<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 (Fee Required)
For the Year Ended December 31, 1996
[_] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (No Fee Required)
Commission File Number 0-8942
DE ANZA PROPERTIES-X
(Exact Name of Registrant as Specified in Its Charter)
California 95-3005938
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
9171 Wilshire Boulevard, Suite 627 90210
Beverly Hills, California (Zip Code)
(Address of Principal Executive Offices)
(310) 550-1111 (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:
Units of Limited Partnership Interests (Title of Class)
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 such
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]
State the aggregate market value of the voting stock held by non-affiliates
of the Partnership.
$22,633,000 (See Item 5 Herein)
DOCUMENTS INCORPORATED BY REFERENCE.
Portions of the Prospectus of the registrant, dated August 9, 1978 filed
pursuant to Rule 424(b) under the Securities Act of 1933, as amended, and
subsequently filed on July 11, 1989 with Form 8 are incorporated by reference in
Parts I, II, III and IV hereof.
Page 1 of 47 pages contained herein. Exhibit Index located on page 17
herein.
<PAGE>
PART I.
ITEM 1. BUSINESS.
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The registrant, De Anza Properties - X (the "Partnership")/1/ is a
limited partnership formed on September 16, 1977 under the California Uniform
Limited Partnership Act to acquire, develop, maintain and operate income-
producing residential real estate properties, including apartment complexes and
mobile home parks, and to engage in general business activities related thereto.
The Partnership considers its business to represent one industry
segment, investment in real property, specifically mobile home parks and
apartment complexes.
After selling two of its three properties in 1995 and 1994, as of
December 31, 1996 the Partnership owned an apartment complex (the "Property"). A
description of the Property owned by the Partnership is set forth in Item 2
hereof and is incorporated herein by reference. The Property was sold on
February 19, 1997.
On July 11, 1995, the Partnership sold Aptos Pines, its sole
mobilehome park remaining after the sale of Colonies of Margate in 1994, to the
Aptos Pines Homeowners Association, as further discussed in Item 7 (1),
Liquidity, which is incorporated herein by reference.
The Partnership's apartment project is located in an upscale urban
area. The project attracts primarily young professionals and business people due
in part to the property's convenient location near major office centers. The
property contains recreational facilities and services that offer its residents
a quality lifestyle. The apartment project competes with other apartment
projects in the area, some of which are newer. Competition is a significant
factor affecting the occupancy and results of operations of the Partnership's
apartment project.
A description of the general development of the business of the
Partnership since the beginning of the year for which this report is being filed
is set forth in Item 7(3), Results of Operations, and is incorporated herein by
reference.
Information regarding the Partnership's revenues, profitability and
identifiable assets attributable to each of the Partnership's geographic areas
is set forth in Item 8, Note 8 to the Financial Statements, in the Schedules of
Projects' Operations attached thereto, and in the description of the Properties
set forth in Item 2 hereof, which are incorporated herein by reference.
The Partnership has no real estate investments which are located
outside of the United States.
As of the date of this report, the Partnership has no employees.
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/1/ A Registration Statement (File No. 2-59904) was filed on behalf of the
Partnership by its general partners (the "General Partners"), and the
securities offered and sold thereunder were units of limited partnership
interests.
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ITEM 2. PROPERTIES.
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The Partnership purchased three Properties using the capital raised.
The Partnership sold one of its Properties -- Aptos Pines -- to a third party on
July 11, 1995. See further details in Item 7(1), Liquidity, and Item 8, Note 3
to the Financial Statements, both of which are incorporated herein by reference.
The Partnership sold Colonies of Margate on August 18, 1994. The Partnership
also sold Woodbridge Meadows Apartments on February 19, 1997. Following is a
description of each Property; for the sold properties, the descriptions are as
of the time of sale.
De Anza Aptos Pines. "Aptos Pines" is a mixed-aged mobile home
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community primarily serving older working adults. Located on 28 acres of
hillside property in Santa Cruz County, California, Aptos Pines consists of 170
homesites in a rural, wooded setting. Clubhouse facilities include a lounge with
a fireplace and seating areas, as well as a billiard room, kitchen, banquet area
and laundry equipment. Outdoor amenities include a pool, sun deck and whirlpool
spa. Six golf courses, the Santa Cruz Yacht Harbor and Seacliff State Beach are
located within ten miles of Aptos Pines. Aptos Pines is subject to the Rent
Control Ordinance of the County of Santa Cruz, which limits rent increases to
50% of the Consumer Price Index of the San Francisco/Oakland/San Jose area.
Residents were billed separately for all utilities. Aptos was sold on July 11,
1995 to a third party.
Colonies of Margate. "Margate" is a 120-acre retirement mobile home
-------------------
community in Margate, Florida, between Fort Lauderdale and Boca Raton. The 819
homesites are served by two clubhouses, both with swimming pools and one with
card rooms, a pool room, exercise rooms, a kitchen and a banquet area. Outdoor
recreational facilities include tennis courts, bocci and shuffleboard courts,
handball courts and barbecue areas. The south side of Margate is bordered by a
navigable inland waterway with a boat launch ramp and fishing area. Colonial
Drive, the community's long, curvilinear entrance road, is shared by Margate
Community Hospital, a nursing home and a high-rise medical office building,
which provide emergency and continuing care. Residents were billed separately
for all utilities. Margate was sold on August 18, 1994 to a third party.
Woodbridge Meadows Apartments. "Woodbridge" is a 375-unit, 17-acre,
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mixed-aged apartment complex located in the planned community of Woodbridge
Village in the city of Irvine, California. Irvine is considered to be a highly
desirable residential community near Newport Center, the Irvine industrial
complex, and the yachting and beach resort city of Newport Beach. Surrounded by
expensive single-family residences, Woodbridge is one of several apartment
properties in Woodbridge Village. The community is densely landscaped with
water streams and footbridges, as well as a clubhouse, outdoor swimming pool,
two whirlpool spas, laundry facilities, and complete access to the 20 tennis
courts, bike trails, adult and child social activities and other recreational
facilities available to residents of the larger Woodbridge Village, including
several pools, parks and barbecue areas. Woodbridge offered
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month-to-month leases for furnished corporate units and six-month and one-year
leases for other units. Rental rates included water and sewer service; tenants
are billed separately for electricity and gas.
For a description of the terms of encumbrances relating to the
Properties, see the information set forth in Item 8, Note 4 to the Financial
Statements, which is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS.
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None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
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No matter was submitted during the quarter ended December 31, 1996.
PART II.
ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED STOCKHOLDER
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MATTERS.
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(a) Market Information.
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There is no public market for the Units of Limited Partnership
Interests and it is not anticipated that a public market for them will develop.
Accordingly, accurate information as to the market value of a Unit at any given
date is not available. The estimated aggregate market price shown on the cover
page of this report is simply the original capital contributed by the Limited
Partners and should not be relied upon as indicative of any bid or ask
quotations or transactions in the Limited Partnership Interests. Units are
transferable only on the books and records of the Partnership and are subject to
certain limitations.
(b) Holders.
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As of December 31, 1996, the approximate number of Unit holders
is 1,852, including General Partners who also hold Cash General Partner
Interests.
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(c) Dividends.
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The Partnership is a limited partnership and, accordingly, does
not pay dividends. It does, however, make quarterly distributions from
operations. During the years ended December 31, 1996, 1995 and 1994, $954,424,
$823,430 and $853,420 ($41.73, $36.01 and $37.32 per interest held),
respectively, was distributed from operations to the holders of Cash General
Partner Interests and to the Limited Partners of the Partnership. In addition,
during the years ended December 31, 1996, 1995 and 1994, $296,158, $255,511 and
$264,816 respectively, was distributed from operations to the General Partners.
During 1995 and 1994, $181,000 and $7,133,000 ($7.91 and $312.01
per interest held) respectively was distributed to the holders of Cash General
Partner Interests and to the Limited Partners from the sale proceeds of Colonies
of Margate. Also in 1995, $3,872,732 ($169.34 per interest held) was distributed
to the holders of Cash General Partner Interests and to the Limited Partners
from the sale proceeds of Aptos Pines, and $392,268 was distributed to the
General Partners.
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ITEM 6. SELECTED FINANCIAL DATA.
-----------------------
The following table sets forth in comparative tabular form a summary
of selected financial data for each of the Partnership's last five years:
<TABLE>
<CAPTION>
Years Ended December 31,
1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Operating revenues: $ 3,917,209 $ 4,274,052 $ 6,894,031 $ 7,775,005 $ 7,464,567
Gain on sale of property &
equipment: 143,365 2,258,041 15,297,374 - -
Net income from continuing
operations: $ 1,346,746 3,260,442 16,080,772 573,956 569,040
Net income from continuing operations
per cash general and limited partner
interest /1/: 44.94 125.85 680.60 20.36 18.91
Total assets: 11,294,792 11,387,725 13,998,705 19,147,277 19,448,646
Long-term obligations: 4,658,315 4,752,430 4,837,624 18,296,772 18,458,814
Cash distributions per partnership
interest:
1. Limited Partner /2/: 41.73 213.27 349.34 42.92 42.71
2. Cash General Partner /2/: 41.73 213.27 349.34 42.92 42.71
3. General Partner (based on each
1% General Partner
Interest) /3/: 2,961.58 6,477.79 2,648.16 2,283.24 3,086.94
</TABLE>
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Assets have been disposed of during 1995 and 1994 which materially affects the
comparability reflected in the selected financial data.
The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing elsewhere in this annual
report.
/1/ Net income from continuing operations per cash general and limited partner
interest is based on the aggregate number of such interests outstanding
(22,869 units) during each year.
