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, 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 March 31, At December 31,
(000's Omitted) 1996 1995
Assets
Cash and cash equivalents $ 424 $ 2,085
Motion pictures released, net of
accumulated amortization of $21,185
in 1996 and $21,031 in 1995 85 112
Receivable from Twentieth Century Fox 391 148
Total Assets $ 900 $ 2,345
Liabilities and Partners' Capital
Liabilities:
Distribution payable $ _ $ 1,445
Accrued management fees 50 200
Accounts payable and accrued expenses 27 40
Total liabilities 77 1,685
Partners' Capital:
General Partner 2 _
Limited Partners 821 660
Total Partners' Capital 823 660
Total Liabilities and
Partners' Capital $ 900 $ 2,345
Statement of Partners' Capital
For the three months ended March 31, 1996
(000's Omitted) General Limited
Partner Partners Total
Balance at December 31, 1995 $ _ $ 660 $ 660
Net income 2 164 166
Distributions _ (3) (3)
Balance at March 31, 1996 $ 2 $ 821 $ 823
Statements of Operations
For the three months ended March 31,
(000's Omitted Except Unit Information) 1996 1995
Net Revenues
Revenues from motion picture exploitation $ 243 $ 183
Less: Amortization of motion picture costs 27 22
Net revenues 216 161
Other Income (Expenses)
Interest income 17 13
Management fees (50) (50)
General and administrative (13) (13)
Professional fees (4) (7)
Net Other Expenses (50) (57)
Net Income $ 166 $ 104
Net Income Allocated:
To the General Partner $ 2 $ 1
To the Limited Partners 164 103
$ 166 $ 104
Per limited partnership unit
(25,000 outstanding) $ 6.58 $ 4.13
Statements of Cash Flows
For the three months ended March 31,
(000's Omitted) 1996 1995
Cash Flows From Operating Activities
Net income $ 166 $ 104
Adjustments to reconcile net income to net cash
used for operating activities:
Amortization of motion picture costs 27 22
Increase (decrease) in cash arising from
changes in operating assets and liabilities
Receivable from Twentieth Century Fox (243) (158)
Accrued management fees (150) (150)
Accounts payable and accrued expenses (13) (9)
Net cash used for operating activities (213) (191)
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 (1,661) (983)
Cash and cash equivalents, beginning of period 2,085 1,373
Cash and cash equivalents, end of period $ 424 $ 390
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 March 31, 1996 and the results of operations and cash flows for
the three months ended March 31, 1996 and 1995 and the statement of changes in
partner's capital for the three months ended March 31, 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 March 31, 1996 was approximately $424,000
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
$1,448,000, the payment of the Partnership's 1995 annual management fee and the
payment of Partnership expenses in the first quarter of 1996. The Partnership's
cash balance is expected to provide sufficient liquidity to enable the
Partnership to meet its expenses.
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 March 31, 1996.
The Partnership's receivable from Fox increased from approximately $148,000 at
December 31, 1995 to approximately $391,000 at March 31, 1996. The increase is
due to the recognition of motion picture revenue for the first quarter of 1996
in the amount of approximately $243,000.
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 $50,000 at March 31, 1996, which represents one quarter of the 1996
management fee.
Accounts payable and accrued expenses decreased from approximately $40,000 at
December 31, 1995 to approximately $27,000 at March 31, 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 months ended March 31, 1996, the Partnership reported net income
of approximately $166,000 as compared to approximately $104,000 for the
corresponding period in 1995. The increase in net income is primarily due to
an increase in revenues 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.
For the three months ended March 31, 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 $243,000 and
$27,000, respectively, compared to $183,000 and $22,000 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 is revenue
received from both foreign and domestic television markets. The Partnership
currently receives revenues from the distribution of the films in ancillary
markets.
Interest income for the period ended March 31, 1996 totaled approximately
$17,000 compared to approximately $13,000 for the corresponding period in 1995.
The increase is due to interest being earned on higher cash balances during the
1996 period compared to the 1995 period.
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 March 31, 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: May 15, 1996 BY: /s/ Moshe Braver
Director and President
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<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-END> Mar-31-1996
<CASH> 424,000
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<OTHER-SE> 823,000
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<OTHER-EXPENSES> 67,000
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<INCOME-TAX> 000
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<EXTRAORDINARY> 000
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<NET-INCOME> 166,000
<EPS-PRIMARY> $6.58
<EPS-DILUTED> 000
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