-----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, J/dCjJ0v5ImH+W00tdsaGgBHydJpjHFp7q1ALvNsvAomqtxo8IMJwKmHa7hkshUa y5Ky5IS7cWE2Cjtu87GUZw== 0001095811-01-001782.txt : 20010328 0001095811-01-001782.hdr.sgml : 20010328 ACCESSION NUMBER: 0001095811-01-001782 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010327 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-K405 SEC ACT: SEC FILE NUMBER: 000-18528 FILM NUMBER: 1579987 BUSINESS ADDRESS: STREET 1: 11300 SORRENTO VALLEY RD STE 108 CITY: SAN DIEGO STATE: CA ZIP: 92121 BUSINESS PHONE: 8584572750 MAIL ADDRESS: STREET 1: 11300 SORRENTO VALLEY ROAD STREET 2: SUITE 108 CITY: SAN DIEGO STATE: CA ZIP: 92121 10-K405 1 a70857e10-k405.txt FORM 10-K405 FISCAL YEAR END DECEMBER 31, 2000 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2000 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, A CALIFORNIA LIMITED PARTNERSHIP (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.) 1300 Sorrento Valley Road, Suite 108, San Diego, California 92121 (Address of principal executive offices) (Zip Code) (858) 457-2750 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: LIMITED PARTNERSHIP INTERESTS 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 [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] 2 TABLE OF CONTENTS
PAGE ---- PART I Item 1. Business........................................................................1 Item 2. Properties......................................................................2 Item 3. Legal Proceedings...............................................................3 Item 4. Submission of Matters to a Vote of Security Holders.............................3 PART II Item 5. Market for the Registrant's Units and Related Security Holder Matters...........3 Item 6. Selected Consolidated Financial Data............................................4 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................................4 Item 8. Financial Statements and Supplementary Data.....................................6 Item 9. Disagreements on Accounting and Financial Disclosures...........................6 PART III Item 10. Directors and Executive Officers of the Registrant..............................7 Item 11. Executive Compensation..........................................................7 Item 12. Security Ownership of Certain Beneficial Owners and Management..................8 Item 13. Certain Relationships and Related Transactions..................................8 PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.................8 Signatures ...............................................................................11
3 PART I ITEM 1. BUSINESS GENERAL Income Growth Partners, Ltd. X, a California limited partnership (the "Limited Partnership") and subsidiaries (collectively, the "Partnership"), was formed in February 1988 to acquire, operate and hold for investment one or more parcels of income-producing, multifamily residential real property. Currently, the Limited Partnership operates two separate apartment complexes in Southern California: 1) Mission Park and 2) Shadow Ridge Meadows. The limited partnership agreement provides that the Partnership shall continue through February 2021, unless terminated sooner. Income Growth Management, Inc. ("IGM") is the sole general partner. The general partner has made no cash capital contributions to date. As of December 31, 2000, there were 2,086 limited partners in the Partnership. The Partnership has no full-time employees. Employees of corporations affiliated with the general partner perform certain administrative and other services on behalf of the Partnership (see Item 13). The Partnership's executive offices are located at 11300 Sorrento Valley Road, Suite 108, San Diego, California 92121 and the Partnership's telephone number is (858) 457-2750. FINANCING STRATEGY The Partnership seeks to minimize the cost of financing its properties and will refinance existing loans from time to time to take advantage of prevailing market conditions. The Mission Park and Shadow Ridge Meadows properties were refinanced to prevailing rates during 1995 and 1997, respectively. COMPETITIVE CONDITIONS Changes in the national and regional economic climates, changes in local real estate conditions, such as the oversupply of apartments or a reduction in demand for apartments, competition from single-family housing, apartment properties and other forms of multifamily residential housing, the inability to provide adequate maintenance and to obtain adequate insurance, increased operating costs, changes in zoning, building, environmental, rent control and other laws and regulations, the costs of compliance with current and future laws, changes in real property taxes and unusual occurrences (such as earthquakes and floods) and other factors beyond the control of the Partnership may adversely affect the income from, and value of, the Partnership's properties. LEASES AND INFLATION Substantially all of the leases at the Partnership's apartment properties are for a period of six months or less, allowing, at the time of renewal, for adjustments in the rental rate and the opportunity to release the apartment unit at the prevailing market rate. The short-term nature of these leases generally serves to minimize the risk to the Partnership of the adverse effect of inflation and the Partnership does not believe that inflation has had a material adverse impact on its revenues. 1 4 ITEM 1. BUSINESS, CONTINUED RESTRICTIONS IMPOSED BY LAWS BENEFITING DISABLED PERSONS Under the Americans with Disabilities Act of 1990 (the "ADA"), all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. These requirements became effective in 1992. A number of additional federal, state and local laws exist which also may require modifications to the properties, or restrict certain further renovations thereof, with respect to access thereto by disabled persons. For example, the Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment properties first occupied after March 13, 1990 to be accessible to the handicapped. Noncompliance with the ADA or the FHAA could result in an order to correct any noncomplying feature, which could result in substantial capital expenditures. Although management of the Partnership believes that the properties are substantially in compliance with present requirements, if the properties are not in compliance, the Partnership is likely to incur additional costs to comply with the ADA and the FHAA. During 1995, on a tax free basis, the Limited Partnership exchanged the Mission Park property for a 99% interest in IGP X Mission Park Associates, L.P., a newly formed California