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 June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT
For the transition period.........to.........
Commission file number 0-10304
ANGELES PARTNERS X
(Exact name of small business issuer as specified in its charter)
California 95-3557899
(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 X
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 486
Restricted--tenant security deposits 65
Accounts receivable 29
Escrows for taxes and insurance 300
Restricted escrows 206
Other assets 491
Investment properties:
Land $ 1,386
Buildings and related personal property 18,329
19,715
Less accumulated depreciation (11,443) 8,272
$ 9,849
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 115
Tenant security deposits 65
Accrued taxes 146
Due to affiliate 466
Other liabilities 596
Mortgage notes payable 18,522
Partners' Deficit
General partners $ (267)
Limited partners (18,645 units
issued and outstanding) (9,794) (10,061)
$ 9,849
See Accompanying Notes to Consolidated Financial Statements
b) ANGELES PARTNERS X
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 1,091 $ 1,055 $ 2,131 $ 2,073
Other income 70 59 126 108
Total revenues 1,161 1,114 2,257 2,181
Expenses:
Operating 387 380 739 709
General and administrative 53 45 101 91
Maintenance 118 118 195 214
Depreciation 225 217 448 431
Interest 483 480 949 958
Property taxes 98 97 197 197
Total expenses 1,364 1,337 2,629 2,600
Loss before extraordinary
item (203) (223) (372) (419)
Extraordinary item-gain on
extinguishment of debt 352 -- 352 --
Net income (loss) $ 149 $ (223) $ (20) $ (419)
Net income (loss) allocated
to general partners (1%) $ 1 $ (2) $ -- $ (4)
Net income (loss) allocated
to limited partners (99%) 148 (221) (20) (415)
Net income (loss) $ 149 $ (223) $ (20) $ (419)
Per limited partnership unit:
Loss before extraordinary
item $(10.78) $(11.85) $(19.75) $(22.26)
Extraordinary item 18.69 -- 18.69 --
Net income (loss) $ 7.91 $(11.85) $ (1.06) $(22.26)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) ANGELES PARTNERS X
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' 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 18,714 $ 1 $ 18,714 $ 18,715
Partners' deficit at
December 31, 1995 18,645 $ (267) $ (9,774) $(10,041)
Net loss for the six months
ended June 30, 1996 -- -- (20) (20)
Partners' deficit at
June 30, 1996 18,645 $ (267) $ (9,794) $(10,061)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) ANGELES PARTNERS X
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (20) $ (419)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 448 431
Amortization of discounts and loan costs 62 48
Extraordinary gain on extinguishment of debt (352) --
Change in accounts:
Restricted cash 4 (2)
Accounts receivable (10) 4
Escrows for taxes and insurance 117 15
Other assets (31) (24)
Accounts payable 21 (5)
Tenant security deposit liabilities (5) 4
Accrued taxes (48) (44)
Due to affiliates 65 60
Other liabilities 180 219
Net cash provided by operating activities 431 287
Cash flows from investing activities:
Property improvements and replacements (125) (218)
Deposits to restricted escrows (39) (63)
Receipts from restricted escrows 28 78
Net cash used in investing activities (136) (203)
Cash flows from financing activities:
Payments on mortgage notes payable (92) (65)
Loan costs (14) --
Net cash used in financing activities (106) (65)
Net increase in cash 189 19
Cash and cash equivalents at beginning of period 297 383
Cash and cash equivalents at end of period $ 486 $ 402
Supplemental disclosure of cash flow information:
Cash paid for interest $ 705 $ 707
Supplemental disclosure of non-cash financing and
investing activities:
Interest on notes transferred to notes payable $ 434 $ --
Accrued interest waived and mortgage discount
resulting from AMIT note modification $ 352 $ --
Property improvements and replacements included
in accounts payable $ 22 $ --
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) ANGELES PARTNERS X
NOTES TO CONSOLIDATED 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 and six
month periods ended June 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 X'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 B - Transactions with Affiliated Parties
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 or accrued to the General Partner
and affiliates for the six months ended June 30, 1996 and 1995:
1996 1995
(in thousands)
Property management fees $111 $ 108
Reimbursement for services of
affiliates including $466,000 accrued
at June 30, 1996 68 62
The Partnership insures its properties 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 to the affiliate of the General Partner who receives
payment 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.
