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 June 30, 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, 29th Floor, New York, NY
ATTN: Andre Anderson 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)
June 30, December 31,
Assets 1995 1994
Cash and cash equivalents $373 $1,373
Motion pictures released, net of accumulated amortization
of $21,019 in 1995 and $20,998 in 1994 124 145
Receivable from Twentieth Century Fox 1,546 1,375
Total Assets $2,043 $2,893
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $28 $39
Accrued management fees 100 200
Distribution payable - 792
Total Liabilities 128 1,031
Partners' Capital:
General Partner 1 -
Limited Partners 1,914 1,862
Total Partners' Capital 1,915 1,862
Total Liabilities and Partners' Capital $2,043 $2,893
Statement of Partners' Capital
For the six months ended June 30, 1995
(000's Omitted)
General Limited
Partner Partners Total
Balance at December 31, 1994 $- $1,862 $1,862
Net income 1 52 53
Balance at June 30, 1995 $1 $1,914 $1,915
Statements of Operations
(000's Omitted Except Unit Information)
Three months ended Six months ended
June 30, June 30,
Revenues 1995 1994 1995 1994
Revenues from motion picture exploitation $13 $75 $196 $407
Less: Amortization of motion picture costs (1) 9 21 87
Net Revenues 14 66 175 320
Other Income (Expenses)
Interest income 7 4 20 9
Management fees (50) (50) (100) (100)
Professional fees (12) (13) (19) (21)
General and administrative (10) (13) (23) (26)
Net Other Expenses (65) (72) (122) (138)
Net Income (Loss) $(51) $(6) $53 $182
Net Income (Loss) Allocated:
To the General Partner $- $- $1 $2
To the Limited Partners (51) (6) 52 180
$(51) $(6) $53 $182
Per limited partnership unit
(25,000 outstanding) $(2.04) $(.25) $2.09 $7.21
Statements of Cash Flows
For the six months ended June 30, 1995 and 1994
(000's Omitted)
Cash Flows from Operating Activities: 1995 1994
Net income $53 $182
Adjustments to reconcile net income to net cash
used for operating activities:
Amortization of motion picture costs 21 87
Decrease in cash arising from changes
in operating assets and liabilities:
Receivable from Twentieth Century Fox (171) (407)
Accrued management fees (100) (100)
Accounts payable and accrued expenses (11) (19)
Net cash used for operating activities (208) (257)
Cash Flows from Financing Activities:
Cash distributions (792) (608)
Net cash used for financing activities (792) (608)
Net decrease in cash and cash equivalents (1,000) (865)
Cash and cash equivalents at beginning of period 1,373 1,265
Cash and cash equivalents at end of period $373 $400
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 June 30, 1995 and the results of operations for the three and
six months ended June 30, 1995 and 1994, and cash flows for the six months
ended June 30, 1995 and 1994, and the statement of changes in partners' capital
for the six months ended June 30, 1995. Results of operations for the periods
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 June 30, 1995 was approximately $373,000 as
compared to approximately $1,373,000 at December 31, 1994. The $1,000,000
decrease is primarily the result of the payment of the 1994 cash distribution,
totalling approximately $792,000, and the payment of the Partnership's 1994
annual management fee. 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
$1,546,000 at June 30, 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 $196,000 during the first half 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 $28,000 at June 30, 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 June 30, 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 $13,000 and
($1,000), respectively, as compared to approximately $75,000 and $9,000,
respectively, for the same period in 1994. For the six months ended June 30,
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 $196,000 and $21,000, respectively, as compared
to approximately $407,000 and $87,000, respectively, for the corresponding
period in 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 and six months ended June 30, 1995, the Partnership reported a
net loss of approximately $51,000 and net income of approximately $53,000,
respectively, as compared to a net loss of approximately $6,000 and net income
of approximately $182,000 for the corresponding periods in 1994. Both the
three-month increase in net loss and six-month decrease in net income are
primarily the result of decreases 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 $4,000 and $9,000 for the three
and six months ended June 30, 1994, to approximately $7,000 and $20,000 for the
three and six months ended June 30, 1995. The increase is primarily due to
interest rate increases.
Total expenses incurred by the Partnership during the first half of 1995 were
relatively unchanged from the corresponding period in 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 June 30, 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: August 11, 1995
BY: /s/ Moshe Braver
Name: Moshe Braver
Title: Director and President
Date: August 11, 1995
BY: /s/ Joseph Donaldson
Name: Joseph Donaldson
Title: Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 373,000
<SECURITIES> 000
<RECEIVABLES> 1,546,000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 1,919,000
<PP&E> 124,000
<DEPRECIATION> 000
<TOTAL-ASSETS> 2,043,000
<CURRENT-LIABILITIES> 128,000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 1,915,000
<TOTAL-LIABILITY-AND-EQUITY> 2,043,000
<SALES> 000
<TOTAL-REVENUES> 196,000
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 142,000
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 53,000
<INCOME-TAX> 000
<INCOME-CONTINUING> 53,000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 53,000
<EPS-PRIMARY> 2.09
<EPS-DILUTED> 000
</TABLE>