limited partnership (the "Mission Park Subsidiary"). The Mission Park Subsidiary is separate and distinct from the Limited Partnership having separate assets, liabilities and business operations. During 1997, on a tax free basis, the Limited Partnership exchanged the Shadow Ridge Meadows property for a 99% interest in IGP X Shadow Ridge Meadows, Ltd., a newly formed California limited partnership (the "Shadow Ridge Meadows Subsidiary"). The Shadow Ridge Meadows Subsidiary is also separate and distinct from the Partnership, having separate assets, liabilities and business operations. Formation of the Mission Park Subsidiary and the Shadow Ridge Subsidiary had no impact on the Partnership's overall financial condition, results of operations, allocation of net income/loss, cash distributions or Partnership assets. ITEM 2. PROPERTIES The Partnership, through its subsidiaries, presently owns two properties as follows: MISSION PARK: Date of purchase: August 1989 Purchase price: $17,100,000 Property Description: A 264 unit apartment complex located in San Marcos, California. The property includes two full-size recreation rooms, two heated swimming pools and spas, night-lighted tennis courts, a satellite cable TV system and covered parking. The building is approximately ten years old. The property contains 215,292 square feet. SHADOW RIDGE MEADOWS: Date of purchase: November 1988 Purchase price: $12,700,000 Property Description: A 184 unit apartment complex located in Vista, California. The property includes a large recreation center, a heated swimming pool and spa, five laundry facilities, a satellite cable TV system and covered parking. The building is approximately 12 years old. The property contains 127,197 square feet. 2 5 ITEM 3. LEGAL PROCEEDINGS The Partnership is not a party to any legal proceedings other than various claims and lawsuits arising in the normal course of its business, which in the opinion of the Partnership's management, are not individually or in the aggregate material to its business. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None PART II ITEM 5. MARKET FOR REGISTRANT'S UNITS AND RELATED SECURITY HOLDER MATTERS (a) Market Information As of December 31, 2000, the outstanding securities of the Partnership included the Original Units and Class A Units held by the limited partners. The Partnership's Amended and Restated Agreement of Partnership substantially restricts transfers of all units and no public trading market for the units exists or is intended or expected to develop. (b) Holders As of December 31, 2000, the Partnership's 18,826.5 outstanding Original Units and 8,100 Class A Units were held by an aggregate of 2,086 Limited Partners. (c) Dividends As a limited partnership, the Partnership does not pay dividends. The amended partnership agreement provides that any distributions of cash from operations will be made in the following order of priority: First, each Class A Unit receives a 12% cumulative noncompounded annual return on the balance of actual funds invested in Class A Units. Second, each Class A Unit receives a total return of original invested capital. Third, each Class A Unit receives a $500 bonus. Fourth, each Original Unit holder receives a 10% noncumulative return on the adjusted balance of original invested capital. Thereafter, 90% of distributions of cash from operations will be made to the Original Unit holders and 10% to the general partner. The amended partnership agreement also provides that any distributions of cash from sale or refinancing of will be made in the following order of priority: First, each Class A Unit receives a 12% cumulative noncompounded annual return on the balance of actual funds invested in Class A Units. Second, each Class A Unit receives a total return of original invested capital. Third, each Class A Unit receives a $500 bonus. Fourth, each Original Unit holder receives an amount equal to the adjusted balance of original invested capital. Fifth, the general partner receives any non-subordinated debts payable to them. Sixth, each Original Unit holder receives a 10% cumulative return on the adjusted balance of original invested capital (the "Preferred Return"). Thereafter, 85% of distributions of cash from sale or refinancing will be made to the Original Unit holders and 15% to the general partner. 3 6 The Partnership distributed $739,125 during 2000. Cash distributions are determined at the discretion of the general partner. Any future distributions are largely dependent on future income, expenses, debt service and operating reserves and there can be no assurance that future distributions will be paid. ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA The following selected consolidated financial data should be read in conjunction with the audited consolidated financial statements and the related notes described in Item 8 herein:
2000 1999 1998 1997 1996 Total assets $19,230,422 $19,818,470 $20,513,980 $21,225,719 $21,476,918 Long-term obligations 19,170,729 19,382,900 19,579,523 19,765,202 19,788,869 Total revenue 4,843,386 4,485,956 4,148,324 3,791,975 3,576,981 Total expenses (4,474,860) (4,463,024) (4,331,753) (4,163,361) (4,063,509) Net income (loss) 368,526 22,932 (183,429) (371,386) (486,528) Net income (loss) per limited partnership unit 11.63 0.72 (5.79) (11.72) (15.36) Weighted average limited partnership units 26,926 26,926 26,926 26,926 26,926
There had been no cash distributions to partners up until December 31, 1997. The Partnership distributed to limited partners approximately $739,000 and $514,000 during 2000 and 1999, respectively. ITEM 7. 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 herein. Historical results and percentage relationships set forth in the consolidated statement of operations in the financial statements, including trends which might appear, should not be taken as indicative of future operations. Statements contained in this report that are not purely historical are forward-looking statements including statements regarding the Partnership's expectations, intentions, beliefs or strategies regarding the future. All forward-looking statements included in this report are based upon the information available to the Partnership on the date thereof, and the Partnership assumes no obligation to update any such forward-looking statements. It is important to note that the Partnership's actual results could differ materially from those in such forward-looking statements. (a) Liquidity and Capital Resources In January 1994, the Limited Partnership filed a voluntary petition for relief under Chapter 11 of the federal bankruptcy laws in the United States Bankruptcy Court for the Southern