-----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, DkIYTHI28plIqp2ko7sM5u2pt4TWY9XnhUVPjFFzPg/svjpxKqTaiSVdGW+jYZ+J EsKQ6+ZBKhWNL1a8fMtm2A== 0000936392-99-000948.txt : 19990811 0000936392-99-000948.hdr.sgml : 19990811 ACCESSION NUMBER: 0000936392-99-000948 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990810 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: 99683112 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 FOR PERIOD ENDING 06-30-99 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 June 30, 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
JUNE 30, DECEMBER 31, 1999 1998 unaudited ------------ ------------ ASSETS Rental properties: Land $ 7,078,365 $ 7,078,365 Buildings and improvements 21,829,335 21,763,241 ------------ ------------ 28,907,700 28,841,606 Less accumulated depreciation 9,883,122 9,445,320 ------------ ------------ 19,024,578 19,396,286 Cash and cash equivalents 478,847 441,909 Deferred loan fees, net of accumulated amortization of $159,456 and $146,223, respectively 617,727 645,044 Prepaid expenses and other assets 21,662 30,742 ------------ ------------ 1,118,236 1,117,695 ------------ ------------ $ 20,142,814 $ 20,513,981 ============ ============ LIABILITIES AND PARTNERS' CAPITAL Mortgage loans payable $ 19,483,035 $ 19,579,523 Other liabilities: Loan payable to affiliate 60,740 72,640 Accounts payable and accrued liabilities 116,003 170,177 Accrued interest payable 125,699 125,699 Security deposits 213,997 199,177 ------------ ------------ 19,999,474 20,147,216 Commitments Partners' capital 153,340 376,765 Note receivable from general partner (10,000) (10,000) ------------ ------------ $ 20,142,814 $ 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 UNAUDITED
FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, -------------------------- -------------------------- 1999 1998 1999 1998 ----------- ----------- ----------- ----------- Revenues: Rents $ 1,067,424 $ 980,981 $ 2,100,987 $ 1,965,623 Other 43,282 38,854 100,346 79,396 ----------- ----------- ----------- ----------- Total revenues 1,110,706 1,019,835 2,201,333 2,045,019 ----------- ----------- ----------- ----------- Expenses: Operating expenses 474,929 490,734 1,010,052 944,786 Depreciation and amortization 233,319 223,546 465,117 446,377 Interest 369,879 343,796 749,171 735,899 ----------- ----------- ----------- ----------- Total expenses 1,078,127 1,058,076 2,224,340 2,127,062 ----------- ----------- ----------- ----------- Net income (loss) $ 32,579 $ (38,241) $ (23,007) $ (82,043) =========== =========== =========== =========== Basic and diluted per limited partnership unit data Net income/(loss) per limited partnership unit $ 1.21 $ (1.42) $ (.85) $ (3.05) =========== =========== =========== =========== Weighted average limited partnership units outstanding 26,926 26,926 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 -- UNAUDITED
FOR THE SIX MONTHS ENDED JUNE 30, ----------------------------- 1999 1998 --------- --------- Cash flows from operating activities: Net loss $ (23,007) $ (82,043) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 465,117 446,379 (Increase) in: Prepaid expenses and other assets 9,080 (92,912) Deferred loan fees - (7,016) Increase in: Accounts payable, accrued liabilities and accrued interest payable (54,173) 29,752 Security deposits 14,820 2,173 --------- --------- Net cash provided by operating activities 411,837 296,333 --------- --------- Cash flows from investing activities: Capital expenditures (66,094) (93,229) --------- --------- Net cash used in investing activities (66,094) (93,229) --------- --------- Cash flows from financing activities: Principal payments under mortgage debt (96,488) (91,166) Principal payments to affiliate (11,900) (9,800) Distributions to investors (200,417) (160,000) --------- --------- Net cash used by financing activities (308,805) (260,966) --------- --------- Net increase (decrease) in cash and cash equivalents 36,938 (57,862) --------- --------- Cash and cash equivalents at beginning of period 441,909 282,293 --------- --------- Cash and cash equivalents at end of period $ 478,847 $ 224,431 ========= =========
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 10-K. 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 six months ended June 30, 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%. 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, 1999 was approximately $412,000 compared to approximately $296,000 for the same period in 1998. The principal reason for this increase was a decrease in funds spent on prepaid expenses. There was no material change in net cash used in investing activities for the six months ended June 30, 1999 when compared to the same period in 1998. Net cash used in financing activities for the six months ended June 30, 1999 was approximately $309,000 compared to approximately $261,000 for the same period in 1998. The principal reason for this increase was an increase in distributions to investors. 6 8 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) b. Results of Operations: COMPARISON OF THREE MONTHS ENDED JUNE 30, 1999 TO THE THREE MONTHS ENDED JUNE 30, 1998. Rental revenue for the three months ended June 30, 1999 was approximately $1,067,000, an increase of 9% over rents of approximately $981,000 for the comparable period in 1998. The increase is primarily attributable to an increase in monthly tenant rental rates and a decrease in employee lodging. Operating expenses for the three months ended June 30, 1999 were approximately $475,000, a decrease of 3% over operating expenses of approximately $491,000 for the comparable period in 1998. The decrease is primarily attributable to a decrease in partnership expenses. COMPARISON OF SIX MONTHS ENDED JUNE 30, 1999 TO THE SIX MONTHS ENDED JUNE 30, 1998. Rental revenue for the six months ended June 30, 1999 was approximately $2,101,000, an increase of 7% over rents of approximately $1,966,000 for the comparable period in 1998. The increase is primarily attributable to an increase in monthly tenant rental rates and a decrease in employee lodging. Operating expenses for the six months ended June 30, 1999 were approximately $1,010,000, an increase of 7% over operating expenses of approximately $945,000 for the comparable period in 1998. The increase is primarily attributable to increases in advertising, credit check fees, liability insurance, cleaning and supplies for rental turnovers, extensive mold treatment, and gas and electric charges. 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 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's two properties was completed by late April 1999. The renovation phase was postponed because of falling system prices and reconfiguration of the on-site hardware. The renovation is anticipated to begin early September, 1999, with system validation and implementation to follow in October, 1999. The cost of addressing the Partnership's Year 2000 issues should not have a material impact on the Partnership. The cost of the Partnership assessment is minimal and renovation and implementation will consist of an acceleration of scheduled upgrade of computer hardware for the Partnership's 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 3rd Quarter of 1999. 7 9 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) 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: Exhibit 27.1 - Financial Data Schedule 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: August 10, 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-27.1 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 JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 478,847 0 0 0 0 1,118,236 28,881,243 (9,883,122) 20,142,814 516,439 19,483,035 0 0 0 143,340 20,142,814 0 2,201,333 0 1,010,052 465,117 0 749,171 (23,007) 0 (23,007) 0 0 0 (23,007) (.85) (.85)
-----END PRIVACY-ENHANCED MESSAGE-----