FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-8851
ANGELES PARTNERS VII
(Exact name of small business issuer as specified in its charter)
California 95-3215214
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) ANGELES PARTNERS VII
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 278
Restricted--tenant security deposits 32
Accounts receivable 7
Escrow for taxes 35
Other assets 4
Investment properties:
Land $ 366
Buildings and related personal property 5,228
5,594
Less accumulated depreciation (3,549) 2,045
$2,401
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 9
Tenant security deposits 32
Other liabilities 105
Notes payable 2,478
Partners' Capital (Deficit)
General partner $ 293
Limited partners (8,669 units issued and
outstanding) (516) (223)
$2,401
See Accompanying Notes to Financial Statements
b) ANGELES PARTNERS VII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 277 $ 257 $ 825 $ 745
Other income 14 11 39 41
Total revenues 291 268 864 786
Expenses:
Operating 85 77 258 256
General and administrative 23 22 73 73
Maintenance 52 36 125 128
Depreciation 67 62 195 176
Interest 56 59 171 179
Property taxes 10 10 30 31
Total expenses 293 266 852 843
Net (loss) income $ (2) $ 2 $ 12 $ (57)
Net (loss) income allocated to
general partners (1%) $ -- $ -- $ -- $ (1)
Net (loss) income allocated to
limited partners (99%) (2) 2 12 (56)
Net (loss) income $ (2) $ 2 $ 12 $ (57)
Net (loss) income per limited
partnership unit $ (.23) $ 0.23 $ 1.38 $(6.53)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
c) ANGELES PARTNERS VII
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 8,674 $ 88 $ 8,674 $ 8,762
Partners' capital (deficit)
at December 31, 1995 8,669 $ 293 $ (528) $ (235)
Net income for the nine months ended
September 30, 1996 -- 12 12
Partners' capital (deficit) at
September 30, 1996 8,669 $ 293 $ (516) $ (223)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) ANGELES PARTNERS VII
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Net income (loss) $ 12 $ (57)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation 195 176
Change in accounts:
Restricted cash -- (6)
Accounts receivable (1) 1
Escrows for taxes 7 (28)
Accounts payable (27) 12
Tenant security deposit liabilities -- 4
Accrued taxes -- 31
Other liabilities 54 8
Net cash provided by operating
activities 240 141
Cash flows from investing activities:
Property improvements and replacements (79) (170)
Net cash used in investing activities (79) (170)
Cash flows from financing activities:
Payments on mortgage notes payable (77) (70)
Distributions to partners -- (100)
Net cash used in financing activities (77) (170)
Net increase (decrease) in cash 84 (199)
Cash and cash equivalents at beginning of period 194 454
Cash and cash equivalents at end of period $ 278 $ 255
Supplemental disclosure of cash flow information
Cash paid for interest $ 173 $ 179
See Accompanying Notes to Financial Statements
e) ANGELES PARTNERS VII
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Angeles Realty Corporation (The "Managing General partner"),
all adjustments (consisting of normal recurring accruals) considered necessary
for a fair presentation have been included. Operating results for the three and
nine months ended September 30, 1996, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1996. For
further information, refer to the financial statements and footnotes thereto
included in Angeles Partners VII's (the "Partnership") annual report on Form 10-
KSB for the fiscal year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
NOTE 2 - TRANSACTIONS WITH AFFILIATES
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The partnership agreement provides for payments to affiliates for services and
as reimbursement of certain expenses incurred by affiliates on behalf of the
Partnership. Property management fees paid to affiliates of Insignia Financial
Group, Inc., during the nine months ended September 30, 1996 and 1995, are
included in operating expenses on the consolidated statements of operations and
are reflected in the following table. The Corporate General Partner and its
affiliates received reimbursements and fees as reflected in the following table:
Nine Months Ended
September 30,
1996 1995
(in thousands)
Property management fees $ 42 $ 39
Reimbursement for services of affiliates 50 44
The Partnership insures its property under a master policy through an agency and
insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations of the affiliate of the General Partner who receives
payments on these obligations from the agent. The amount of the Partnership's
insurance premiums accruing to the benefit of the affiliate of the General
Partner by virtue of the agent's obligations is not significant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment property consists of one apartment complex. The
following table sets forth the average occupancy of the property for the nine
months ended September 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Cedarwood Apartments
Gretna, Louisiana 97% 95%
The increase in occupancy at Cedarwood Apartments is attributable to property
improvements and increased advertising.
The Partnership reported net income of approximately $12,000 for the nine months
ended September 30, 1996, versus a net loss of approximately $57,000 for the
nine months ended September 30, 1995. For the three months ended September 30,
1996, the Partnership reported a net loss of approximately $2,000 as compared to
net income of approximately $2,000 for the three months ended September 30,
1995. The increase in net income for the nine months ended September 30, 1996,
is attributable to an increase in rental income offset by an increase in
depreciation expense. Rental income increased as a result of increased
occupancy and increased rental rates. The increase in depreciation expense was
due to the completion of property improvements in 1996 and 1995 in an effort to
upgrade the interior of the units.
The General Partner continues to monitor the rental market environment at its
apartment property to assess the feasibility of increasing rents, to maintain or
increase the occupancy level and to protect the Partnership from increases in
expense. The General Partner expects to be able, at a minimum, to continue
protecting the Partnership from the burden of inflation-related increases in
expenses by increasing rents and maintaining a high overall occupancy level.
However, rental concessions and rental rate reductions needed to offset
softening market conditions could affect the ability to sustain this plan.
As of September 30, 1996, the Partnership had unrestricted cash and cash
equivalents of $278,000 versus $255,000 at September 30, 1995. Net cash
provided by operating activities increased due to the increase in net income, as
mentioned above, an increase in other liabilities, and the decrease in escrows
for taxes. Other liabilities increased due to the timing of the payment of
various operating expenses as well as an increase in prepaid rent at September
30, 1996. This increase was partially offset by a decrease in accounts payable.
Net cash used in investing activities decreased as a result of a decrease in
property improvements and replacements in 1996 versus 1995. Net cash used in
financing activities decreased due to distributions to partners made during the
nine months ended September 30, 1995. There were no distributions during the
nine months ended September 30, 1996.
The Partnership has no material capital programs scheduled to be performed in
1996, although certain routine capital expenditures and maintenance expenses
have been budgeted. These capital expenditures and maintenance expenses will be
incurred only if cash is available from operations.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any short-term needs of the Partnership. The mortgage
indebtedness of approximately $2,478,000 is being amortized over 28 years with a
maturity date of May 2007 at which time the property will be refinanced or sold.
A cash distribution of $100,000 was made during the year ended December 31,
1995. No cash distributions were made during the nine months ended September
30, 1996. Future distributions will depend on the levels of net cash generated
from operations, refinancings, property sale and the availability of cash
reserves.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
ANGELES PARTNERS VII
By: Angeles Realty Corporation
General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long
Robert D. Long
Vice President/CAO
Date: November 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners VII 1996 Third Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000310303
<NAME> ANGELES PARTNERS VII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 278
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 5,594
<DEPRECIATION> 3,549
<TOTAL-ASSETS> 2,401
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,478
0
0
<COMMON> 0
<OTHER-SE> (223)
<TOTAL-LIABILITY-AND-EQUITY> 2,401
<SALES> 0
<TOTAL-REVENUES> 864
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 852
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 171
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12
<EPS-PRIMARY> 1.38<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