District of California. Under the provisions of the Plan of Reorganization (the "Plan"), the Limited Partnership was allowed to retain ownership of the Mission Park and Shadow Ridge Meadows properties. Despite $2,025,000 in additional capital from existing investors in the form of Class A Units, the Limited Partnership was unable to raise the necessary capital to retain ownership of its third property, Margarita Summit. The Limited Partnership emerged from Chapter 11 effective in May 1995 having fully satisfied all claims in accordance with the Plan. 4 7 Prior to 1996, the Partnership's operating and debt service obligations had been financed through the sale of Partnership Units, cash provided by operating activities, and 1995 debt restructuring activities. During 1996 through 2000, all of the Partnership's operating and debt service cash requirements have been met through cash generated from operations. COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO THE YEAR ENDED DECEMBER 31, 1999. Net cash provided by operating activities for the year ended December 31, 2000 was $1,317,000 compared to $871,000 for the same period in 1999. The principal reason for this difference was an increase in net income of approximately $346,000 and a decrease in prepaids and other assets of approximately $94,000. Net cash used in investing activities for the year ended December 31, 2000 was $171,000 compared to $144,000 for the same period in 1999. The increase in cash used in investing activities was due primarily to increases in property & improvements as compared to the prior year. Net cash used in financing activities for the year ended December 31, 2000 was $981,000 compared to $734,000 for the same period in 1999. The increase was primarily due to an increase of approximately $226,000 in distributions paid during 2000 and an increase of principal payments under mortgage debt of approximately $16,000. COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31, 1998. Net cash provided by operating activities for the year ended December 31, 1999 was $871,000 compared to $871,000 for the same period in 1998. Net cash used in investing activities for the year ended December 31, 1999 was $144,000 compared to $156,000 for the same period in 1998. The decrease in cash used in investing activities was due primarily to decreases in property & improvements as compared to the prior year. Net cash used in financing activities for the year ended December 31, 1999 was $734,000 compared to $555,000 for the same period in 1998. The increase was primarily due to an increase of approximately $192,000 in distributions paid during 1999, an increase of principal payments under mortgage debt of approximately $11,000 and a decrease in principal payments to affiliate of approximately $26,000. (b) Results of Operations COMPARISON OF YEAR ENDED DECEMBER 31, 2000 TO THE YEAR ENDED DECEMBER 31, 1999. Rental revenue for the year ended December 31, 2000 was $4,670,000, an increase of 9% over rents of $4,304,000 in the comparable period in 1999. The increase is primarily attributable to an increase in monthly tenant rental rates. Average occupancy rates were essentially unchanged from 1999 to 2000 at approximately 96.5%. Interest expense for the year ended December 31, 2000 was $1,472,000, an increase of .5% over interest expense of $1,464,000 in the comparable period in 1999. Operating expense for the year ended December 31, 2000 was $2,077,000, an increase of .2% over operating expense of $2,072,000 in the comparable period in 1999. 5 8 Depreciation and amortization expense for the year ended December 31, 2000 was $925,000, a decrease of .3% over the expense of $928,000 in the comparable period in 1999. Operating expenses, as well as depreciation, amortization and interest expense, were consistent with the results of 1999. COMPARISON OF YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31, 1998. Rental revenue for the year ended December 31, 1999 was $4,304,000, an increase of 9% over rents of $3,944,000 in the comparable period in 1998. The increase is primarily attributable to an increase in monthly tenant rental rates. Interest expense for the year ended December 31, 1999 was $1,464,000, a decrease of 2% over interest expense of $1,489,000 in the comparable period in 1998. Operating expense for the year ended December 31, 1999 was $2,072,000, an increase of 7% over operating expense of $1,929,000 in the comparable period in 1998. The increase is attributable to higher expenses related to the increase in rental revenue. Depreciation and amortization expense for the year ended December 31, 1999 was $928,000, an increase of 2% over the expense of $914,000 in the comparable period in 1998. The increase is attributable to consistent yearly increases in total capitalized fixed asset expenditures. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The consolidated financial statements and supplementary data required by this Item are set forth at the pages indicated in Item 14(a). ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE The Registrant was advised by the accounting firm of PricewaterhouseCoopers LLP on September 6, 2000 that it had resigned as of that date as the principal accountant to audit the Registrant's financial statements. There have been no adverse opinions, disclaimers of opinion or qualifications or modifications as to uncertainty, audit scope or accounting principles regarding the reports of PricewaterhouseCoopers LLP on the Registrant's financial statements within the two most recent fiscal years or any subsequent interim period. There were no disagreement(s) with PricewaterhouseCoopers LLP on any matter of accounting principles or practice, financial statement disclosure or auditing scope or procedure within the two most recent fiscal years and any subsequent interim period preceding its resignation, which disagreement(s), if not resolved to the satisfaction of PricewaterhouseCoopers LLP, would have caused it to make reference to the subject matter of the disagreement in connection with its report. No "reportable events" (as defined in Item 304 (a)(1)(v) of Regulation S-K) occurred during the Registrant's two most recent fiscal years and any subsequent interim period preceding PricewaterhouseCoopers LLP's resignation. The Registrant engaged the accounting firm of Nation Smith Hermes Diamond ("Nation Smith"), on December 18, 2000, as the principal accountant to audit the Registrant's financial statements. Neither the Registrant nor anyone acting on its behalf has previously consulted Nation Smith during the two most recent fiscal years or any subsequent interim period for any purpose. 6 9 PART III ITEM 10. GENERAL PARTNER AND EXECUTIVE OFFICERS OF THE PARTNERSHIP The general partner of the Partnership is Income Growth Management, Inc. ("IGM"), a California corporation. The executive officers of IGM do not receive compensation from the Partnership. The names, ages and positions of responsibility held by the executive officers and directors of IGM are as follows:
