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 September 30, 1996
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 Identification No.
Incorporation or Organization
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 ____
Balance Sheets At September 30, At December 31,
(000's Omitted) 1996 1995
Assets
Cash and cash equivalents $ 403 $ 2,085
Motion pictures released, net
of accumulated amortization of
$21,072 in 1996 and $21,031 in 1995 71 112
Receivable from Twentieth Century Fox 673 148
Total Assets $ 1,147 $ 2,345
Liabilities and Partners' Capital
Liabilities:
Distribution payable $ -- $ 1,445
Accrued management fees 150 200
Accounts payable and accrued expenses 28 40
Total Liabilities 178 1,685
Partners' Capital:
General Partner 3 --
Limited Partners 966 660
Total Partners' Capital 969 660
Total Liabilities and Partners'
Capital $ 1,147 $ 2,345
Statement of Partners' Capital
For the nine months ended September 30, 1996
General Limited
(000's Omitted) Partner Partners Total
Balance at December 31, 1995 $ -- $ 660 $ 660
Net income 3 309 312
Distributions -- (3) (3)
Balance at September 30, 1996 $ 3 $ 966 $ 969
Statements of Operations
(000's Omitted Except Unit Information)
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
Net Revenues
Revenues from motion
picture exploitation $ 55 $ 309 $ 525 $ 505
Less: Amortization of
motion picture costs 6 10 41 31
Net Revenues 49 299 484 474
Other Income (Expenses)
Interest income 6 6 29 26
Management fees (50) (50) (150) (150)
General and administrative (13) (11) (37) (34)
Professional fees (4) (7) (14) (26)
Net Other Expenses (61) (62) (172) (184)
Net Income (Loss) $ (12) $ 237 $ 312 $ 290
Net Income (Loss) Allocated:
To the General Partner $ -- $ 2 $ 3 $ 3
To the Limited Partners (12) 235 309 287
$ (12) $ 237 $ 312 $ 290
Per limited partnership unit
(25,000 outstanding) $ (.48) $ 9.40 $ 12.34 $ 11.48
Statements of Cash Flows
For the nine months ended September 30,
(000's Omitted) 1996 1995
Cash Flows From Operating Activities
Net income $ 312 $ 290
Adjustments to reconcile net income to net cash
used for operating activities:
Amortization of motion picture costs 41 31
Decrease in cash arising from changes in
operating assets and liabilities:
Receivable from Twentieth Century Fox (525) (480)
Accrued management fees (50) (50)
Accounts payable and accrued expenses (12) (9)
Net cash used for operating activities (234) (218)
Cash Flows From Financing Activities
Cash distributions (1,448) (792)
Net cash used for financing activities (1,448) (792)
Net decrease in cash and cash equivalents (1,682) (1,010)
Cash and cash equivalents, beginning of period 2,085 1,373
Cash and cash equivalents, end of period $ 403 $ 363
Notes to the Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1995 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 September 30, 1996 and the results of operations for the three
and nine months ended September 30, 1996 and 1995, statements of cash flows for
the nine months ended September 30, 1996 and 1995 and the statement of
partners' capital for the nine months ended September 30, 1996. 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 1995, and no
material contingencies exist which would require disclosure in this interim
report per Regulation S-X, Rule 10-01, Paragraph (a)(5).
Part 1. 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 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 September 30, 1996 was approximately $403,000
compared to approximately $2,085,000 at December 31, 1995. The decrease is
primarily due to the payment of the 1995 annual distribution, in the amount of
$1,445,000, the payment of the Partnership's 1995 annual management fee and the
payment of Partnership expenses during 1996. The Partnership's cash balance is
expected to provide sufficient liquidity to enable the Partnership to meet its
expenses.
The Partnership's receivable from Fox increased from approximately $148,000 at
December 31, 1995 to approximately $673,000 at September 30, 1996. The
increase is due to the recognition of motion picture revenue for the first
three quarters of 1996 in the amount of approximately $525,000.
The payment of the Partnership's 1995 annual distribution in February 1996 was
the reason distribution payable decreased from $1,445,000 at December 31, 1995
to $0 at September 30, 1996.
Accrued management fees decreased from $200,000 at December 31, 1995, which
represents the entire 1995 management fee paid during the first quarter of
1996, to $150,000 at September 30, 1996, which represents nine months of the
1996 management fee.
Accounts payable and accrued expenses decreased from approximately $40,000 at
December 31, 1995 to approximately $28,000 at September 30, 1996. The decrease
is primarily attributable to the timing of payments related to the
Partnership's general and administrative expenses.
Results of Operations
For the three and nine months ended September 30, 1996, the Partnership
reported a net loss of approximately $12,000 and net income of $312,000,
respectively, as compared to net income of $237,000 and $290,000 for the
corresponding periods in 1995. The change from net income to net loss for the
three-month period is primarily due to a decrease in revenues from motion
picture exploitation. The increase in net income for the nine-month period is
primarily due to increases in revenues from motion picture exploitation in
foreign pay and free television markets. 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.
For the three months ended September 30, 1996, 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
$55,000 and $6,000, respectively, compared to $309,000 and $10,000 during the
same period in 1995. The decreases in revenues from motion picture
exploitation and amortization of motion picture costs for the three-month
period are primarily due to decreases in revenues received from both foreign
pay and free television markets. For the nine months ended September 30, 1996,
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 $525,000 and $41,000, respectively, compared to
$505,000 and $31,000 during the same period in 1995. The increases in revenues
from motion picture exploitation and amortization of motion picture costs for
the nine-month period are primarily due to increases in revenue received from
both foreign pay and free television markets. The Partnership currently
receives revenues from the distribution of the films in ancillary markets.
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the quarter ended September 30, 1996.
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: November 14, 1996 BY: /s/ Moshe Braver
Director, President and Chief Financial Officer
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-END> Sept-30-1996
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