/2/ Cash distributions per limited partner and cash general partner interest
are based on the aggregate number of such interests outstanding (22,869
units) during each year.
/3/ The calculations are based on 1% of the total subordinated general partner
interests. See Item 12(b), General Partner Interests.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
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(1) and (2) Liquidity and Capital Resources.
-------------------------------
The Partnership's quick ratios were 1.7:1 and 1.6:1 including
unrestricted cash balances of $700,939 and $544,356 at December 31, 1996 and
December 31, 1995, respectively. The increase in the ratio is primarily due to
the increased cash balance. The Partnership's cash balance is its immediate
source of liquidity.
On a long-term basis, the Partnership's liquidity is sustained
primarily from cash flow from operations, which during 1996 was approximately
$1,541,000.
The Partnership sold Aptos Pines to a non-profit mutual benefit
corporation formed by the Aptos Pines Homeowners' Association on July 11, 1995.
See further detailed discussion of the transaction in Item 8, Note 3 to the
Financial Statements, which is incorporated herein by reference.
As a consequence of the sale in 1994 of Margate, three reserve
accounts were established as follows:
1) The MHC Reserve in the amount of $181,000 was established as a
requirement of the Amended Acquisition Agreement between MHC and the
Partnership. The funds were released in full in 1995 and distributed to the Cash
General and Limited Partners.
2) The General Reserve is maintained in a separate interest bearing
trust account, pursuant to the terms of a trust agreement between the
Partnership, as the beneficiary, and Mr. Gelfand, as trustee, with an all cash
fund in the amount of $557,192. Pursuant to the terms of a contribution
agreement entered into among all of the partnerships and/or liquidating trusts
whose properties were acquired in the MHC transaction described above, funds in
the General Reserve may be used to discharge or satisfy the Partnership's pro
rata portion of any contingent liabilities of any of the liquidating trusts or
partnerships, and to discharge or satisfy any liabilities of Mr. Gelfand and his
affiliates. Such liabilities may include any legal expenses incurred by the
liquidating trusts, the partnerships, Mr. Gelfand and his affiliates personally,
in the defense or resolution of any claim or action arising out of the MHC
transaction, including claims arising out of indemnification obligations. In
August 1997, assuming no claims are threatened or pending, all funds remaining
in the General Reserve will be released to the Partnership.
3) The amount of the Independent Committee Reserve for the
Partnership was initially $286,731. The funds held in the Independent Committee
Reserve are invested in an interest bearing account (but not in derivative
securities) pursuant to the terms of the Independent Committee Trust Agreement,
between the Partnership as beneficiary, and Citicorp Trust N.A. as trustee for
the benefit of the Partnership's Independent Committee. Pursuant to the terms of
a contribution agreement among all of the partnerships/liquidating trusts, each
partnership/liquidating trust, including the Partnership, will contribute a pro
rata portion of any claim for indemnification made by the Independent Committee
regardless of which specific partnership or partnerships, if less than all, a
claim relates to. In August 1996, $143,365 of the reserve was
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released to the Partnership from the Independent Committee Reserve and assuming
no claims against the Independent Committee Reserve have been made or
threatened, the remaining $143,365, will be released in August 1997. The
Independent Committee in its sole discretion may extend the term of the
Independent Committee Reserve Trust for an additional year.
In the future, liquidity may improve to the extent that funds are
released from the General Reserve and/or the Independent Committee Reserve.
However, the Partnership sold Woodbridge Meadows on February 19, 1997 and
expects to wind up its operations in 1997 and dissolve.
Other than as described above, there are no known material trends,
favorable or unfavorable, in the Partnership's liquidity and capital resources.
The Partnership does not contemplate any material changes in the mix of its
capital resources, other than as described above.
(3) Results of Operations.
---------------------
Since Aptos Pines was sold July 11, 1995 and Margate was sold in
August, 1994, a comparison of operations including Aptos Pines and Margate would
not be meaningful. However, a comparison can be made excluding these
operations.
Rental income increased 2.5% in 1996 over 1995 due to increased
occupancy. Rental income increased 0.3% in 1995 over 1994 due to increased
rents being mostly offset by decreased occupancy at Woodbridge. Competition
mostly arises from Irvine Apartment Communities whose numerous properties
dominate the local luxury apartment market. Average occupancy at Woodbridge for
the last three years is as follows:
Average Occupancy
-----------------
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Woodbridge Meadows 96% 94% 96%
</TABLE>
Other income increased in 1996 over 1995 due to higher Woodbridge
Meadows occupancy and increased fee income reimbursing partnership costs to
record transfers of limited partner interests. Interest income increased in
1995 over 1994 due to increased cash balances as a result of higher investment
balances and higher interest rates received.
Expenses during 1996 decreased 15.6% over 1995 mostly due to the
Partnership ceasing Woodbridge Meadows depreciation when it listed the property
for sale in 1996 at a value greatly exceeding its book value. Interest expense
decreased due to increasing principal amortization of the secured note payable.
Partly offsetting these decreases were increases in utilities, maintenance and
other expenses largely due to increased occupancy. Additionally, salaries
increased with more leasing personnel and professional fees and services
increased largely due to costs of responding to offers by Moraga Capital, LLC
for the Partnership's limited partner interests.
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<PAGE>
Expenses during 1995 increased 1.0% over 1994. Professional fees and
services increased due to increased legal costs associated with Moraga Capital,
LLC's offer to purchase Limited Partner units. Insurance premiums at Woodbridge
increased 54% over 1994 largely as a result of the January 1994 Northridge
earthquake centered approximately 70 miles from Woodbridge. Other expenses
increased due to the design and production of a new brochure in 1995 to promote
the property's recent upgrades. Offsetting these increases was a decrease in
depreciation due to the declining balance method of depreciation. Also, interest
expense decreased due to increasing principal amortization of the secured note
payable and interest on a short-term loan in 1994 not repeated in 1995.
Other than as described above, there are no known trends or
uncertainties which have had or can be reasonably expected to have a material
effect on continuing operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
-------------------------------------------
See Index to Financial Statements set forth in Item 14 of this Annual
Report on Form 10-K. The material contained in such Financial Statements, Notes
and Supplementary Schedules is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
---------------------------------------------------------------
FINANCIAL DISCLOSURE.
--------------------
None.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP.
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(a) General Partners
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The Partnership is a limited partnership and has no executive officers
or directors. De Anza Corporation has served as the Operating General Partner
of the Partnership since May 31, 1990 and its directors and policy making
executive officers are described below together with the names and ages of the
other General Partners, each of whom has served in that capacity since the
creation of the Partnership.
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<TABLE>
<CAPTION>
Name of General Partners Age
- ------------------------ ---
<S> <C>
De Anza Corporation
(Operating General Partner) N/A
Herbert M. Gelfand 65
Benjamin L. Susman 73
Harold H. Benjamin 72
Jack Bevash 72
Name of Directors/Key Executive Officers
of De Anza Corporation, Operating General Partner
- -------------------------------------------------
Michael D. Gelfand 42
David G. Licht 72
Sheila M. Schrank 41
</TABLE>
Pursuant to the Partnership's Third Amended and Restated Agreement of
Limited Partnership as amended, (the "Partnership Agreement"), the General
Partners will retain their respective positions until their death, insanity,
bankruptcy, disability, removal, or withdrawal.
De Anza Corporation, the Operating General Partner of the Partnership,
is wholly owned by Herbert M. Gelfand. De Anza Corporation was formed as a
California corporation in 1984 and since October 1985, has been available to
serve as a general partner of real estate partnerships previously sponsored by
De Anza Group, Inc. or Mr. Gelfand. De Anza Corporation currently serves as the
operating general partner of one other real estate partnership and is the
liquidating agent for three other partnerships which are dissolving.
Herbert M. Gelfand served as the Operating General Partner of the
Partnership from its inception to May 31, 1990 and currently serves as a general
partner of five affiliated partnerships. Mr. Gelfand is currently the Operating
General Partner of four of the five affiliated partnerships, the first of which
was formed in 1969. Mr. Gelfand was also the founder, and together with his
wife, Beverly J. Gelfand, were the principal shareholders of De Anza Group, Inc.
which was sold August 18, 1994. Mr. Gelfand served as its Chairman of the Board
of Directors until its sale. From 1986 to 1990, Mr. Gelfand was also its Chief
Executive Officer. In addition, Mr. Gelfand is the Chairman of the Board of
Directors of De Anza Corporation. He is a member of the Bar of the State of
California and was engaged in the private practice of law from 1956 through 1977
and from 1970 until 1975, Mr. Gelfand was a partner in the predecessor to the
firm of Benjamin and Susman, a Law Corporation (and thereafter was counsel to
that firm until 1977), which predecessor law firm performed legal services for
all but one of the affiliated partnerships. Mr. Gelfand is married to Beverly
J. Gelfand, who served as a director of De Anza Group, Inc. until its sale, and
is the father of Michael D. Gelfand, Director, President, Chief Financial
Officer and Treasurer of De Anza Corporation.
Benjamin L. Susman is an inactive member of the Bar of the State of
California and was engaged in the private practice of law from 1951 until his
retirement in 1980. He was, until his retirement, a
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partner in the law firm of Benjamin and Susman, a Law Corporation, which
performed legal services for the Partnership in prior years. He has served as a
general partner in ten public and private real estate limited partnerships. Mr.
Susman is currently retired. Mr. Susman is not actively engaged in the
management of the Partnership.
