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, 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 June 30, At December 31,
(000's Omitted) 1996 1995
Assets
Cash and cash equivalents $ 412 $ 2,085
Motion pictures released, net
of accumulated amortization of
$21,066 in 1996 and $21,031 in 1995 77 112
Receivable from Twentieth Century Fox 618 148
Total Assets $ 1,107 $ 2,345
Liabilities and Partners' Capital
Liabilities:
Distribution payable $ -- $ 1,445
Accrued management fees 100 200
Accounts payable and accrued expenses 26 40
Total Liabilities 126 1,685
Partners' Capital:
General Partner 3 --
Limited Partners 978 660
Total Partners' Capital 981 660
Total Liabilities and
Partners' Capital $ 1,107 $ 2,345
Statement of Partners' Capital
For the six months ended June 30, 1996 General Limited
(000's Omitted) Partner Partners Total
Balance at December 31, 1995 $ -- $ 660 $ 660
Net income 3 321 324
Distributions -- (3) (3)
Balance at June 30, 1996 $ 3 $ 978 $ 981
Statements of Operations
(000's Omitted Except Unit Information)
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
Net Revenues
Revenues from motion
picture exploitation $ 227 $ 13 $ 470 $ 196
Less: Amortization of
motion picture costs 8 (1) 35 21
Net Revenues 219 14 435 175
Other Income (Expenses)
Interest income 6 7 23 20
Management fees (50) (50) (100) (100)
General and administrative (11) (10) (24) (23)
Professional fees (6) (12) (10) (19)
Net Other Expenses (61) (65) (111) (122)
Net Income (Loss) $ 158 $ (51) $ 324 $ 53
Net Income (Loss) Allocated:
To the General Partner $ 1 $ -- $ 3 $ 1
To the Limited Partners 157 (51) 321 52
$ 158 $ (51) $ 324 $ 53
Per limited partnership unit
(25,000 outstanding) $ 6.24 $ (2.04) $ 12.82 $ 2.09
Statements of Cash Flows
For the six months ended June 30,
(000's Omitted) 1996 1995
Cash Flows From Operating Activities
Net income $ 324 $ 53
Adjustments to reconcile net income
to net cash used for operating activities:
Amortization of motion picture costs 35 21
Decrease in cash arising from changes in
operating assets and liabilities:
Receivable from Twentieth Century Fox (470) (171)
Accrued management fees (100) (100)
Accounts payable and accrued expenses (14) (11)
Net cash used for operating activities (225) (208)
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 (1,673) (1,000)
Cash and cash equivalents,
beginning of period 2,085 1,373
Cash and cash equivalents,
end of period $ 412 $ 373
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 June 30, 1996 and the results of operations for the three and
six months ended June 30, 1996 and 1995, statements of cash flows for the six
months ended June 30, 1996 and 1995 and the statement of changes in partners'
capital for the six months ended June 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 June 30, 1996 was approximately $412,000
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 in the first and second quarters of 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 $618,000 at June 30, 1996. The increase is
due to the recognition of motion picture revenue for the first two quarters of
1996 in the amount of approximately $470,000.
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 June 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 $100,000 at June 30, 1996, which represents one half of the 1996
management fee.
Accounts payable and accrued expenses decreased from approximately $40,000 at
December 31, 1995 to approximately $26,000 at June 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 six months ended June 30, 1996, the Partnership reported net
income of approximately $158,000 and $324,000, respectively, as compared to a
net loss of $51,000 and net income of $53,000 for the corresponding periods in
1995. The increases in net income are 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 June 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 $227,000 and
$8,000, respectively, compared to $13,000 and ($1,000) during the same period
in 1995. For the six months ended June 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
$470,000 and $35,000, respectively, compared to $196,000 and $21,000 during the
same period in 1995. The increases in revenues from motion picture
exploitation and amortization of motion picture costs 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 June 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: August 14, 1996 BY: /s/ Moshe Braver
Director, President and Chief Financial Officer
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<ARTICLE> 5
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<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Jun-30-1996
<CASH> 412,000
<SECURITIES> 000
<RECEIVABLES> 618,000
<ALLOWANCES> 000
<INVENTORY> 000
<CURRENT-ASSETS> 000
<PP&E> 000
<DEPRECIATION> 000
<TOTAL-ASSETS> 1,107,000
<CURRENT-LIABILITIES> 126,000
<BONDS> 000
<COMMON> 000
000
000
<OTHER-SE> 981,000
<TOTAL-LIABILITY-AND-EQUITY> 1,107,000
<SALES> 000
<TOTAL-REVENUES> 493,000
<CGS> 000
<TOTAL-COSTS> 000
<OTHER-EXPENSES> 134,000
<LOSS-PROVISION> 000
<INTEREST-EXPENSE> 000
<INCOME-PRETAX> 324,000
<INCOME-TAX> 000
<INCOME-CONTINUING> 324,000
<DISCONTINUED> 000
<EXTRAORDINARY> 000
<CHANGES> 000
<NET-INCOME> 324,000
<EPS-PRIMARY> 12.82
<EPS-DILUTED> 000
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