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 March 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT
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)
March 31, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 232
Restricted--tenant security deposits 33
Accounts receivable 5
Escrows for taxes 14
Other assets 4
Investment properties
Land $ 366
Buildings and related personal property 5,168
5,534
Less accumulated depreciation (3,418) 2,116
$ 2,404
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 11
Tenant security deposits 33
Other liabilities 53
Mortgage note payable 2,530
Partners' Capital (Deficit)
General partner $ 293
Limited partners' (8,669 units issued and
outstanding) (516) (223)
$ 2,404
See Accompanying Notes to Financial Statements
b) ANGELES PARTNERS VII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1996 1995
Revenues:
Rental income $ 270 $ 241
Other income 13 15
Total revenues 283 256
Expenses:
Operating 84 77
General and administrative 22 21
Maintenance 34 43
Depreciation 63 56
Interest 58 61
Property taxes 10 10
Total expenses 271 268
Net income (loss) $ 12 $ (12)
Net income (loss) allocated to general
partner (1%) $ -- $ --
Net income (loss) allocated to limited
partners (99%) 12 (12)
Net income (loss) $ 12 $ (12)
Net income (loss) per limited
partnership unit $ 1.38 $ (1.38)
See Accompanying Notes to Financial Statements
c) ANGELES PARTNERS VII
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Unit Partner 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 three months
ended March 31, 1996 -- -- 12 12
Partners' capital (deficit) at
March 31, 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)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 12 $ (12)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 63 56
Change in accounts:
Restricted cash (1) (3)
Accounts receivable 1 2
Escrows for taxes 28 (11)
Accounts payable (24) (10)
Tenant security deposit liabilities 1 1
Other liabilities 3 13
Net cash provided by
operating activities 83 36
Cash flows used in investing activities:
Property improvements and replacements (19) (24)
Cash flows from financing activities:
Payments on mortgage notes payable (25) (23)
Cash distributions to partners -- (100)
Net cash used in financing activities (25) (123)
Net increase (decrease) in cash 39 (111)
Cash at beginning of period 193 454
Cash at end of period $ 232 $ 343
Supplemental disclosure of cash flow information:
Cash paid for interest $ 58 $ 60
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
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 management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 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.
The following payments were paid to the General Partner and affiliates for the
three months ended March 31, 1996 and 1995:
1996 1995
(in thousands)
Property management fees $14 $13
Reimbursement for services of
affiliates 15 12
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 three
months ended March 31, 1996 and 1995:
Average Occupancy
Property 1996 1995
Cedarwood Apartments (1) 97% 94%
Gretna, Louisiana
(1) The increase in occupancy at Cedarwood Apartments is attributable to
property improvements and increased advertising.
The Partnership realized net income of $12,000 for the first three months of
1996 versus a net loss of $12,000 for the first three months of 1995. The
increase in net income is primarily attributable to an increase in rental
income.
Rental income increased as a result of increased occupancy and increased rental
rates. Complimenting the increase in rental income is a decrease in maintenance
expense. Maintenance expense decreased due to the completion of the unit
renovations in the beginning of 1995. There was an increase in operating
expenses and depreciation expense for the three months ended March 31, 1996,
versus the three months ended March 31, 1995. The increase in operating expense
is a result of higher electricity costs and the increase in depreciation expense
is due to increased property improvements 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. The
General Partner plans to actively market this apartment complex for sale in May
1996.
At March 31, 1996, the Partnership had unrestricted cash of $232,000 versus
$343,000 at March 31, 1995. Net cash provided by operating activities increased
primarily due to the increase in net income, as mentioned above, and due to the
decrease in escrows for taxes. This increase was partially offset by a decrease
in accounts payable. Net cash used in investing activities decreased slightly
as a result of decreased property improvements during the first three months of
1996 as compared to the first three months of 1995. Net cash used in financing
activities decreased due to distributions to partners during the three months
ended March 31, 1995. There were no distributions for the three months ended
March 31, 1996.
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 near-term needs of the Partnership. The mortgage
indebtedness of $2,530,000 is being amortized over 28 years with a maturity date
of May 2007. Future cash distributions will depend on the levels of net cash
generated from operations, refinancings, property sales and the availability of
cash reserves.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. The General Partner of the Registrant believes that all
such pending or outstanding litigation will be resolved without a material
adverse effect upon the business, financial condition, or operations of the
Partnership.
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 three months ended March 31, 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 and Principal
Executive Officer
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: May 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners VII First 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 232
<SECURITIES> 0
<RECEIVABLES> 5
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 284
<PP&E> 5,534
<DEPRECIATION> 3,418
<TOTAL-ASSETS> 2,404
<CURRENT-LIABILITIES> 44
<BONDS> 2,530
0
0
<COMMON> 0
<OTHER-SE> (223)
<TOTAL-LIABILITY-AND-EQUITY> 2,404
<SALES> 0
<TOTAL-REVENUES> 283
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 271
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 58
<INCOME-PRETAX> 12
<INCOME-TAX> 0
<INCOME-CONTINUING> 12
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12
<EPS-PRIMARY> 1.38
<EPS-DILUTED> 0
</TABLE>