Harold H. Benjamin is a member of the Bar of the State of California
and was engaged in the private practice of law from 1950 until his retirement in
1982. He was a member of the Board of Directors and an Officer of Deauville
Real Estate Corporation and Conventional Mortgage Corporation, and a partner in
the law firm of Benjamin and Susman, a Law Corporation, which performed legal
services for the Partnership. He serves as a general partner in 13 private and
public real estate limited partnerships. He is currently Executive Director of
Wellness Community, Santa Monica, California. Mr. Benjamin is not actively
engaged in the management of the Partnership.
Jack Bevash has, since 1964, been the principal executive of Jack
Bevash Associates, a planning and architectural firm which has directed the
master planning for projects located in California, Hawaii and other regions.
From 1959 to 1964, he was the principal associate in charge of planning for
William L. Pereira & Associates, another planning and architectural firm, and in
this capacity supervised the development of master plans for the Irvine Ranch in
Orange County, California. Mr. Bevash is not actively engaged in the management
of the Partnership.
Michael D. Gelfand is a director, President, Chief Financial Officer
and Treasurer of De Anza Corporation, and is President of and sole shareholder
of Terra Vista Management, Inc. a real estate management company that currently
manages Woodbridge and properties owned by other affiliated partnerships. Mr.
Gelfand joined De Anza Group, Inc. in 1978 and is the son of Herbert M. Gelfand
and Beverly J. Gelfand. He received a B.S. degree from Claremont Men's College
in 1977. Mr. Gelfand is a previous member of the Board of Directors of the
National Campground Owner's Association, and is a licensed NASD General
Securities Principal.
David G. Licht has been an attorney practicing in California since
1950, and is the senior member of Licht & Licht, a Professional Corporation,
specializing in business law. He became a director of De Anza Group, Inc. in
April 1980 and served until its sale. He has served as a Director of De Anza
Corporation since its inception. He also served as the Secretary of De Anza
Group, Inc. from April 1980 until February 1981, and is a general partner in an
affiliated partnership.
Sheila M. Schrank became Vice President - Controller of De Anza
Corporation in October 1990. Prior to that, Ms. Schrank served as Assistant
Vice President from 1983-1990, after having served as Assistant Controller since
1982. From 1976 to June 1982, she served in various accounting and data
processing functions at De Anza Accounting Corporation, a former affiliate of
the Operating General Partner.
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(b) Independent Committee.
---------------------
The Partnership created an independent committee (the "Independent
Committee") to review and evaluate certain "Interested Partner" and
"Fundamental" transactions. These transactions are defined in the Partnership
Agreement, which is incorporated herein by reference, and are to be reviewed
prior to the expenditure of significant sums in connection with the pursuit of
any such transactions. The Independent Committee was created pursuant to an
amendment to the Partnership Agreement which was adopted at the May 31, 1990
Special Meeting of the Limited Partners.
The members of the Independent Committee are Frederick M. Nicholas,
Arthur W. Schmutz and Ira Yellin. The appointment of these individuals to the
Independent Committee was approved and ratified by vote of the Limited Partners
at the May 31, 1990 Special Meeting of the Limited Partners. None of the
members of the Independent Committee has had any prior dealings or affiliation
with the Partnership or the General Partners.
Frederick M. Nicholas, age 75 is President and the principal
shareholder of The Hapsmith Company since it was formed. The Hapsmith Company
specialized in commercial real estate development. Mr. Nicholas attended the
University of Southern California, where he received an AB degree in 1947 and a
JD degree in 1952. Mr. Nicholas was the Chairman of the Board of Trustees for
the Museum of Contemporary Art, Los Angeles, California.
Arthur W. Schmutz, age 74 has been a partner at Gibson, Dunn &
Crutcher, a law firm, from 1960 to 1986 and an advisory partner at the same law
firm from 1987 to the present. Mr. Schmutz has been practicing law in
California since 1953 and his areas of specialty include securities, real
estate, corporate and general commercial law. He received his AB degree from
Johns Hopkins University in 1949 and an LLB degree from Harvard Law School in
1952.
Ira Yellin, age 56 served as Executive Vice President of The Hapsmith
Company from 1975 to 1985. From 1985 to 1997, he was the President and principal
shareholder of The Yellin Company, which is engaged in general real estate
investment, development and management. Currently, Mr. Yellin is Senior Vice
President of Catellus Development Corp. Mr. Yellin received an AB degree from
Princeton University in 1962. He also received an LLB degree from Harvard Law
School in 1965 and an LLM degree from the University of California, Berkeley, in
1966.
ITEM 11. EXECUTIVE COMPENSATION.
----------------------
The Partnership does not have directors, a chief executive officer or
any other executive officers. The following table sets forth, for the years
ended December 31, 1996, 1995 and 1994, information regarding compensation
(including distributions) exceeding $100,000 paid to the General Partners of the
Partnership and compensation paid by the Partnership to the Operating General
Partner's President. None of the four most highly compensated officers of the
Operating General Partner received reimbursement from the Partnership exceeding
$100,000 each during the years ended December 31, 1996, 1995 and 1994.
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<TABLE>
<CAPTION>
Summary Compensation Table
--------------------------
Name and Other Annual All Other
Principal Position Year Salary Bonus Compensation Compensation/1/
- ---------------------------------------- ---- ------ ----- ------------- ---------------
<S> <C> <C> <C> <C> <C>
Herbert M. Gelfand,
General Partner 1996 $-0- $-0- $-0- $120,873
1995 $-0- $-0- $-0- $250,828
1994 $-0- $-0- $-0- $100,600
Michael D. Gelfand,
President of De Anza Corporation,
Operating General Partner 1996 $-0- $-0- $-0- $ 4,338/2/
1995 $-0- $-0- $-0- $ 9,489
1994 $-0- $-0- $-0- $ 3,879
</TABLE>
Information contained in Item 13 of this Annual Report on Form 10-K
is incorporated herein by reference.
COMPENSATION OF DIRECTORS.
The Partnership does not have directors. De Anza Corporation, the
Operating General Partner, has directors, none of whom received compensation for
the year ended December 31, 1996, from the Partnership.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
There is no compensation committee for the Partnership or the
Operating General Partner. The President of the Operating General Partner
participates in deliberations regarding executive officer compensation.
Payments of compensation by the Partnership are governed by the Partnership
Agreement and described in the Prospectus under the heading "Compensation and
Fees of General Partners", page 10, which is incorporated herein by reference.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
AGREEMENTS.
In the event a General Partner (other than the Operating General
Partner) withdraws as a General Partner of the Partnership, such individual may
either (i) upon payment of $1,000 to the Partnership,
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/1/ The compensation specified in this column represents distributions
attributable to incentive interests held by the General Partners pursuant
to the Partnership Agreement described under the heading "Compensation and
Fees of General Partners - Operational Stage, General Partners Incentive
Interest", page 11 of the Prospectus, which is incorporated herein by
reference.
/2/ Michael D. Gelfand was assigned a portion of the economic benefits of
Herbert M. Gelfand's General Partner Interest.
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continue as a Limited Partner (but without the right to vote as a Limited
Partner), and thereafter receive all profits, losses and cash distributions to
which he would have been entitled as a General Partner, or (ii) sell his
interest to the Partnership or the remaining General Partners at a price and on
such terms agreed upon by the withdrawing General Partner and De Anza
Corporation, the Partnership's Operating General Partner. In the event the
withdrawing General Partner elects to sell his interest in the Partnership, he
must first offer to sell such interest to the Partnership. If such offer is not
accepted by a majority in interest of the Partnership's Limited Partners within
30 days after the Partnership's receipt of the notice of withdrawal, then the
withdrawing General Partner shall offer his interest for sale to the remaining
General Partners, who shall have the right to accept such offer for a period of
30 days.
In the event a General Partner is removed as a General Partner by vote
of a majority in interest of the Limited Partners, such General Partner shall
automatically become a Limited Partner and if the vote of a majority in interest
of the Limited Partners so requires, sell his interest to the Limited Partners
who shall purchase such interest on behalf of the Partnership. If a removed
General Partner is required by the Limited Partners to sell his interest in the
Partnership, the amount to be paid for such interest shall be computed as of the
date of the consummation of the purchase and in accordance with Section 15 of
the Partnership's Partnership Agreement, which is incorporated herein by
reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
--------------------------------------------------------------
(a) Security Ownership of Certain Beneficial Owners.
-----------------------------------------------
<TABLE>
<CAPTION>
Name & Address of Amount & Nature of
Title of Class Beneficial Owner Beneficial Ownership Percent of Class
- -------------- ----------------- -------------------- ----------------
<S> <C> <C> <C>
Limited Partnership Moraga Capital, LLC 3,281 UNITS/1/ 14.4%(1)
Interests: MacKenzie Patterson DIRECT
1640 School Street, #103
Moraga, CA 94556
</TABLE>
- -------------------------
/1/ Moraga Capital, LLC, an affiliate of MacKenzie Partners, completed a tender
offer for Limited Partner Units on January 31, 1996, whereupon Moraga and
its members, including MacKenzie, were the beneficial owners of 3,281 units
as reported in Amendment No. 3 to Schedule 14D-1 amending Schedule 13D,
dated February 1, 1996.
-14-
<PAGE>
(b) Security Ownership of Management.