NAME AGE POSITION ---- --- -------- David Maurer 48 President and Director Timothy Maurer 51 Secretary and Director Robert Green 43 Vice President of Operations and Director
FAMILY RELATIONSHIPS David Maurer and Timothy Maurer are brothers. BUSINESS EXPERIENCE The following is a brief background of the directors and executive officers of IGM: DAVID MAURER has served as President and Director of IGM since 1992, and as President and Director of ENA Corporation ("ENA"), an affiliate of IGM, since 1979. He has been involved in real estate syndication and property management since 1980, and in real estate development and construction since 1974. David was educated at the University of California, San Diego (B.A. 1974). TIMOTHY MAURER has served as Secretary and Director of IGM since 1979. He has been involved in real estate syndication, development, design and construction since 1975. Timothy was educated at the California College of Arts and Crafts, Oakland (B.F.A. 1972). ROBERT GREEN has served as Vice President of Operations and Director of IGM since 1988. He has also been the Director of Property Management of ENA since 1988. He has been directly involved in property management since 1980. Robert worked for four years with Coldwell Banker Real Estate Management Services in San Diego, managing both commercial and residential property. He also worked for four years with C&R Realty Company managing over 75 residential properties in Oregon and Washington. Robert was educated at Pacific University in Forest Grove, Oregon (B.A. 1980). ITEM 11. EXECUTIVE COMPENSATION The Partnership has no executive officers and has not paid nor proposes to pay any compensation or retirement benefits to the directors or executive officers of Income Growth Management, Inc., the general partner. See Item 13 for compensation to the general partner. 7 10 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) Security Ownership of Certain Beneficial Owners
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS -------------- ---------------- -------------------- -------- Class A Units John W. Baer 609.0000 7.5% 1091 Valley View Court Los Altos, CA 94024
No other person or group is known by the Partnership to own beneficially more than 5% of the outstanding Original Units or Class A Units. (b) Security Ownership of Management None of the officers and directors of the Partnership's corporate general partners are the beneficial owners of any Original Units or Class A Units. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Partnership is entitled to engage in various transactions involving its general partners and its affiliates as described in the Partnership Agreement. The table below reflects amounts paid to the general partner or its affiliates during the following years:
2000 1999 1998 ---- ---- ---- Management fees $270,000 $226,000 $207,000 Administrative fees 91,000 130,000 99,000 Loan origination fees -- -- 10,000
PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) Documents filed as part of this report: (1) Financial Statements The following financial statements of the Partnership and related notes to financial statements and accountants' report are filed herein: 8 11 Reports of Independent Accountants Consolidated Balance Sheets as of December 31, 2000 and 1999 Consolidated Statements of Operations for the years ended December 31, 2000, 1999 and 1998 Consolidated Statements of Partners' Capital (Deficit) for the years ended December 31, 2000, 1999 and 1998 Consolidated Statements of Cash Flows for the years ended December 31, 2000, 1999 and 1998 Notes to Consolidated Financial Statements (2) Financial Statement Schedule Schedule III - Real Estate and Accumulated Depreciation All other schedules are either not required, or the information therein is included in the notes to the audited financial statements. (b) Reports on Form 8-K Form 8-K was filed on December 21, 2000. (c) Exhibits The following Exhibit Index lists the exhibits that are either filed as part of this report or incorporated herein by reference from a prior filing.
EXHIBIT INDEX EXHIBIT NO. DESCRIPTION LOCATION - ----------- ----------- -------- 2.2 Second Amended Disclosure Statement to Debtor's (1) Second Amended Plan of Reorganization, As Revised (with Second Amended Plan of Reorganization attached as Exhibit 1) filed with the Bankruptcy Court on October 25, 1994; Order Approving Second Amended Disclosure Statement to Debtor's Second Amended Plan of Reorganization, Approving Ballots and Fixing Dates for Filing Acceptances or Rejections of Plan and for Confirmation Hearing, Combined with Notice Thereof; Equity Interest Holder Ballot for Accepting or
9 12 Rejecting Debtor's Second Amended Plan of Reorganization; Offering Memorandum for Income Growth Partners, Ltd. X Class A Units dated October 27, 1994 (with Amended and Restated Agreement of Limited Partnership attached as Exhibit B). 3.1 Articles of Incorporation of IGP X Mission Park, Inc. (2) 4.2 Amended and Restated Agreement of Limited Partnership (3) 4.3 Agreement of Limited Partnership of IGP X Mission (2) Park Associates, L.P., A California Limited Partnership 4.4 Agreement of Limited Partnership of IGP X Shadow Ridge (2) Meadows, Ltd., A California Limited Partnership 28.1 Prospectus dated January 3, 1991 (4) 28.4 Letter regarding resignation of General Partner (5)
- ------------------------- (1) Incorporated by reference from the Partnership's Quarterly Report on Form 10-Q for the third quarter ended September 30, 1994 (Commission File Number 0-18528). (2) Incorporated by reference from the Partnership's Current Report on Form 8-K dated December 27, 1995 (Commission File Number 0-18528). (3) Included as Exhibit "B" to the Partnership's Offering Memorandum for Income Growth Partners, Ltd. X Class A Units dated October 27, 1994, included in Exhibit 2.2 incorporated by reference from the Partnership's Quarterly Report on Form 10-Q for the third quarter ended September 30, 1994 (Commission File Number 0-18528). (4) Incorporated by reference from the Partnership's Annual Report on Form 10-K for the Fiscal Year ended December 31, 1992 (Commission File Number 0-18528). (5) Incorporated by reference from the Partnership's Annual Report on Form 10-K for the Fiscal Year ended December 31, 1993 (Commission File Number 0-18528). 10 13 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 26, 2001 INCOME GROWTH PARTNERS, LTD. X (a California Limited Partnership) By: Income Growth Management, Inc. General Partner By: /s/ David W. Maurer David W. Maurer, President Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signatures Title and Capacity Date /s/ David W. Maurer President March 26, 2001 /s/ Timothy C. Maurer Secretary and Principal March 26, 2001 Financial Officer 11 14 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS - ITEM 14 OF FORM 10-K
