 72,762 73,978 Security deposits 2,900 (1,191) --------- --------- Net cash provided by operating activities 253,951 116,292 --------- --------- Cash flows from investing activities: Capital expenditures (39,637) (53,462) --------- --------- Net cash used in investing activities (39,637) (53,462) --------- --------- Cash flows from financing activities: Principal payments under mortgage debt (44,463) (47,144) Principal payments to affiliate -- (3,292) Collection on loan receivable from general partner -- -- Distributions to Investors (78,842) (100,000) --------- --------- Net cash used by financing activities (123,305) (150,436) --------- --------- Net increase (decrease) in cash and cash equivalents 91,009 (87,606) --------- --------- Cash and cash equivalents at beginning of period 441,909 282,293 --------- --------- Cash and cash equivalents at end of period $ 532,918 $ 194,687 ========= =========
The accompanying notes are an integral part of the financial statements. 4 6 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) 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, 1998 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. -5- 7 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) 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, 1999, 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%. 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, 1999 was approximately $253,951 compared to approximately $116,292 for the same period in 1998. The reason for this increase was primarily attributable to a decrease in prepaid property taxes of $67,000. There was no material change in net cash used in investing activities for the three months ended March 31, 1999 when compared to the same period in 1998. Net cash used in investing activities for the three months ended March 31, 1999 was approximately $123,305 compared to approximately $150,436 for the same period in 1998. The principal reason for this decrease is a decrease in distributions to investors. b. Results of Operations: COMPARISON OF THREE MONTHS ENDED MARCH 31, 1999 TO THE THREE MONTHS ENDED MARCH 31, 1998. Rental revenue for the three months ended March 31, 1999 was approximately $1,033,563, an increase of 5% over rents of approximately $984,642 for the comparable period in 1998. 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 March 31, 1999 were approximately $535,123, an increase of 18% over operating expenses of approximately $454,052 for the comparable period in 1998. c. Year 2000 The Partnership has completed its awareness phase of Year 2000 Compliance and has begun its assessment. All of the Partnership's current software applications and computer hardware is undergoing assessment. So far, the -6- 8 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) Partnership's computer software for the Operating System, Investor Relations, Accounting and Property Management are in Year 2000 compliance. The on-site hardware assessment of the Partnership's computer hardware at the Partnership' two properties will be completed by late April 1999. The computer software for the Partnership's two properties is under assessment and is to be completed by late April 1999. After the Partnership's assessment is completed in late April 1999, the renovation phase will begin. It is anticipated it will be completed by the end of the 2nd Quarter of 1999 with system validation and implementation to follow during the 3rd Quarter. The cost of addressing the Partnership's Year 2000 issues have been estimated at $30,000. The cost of the renovation and implementation will consist of an acceleration of scheduled upgrade of computer hardware for the Partnership properties and the corresponding upgrade of the computer operating system. The Partnership's contingency plans for the Year 2000 problems are still under assessment and should be completed by the end of the 2nd Quarter of 1999. 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 -7- 9 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 5. OTHER INFORMATION: None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: None -8- 10 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (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: March 14, 1999 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 EXHIBIT 27
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, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS 3-MOS DEC-31-1998 JAN-01-1999 MAR-31-1999 532,918 0 0 0 0 1,192,544 28,881,243 (9,663,036) 20,410,752 643,355 19,535,060 0 0 0 232,337 20,410,752 0 1,090,627 0 535,123 231,798 0 379,292 (55,586) 0 (55,586) 0 0 0 (55,586) 2.06 2.06
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