FORM 10-QSB.--QUARTERLY 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 March 31, 1997
[ ] 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, 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
ANGELES PARTNERS VII
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 282
Restricted--tenant security deposits 31
Accounts receivable 9
Escrows for taxes 15
Other assets 5
Investment properties:
Land $ 366
Buildings and related personal property 5,273
5,639
Less accumulated depreciation (3,684) 1,955
$ 2,297
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 4
Tenant security deposits 32
Other liabilities 49
Mortgage note payable 2,424
Partners' Capital (Deficit)
General partner $ 292
Limited partners' (8,669 units issued and
outstanding) (504) (212)
$ 2,297
See Accompanying Notes to Financial Statements
b) ANGELES PARTNERS VII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1997 1996
Revenues:
Rental income $ 283 $ 270
Other income 16 13
Total revenues 299 283
Expenses:
Operating 82 84
General and administrative 21 22
Maintenance 42 34
Depreciation 67 63
Interest 56 58
Property taxes 10 10
Total expenses 278 271
Net income $ 21 $ 12
Net income allocated to general
partner (1%) $ -- $ --
Net income allocated to limited
partners (99%) 21 12
Net income $ 21 $ 12
Net income per limited
partnership unit $ 2.42 $ 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
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 three months
ended March 31, 1997 -- -- 21 21
Partners' capital (deficit) at
March 31, 1997 8,669 $ 292 $ (504) $ (212)
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 21 $ 12
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 67 63
Change in accounts:
Restricted cash -- (1)
Accounts receivable 13 1
Escrows for taxes 31 28
Other assets (1) --
Accounts payable (15) (24)
Tenant security deposit liabilities 1 1
Other liabilities (27) 3
Net cash provided by
operating activities 90 83
Cash flows used in investing activities:
Property improvements and replacements (20) (19)
Cash flows used in financing activities:
Payments on mortgage notes payable (27) (25)
Net increase in cash and cash equivalents 43 39
Unrestricted cash and cash equivalents at
beginning of period 239 193
Unrestricted cash and cash equivalents at
end of period $ 282 $ 232
Supplemental disclosure of cash flow information:
Cash paid for interest $ 56 $ 58
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
e) ANGELES PARTNERS VII
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE A - 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 "General Partner"), all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three months
ended March 31, 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 Angeles
Partners VII's (the "Partnership") 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.
Three Months Ended
March 31,
1997 1996
(in thousands)
Property management fees $ 14 $ 14
Reimbursement for services of affiliates 15 15
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, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Cedarwood Apartments
Gretna, Louisiana 96% 97%
The Partnership reported net income of $21,000 for the three months ended March
31, 1997, versus net income of $12,000 for the three months ended March 31,
1996. The increase in net income for the three months ended March 31, 1997, is
attributable to an increase in rental income, which is slightly offset by an
increase in depreciation expense and maintenance expense. Rental income
increased as a result of an increase in average rental rates, despite a 1%
decrease in occupancy at Cedarwood Apartments. The increase in depreciation
expense was due to the completion of property improvements in 1996 in an effort
to upgrade the interior of the units. This 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 months ended March 31, 1997.
Included in maintenance expense for the period ended March 31, 1996, is $17,000
of major repairs and maintenance mainly comprised of interior 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 March 31, 1997, the Partnership had unrestricted cash and cash equivalents
of $282,000 versus $232,000 at March 31, 1996. Net cash provided by operating
activities increased due to the increase in net income as mentioned above, a
decrease in accounts receivable and a lesser decrease in accounts payable.
These increases were partially offset by a decrease in other liabilities. Net
cash used in investing and financing activities for the period ending March 31,
1997, remained relatively consistent with the period ending 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 short-term needs of the Partnership. The mortgage
indebtedness of $2,424,000 is being amortized over 28 years with a maturity date
of May 2007, at which time the property will be refinanced or sold. No cash
distributions were made during the three months ended March 31, 1997. 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 March 31, 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: May 7, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners VII 1997 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-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 282
<SECURITIES> 0
<RECEIVABLES> 9
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 5,639
<DEPRECIATION> 3,684
<TOTAL-ASSETS> 2,297
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 2,424
0
0
<COMMON> 0
<OTHER-SE> (212)
<TOTAL-LIABILITY-AND-EQUITY> 2,297
<SALES> 0
<TOTAL-REVENUES> 299
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 278
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 21
<EPS-PRIMARY> 2.42<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