--------------------------------
<TABLE>
<CAPTION>
Amount & Nature of
Title of Class Name of Beneficial Owner Beneficial Ownership Percent of Class
- -------------- ------------------------ -------------------- ----------------
<S> <C> <C> <C>
General Partner
Interests: Herbert M. Gelfand 37.98870% 37.98870%
TTEE
Benjamin L. Susman 9.13097% 9.13097%
TTEE
Harold H. Benjamin 8.60487% 8.60487%
TTEE
Jack Bevash 4.29693% 4.29693%
TTEE
De Anza Corporation 1.07423% 1.07423%
DIRECT --------
--------
All GeneralPartners and
directors/key executive
officers of De Anza
Corporation as a group (9): 61.0957%/2/ 61.0957%/2/
=========== ===========
Limited Partnership
Interests:/3/ /4/ Herbert M. Gelfand 147.25133 UNITS *
TTEE
Herbert M. Gelfand 1.25042 UNITS *
BY SPOUSE
Benjamin L. Susman 20.22292 UNITS *
TTEE
Harold H. Benjamin 20.21046 UNITS
TTEE
Jack Bevash 20.10844 UNITS *
TTEE
----
All General Partners and
directors/key executive
officers of De Anza
Corporation as a group (9): 209.04357 UNITS *
=========
</TABLE>
* Less than 1%
(c) Changes in Control.
------------------
- -------------------------
/2/ Beneficial ownership excludes the assignment by a Beneficial Owner of any
economic interests to others; however, it does include the economic
interest if the Beneficial Owner is the assignee.
/3/ Includes Cash General Partner Interests where applicable.
/4/ Since Aubrey Meyerson ceased being a General Partner upon his death in
October 1995, the General Partners now hold less than 1% of the Limited
Partnership interests.
-15-
<PAGE>
None.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
----------------------------------------------
For the year ended December 31, 1996, Terra Vista Management, Inc., an
affiliate of the Operating General Partner, was paid management fees of
$192,085. In addition, one or more affiliates of the Operating General Partner
or Terra Vista Management, Inc., for the year ended December 31, 1996, were
reimbursed $155,840 for the costs of goods and services provided that were
necessary for the operation of the Partnership and its property. A portion of
the foregoing fees were for compensation to executives as set forth in Item 11
above. See Item 8, Note 6 to the Financial Statements for discussion of Terra
Vista Management, Inc.'s affiliation with the Partnership and actual transaction
amounts which is incorporated herein by reference.
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
---------------------------------------------------------------
(a) 1. Index to Financial Statements for the years ended December 31,
1996, 1995, and 1994 that are filed as part of this report:
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditor's Report........................................... 22
Balance Sheets, December 31, 1996 and 1995............................. 24
Statements of Income for the years ended
December 31, 1996, 1995 and 1994.................................. 26
Statements of Changes in Partners' Capital (Deficit)
for the period January 1, 1994 to December 31, 1996............... 27
Statements of Cash Flows for the years ended
December 31, 1996, 1995 and 1994.................................. 28
Notes to Financial Statements.......................................... 30
Schedules of Projects' Operations for the years ended
December 31, 1996, 1995 and 1994.................................. 41
Schedule of Distributable Income, Partners' Distributions
and Reserves for the years ended
December 31, 1996, 1995 and 1994.................................. 44
</TABLE>
-16-
<PAGE>
2. All Schedules have been omitted since they are not required, not
applicable or the information is included in the Financial Statements or notes
thereto.
3. The following index sets forth the exhibits required to be filed
by Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ----------- ----
<S> <C> <C>
3.1 Third Amended and Restated Agreement of Limited
Partnership effective as of May 31, 1990.
(See Exhibit 3.1 in the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1990,
incorporated herein by reference.)
3.2 First Amended to Third Amended and Restated Agreement
of Limited Partnership effective as of April 9, 1992.
(See Exhibit 3.2 in the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1992,
incorporated herein by reference.)
10.1 Secured Promissory Note in the amount of $13,510,000
and Mortgage and Security Agreement dated July 26, 1990.
(See Exhibit 4.2 in the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1990,
incorporated herein by reference.)
10.2 Promissory Notes in the amount of $6,000,000 Security
Agreement, Collateral Assignment of Leases and Rents,
Deed of Trust and Assignment of Rents dated June 28,
1979. (See Exhibit 10.6 in the Partnership's Annual
Report on Form 10-K for the year ended December 31,
1991, incorporated herein by reference.)
10.3 Amended Acquisition Agreement and Joint Escrow
Instructions dated May 9, 1994 by and between De Anza
Properties-X and MHC Operating Limited Partnership
respecting Colonies of Margate, as executed. (See
Exhibit 10.8 in the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1994,
incorporated herein by reference.)
10.4 General Reserve Contribution Agreement dated August 1,
1994 between the Partnership, affiliated partnerships,
the Herbert M. and Beverly J. Gelfand Family Trust,
and Herbert M. Gelfand as trustee. (See Exhibit 10.10
in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1994, incorporated herein by
reference.)
</TABLE>
-17-
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ----------- ----
<S> <C> <C>
10.5 Independent Committee Reserve Contribution Agreement
dated August 1, 1994 between the Partnership,
affiliated partnerships, and Citicorp Trust N.A. as
trustee. (See Exhibit 10.11 in the Partnership's
Annual Report on Form 10-K for the year ended
December 31, 1994, incorporated herein by reference.)
10.6 Independent Committee Trust Agreement dated August 1,
1994 by and between the Partnership and Citicorp Trust
N.A. as Trustee. (See Exhibit 10.12 in the Partnership's
Annual Report on Form 10-K for the year ended December 31,
1994, incorporated herein by reference.)
10.7 General Reserve Trust Agreement dated August 1, 1994 by
and between the Partnership, the Herbert M. and Beverly J.
Gelfand Family Trust, and Herbert M. Gelfand as Trustee.
(See Exhibit 10.13 in the Partnership's Annual Report on
Form 10-K for the year ended December 31, 1994,
incorporated herein by reference.)
10.8 Woodbridge/Terra Vista Management Agreement dated
August 18, 1994. (See Exhibit 10.1 in the Partnership's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995, incorporated herein by reference.)
10.9 Contract to sell Woodbridge dated October 7, 1996. (See
Exhibit 10.1 on Form 10-Q for the quarter ended
September 30, 1996 incorporated herein by reference.)
</TABLE>
(b) Reports on Form 8-K.
None.
(c) The information set forth in Item 14(a)(3) of this Annual
Report on Form 10-K is incorporated herein by reference.
(d) All information required by Regulation S-X will be furnished
by the Partnership to its partners in its annual report. Therefore, this Item is
not applicable.
-18-
<PAGE>
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.
DE ANZA PROPERTIES - X (a California limited partnership)
By DE ANZA CORPORATION (a California corporation)
Operating General Partner
By /s/Michael D. Gelfand
---------------------
Michael D. Gelfand
President and Chief Financial Officer
Date: March 26, 1997
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.
By /s/Herbert M. Gelfand
---------------------
Herbert M. Gelfand, Chairman of the Board Of Directors of De Anza
Corporation, the Operating General Partner
Date: March 26, 1997
By /s/Michael D. Gelfand
---------------------
Michael D. Gelfand, Director of De Anza Corporation, the Operating
General Partner
Date: March 26, 1997
By /s/David Licht
--------------
David Licht, Director of De Anza Corporation, the Operating General
Partner
Date: March 26, 1997
-19-
<PAGE>
DE ANZA PROPERTIES - X
(A LIMITED PARTNERSHIP)
AUDITED FINANCIAL STATEMENTS
AND SUPPLEMENTAL SCHEDULES
December 31, 1996 and 1995
<PAGE>
De Anza Properties - X
(A Limited Partnership)
December 31, 1996 and 1995
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors............................................ 1
Audited Financial Statements
Balance Sheets............................................................ 3
Statements of Income...................................................... 5
Statement of Changes in Partners' Capital (Deficit)....................... 6
Statements of Cash Flows.................................................. 7
Notes to Financial Statements............................................. 9
Other Financial Information
Schedules of Projects' Operations......................................... 20
Schedules of Distributable Income, Partners' Distributions and Reserves... 23
</TABLE>
<PAGE>
Report of Independent Auditors
To the Partners
De Anza Properties - X
Beverly Hills, California
We have audited the accompanying balance sheets of De Anza Properties - X, a
Limited Partnership (the Partnership), as of December 31, 1996 and 1995, and the
related statements of income, changes in partners' capital (deficit) and cash
flows for the years ended December 31, 1996, 1995 and 1994. 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 in accordance with generally accepted auditing
standards. 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 audits provide a reasonable basis for our opinion.
As discussed in Note 3 to the financial statements, the Partnership sold two of
its properties on July 11, 1995 and on August 18, 1994. The assets and
operations of the properties sold represented a significant portion of the
Partnership's total assets and results of operations. On March 4, 1997, the
Partnership sold its remaining operating property.
As discussed in Note 1 to the financial statements, in 1996 the partnership
changed its method of accounting for long-lived assets and long-lived assets to
be disposed of.
