FORM 10-QSB.--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
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, 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)
September 30, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 369
Restricted--tenant security deposits 31
Accounts receivable 10
Escrow for taxes 36
Other assets 14
Investment property:
Land $ 366
Buildings and related personal property 5,317
5,683
Less accumulated depreciation (3,821) 1,862
$ 2,322
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 20
Tenant security deposits 31
Other liabilities 73
Mortgage note payable 2,368
Partners' Capital (Deficit)
General partner $ 293
Limited partners (8,674 units issued and
8,669 outstanding) (463) (170)
$ 2,322
See Accompanying Notes to Financial Statements
b) ANGELES PARTNERS VII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
Rental income $ 299 $ 277 $ 873 $ 825
Other income 17 14 48 39
Total revenues 316 291 921 864
Expenses:
Operating 95 85 268 258
General and administrative 23 23 54 73
Maintenance 45 52 135 125
Depreciation 70 67 205 195
Interest 54 56 165 171
Property taxes 10 10 31 30
Total expenses 297 293 858 852
Net income (loss) $ 19 $ (2) $ 63 $ 12
Net income (loss) allocated
to general partner (1%) $ -- $ -- $ 1 $ --
Net income (loss) allocated
to limited partners (99%) 19 (2) 62 12
Net income (loss) $ 19 $ (2) $ 63 $ 12
Net income (loss) per limited
partnership unit $ 2.19 $ (.23) $ 7.15 $ 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)
Limited
Partnership General Limited
Units Partner Partners Total
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 nine months
ended September 30, 1997 -- 1 62 63
Partners' capital (deficit)
at September 30, 1997 8,669 $ 293 $ (463) $ (170)
See Accompanying Notes to Financial Statements
d) ANGELES PARTNERS VII
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities:
Net income $ 63 $ 12
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 205 195
Change in accounts:
Restricted cash -- --
Accounts receivable 11 (1)
Escrows for taxes 10 7
Other assets (10) --
Accounts payable 2 (27)
Other liabilities (3) 54
Net cash provided by
operating activities 278 240
Cash flows used in investing activities:
Property improvements and replacements (64) (79)
Cash flows used in financing activities:
Payments on mortgage note payable (84) (77)
Net increase in unrestricted cash and
cash equivalents 130 84
Unrestricted cash and cash equivalents at
beginning of period 239 194
Unrestricted cash and cash equivalents at
end of period $ 369 $ 278
Supplemental disclosure of cash flow information:
Cash paid for interest $ 165 $ 173
See Accompanying Notes to Financial Statements
e) ANGELES PARTNERS VII
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - 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 nine
months ended September 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 B - 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 nine months ended September 30, 1997 and 1996:
1997 1996
(in thousands)
Property management fees $ 45 $ 42
Reimbursement for services of affiliates 34 48
For the period from January 1, 1996, to August 31, 1997, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing 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 master
policy. The agent assumed the financial obligations to the affiliate of the
Managing General Partner who receives payment on these obligations from the
agent. The amount of the Partnership's insurance premiums that accrued to the
benefit of the affiliate of the Managing General Partner by virtue of the
agent's obligations was 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, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Cedarwood Apartments
Gretna, Louisiana 97% 97%
The Partnership reported net income of $19,000 and $63,000 for the three and
nine month periods ended September 30, 1997, respectively, versus a net loss and
net income of $2,000 and $12,000 for the three and nine month periods ended
September 30, 1996, respectively. The increase in net income for the three and
nine months ended September 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 operating expense. Rental income increased as a result
of an increase in average rental rates at Cedarwood Apartments, although
occupancy remained consistent. The decrease in general and administrative
expenses is mainly due to a decrease in reimbursements for services of
affiliates. For the three and nine months ended September 30, 1997, operating
expense increased as compared to the three and nine months ended September 30,
1996, due to slightly increased utility costs and management salaries.
Included in maintenance expense for the nine months ended September 30, 1997, is
$8,000 of major repairs and maintenance mainly comprised of major landscaping,
swimming pool repairs and window coverings. Included in maintenance expense for
the nine months ended September 30, 1996, is $2,000 of major repairs and
maintenance mainly comprised of major landscaping and exterior building
improvements.
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, 1997, the Partnership had unrestricted cash and cash
equivalents of $369,000 versus $278,000 at September 30, 1996. Net cash
provided by operating activities increased primarily due to the increase in net
income, as discussed above. Net cash used in investing activities decreased as
a result of decreased capitalizable property improvements in 1997 versus 1996,
despite continuing interior upgrades at the property. These upgrades have not
met the Partnership's requirement for capitalization and have therefore been
expensed and are included as a part of maintenance expense. Net cash used in
financing activities for the nine months ended September 30, 1997, remained
relatively consistent with the nine months ended September 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 $2,368,000 is being amortized over twenty-eight years with a
maturity date of May 2007. No cash distributions were made during the nine
months ended September 30, 1997, or the nine months ended September 30, 1996.
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 September 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: October 30, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners VII 1997 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 369
<SECURITIES> 0
<RECEIVABLES> 10
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 5,683
<DEPRECIATION> 3,821
<TOTAL-ASSETS> 2,322
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,368
0
0
<COMMON> 0
<OTHER-SE> (170)
<TOTAL-LIABILITY-AND-EQUITY> 2,322
<SALES> 0
<TOTAL-REVENUES> 921
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 858
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 165
<INCOME-PRETAX> 63
<INCOME-TAX> 0
<INCOME-CONTINUING> 63
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63
<EPS-PRIMARY> 7.15<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