PAGE ---- Reports of Independent Accountants........................................................F-2 Consolidated Financial Statements and Notes: Balance Sheets as of December 31, 2000 and 1999......................................F-4 Statements of Operations for the Years Ended December 31, 2000, 1999 and 1998.....................................................F-5 Statements of Partners' Capital (Deficit) for the Years Ended December 31, 2000, 1999 and 1998.....................................................F-6 Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998.....................................................F-7 Notes to Consolidated Financial Statements...........................................F-8 Schedule III - Real Estate and Accumulated Depreciation ............................F-16
F-1 15 REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES We have audited the accompanying consolidated balance sheet of INCOME GROWTH PARTNERS, LTD. X (A CALIFORNIA LIMITED PARTNERSHIP) AND SUBSIDIARIES (the "Partnership") (see Note 1(b) to the consolidated financial statements) as of December 31, 2000, and the related consolidated statements of operations, partners' capital (deficit) and cash flows for the year then ended. We have also audited the schedule listed in the accompanying index. These consolidated financial statements and schedule are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES as of December 31, 2000, and the consolidated results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the schedule presents fairly, in all material respects, the information set forth therein. /s/ Nation Smith Hermes Diamond February 16, 2001 F-2 16 Report of Independent Accountants TO INCOME GROWTH PARTNERS, LTD. X and Subsidiaries: In our opinion, the consolidated balance sheet as of December 31, 1999 and the related consolidated statements of operations, partners' capital (deficit) and cash flows for each of the two years in the period ended December 31, 1999 (appearing in this Form 10-K) present fairly, in all material respects, the consolidated financial position, results of operations and cash flows of Income Growth Partners, Ltd. X, a California limited partnership, and subsidiaries (collectively, the "Partnership") at December 31, 1999 and for each of the two years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. We have not audited the consolidated financial statements of Income Growth Partners, Ltd. X, and subsidiaries for any period subsequent to December 31, 1999. /s/ PricewaterhouseCoopers LLP San Diego, CA March 3, 2000 F-3 17 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - --------------------------------------------------------------------------------
December 31, 2000 1999 - ----------------------------------------------------------------------------------------- ASSETS Rental properties (Notes 1(e) and 3) Land $ 7,078,365 $ 7,078,365 Buildings and improvements 22,078,598 21,907,461 - ----------------------------------------------------------------------------------------- 29,156,963 28,985,826 Less accumulated depreciation (11,186,735) (10,316,949) - ----------------------------------------------------------------------------------------- 17,970,228 18,668,877 Cash and cash equivalents (Notes 1(d) and 5(a)) 599,660 434,712 Deferred loan fees, net of accumulated amortization of $243,849 and $188,166, respectively (Note 1(h)) 533,334 589,017 Prepaids and other assets 127,200 125,864 - ----------------------------------------------------------------------------------------- $ 19,230,422 $ 19,818,470 ========================================================================================= LIABILITIES AND PARTNERS' DEFICIT Mortgage loans payable (Note 3) $ 19,170,729 $ 19,382,900 OTHER LIABILITIES Loan payable to affiliates (Notes 3 and 4(d)) 18,703 48,540 Accounts payable and accrued liabilities 177,008 172,559 Accrued interest payable 125,699 120,684 Security deposits 232,852 217,757 - ----------------------------------------------------------------------------------------- 19,724,991 19,942,440 COMMITMENTS AND CONTINGENCIES (NOTE 5) LIMITED PARTNERS' (DEFICIT) CAPITAL (172,403) 253,475 GENERAL PARTNER'S DEFICIT (312,166) (367,445) Note receivable from general partner (Note 4(c)) (10,000) (10,000) - ----------------------------------------------------------------------------------------- Total partners' deficit (494,569) (123,970) - ----------------------------------------------------------------------------------------- $ 19,230,422 $ 19,818,470 =========================================================================================
The accompanying notes are an integral part of these consolidated financial statements. F-4 18 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
Years Ended December 31, 2000 1999 1998 - ------------------------------------------------------------------------------------------ REVENUES Rents (Note 1(f)) $ 4,669,871 $ 4,303,557 $ 3,943,519 Other 156,755 175,224 198,095 Interest 16,760 7,175 6,710 - ------------------------------------------------------------------------------------------ Total revenues 4,843,386 4,485,956 4,148,324 EXPENSES Operating expenses 2,077,285 2,071,793 1,928,765 Interest 1,472,105 1,463,577 1,488,893 Depreciation and amortization (Notes 1(e) and (h)) 925,470 927,654 914,095 - ------------------------------------------------------------------------------------------ Total expenses 4,474,860 4,463,024 4,331,753 - ------------------------------------------------------------------------------------------ NET INCOME (LOSS) $ 368,526 $ 22,932 $ (183,429) - ------------------------------------------------------------------------------------------ BASIC AND DILUTED PER LIMITED PARTNERSHIP UNIT DATA (NOTE 2) Net income (loss) $ 11.63 $ 0.72 $ (5.79) - ------------------------------------------------------------------------------------------ Weighted average limited partnership units 26,926 26,926 26,926 ===========================================================================================