Note B - Transactions with Affiliated Parties (continued)
Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, has
provided unsecured loans totalling $3,568,000 at June 30, 1996. Interest
expense for these loans was $202,000 and $197,000 for the six months ended June
30, 1996 and 1995, respectively. Two of these loans totaling $2,500,000 were
previously secured by two investment properties; however, the second mortgages
were released in 1992 as part of the terms and conditions for refinancing the
first mortgages. Multifamily riders were executed between the Partnership and
the first mortgage holders for Carriage APX and Vista APX, stating that any
subordinated debt must be non-foreclosable and maturity dates not less than 2
years beyond the maturity of the refinanced first mortgages; the agreement also
provided for interest to be paid based on available cash flow. In June 1996,
but effective March 31, 1996, these loans were modified (see "Note C"), adding
non-default accrued interest payable to the loan balances and waiving accrued,
but unpaid, default interest and late charges. The modified $1,404,000 Carriage
APX note matures in September 2000 and provides for interest at 12% on the
original $1,200,000 note amount. The modified $1,530,000 Vista APX note matures
in September 2002 and provides for interest at 12.5% on the original $1,300,000
note amount. As part of the modifications, AMIT was granted a first priority
lien on the Partnership's 99% limited partnership interests in the Vista APX and
Carriage APX lower-tier partnerships which own Vista Hills Apartments and
Carriage Hills Apartments, respectively.
MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns
1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class
B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A
Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1.2% of the distributions of net cash distributed by AMIT. These Class
B Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1.2% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted, and continues to decline to
exert, any management control over or participate in the management of AMIT. In
addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General
Partner and an affiliate of Insignia Financial Group, Inc., which provides
property management and partnership administration services to the Partnership,
owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote
approximately 1.5% of the total shares.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an
option to acquire the Class B Shares. This option can be exercised at the end
of 10 years or when all loans made by AMIT to partnerships affiliated with MAE
GP as of November 9, 1994, (which is the date of execution of a definitive
Settlement Agreement), have been paid in full, but in no event prior to November
9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which
occurred April 14, 1995, as payment for the option. Upon exercise of the
option, AMIT would remit to MAE GP an additional $94,000.
Note B - Transactions with Affiliated Parties (continued)
Simultaneously with the execution of the option, MAE GP executed an irrevocable
proxy in favor of AMIT the result of which is MAE GP will be able to vote the
Class B Shares on all matters except those involving transactions between AMIT
and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an
officer or trustee of AMIT. On those matters, MAE GP granted to the AMIT
trustees, in their capacity as trustees of AMIT, proxies with regard to the
Class B Shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited
partnership was organized to acquire and hold the obligations evidencing the
working capital loans previously provided to the Partnership by Angeles Capital
Investments, Inc. ("ACII"). Angeles Corporation ("Angeles") is the 99% limited
partner of AAP and Angeles Acceptance Directives, Inc.("AAD"), an affiliate of
the General Partner, was, until April 14, 1995, the 1% general partner of AAP.
On April 14, 1995, as part of a settlement of claims between affiliates of the
General Partner and Angeles, AAD resigned as general partner of AAP and
simultaneously received a 1/2% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP.
These working capital loans funded the Partnership's operating deficits in prior
years. Total indebtedness, which is included as a note payable, was $651,000 at
June 30, 1996, and June 30, 1995, with monthly interest only payments at prime
and prime plus 2%. Principal is to be paid the earlier of i) the availability
of funds, ii) the sale of one or more properties owned by the Partnership, or
iii) November 25, 1997. Total interest expense for this loan was $29,000 and
$31,000 for the six months ended June 30, 1996 and 1995, respectively.
Note C - Refinancings
In June 1996, but effective March 31, 1996, the General Partner negotiated a
refinance of two loans payable to AMIT totalling $2,500,000. The terms of the
refinance included adding non-default accrued interest payable to the loan
balances and waiving accrued, but unpaid, default interest and late charges.
