UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 33-11101
AMERICAN ENTERTAINMENT PARTNERS II L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3388759
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) identification No.)
3 World Financial Center, New York, NY 10285
(Address of principal executive offices) (Zip code)
(212) 526-3237
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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
Statements of Financial Condition
(000's Omitted)
March 31, December 31,
Assets 1995 1994
Cash and cash equivalents $ 390 $ 1,373
Motion pictures released, net of
accumulated amortization of $21,020
in 1995 and $20,998 in 1994 123 145
Receivable from Twentieth Century Fox 1,533 1,375
Total Assets $ 2,046 $ 2,893
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 30 $ 39
Accrued management fees 50 200
Distribution payable --- 792
Total Liabilities 80 1,031
Partners' Capital:
General Partner 1 ---
Limited Partners 1,965 1,862
Total Partners' Capital 1,966 1,862
Total Liabilities and Partners' Capital $ 2,046 $ 2,893
See accompanying notes to the financial statements.
Statement of Partners' Capital
For the three months ended March 31, 1995
(000's Omitted)
General Limited
Partners Partners Total
Balance at December 31, 1994 $ --- $ 1,862 $ 1,862
Net income 1 103 104
Balance at March 31, 1995 $ 1 $ 1,965 $ 1,966
See accompanying notes to the financial statements.
Statements of Operations
For the three months ended March 31, 1995 and 1994
(000's Omitted Except Unit Information)
Net Revenues 1995 1994
Revenues from motion picture exploitation $ 183 $ 332
Less: Amortization of motion picture costs 22 78
Net Revenues 161 254
Other Income (Expenses)
Interest income 13 5
Management fees (50) (50)
General and administrative (13) (13)
Professional fees (7) (8)
Net Other Expenses (57) (66)
Net Income $ 104 $ 188
Net Income Allocated:
To the General Partner $ 1 $ 2
To the Limited Partners 103 186
$ 104 $ 188
Per limited partnership unit (25,000
outstanding Original cost - $1,000 per unit) $4.13 $7.46
See accompanying notes to the financial statements.
Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
(000's Omitted)
Cash Flows from Operating Activities: 1995 1994
Net income $ 104 $ 188
Adjustments to reconcile net income
to net cash used for operating activities:
Amortization of motion picture costs 22 78
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Receivable from Twentieth Century Fox (158) (332)
Accrued management fees (150) (150)
Accounts payable and accrued expenses (9) (22)
Net cash used for operating activities (191) (238)
Cash Flows from Financing Activities:
Cash distributions (792) (608)
Net cash used for financing activities (792) (608)
Net decrease in cash and cash equivalents (983) (846)
Cash and cash equivalents at beginning of period 1,373 1,265
Cash and cash equivalents at end of period $ 390 $ 419
See accompanying notes to the financial statements.
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 audited financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and the statement of changes in
partners' capital for the three months ended March 31, 1995. Results of
operations for the period are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1994, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Part I, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
The Partnership's principal source of funds is the proceeds received from
Twentieth Century Fox Film Corporation ("Fox") pursuant to the Distribution
Agreement, as defined in the Partnership's prospectus. According to the terms
set forth in the Partnership Agreement, effective January 1993, the Partnership
receives proceeds from Fox on an annual basis. Accordingly, all future cash
distributions from the Partnership's investment in the Joint Venture films will
be paid to limited partners on an annual basis.
The Partnership's cash balance at March 31, 1995 was approximately $390,000 as
compared to approximately $1,373,000 at December 31, 1994. The $983,000
decrease is primarily the result of the payment of the 1994 cash distribution,
totalling approximately $792,000, the payment of the Partnership's 1994 annual
management fee and the payment of Partnership expenses in the first quarter of
1995. The Partnership's cash balance is expected to provide sufficient
liquidity to enable the Partnership to meet its expenses.
During the third quarter of 1993, the General Partner engaged an independent
audit firm to perform a distribution audit to ensure that the Partnership is
receiving its allocable share of the revenues generated by the Joint Venture
films. The audit was completed during the second quarter of 1994 and the
results indicated that, overall, Fox properly allocated revenues to the
Partnership. Nevertheless, it was determined that approximately $75,000 of
additional revenue was owed to the Partnership by Fox, of which approximately
$50,000 was received by the Partnership during 1994. In accordance with a
settlement agreement between Fox and the Partnership executed in January 1995,
the Partnership received the remaining $25,000 on February 2, 1995.
The Partnership's receivable from Twentieth Century Fox totalled approximately
$1,533,000 at March 31, 1995, as compared to approximately $1,375,000 at
December 31, 1994. The increase is primarily attributable to the Joint
Venture's recognition of revenues of $183,000 during the first quarter of 1995,
offset by the collection of $25,000 of additional revenues received from Fox on
February 2, 1995, as mentioned above.
Accounts payable and accrued expenses decreased from approximately $39,000 at
December 31, 1994 to approximately $30,000 at March 31, 1995. The decrease is
primarily attributable to the timing of payments related to the Partnership's
1994 annual audit fee.
Results of Operations
For the three months ended March 31, 1995, the Partnership recognized revenues
from motion picture exploitation and amortization of motion picture costs with
respect to its investment in the released films of approximately $183,000 and
$22,000, respectively, as compared to $332,000 and $78,000, respectively, for
the three months ended March 31, 1994. The decrease in revenues from motion
picture exploitation is primarily attributable to the mature stage of the
films. The Partnership currently receives revenues from the distribution of
the films in ancillary markets.
For the three months ended March 31, 1995, the Partnership reported net income
of approximately $104,000, as compared to net income of approximately $188,000
for the corresponding period in 1994. The decrease in net income is primarily
the result of the decrease in revenues generated from motion picture
exploitation. Motion picture profits are based on current estimates of
ultimate film revenues and costs. These estimates are subject to review
periodically as more information about a film's distribution becomes available.
Such reviews can result in significant adjustments to prior estimates.
Interest income increased from approximately $5,000 for the three months ended
March 31, 1994 to approximately $13,000 for the three months ended March 31,
1995. The increase is due to an increase in interest rates, and a $4,000
interest reimbursement received in the first quarter of 1995.
Total expenses incurred by the Partnership during the first quarter of 1995
were relatively unchanged from the first quarter of 1994.
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were
filed during the quarter ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICAN ENTERTAINMENT PARTNERS II L.P.
BY: AEP PREMIERE CORPORATION II
General Partner
Date: May 11, 1995
BY: /s/ Moshe Braver
Name: Moshe Braver
Title: Director and President
Date: May 11, 1995
BY: /s/ Joseph Donaldson
Name: Joseph Donaldson
Title: Vice President and
Chief Financial Officer
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<PERIOD-END> MAR-31-1995
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