The accompanying notes are an integral part of these consolidated financial statements. F-5 19 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL (DEFICIT) - --------------------------------------------------------------------------------
Limited Partners ---------------------- General Original Class A Partner Partners Partners Total - ----------------------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1997 $ (343,371) $-- $ 1,225,514 $ 882,143 Distributions (Note 2) -- -- (321,949) (321,949) Net loss (27,514) -- (155,915) (183,429) - ----------------------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1998 (370,885) -- 747,650 376,765 Distributions (Note 2) -- -- (513,667) (513,667) Net income 3,440 -- 19,492 22,932 - ----------------------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 1999 (367,445) -- 253,475 (113,970) Distributions (Note 2) -- -- (739,125) (739,125) Net income 55,279 -- 313,247 368,526 - ----------------------------------------------------------------------------------------------- BALANCE AT DECEMBER 31, 2000 $ (312,166) $-- $ (172,403) $ (484,569) ===============================================================================================
The accompanying notes are an integral part of these consolidated financial statements. F-6 20 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - --------------------------------------------------------------------------------
Years Ended December 31, 2000 1999 1998 - ------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 368,526 $ 22,932 $ (183,429) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 869,786 871,629 862,828 Amortization of loan fees 55,683 56,025 51,267 Change in operating assets and liabilities: Prepaids and other assets (1,336) (95,122) 120,439 Accounts payable and accrued liabilities 4,449 2,382 21,676 Security deposits 15,095 18,580 (2,073) Accrued interest payable 5,015 (5,015) 76 - ------------------------------------------------------------------------------------------------------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 1,317,218 871,411 870,784 - ------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (171,137) (144,218) (156,164) - ------------------------------------------------------------------------------------------------------------- CASH FLOWS FROM FINANCING ACTIVITIES Distributions to Partners (739,125) (513,667) (321,949) Principal payments of mortgage debt (212,171) (196,623) (185,679) Principal payments to affiliate (29,837) (24,100) (50,360) Loan fees and refinancing costs -- -- (7,016) Increase in note receivable from general partner -- -- 10,000 - ------------------------------------------------------------------------------------------------------------- NET CASH USED IN FINANCING ACTIVITIES (981,133) (734,390) (555,004) - ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 164,948 (7,197) 159,616 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 434,712 441,909 282,293 - ------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF YEAR $ 599,660 $ 434,712 $ 441,909 - ------------------------------------------------------------------------------------------------------------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the year for: Interest $ 920,455 $ 1,463,577 $ 1,448,893 =============================================================================================================
The accompanying notes are an integral part of these consolidated financial statements. F-7 21 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 1. SUMMARY OF A summary of the Partnership's significant accounting SIGNIFICANT policies consistently applied in the preparation of the ACCOUNTING accompanying consolidated financial statements follows. POLICIES (a) Nature of INCOME GROWTH PARTNERS, LTD. X, a California limited operations partnership (the "Limited Partnership"), and subsidiaries (collectively, the "Partnership") was formed in February 1988, to acquire, operate and hold for investment one or more parcels of income-producing, multifamily residential real property. Currently, the Partnership owns a 264 unit building in San Marcos, California ("Mission Park") and a 184 unit building in Vista, California ("Shadow Ridge Meadows"). The limited partnership agreement provides that the Partnership shall continue through February 2021, unless terminated sooner. Income Growth Management, Inc. is the sole general partner. The general partner has made no cash capital contributions to date. As of December 31, 2000, there were 2,086 limited partners in the Partnership. (b) Principles of The consolidated financial statements include the consolidation accounts of the Limited Partnership and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (c) Use of The preparation of the consolidated financial estimates statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. (d) Cash and cash The Partnership considers all highly-liquid investments equivalents with original maturities of three months or less to be cash equivalents. (e) Buildings, Land, buildings and improvements are recorded at cost. improvements Buildings and improvements are depreciated using the and straight-line method over the estimated useful lives of depreciation 27.5 and 5 to 15 years, respectively. F-8 22 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (e) Buildings, Expenditures for maintenance and repairs are charged to improvements expense as incurred. Significant renovations are and capitalized and depreciated over the remaining life of depreciation, the property. cont'd 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. (f) Revenue Rental revenues are recognized at the beginning of each recognition month based on the current occupancy of the apartments. Tenant leases are generally for a term of six months with an option to renew for an additional six months or to rent on a month-to-month basis. (g) Income No provision has been made for federal or state income taxes taxes on the operations of the Partnership. Such taxes are imposed on the individual partners for their respective shares of Partnership income or loss. The tax returns and amounts of allocable Partnership income or loss of the Partnership are subject to examination by federal and state taxing authorities. If such examinations result in a change in the Partnership status or in changes to allocable Partnership income or loss, the tax liability of the Partnership or the partners could be changed accordingly. (h) Deferred loan Deferred loan fees represent expenses incurred in fees obtaining the Partnership's mortgage loans payable. These fees are being amortized to interest expense over the initial term of the loan using the straight-line method, which approximates the effective interest method. F-9 23 