The modified $1,404,000 Carriage APX note matures in September 2000 and provides
for interest at 12% on the original $1,200,000 note amount. The modified
$1,530,000 Vista APX note matures in September 2002 and provides for interest at
12.5% on the original $1,300,000 note amount. As part of the modifications,
AMIT was granted a first priority lien on the Partnership's 99% limited
partnership interests in the Vista APX and Carriage APX lower-tier partnerships
which own Vista Hills Apartments and Carriage Hills Apartments, respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of four apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 1996, and June 30, 1995:
Average
Occupancy
Property 1996 1995
Cardinal Woods Apartments
Cary, North Carolina 97% 97%
Greentree Apartments
Mobile, Alabama 97% 98%
Carriage Hills Apartments
East Lansing, Michigan 93% 95%
Vista Hills Apartments (1)
El Paso, Texas 81% 80%
(1) The low occupancy at Vista Hills Apartments is due to the transfer of
military and civilian jobs out of, as well as a high unemployment rate in
the El Paso, Texas area. As a result of this market change, the property
has increased advertising and offered rent concessions to increase
occupancy.
The Partnership realized a net loss for the six month period ended June 30, 1996
and June 30, 1995, of $20,000 and $419,000, respectively. The Partnership
realized net income of $149,000 for the three months ended June 30, 1996, versus
a net loss of $223,000 for the three months ended June 30, 1995. The decrease
in net loss is mainly attributable to a gain on the extinguishment of debt
recognized in the three months ended June 30, 1996 (see discussion below). The
increase in rental income and decrease in maintenance expenses is partially
offset by an increase in operating expense. The increase in rental income is
primarily the result of an increase in rental rates at Cardinal Woods
Apartments. The increase in operating expenses is due primarily to salary and
utility expense increases at the properties. Maintenance expense decreased
primarily due to the completion of exterior painting at Greentree Apartments in
1995.
In June 1996, but effective March 31, 1996, two of the Partnership's AMIT notes
were modified. Previously accrued interest of $434,000 was added to the
principal balance of existing debt. The modifications provided for the
additional debt to be non-interest bearing and to be secured by a first priority
lien on the Partnership's limited partnership interests in Vista APX and
Carriage APX. Interest was imputed on the non-interest bearing component of the
notes. The amount of the note discounts, along with the waived default interest
and late charges, which amounted to $292,000 and $60,000, respectively, were
recognized as gain (total $352,000) from extinguishment of debt resulting from
the modifications, in the three months ended June 30, 1996.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership had unrestricted cash of $486,000 compared to
$402,000 at June 30, 1995. Net cash provided by operating activities increased
as a result of a decreased net loss and a decrease in the escrow for taxes and
insurance. Net cash used in investing activities decreased primarily as a
result of reduced expenditures for property improvements. Net cash used in
financing activities increased due to an increase in principal payments on
mortgage notes payable and the payment of loan costs to AMIT in order to
refinance the aforementioned indebtedness.
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 outstanding
indebtedness of $18,522,000 (net of discount) has maturity dates of November
1997 to December 2003, at which time $17,879,000 of balloon payments are due.
Future cash distributions will depend on the levels of net cash generated from
operations, refinancings, property sales and the availability of cash reserves.
There were no distributions made during the six months ended June 30, 1996, or
the six months ended June 30, 1995.
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.
b) Reports on Form 8-K:
None filed during the quarter ended June 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 X LIMITED PARTNERSHIP
By: Angeles Realty Corporation
General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: August 8, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners X 1996 Second Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000317900
<NAME> ANGELES PARTNERS X
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 486
<SECURITIES> 0
<RECEIVABLES> 29
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 19,715
<DEPRECIATION> 11,443
<TOTAL-ASSETS> 9,849
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 18,522
0
0
<COMMON> 0
<OTHER-SE> (10,061)
<TOTAL-LIABILITY-AND-EQUITY> 9,849
<SALES> 0
<TOTAL-REVENUES> 2,257
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,629
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 949
<INCOME-PRETAX> (372)
<INCOME-TAX> 0
<INCOME-CONTINUING> (372)
<DISCONTINUED> 0
<EXTRAORDINARY> 352
<CHANGES> 0
<NET-INCOME> (20)
<EPS-PRIMARY> (1.06)<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