1
<PAGE>
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Partnership as of December
31, 1996 and 1995, and the results of its operations and its cash flows for the
years ended December 31, 1996, 1995 and 1994, in conformity with generally
accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary Schedules
I and II are presented for the purposes of additional analysis and are not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
ERNST & YOUNG, LLP
January 28, 1997, except for Note 8
as to which the date is March 4, 1997,
Los Angeles, California
2
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Balance Sheets
<TABLE>
<CAPTION>
December 31,
1996 1995
-------- ---------
<S> <C> <C>
ASSETS
CASH AND CASH EQUIVALENTS, including
restricted cash of $700,558 and $843,923 at
December 31, 1996 and 1995, respectively
(Notes 1 and 3) $ 1,401,497 $ 1,388,279
ACCOUNTS RECEIVABLE 11,122 10,812
PREPAID EXPENSES 70,995 70,222
----------- -----------
1,483,614 1,469,313
----------- -----------
PROPERTY AND EQUIPMENT (Notes 1, 3, 5, 8 and 9)
Land 2,989,265 2,989,265
Land improvements 4,793,220 4,704,170
Buildings and improvements 11,448,171 11,448,171
Furniture and equipment 647,412 623,498
----------- -----------
19,878,068 19,765,104
Less accumulated depreciation 10,208,135 9,921,679
----------- -----------
9,669,933 9,843,425
----------- -----------
OTHER ASSETS
Loan costs, less accumulated amortization of
$56,564 and $53,484 in 1996 and 1995,
respectively (Notes 1 and 5) 51,251 54,331
Prepaid sale costs (Notes 1 and 3) 69,994 -
Other 20,000 20,656
----------- -----------
141,245 74,987
----------- -----------
$11,294,792 $11,387,725
=========== ===========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
3
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Balance Sheets (Continued)
<TABLE>
<CAPTION>
December 31,
1996 1995
-------- ---------
<S> <C> <C>
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
ACCOUNTS PAYABLE AND ACCRUED EXPENSES,
including $19,020 and $11,305 due to
related parties at December 31, 1996 and
1995, respectively (Note 6) $ 158,809 $ 127,389
DEPOSITS AND ADVANCE RENTALS 139,900 122,937
UNRECOGNIZED GAIN (Note 3) 700,558 843,923
SECURED NOTE PAYABLE (Note 5) 4,658,315 4,752,430
----------- -----------
5,657,582 5,846,679
----------- -----------
PARTNERS' CAPITAL (DEFICIT)
General partners (3,453,230) (3,476,003)
Cash general partners, 228.5 units
issued and outstanding 78,420 77,686
Limited partners, 22,640.5 units
issued and outstanding 9,012,020 8,939,363
----------- -----------
5,637,210 5,541,046
----------- -----------
$11,294,792 $11,387,725
=========== ===========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
4
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Statements of Income
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
INCOME
Gain on sale of property and
equipment (Note 3) $ 143,365 $2,258,041 $16,322,297
Unrecognized gain (Note 3) - - (1,024,923)
---------- ---------- -----------
Net gain recognized 143,365 2,258,041 15,297,374
Rent (Note 4) 3,713,584 3,935,175 6,346,217
Utilities - 143,232 359,265
Other 136,390 120,967 150,677
Interest and dividends 67,235 74,678 37,872
---------- ---------- -----------
4,060,574 6,532,093 22,191,405
---------- ---------- -----------
EXPENSES
Interest 471,805 481,556 1,360,876
Maintenance, repairs and supplies 363,384 377,233 670,009
Other 302,870 293,714 354,340
Salaries, including $20,819, $22,186
and $44,958 paid to related parties
in 1996, 1995 and 1994, respectively
(Note 6) 297,085 323,316 555,829
Depreciation and amortization 289,536 659,185 1,210,415
Professional fees and services,
including $101,646, $127,517 and
$232,581 paid to related parties
in 1996, 1995 and 1994, respectively
(Note 6) 223,469 238,546 367,705
Real estate taxes 208,208 237,816 473,999
Utilities 202,441 284,007 540,032
Management fees, including $192,085,
$187,208 and $313,036 paid to related
parties in 1996, 1995 and 1994,
respectively (Note 6) 192,085 211,442 326,742
Insurance 103,924 102,215 120,570
Payroll taxes and employee benefits 59,021 62,621 130,116
---------- ---------- -----------
2,713,828 3,271,651 6,110,633
---------- ---------- -----------
NET INCOME $1,346,746 $3,260,442 $16,080,772
========== ========== ===========
NET INCOME
GENERAL PARTNERS $ 318,931 $ 382,274 $ 516,098
========== ========== ===========
CASH GENERAL AND LIMITED PARTNERS $1,027,815 $2,878,168 $15,564,674
========== ========== ===========
INCOME PER 1% GENERAL PARTNER INTEREST
(Note 7) $ 3,189.31 $ 3,822.74 $ 5,160.98
========== ========== ===========
INCOME PER CASH GENERAL AND LIMITED
PARTNERSHIP UNIT (Note 7) $ 44.94 $ 125.85 $ 680.60
========== ========== ===========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
5
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Statement of Changes in Partners' Capital (Deficit)
Years Ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Cash
General General Limited
Partners Partners Partners
Total (Note 2) (Note 2) (Note 2)
------------ ----------- -------- -----------
<S> <C> <C> <C> <C>
BALANCE - January 1, 1994 $ (23,991) $(3,461,780) $ 21,940 $ 3,415,849
DISTRIBUTIONS TO PARTNERS (8,251,236) (264,816) (79,798) (7,906,622)
NET INCOME - for the year ended
December 31, 1994 16,080,772 516,098 155,517 15,409,157
----------- ----------- -------- -----------
BALANCE - December 31, 1994 7,805,545 (3,210,498) 97,659 10,918,384
DISTRIBUTIONS TO PARTNERS (5,524,941) (647,779) (48,731) (4,828,431)
NET INCOME - for the year ended
December 31, 1995 3,260,442 382,274 28,758 2,849,410
----------- ----------- -------- -----------
BALANCE - December 31, 1995 5,541,046 (3,476,003) 77,686 8,939,363
DISTRIBUTIONS TO PARTNERS (1,250,582) (296,158) (9,536) (944,888)
NET INCOME - for the year ended
December 31, 1996 1,346,746 318,931 10,270 1,017,545
----------- ----------- -------- -----------
BALANCE - December 31, 1996 $ 5,637,210 $(3,453,230) $ 78,420 $ 9,012,020
=========== =========== ======== ===========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
6
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Statements of Cash Flows
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Gross rents received from real estate operations $ 3,726,152 $ 4,101,943 $ 7,289,290
Cash paid to suppliers and employees, including $347,925, $344,199
and $596,597 paid to related parties in 1996, 1995 and 1994,
respectively (Note 6) (1,921,184) (2,148,160) (4,661,509)
Interest paid (471,805) (481,556) (1,360,876)
Interest and other income received 207,710 189,311 187,650
----------- ----------- ------------
Net cash provided by operating activities 1,540,873 1,661,538 1,454,555
----------- ----------- ------------
INVESTING ACTIVITIES
Additions to property and equipment (112,964) (348,519) (286,938)
Sale of property and equipment - 4,325,000 23,704,420
Sales costs (69,994) (71,498) (539,156)
Escrow deposits - 100 (100)
----------- ----------- ------------
Net cash (used in) provided by investing activities (182,958) 3,905,083 22,878,226
----------- ----------- ------------
FINANCING ACTIVITIES
Principal payments on secured notes payable (94,115) (85,194) (13,459,150)
Proceeds from unsecured note payable - - 200,000
Principal payment of unsecured note payable - - (200,000)
Prepayment penalty - - (1,618,831)
Loan costs - - (1,000)
Partner distributions (1,250,582) (5,524,941) (8,251,236)
----------- ----------- ------------
Net cash used in financing activities (1,344,697) (5,610,135) (23,330,217)
----------- ----------- ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 13,218 (43,514) 1,002,564
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 1,388,279 1,431,793 429,229
----------- ----------- ------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 1,401,497 $ 1,388,279 $ 1,431,793
=========== =========== ============
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
7
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
Year Ended December 31,
1996 1995 1994
----------- ----------- ------------
<S> <C> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING
ACTIVITIES
Net income $1,346,746 $ 3,260,442 $ 16,080,772
Adjustments to reconcile net income to net cash provided by
operating activities:
Gain on sale of property and equipment (143,365) (2,258,041) (15,297,374)
Depreciation and amortization 289,536 659,185 1,210,415
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (310) 66,243 (1,228)
(Increase) decrease in prepaid expenses (773) (3,122) 20,452
Increase in mobile homes held for resale - - (75,119)
Decrease in other assets 656 1,806 10,627
Increase (decrease) in accounts payable and accrued expenses 31,420 (62,394) (491,392)
Increase (decrease) in deposits and advance rentals 16,963 (2,581) (2,598)
---------- ----------- ------------
Net cash provided by operating activities $1,540,873 $ 1,661,538 $ 1,454,555
========== =========== ============
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
8
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements
For the Years Ended December 31, 1996, 1995 and 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
The Partnership invests its cash not needed for working capital in highly liquid
short-term investments consisting primarily of money market funds. The
Partnership considers such items to be cash equivalents. Restricted cash at
December 31, 1996 and 1995 is comprised of the cash reserves established in
connection with the sale of certain property described in Note 3. The
Partnership maintains some of its cash in bank deposit accounts which, at times,
may exceed the federally insured limits. No losses have been experienced to date
related to such accounts. The Partnership places its cash and cash equivalents
with quality financial institutions and believes it is not exposed to any
significant concentrations of credit risk on cash and cash equivalents.
FINANCIAL INSTRUMENTS
The carrying value of the Partnership's cash and cash equivalents, accounts
receivable and accounts payable approximates their fair value at December 31,
1996, due to the short maturity of these instruments. The carrying value of the
note payable approximates fair value at December 31, 1996, based on the current
borrowing rates for similar obligations.
LOAN COSTS
The costs incurred in obtaining financing are capitalized and amortized over the
terms of the respective loans. The loan costs pertaining to the loan secured by
Colonies of Margate were written off upon the sale of the property (see Note 3).
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at December 31, 1996 and
1995 and revenues and expenses for the years ended December 31, 1996, 1995 and
1994. Actual results could differ from those estimates.
See accompanying report of independent auditors and notes to financial
statements.