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (i) Advertising The Partnership follows the policy of charging the costs of advertising to expense as incurred. Advertising expenses were approximately $55,000, $70,000 and $58,000 for 2000, 1999 and 1998, respectively. (j) Comprehensive Other comprehensive income refers to changes in capital income (net assets) which do not result from investments by partners or distributions to partners. Other comprehensive income consists of revenues, expenses, gains and losses that, under accounting principles generally accepted in the United States of America, are included in comprehensive income but are excluded from net income as these amounts are recorded directly as an adjustment to partners' capital. For the periods ending December 31, 2000, 1999 and 1998, the Partnership's comprehensive income was equal to the Partnership's net income. (k) Reclassifications Certain amounts in the 1999 and 1998 financial statements have been reclassified to conform with the 2000 classifications. These reclassifications have no effect on reported net income. 2. ACTIVITIES OF The general partner or its affiliates manage and THE control the affairs of the Partnership and have general PARTNERSHIP responsibility for supervising the Partnership's properties and operations. The general partner and affiliates are compensated for these efforts as explained in Note 4. The original partnership agreement was amended in October 1994 and provides that cash distributions from operations are to be determined at the discretion of the general partner. After adequate working capital reserves have been met, cash distributions deemed appropriate by the general partner will be made as set forth therein. DISTRIBUTION OF CASH FROM OPERATIONS The amended partnership agreement provides that any distributions of cash from operations will be made in the following order of priority: First, each Class A Unit receives a 12% cumulative noncompounded annual return on the balance of actual funds invested in Class A Units. Second, each Class A Unit receives a total return of original invested capital. Third, each Class A Unit receives a $500 bonus. Fourth, each F-10 24 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. ACTIVITIES OF Original Unit holder receives a 10% noncumulative THE return on the adjusted balance of original invested PARTNERSHIP, capital. Thereafter, 90% of distributions of cash from cont'd operations will be made to the Original Unit holders and 10% to the general partner. Distributions of $739,125, $513,667 and $321,949 were made during 2000, 1999 and 1998, respectively. DISTRIBUTION OF CASH FROM SALE OR REFINANCING The amended partnership agreement provides that any distributions of sale or refinancing will be made in the following order of priority: First, each Class A Unit receives a 12% cumulative noncompounded annual return on the balance of actual funds invested in Class A Units. Second, each Class A Unit receives a total return of original invested capital. Third, each Class A Unit receives a $500 bonus. Fourth, each Original Unit holder receives an amount equal to the adjusted balance of original invested capital. Fifth, the general partner receives any non-subordinated debts payable to them. Sixth, each Original Unit holder receives a 10% cumulative return on the adjusted balance of original invested capital (the "Preferred Return"). Thereafter, 85% of distributions of cash from sale or refinancing will be made to the Original Unit holders and 15% to the general partner. ALLOCATION OF NET INCOME/LOSS Net losses are allocated 85% to the limited partners and 15% to the general partner. Losses in excess of the limited partners' capital balances are allocated 100% to the general partner. Net income will be allocated 100% to the general partner until the aggregate net income allocated is equal to the aggregate net losses allocated to the general partner in all previous years. The balance of net income after the initial allocation to the general partner shall be allocated 85% to the limited partners and 15% to the general partner. F-11 25 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 2. ACTIVITIES OF Net income allocation to limited partners and basic and THE diluted partnership unit data were calculated as PARTNERSHIP, follows: cont'd
December 31, 2000 1999 1998 --------------------------------------------------------------------------- Net income from operations $368,526 $22,932 $(183,429) Percentage allocable to limited partners 85% 85% 85% --------------------------------------------------------------------------- $313,247 $19,492 $(155,915) Weighted average limited partnership units 26,926 26,926 26,926 --------------------------------------------------------------------------- Basic and diluted per limited limited partnership unit data $ 11.63 $ 0.72 $ (5.79) ===========================================================================
3. MORTGAGE Mortgage loans and loans payable to affiliate consisted LOANS AND of the following: LOANS PAYABLE
December 31, 2000 1999 ----------------------------------------------------------------------------------- Mission Park - Mortgage note payable dated December 27, 1995, collateralized by first trust deed on land and buildings and guaranteed by officers of the general partner, interest and principal of $73,144 payable monthly based on 7.76% fixed annual interest rate, amortized over 30 years, balloon payment of approximately $8,918,000 due in January 2006. $ 9,685,900 $ 9,806,865 Shadow Ridge Meadows - Mortgage note payable dated October 27, 1997, collateralized by first trust deed on land and buildings, interest and principal of $68,106 payable monthly based on 7.49% fixed annual interest rate, amortized over 30 years, balloon payments of approximately $8,475,000 due in November 2007. 9,484,829 9,576,035
F-12 26 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 3. MORTGAGE LOANS AND LOANS PAYABLE, cont'd
December 31 2000 1999 ------------------------------------------------------------------------------------- Note payable to ENA, affiliate of the general partner - promissory note dated December 27, 1995, simple interest and principal payable from time to time at the published prime rate, stated as 9.5% at December 31, 2000, due upon demand (Note 4(d)). 18,703 24,593 Note payable to Income Growth Property Management, Inc., affiliate of the general partner - promissory note dated October 23, 1997, simple interest and principal payable from time to time at the published prime rate, paid in full in 2000. -- 23,947 -------------------------------------------------------------------------------------- $19,189,432 $19,431,440 ======================================================================================
