FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
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 June 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO 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
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
(864) 239-1000
(Issuer's telephone number)
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)
June 30, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 325
Restricted--tenant security deposits 31
Accounts receivable 10
Escrow for taxes 26
Other assets 16
Investment properties:
Land $ 366
Buildings and related personal property 5,287
5,653
Less accumulated depreciation (3,751) 1,902
$ 2,310
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 12
Tenant security deposits 31
Other liabilities 60
Mortgage note payable 2,396
Partners' Capital (Deficit)
General partner $ 292
Limited partners (8,669 units issued and
outstanding) (481) (189)
$ 2,310
See Accompanying Notes to Financial Statements
b)
ANGELES PARTNERS VII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 291 $ 278 $ 574 $ 548
Other income 15 12 31 25
Total revenues 306 290 605 573
Expenses:
Operating 91 89 173 173
General and administrative 10 28 31 50
Maintenance 48 39 90 73
Depreciation 68 65 135 128
Interest 55 57 111 115
Property taxes 11 10 21 20
Total expenses 283 288 561 559
Net income $ 23 $ 2 $ 44 $ 14
Net income allocated to
general partner (1%) $ -- $ -- $ -- $ --
Net income allocated to
limited partners (99%) 23 2 44 14
Net income $ 23 $ 2 $ 44 $ 14
Net income per limited
partnership unit $ 2.65 $ 0.23 $ 5.08 $ 1.61
<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 Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 8,674 $ 88 $ 8,674 $ 8,762
Partners' capital (deficit)
at December 31, 1996 8,669 $ 292 $ (525) $ (233)
Net income for the six months
ended June 30, 1997 -- -- 44 44
Partners' capital (deficit)
at June 30, 1997 8,669 $ 292 $ (481) $ (189)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d)
ANGELES PARTNERS VII
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 44 $ 14
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 135 128
Change in accounts:
Restricted cash -- (1)
Accounts receivable 11 1
Escrows for taxes 20 17
Other assets (12) --
Accounts payable (6) (23)
Tenant security deposit liabilities -- 1
Other liabilities (16) 15
Net cash provided by
operating activities 176 152
Cash flows used in investing activities:
Property improvements and replacements (34) (48)
Cash flows used in financing activities:
Payments on mortgage notes payable (56) (50)
Net increase in unrestricted cash and
cash equivalents 86 54
Unrestricted cash and cash equivalents at
beginning of period 239 194
Unrestricted cash and cash equivalents at
end of period $ 325 $ 248
Supplemental disclosure of cash flow information:
Cash paid for interest $ 111 $ 116
<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 of Angeles Partners VII (the
"Partnership" or the "Registrant") 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 "General Partner"), all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and six
months ended June 30, 1997, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 1997. For further
information, refer to the financial statements and footnotes thereto included in
the Partnership's annual report on Form 10-KSB for the fiscal year ended
December 31, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 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 amounts were paid to the General Partner and
affiliates during the six months ended June 30, 1997 and 1996:
1997 1996
(in thousands)
Property management fees $ 30 $ 28
Reimbursement for services of affiliates 20 33
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 six
months ended June 30, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Cedarwood Apartments
Gretna, Louisiana 97% 98%
The Partnership reported net income of $23,000 and $44,000 for the three and six
month periods ended June 30, 1997, respectively, versus net income of $2,000 and
$14,000 for the three and six month periods ended June 30, 1996, respectively.
The increase in net income for the three and six months ended June 30, 1997, is
attributable to an increase in rental income and a decrease in general and
administrative expenses, which is slightly offset by an increase in maintenance
expense. Rental income increased as a result of an increase in average rental
rates at Cedarwood Apartments, despite a 1% decrease in occupancy. The decrease
in general and administrative expenses is mainly due to a decrease in
reimbursements for services of affiliates. An interior upgrading project has
continued from fourth quarter 1996 into 1997 and, as a result, has lead to an
increase in maintenance expense for the three and six months ended June 30,
1997.
Included in maintenance expense for the six months ended June 30, 1997, is
$5,000 of major repairs and maintenance mainly comprised of major landscaping,
exterior building improvements and window coverings.
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 June 30, 1997, the Partnership had unrestricted cash of $325,000 versus
$248,000 at June 30, 1996. Net cash provided by operating activities increased
primarily due to the increase in net income, as mentioned above. Net cash used
in investing activities decreased as a result of decreased property improvements
in 1997 versus 1996, despite continuing interior upgrades at the property, which
are included in maintenance expense, as described above. Net cash used in
financing activities for the six months ended June 30, 1997, remained relatively
consistent with the six months ended June 30, 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 short-term needs of the Partnership. The mortgage
indebtedness of $2,396,000 is being amortized over 28 years with a maturity date
of May 2007. No cash distributions were made during the six months ended June
30, 1997. Future cash 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 June 30, 1997.
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: July 31, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners VII 1997 Second 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 325
<SECURITIES> 0
<RECEIVABLES> 10
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 5,653
<DEPRECIATION> 3,751
<TOTAL-ASSETS> 2,310
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,396
0
0
<COMMON> 0
<OTHER-SE> (189)
<TOTAL-LIABILITY-AND-EQUITY> 2,310
<SALES> 0
<TOTAL-REVENUES> 605
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 561
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 111
<INCOME-PRETAX> 44
<INCOME-TAX> 0
<INCOME-CONTINUING> 44
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 44
<EPS-PRIMARY> 5.08<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