9
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
PROPERTY AND EQUIPMENT
In 1996, the Partnership adopted Statement of Financial Accounting Standards No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of, which requires impairment losses to be recorded on
long-lived assets used in operations when indicators of impairment are present
and the undiscounted cash flows estimated to be generated by those assets are
less than the assets' carrying amount. Assets to be disposed of are reported at
the lower of carrying amount or fair value less costs to sell. Property and
equipment were stated at cost at December 31, 1995.
Depreciation is computed using the declining-balance method based on estimated
useful lives as follows:
<TABLE>
<CAPTION>
Years
-------
<S> <C>
Land improvements 35
Buildings and improvements 15 - 20
Furniture and equipment 5 - 8
Mobile homes 7
Transportation equipment 3 - 6
</TABLE>
Maintenance and repairs are expensed as incurred.
In July 1996, the Partnership began actively marketing the sale of its remaining
property, Woodbridge Meadows Apartments. In accordance with Statement of
Financial Accounting Standards No. 121, the Partnership ceased depreciating the
assets' carrying value at that time.
See accompanying report of independent auditors and notes to financial
statements.
10
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
INCOME TAXES
Since the Partnership's income is allocated to the partners, there is no
provision for income taxes reflected in the accompanying financial statements.
The amount of income for federal tax purposes for the years ended December 31,
1996, 1995 and 1994 was $1,032,148, $3,488,188 and $17,582,090, respectively.
The income for federal tax purposes was calculated as follows:
<TABLE>
<CAPTION>
December 31,
1996 1995 1994
---------- ---------- -----------
<S> <C> <C> <C>
Net income per financial statements $1,346,746 $3,260,442 $16,080,772
Tax basis depreciation in excess of financial statements
depreciation (189,195) 63,140 (17,233)
Financial statements amortization in excess of tax basis
amortization - - 10,848
Gain on sale of property and equipment (143,365) 164,606 1,579,179
Other - net 17,962 - (71,476)
---------- ---------- -----------
Income for federal tax purposes $1,032,148 $3,488,188 $17,582,090
========== ========== ===========
</TABLE>
Partners' capital as reflected on the financial statements differs from the
amount reflected on the Partnership's federal tax return for the years ended
December 31, 1996, 1995 and 1994. Partners' capital is reconciled as follows:
<TABLE>
<CAPTION>
December 31,
1996 1995 1994
---------- ---------- -----------
<S> <C> <C> <C>
Partners' capital per financial statements $5,637,210 $5,541,046 $ 7,805,545
Syndication costs 2,368,296 2,368,296 2,368,296
Accumulated depreciation difference 303,171 (105,572) (642,595)
Deferred expense 431,202 431,202 431,202
Aggregate of differences described in the preceding reconciliation (314,598) 227,746 1,501,316
Financial statement basis of deferred gain 843,923 1,024,923 -
Other 5,150 5,150 65,781
---------- ---------- -----------
Partners' capital per federal tax return $9,274,354 $9,492,791 $11,529,545
========== ========== ===========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
11
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
2. PARTNERSHIP AGREEMENT
The Partnership was formed on September 16, 1977 to acquire and operate income-
producing residential real properties. The Partnership owns and operates
Woodbridge Meadows Apartments, a 375-unit apartment complex in Irvine,
California which was sold during 1997 (see Note 8). The Partnership also owned
Aptos Pines, a 170-space community in Aptos, California, which was sold in 1995
and Colonies of Margate, an 819-space community in Margate, Florida, which was
sold in 1994 (see Note 3).
A cash general partner is a general partner who purchased limited partnership
units and, to the extent of these contributions, will participate in the
benefits of Partnership ownership in the same manner as a limited partner.
The partnership agreement provides that distributable cash, as defined, will be
distributed to the cash general and limited partners, up to a sum equivalent to
6% per annum of their adjusted cash capital contributions, as defined. Cash is
then distributed 5.2736% to the cash general and limited partners and 94.7264%
to the general partners, up to a sum equivalent to 2% per annum of the aggregate
adjusted cash capital contributions of the cash general and limited partners.
Any additional cash is distributed 76.3184% to the cash general and limited
partners and 23.6816% to the general partners. Net income is allocated in the
same proportion as cash distributions to partners; however, general partners
receive a minimum 1% allocation. If no distributions are made, the net income is
allocated 85.7910% to the cash general and limited partners and 14.2090% to the
general partners. Losses are allocated 85.7910% to the cash general and limited
partners and 14.2090% to the general partners.
See accompanying report of independent auditors and notes to financial
statements.
12
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
3. SALE OF PROPERTY AND EQUIPMENT
COLONIES OF MARGATE
In 1993, the Partnership entered into negotiations through De Anza Group, Inc.
(DAG), the former parent company of the operating general partner, for the sale
of Colonies of Margate (Margate). On January 19, 1994, the Partnership entered
into an Acquisition Agreement to sell Margate to MHC Operating Limited
Partnership (MHC). The sale was part of an overall transaction for the sale of
the related management business of DAG and other mobile home communities
affiliated with DAG. The sale closed escrow on August 18, 1994.
The sales price for Margate was $23,147,228. Additional proceeds of $557,192,
which were included in the sales prices for calculating the gain on sale of
property and equipment, were received from MHC to fund a General Reserve. Excess
proceeds of $7,133,000 were distributed to the cash general and limited partners
as a return of capital on September 16, 1994, after repayment of debt of
$13,523,715, sales and closing costs of $644,488, a prepayment penalty of
$1,618,831, and $784,386 set aside toward various required reserves.
The Partnership has been charged with certain costs for the transaction, some of
which were based upon an allocation of costs from the overall transaction with
MHC. Such transaction costs have been capitalized and deducted in the
determination of net gain on the sale of the Partnership's property and
equipment. Transaction and closing costs charged to the Partnership totaled
$644,488 as of December 31, 1994.
In addition to the $784,386, funds from operations totaling $240,537 were used
to establish the following cash reserves:
<TABLE>
<S> <C>
MHC Reserve $181,000
General Reserve 557,192
Independent Committee Reserve 286,731
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
13
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
3. SALE OF PROPERTY AND EQUIPMENT (Continued)
COLONIES OF MARGATE (Continued)
The MHC Reserve was required by the Amended Acquisition Agreement. The General
Reserve and Independent Committee Reserve were established to fund contingent
liabilities that may arise out of the MHC transaction. During 1995, the MHC
Reserve was released in full and distributed to the cash general and limited
partners as a return of original capital. During 1996, $143,365 of the
Independent Committee Reserve was released from restricted cash.
Pursuant to the guidelines of Financial Accounting Standards No. 66, "Accounting
for Sales of Real Estate," the Partnership deferred in 1994 the recognition of
gain on that portion of the sale proceeds represented by the MHC Reserve,
General Reserve and Independent Committee Reserve, totaling $1,024,923. During
the years ended December 31, 1996 and 1995, the Partnership recognized as income
$143,365 attributable to the Independent Committee Reserve released and $181,000
attributable to the MHC Reserve released, respectively.
APTOS PINES
On July 11, 1995, Aptos Pines (Aptos) was sold to a non-profit mutual benefit
corporation formed by the Aptos Pines Homeowners' Association. The sales price
for Aptos was $4,325,000, all cash, and an additional $35,000 was received as
reimbursement of capital outlays related to the newly constructed sewer system.
The Partnership incurred sales and closing costs of approximately $56,200,
distributed $4,265,000 of the proceeds to the cash general, limited and general
partners, and reserved the remaining $38,800. A portion of the distribution to
the cash general and limited partners represents a return of original capital.
WOODBRIDGE MEADOWS
In October 1996, the Partnership entered into a contract with J.F. Shea Co.,
Inc. to sell its remaining property, Woodbridge Meadows (see Note 8).
See accompanying report of independent auditors and notes to financial
statements.
14
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
4. TENANT LEASES
Apartment units are leased for periods of less than one year or on a month-to-
month basis. The Partnership accounts for all leases as operating leases. Rental
revenue is reported ratably over the lease terms. The annual rents from
noncancelable operating leases from tenants for the year ending December 31,
1997 is $640,105.
5. SECURED NOTE PAYABLE
Secured note payable at December 31, 1996 and 1995 consisted of:
<TABLE>
<CAPTION>
December 31,
1996 1995
---------- ----------
<S> <C> <C>
Note collateralized by first trust deed on the
Woodbridge Meadows property, payable in monthly
installments of $47,093, including interest at
10%, maturing in 2014 $4,658,315 $4,752,430
========== ==========
</TABLE>
The annual maturities on the secured note payable for the years subsequent to
December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Year Ending
December 31,
------------
<S> <C>
1997 $ 103,970
1998 114,857
1999 126,884
2000 140,171
2001 154,848
Thereafter 4,017,585
----------
$4,658,315
==========
</TABLE>
The entire note will be paid off upon the sale of Woodbridge Meadows.
See accompanying report of independent auditors and notes to financial
statements.
15
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
6. TRANSACTIONS WITH RELATED PARTIES
Pursuant to a former management agreement dated October 1, 1985, De Anza Assets,
Inc., a former affiliate of the operating general partner, was paid a management
fee in the amount of 5% of the annual gross receipts from the operations of the
Partnership's properties. The payment of this fee is subordinated to the
distributions to the cash general and limited partners of 6% of their adjusted
capital contributions each year and is noncumulative, except in the case of a
sale, refinancing or other disposition of the Partnership's properties. In that
case, the difference between the management fee actually paid and the management
fee that would have been paid if it were not subordinated is payable out of the
proceeds from the sale, refinancing or other disposition after payment of the
limited partners' priority return and capital contribution and the general
partners' incentive interest. Management fees of $238,218 were paid to De Anza
Assets, Inc. during the year ended December 31, 1994.