Future minimum principal payments on notes payable are as follows:
Year Ending December 31, ----------------------------------------------------------------------- 2001 $ 249,861 2002 249,590 2003 269,470 2004 288,920 2005 313,947 Thereafter 17,817,644 ----------------------------------------------------------------------- Total $19,189,432 =======================================================================
4. RELATED PARTY Following is a description of related party TRANSACTIONS transactions for the three years ended December 31, 2000 that have not otherwise been disclosed: (a) Management The Partnership's properties are managed by an fees affiliate of the general partner who receives management fees. The fee for each property is equal to 5% of the operating revenues generated by that property. Management fees aggregated approximately $270,000, $226,000 and $207,000 in 2000, 1999 and 1998, respectively. F-13 27 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- (b) Administration The Partnership has an agreement with an affiliate of costs the general partner (the "Affiliate") who furnishes certain administrative services and facilities to the Partnership, including accounting, data processing, duplication and transfer agent expenses, professional (including, but not limited to, regulatory reporting and legal services), recording and partner communication expenses. The agreement provides for reimbursement to the Affiliate for actual costs incurred. Reimbursements paid to the Affiliate under the provisions of this agreement aggregated approximately $91,000, $130,000 and $99,000 in 2000, 1999 and 1998, respectively. (c) Note At December 31, 2000 and 1999, a non-interest bearing receivable note receivable of $10,000 was due from the general from general partner for their initial partnership capital partner contribution. (d) Debt placement During 1997 and 1995, the Partnership issued notes fees payable to an affiliate of the general partner for payment of debt placement fees of $97,500 and $102,000, respectively. Debt placement fees were equal to 1% of the principal amounts of the new third party financing. At December 31, 2000 and 1999, the aggregate balances of these notes were $18,703 and $48,540, respectively (Note 3). (e) Subordinated If the general partner, or any of its affiliates, real estate render services in negotiating and implementing the brokerage sale of Partnership properties, the general partner or commissions such affiliates will be paid by a real estate brokerage commission in an amount up to one-half of the commission customarily charged in arm's-length transactions, but not in excess of 3% of the contract price for the property. Payment of such commission (other than payments in the form of promissory notes that are subordinated to the return of capital contributions to limited partners) shall be deferred until the limited partners have received distributions equal to their total original invested capital, plus the 10% Preferred Return described in Note 2. No properties were sold in 2000, 1999 or 1998 and, accordingly, no brokerage commissions were paid by the Partnership. F-14 28 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- 5. CONCENTRATIONS (a) Credit risk The Partnership maintains cash balances at various financial institutions primarily located in San Diego. Accounts at these institutions are secured by the Federal Deposit Insurance Corporation up to $100,000. As of December 31, 2000, the Partnership had approximately $529,000 of uninsured cash based on actual bank balances. The Partnership has not experienced any losses in such accounts. Management believes that the Partnership is not exposed to any significant credit risk on cash and cash equivalents. (b) Nature of Changes in the national and regional economic climates, business changes in local real estate conditions, such as the oversupply of apartments or a reduction in demand for apartments, competition from single-family housing, apartment properties and other forms of multifamily residential housing, the inability to provide adequate maintenance and to obtain adequate insurance, increased operating costs, changes in zoning, building, environment, rent control and other laws and regulations, the costs of compliance with current and future laws, changes in real property taxes and unusual occurrences (such as earthquakes and floods) and other factors beyond the control of the Partnership may adversely affect the income from, and value of, the Partnership's properties. F-15 29 SCHEDULE III INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION FOR THE YEAR ENDED DECEMBER 31, 2000
NET CHANGE GROSS AMOUNT AT WHICH INITIAL COST SUBSEQUENT TO ACQUISITION CARRIED AT CLOSE OF PERIOD -------------------------- --------------------------- ------------------------------------- BUILDINGS AND BUILDINGS AND BUILDINGS AND ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS TOTAL ------------ ---- ------------ ---- ------------ ---- ------------ ----- Shadow Ridge Meadows $ 9,484,829 $3,294,260 $13,490,802 $(400,000) $ 329,893 $2,894,260 $13,820,695 $16,714,955 Mission Park 9,685,900 4,484,105 9,821,589 (300,000) (1,563,686) 4,184,105 8,257,903 12,442,008 ----------- ---------- ----------- ---------- ------------ ---------- ----------- ----------- $19,170,729 $7,778,365 $23,312,391 $(700,000) $(1,233,793) $7,078,365 $22,078,598 $29,156,963 =========== ========== =========== ========== ============ ========== =========== ===========
LIFE ON WHICH DEPRECIATION IN ACCUMULATED DATE OF DATE LATEST STATEMENTS DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED ------------ ------------ -------- ----------- Shadow Ridge Meadows $ 5,226,161 Jan. 1988 Nov. 1988 27.5 years Mission Park 5,960,574 May 1989 Aug. 1989 27.5 years ----------- $11,186,735 ===========
(a) Reconciliation of total real estate carrying value for the three years ended December 31, 2000:
2000 1999 1998 ---- ---- ---- Balance at beginning of year $28,985,826 $28,841,606 $28,685,443 Acquisitions 171,137 144,220 156,163 ----------- ----------- ----------- Balance at end of year $29,156,963 $28,985,826 $28,841,606 =========== =========== ===========
(b) Reconciliation of accumulated depreciation for the three years ended December 31, 2000:
2000 1999 1998 ----------- ----------- ----------- Balance at beginning of year $10,316,949 $ 9,445,320 $ 8,582,492 Expense 869,786 871,629 862,828 ----------- ----------- ----------- Balance at end of year $11,186,735 $10,316,949 $ 9,445,320 =========== =========== ===========
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