On August 18, 1994, subsequent to the sale of the Colonies of Margate and the
property management business of DAG, as discussed in Note 3, the property
management of Woodbridge Meadows Apartments was assumed by Terra Vista
Management, Inc. (Terra Vista). Terra Vista is wholly owned by Michael D.
Gelfand, president of the operating general partner and the son of Herbert M.
Gelfand. Herbert M. Gelfand, together with Beverly Gelfand, was the sole
shareholder of the operating general partner and the controlling shareholder of
DAG prior to the sale. Terra Vista was paid $192,085, $187,208 and $74,818 for
management fees during the years ended December 31, 1996, 1995 and 1994,
respectively.
In addition, DAG or a wholly owned subsidiary was paid $198,746 for the year
ended December 31, 1994, and Terra Vista Management, Inc. or De Anza Leasing
Corporation, a related party and affiliate of the Operating General Partner,
respectively, was paid $155,840, $156,991 and $84,815 for the years ended
December 31, 1996 and 1995 and for the period from August 18, 1994 through
December 31, 1994, respectively, for performing bookkeeping, regional
management, computer, disposition and investor relations services necessary for
the operation of the Partnership and its properties.
See accompanying report of independent auditors and notes to financial
statements.
16
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
7. INCOME PER 1% GENERAL PARTNERSHIP INTEREST AND CASH GENERAL AND LIMITED
PARTNERSHIP UNIT
Income per 1% general partner interest was computed based on the general
partners' share of net income as reflected on the statement of changes in
partners' capital (deficit). Income per cash general and limited partnership
unit was computed based on the cash general and limited partners' share of net
income as reflected on the statement of changes in partners' capital (deficit)
and the number of units outstanding (22,869 units in each year).
8. SUBSEQUENT EVENT
SALE OF WOODBRIDGE MEADOWS
On or about October 7, 1996, the Partnership entered into an agreement to sell
Woodbridge Meadows Apartments (Woodbridge) to J.F. Shea Co., Inc. or an
affiliate (Buyer) for $29,600,000. As a result of renegotiations with the Buyer
following completion of Buyer's inspections, the sales agreement was amended on
January 15, 1997 to reduce the sale price to $29,433,000, all cash. The closing
occurred February 19, 1997. Net sale proceeds, after repayment of mortgage debt
of $4,757,740 (including a prepayment penalty of $116,042), broker's commission
of $261,330 and estimated transaction costs of $164,398, totaled approximately
$24,249,532. The net proceeds were distributed to the cash general and limited
and general partners on March 4, 1997. Following the release of the remaining
Colonies of Margate sale reserves, the Partnership will cease operations,
commence liquidation and dissolve.
See accompanying report of independent auditors and notes to financial
statements.
17
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years ended December 31, 1996, 1995 and 1994
9. SCHEDULE OF REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
INITIAL COST TO THE PARTNERSHIP
------------------------------------
COST
BUILDINGS, CAPITALIZED
IMPROVEMENTS, SUBSEQUENT
FURNITURE AND TO
DESCRIPTION ENCUMBRANCES LAND EQUIPMENT ACQUISITION
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Woodbridge Meadows
apartment complex,
Irvine, California $4,658,315 $2,700,000 $11,343,940 $5,834,128
====================================================================
<CAPTION>
GROSS AMOUNT CARRIED AT CLOSE OF PERIOD
ENDED DECEMBER 31, 1996
------------------------------------------
LIFE ON WHICH
DEPRECIATION
IN LATEST
BUILDINGS, INCOME
IMPROVEMENTS, STATEMENT IS
FURNITURE AND ACCUMULATED DATE OF COMPUTED
DESCRIPTION LAND EQUIPMENT TOTAL DEPRECIATION CONSTRUCTION ACQUISITION YEARS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Woodbridge Meadows
apartment complex,
Irvine, California $2,989,265 $16,888,803 $19,878,068/(1)/ $10,208,135 1978 - 1979 11/13/78 5 to 35
==============================================================================================================
</TABLE>
(1) Aggregate cost for federal income tax purposes is $19,878,067.
See accompanying report of independent auditors and notes to financial
statements.
18
<PAGE>
De Anza Properties - X
(A Limited Partnership)
Notes to Financial Statements (Continued)
For the Years Ended December 31, 1996, 1995 and 1994
10. RECONCILIATION OF REAL ESTATE AND ACCUMULATED DEPRECIATION
<TABLE>
<CAPTION>
BUILDINGS,
IMPROVEMENTS,
FURNITURE AND
LAND EQUIPMENT TOTAL
----------- ------------- -----------
<S> <C> <C> <C>
REAL ESTATE:
Balance at January 1, 1994 $ 6,515,774 $24,023,684 $30,539,458
Additions during 1994 - 286,938 286,938
Reductions due to sale of property and equipment during 1994 (2,455,440) (5,279,978) (7,735,418)
----------- ----------- -----------
Balance at December 31, 1994 4,060,334 19,030,644 23,090,978
Additions during 1995 - 348,519 348,519
Reductions due to sale of property and equipment during 1995 (1,071,069) (2,603,324) (3,674,393)
----------- ----------- -----------
Balance at December 31, 1995 2,989,265 16,775,839 19,765,104
Additions during 1996 - 112,964 112,964
----------- ----------- -----------
Balance at December 31, 1996 $ 2,989,265 $16,888,803 $19,878,068
=========== =========== ===========
ACCUMULATED DEPRECIATION:
Balance at January 1, 1994 $12,933,755
Depreciation charged to expense during 1994 862,298
Reduction due to sale of property and equipment during 1994 (3,047,859)
-----------
Balance at December 31, 1994 10,748,194
Depreciation charged to expense during 1995 656,105
Reduction due to sale of property and equipment during 1995 (1,482,620)
-----------
Balance at December 31, 1995 9,921,679
Depreciation charged to expense during 1996 286,456
-----------
Balance at December 31, 1996 $10,208,135
===========
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
19
<PAGE>
SCHEDULE I
Page 1 of 3
De Anza Properties-X
(A Limited Partnership)
Schedule of Projects' Operations
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
------------------------------------------------------------------------------------------
WOODBRIDGE MEADOWS DE ANZA PROPERTIES-X TOTALS
------------------------------------------------------------------------------------------
% OF % OF % OF
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INCOME
Gain on sale of property and
equipment (Note 3) - - $ 143,365 64.28% $ 143,365 3.53%
Rent (Note 4) $3,713,584 96.77% - - 3,713,584 91.45
Other 123,973 3.23 12,417 5.57 136,390 3.36
Interest and dividends - - 67,235 30.15 67,235 1.66
------------------------------------------------------------------------------------------
3,837,557 100.00 223,017 100.00 4,060,574 100.00
------------------------------------------------------------------------------------------
EXPENSES
Interest 471,805 12.29 - - 471,805 11.62
Maintenance, repairs and supplies 362,999 9.46 385 0.17 363,384 8.95
Other 235,157 6.13 67,713 30.36 302,870 7.46
Salaries, including $20,819 paid to
related parties (Note 6) 279,364 7.28 17,721 7.95 297,085 7.32
Depreciation and amortization 289,536 7.54 - - 289,536 7.13
Professional fees and services,
including $101,646 paid to related
parties (Note 6) 104,472 2.72 118,997 53.36 223,469 5.50
Real estate taxes 208,208 5.43 - - 208,208 5.13
Utilities 202,205 5.27 236 0.11 202,441 4.99
Management fees paid to related party
(Note 6) 192,085 5.01 - - 192,085 4.73
Insurance 103,524 2.70 400 0.18 103,924 2.56
Payroll taxes and employee benefits 59,021 1.54 - - 59,021 1.45
------------------------------------------------------------------------------------------
2,508,376 65.37 205,452 92.13 2,713,828 66.84
------------------------------------------------------------------------------------------
NET INCOME $1,329,181 34.63% $ 17,565 7.87% $1,346,746 33.16%
==========================================================================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
20
<PAGE>
SCHEDULE I
Page 2 of 3
De Anza Properties-X
(A Limited Partnership)
Schedule of Projects' Operations
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
------------------------------------------------------------------------------------------------
APTOS PINES WOODBRIDGE MEADOWS DE ANZA PROPERTIES-X TOTALS
------------------------------------------------------------------------------------------------
% OF % OF % OF % OF
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
------------------------------------------------------------------------------------------------
INCOME
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gain on sale of property
and equipment (Note 3) $2,077,041 81.95% - - $ 181,000 70.79% $2,258,041 34.57%
Rent (Note 4) 313,099 12.35 $3,622,076 96.80% - - 3,935,175 60.25
Utilities 143,232 5.65 - - - - 143,232 2.19
Other 1,330 0.05 119,637 3.20 - - 120,967 1.85
Interest and dividends - - - - 74,678 29.21 74,678 1.14
------------------------------------------------------------------------------------------------
2,534,702 100.00 3,741,713 100.00 255,678 100.00 6,532,093 100.00
------------------------------------------------------------------------------------------------
EXPENSES
Interest - - 481,556 12.87 - - 481,556 7.37
Maintenance, repairs and
supplies 25,429 1.00 351,804 9.40 - - 377,233 5.78
Other 9,230 0.36 239,462 6.40 45,022 17.61 293,714 4.50
Salaries, including $22,186
paid to related parties (Note 6) 38,577 1.52 264,214 7.06 20,525 8.03 323,316 4.95
Depreciation and amortization 46,107 1.82 613,078 16.38 - - 659,185 10.09
Professional fees, including
$127,517 paid to related
parties (Note 6) 42,057 1.66 120,725 3.23 75,764 29.63 238,546 3.65
Real estate taxes 27,226 1.07 210,590 5.63 - - 237,816 3.64
Utilities 93,109 3.67 190,654 5.10 244 0.10 284,007 4.35
Management fees, including
$187,208 paid to related party 24,234 0.96 187,208 5.00 - - 211,442 3.24
Insurance 8,441 0.33 93,579 2.50 195 0.08 102,215 1.56
Payroll taxes and employee
benefits 10,339 0.41 52,282 1.40 - - 62,621 0.96
------------------------------------------------------------------------------------------------
324,749 12.80 2,805,152 74.97 141,750 55.45% 3,271,651 50.09
------------------------------------------------------------------------------------------------
NET INCOME $2,209,953 87.20% $ 936,561 25.03% $113,928 44.55% $3,260,442 49.91%
================================================================================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
21
<PAGE>
SCHEDULE I
Page 3 of 3
De Anza Properties-X
(A Limited Partnership)
Schedule of Projects' Operations
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1994
---------------------------------------------------------------------------------------------------
APTOS PINES COLONIES OF WOODBRIDGE DE ANZA
MARGATE MEADOWS PROPERTIES-X TOTALS
---------------------------------------------------------------------------------------------------
% OF % OF % OF % OF % OF
AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME AMOUNT INCOME
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME
Gain on sale of property
and equipment (Note 3) - - $16,322,297 92.42% - - - - $16,322,297 73.55%
Unrecognized gain (Note 3) - - (1,024,923) (5.80) - - - - (1,024,923) (4.62)
-------------------------------------------------------------------------------------------------
Net gain recognized - - 15,297,374 86.62 - - - - 15,297,374 68.93
Rent (Note 4) $577,154 76.09% 2,157,533 12.21 $3,611,530 96.87% - - 6,346,217 28.60
Utilities 179,358 23.65 179,907 1.02 - - - - 359,265 1.62
Other 2,009 0.26 24,712 0.14 116,518 3.13 $ 7,438 16.92% 150,677 0.68
Interest - - 1,339 0.01 - - 36,533 83.08 37,872 0.17
-------------------------------------------------------------------------------------------------
758,521 100.00 17,660,865 100.00 3,728,048 100.00 43,971 100.00 22,191,405 100.00
-------------------------------------------------------------------------------------------------
EXPENSES
Interest 236 0.03 863,147 4.89 489,583 13.13 7,910 17.99 1,360,876 6.13
Maintenance, repairs and
supplies 55,355 7.30 270,360 1.53 344,294 9.24 - - 670,009 3.02
Other 22,477 2.96 72,848 0.42 232,241 6.23 26,774 60.89 354,340 1.60
Salaries, including $44,958
paid to related
parties (Note 6) 65,724 8.66 203,563 1.15 245,381 6.58 41,161 93.61 555,829 2.50
Depreciation and amortization 91,820 12.11 456,229 2.58 657,216 17.63 5,150 11.71 1,210,415 5.45
Professional fees and
services, including
$232,581 paid to related
parties (Note 6) 92,361 12.18 113,009 0.64 122,236 3.28 40,099 91.19 367,705 1.66
Real estate taxes 43,574 5.74 220,269 1.25 210,156 5.64 - - 473,999 2.14
Utilities 150,230 19.81 194,060 1.10 195,024 5.23 718 1.63 540,032 2.43
Management fees, including
$313,036 paid to related
parties (Note 6) 31,971 4.21 108,368 0.61 186,403 5.00 - - 326,742 1.47
Insurance 11,341 1.50 48,298 0.27 60,931 1.63 - - 120,570 0.54
Payroll taxes and employee
benefits 17,482 2.30 58,690 0.33 53,944 1.45 - - 130,116 0.59
-------------------------------------------------------------------------------------------------
582,571 76.80 2,608,841 14.77 2,797,409 75.04 121,812 277.02 6,110,633 27.53
-------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $175,950 23.20% $15,052,024 85.23% $ 930,639 24.96% $(77,841) (177.02)% $16,080,772 72.47%
=================================================================================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
22
<PAGE>
SCHEDULE II
Page 1 of 3
De Anza Properties - X
(A Limited Partnership)
Schedule of Distributable Income, Partners' Distributions and Reserves
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------
1996 1995 1994
-----------------------------------------
<S> <C> <C> <C>
Net income $1,346,746 $ 3,260,442 $ 16,080,772
Add (deduct) adjustments per partnership
agreement:
Gain on sale of property (143,365) (2,258,041) (15,297,374)
Depreciation and amortization 289,536 659,185 1,210,415
Debt amortization (94,115) (85,194) (135,433)
Net change in accruals 46,544 (15,576) (474,766)
Release of prior year's
reserves 3,223,465 2,741,590 2,476,212
-----------------------------------------
Cash available for distribution (1) 4,668,811 4,302,406 3,859,826
-----------------------------------------
Cash distributions:
Cash general and limited partners - 6%
per annum of average adjusted
capital contributions of $4,882,268,
$7,236,764 and $13,977,956 in 1996,
1995 and 1994, respectively 292,936 434,206 838,677
General partners - 1.89% per annum of
average adjusted capital contributions
of $4,882,268, $7,236,764 and
$13,977,956 in 1996, 1995 and
1994, respectively 92,496 137,102 264,816
Cash general and limited partners -
additional distributions 661,488 389,224 14,743
General partners- additional
distributions 203,662 118,409 -
-----------------------------------------
Total distributions 1,250,582 1,078,941 1,118,236
-----------------------------------------
Reserves from operations (2) $3,418,229 $ 3,223,465 $ 2,741,590
=========================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
23
<PAGE>
SCHEDULE II
Page 2 of 3
De Anza Properties - X
(A Limited Partnership)
Schedule of Distributable Income, Partners' Distributions and Reserves
(Continued)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------
1996 1995 1994
--------------------------------------------
<S> <C> <C> <C>
Proceeds from sales or refinancing of
properties available for distribution
or reserves (2)(3) - $ 4,268,814 $ 7,917,386
Distribution to cash general
and limited partners (3) - (4,053,732) (7,133,000)
Distribution to general
partners (3) - (392,268) -
Use of reserves for capital
improvements - (163,300) -
Release of prior year's
reserves $2,323,978 2,664,464 1,880,078
--------------------------------------------
Reserves from sale and refinancing of
properties (2)(3)(4) $2,323,978 $ 2,323,978 $ 2,664,464
============================================
Distributions to cash general and
limited partners per original
$1,000 investment
From operations
Amount $ 41.75 $ 36.02 $ 37.33
============================================
Percent (of adjusted capital) 19.55% 11.38% 6.11%
============================================
From sales or refinancing (2)(3)
Amount - $ 177.34 $ 312.04
============================================
Percent (of original capital) - 17.73% 31.20%
============================================
</TABLE>
See accompanying report of independent auditors and notes to financial
statements.
24
<PAGE>
SCHEDULE II
Page 3 of 3
De Anza Properties - X
(A Limited Partnership)
Schedule of Distributable Income, Partners' Distributions and Reserves
(Continued)
/(1)/ Cash available for distribution represents amounts as defined by the
partnership agreement.
/(2)/ The operating general partner has exercised its discretion in reserving
amounts in excess of required reserves for operations, additions to
property and equipment, and future distributions.
/(3)/ On August 18, 1994, the Partnership sold Colonies of Margate for a price
of $23,147,228, and additional proceeds of $557,192 were received to fund
a General Reserve. After repayment of debt of $13,523,715, sales and
closing costs of $644,488 and a prepayment penalty of $1,618,831, the
Partnership netted proceeds of $7,917,386. Of this amount, $7,133,000 was
distributed in September 1994 to the cash general and limited partners,
representing a return of original capital. The balance of $784,386 is
being held to fund certain required reserves (see Note 3).
On July 11, 1995, the Partnership sold Aptos Pines for an all cash price
of $4,325,000. After payment of sales and closing costs of $56,200 and
reserving $3,800, the balance of $4,265,000 was distributed to cash
general and limited partners, representing a return of original capital,
and to general partners (see Note 3).
In 1995, the MHC Reserve of $181,000 reserved from the sale of the
Colonies of Margate was released and distributed to the cash general and
limited partners as a return of original capital (see Note 3).
In 1996, $143,366, one-half of the Independent Committee Reserve reserved
from the sale of the Colonies of Margate was released.
/(4)/ Included in the reserves from sales and refinancing of properties is
$700,558, $843,923 and $1,024,923 at December 31, 1996, 1995 and 1994,
respectively, in specific reserves established to fund contingent
liabilities that may arise from the MHC transaction.
See accompanying report of inependent auditors and notes to financial
statements.
25
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,401,497
<SECURITIES> 0
<RECEIVABLES> 11,122
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,483,614
<PP&E> 19,878,068
<DEPRECIATION> 10,208,135
<TOTAL-ASSETS> 11,294,792
<CURRENT-LIABILITIES> 402,679
<BONDS> 4,658,315
0
0
<COMMON> 0
<OTHER-SE> 5,637,210
<TOTAL-LIABILITY-AND-EQUITY> 11,294,792
<SALES> 3,713,584
<TOTAL-REVENUES> 4,060,574
<CGS> 0
<TOTAL-COSTS> 1,952,487
<OTHER-EXPENSES> 289,536
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 471,805
<INCOME-PRETAX> 1,346,746
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,346,746
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,346,746
<EPS-PRIMARY> 44.94<F1>
<EPS-DILUTED> 44.94<F1>
<FN>
<F1>EPS is per limited partnership unit.
</FN>
</TABLE>
