<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____ to ____
Commission File Number 0-18528
INCOME GROWTH PARTNERS, LTD. X, A CALIFORNIA LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
CALIFORNIA 33-0294177
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1300 Sorrento Valley Road, Suite 108, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
(619) 457-2750
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
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
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [X]
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes[X] No [ ]
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I
Item 1. Business........................................................................1
Item 2. Properties......................................................................3
Item 3. Legal Proceedings...............................................................3
Item 4. Submission of Matters to a Vote of Security Holders.............................3
PART II
Item 5. Market for the Registrant's Units and Related Security Holder Matters...........4
Item 6. Selected Financial Data.........................................................5
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................................5
Item 7A. Quantitative and Qualitative Disclosures About Market Risk......................9
Item 8. Financial Statements and Supplementary Data.....................................9
Item 9. Disagreements on Accounting and Financial Disclosures...........................9
PART III
Item 10. Directors and Executive Officers of the Registrant..............................9
Item 11. Executive Compensation.........................................................10
Item 12. Security Ownership of Certain Beneficial Owners and Management.................10
Item 13. Certain Relationships and Related Transactions.................................11
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K................11
Signatures ...............................................................................14
</TABLE>
<PAGE> 3
PART I
ITEM 1. BUSINESS
GENERAL
Income Growth Partners, Ltd. X, a California limited partnership (the "Limited
Partnership") and subsidiaries (collectively, the "Partnership"), was formed in
February 1988, to acquire, operate and hold for investment one or more parcels
of income-producing, multi-family residential real property. Currently, the
Limited Partnership operates two separate apartment complexes in Southern
California: 1) Mission Park and 2) Shadowridge Meadows. The limited partnership
agreement provides that the Partnership shall continue through February 2021,
unless terminated sooner.
Income Growth Management, Inc. ("IGM") is the sole general partner. The general
partner has made no cash capital contributions to date. As of December 31, 1998,
there were approximately 2,082 limited partners in the Partnership.
The Partnership has no full-time employees. Employees of corporations affiliated
with the general partner perform certain administrative and other services on
behalf of the Partnership (see Item 13). The Partnership's executive offices are
located at 11300 Sorrento Valley Road, Suite 108, San Diego, California 92121
and the Partnership's telephone number is (619) 457-2750.
FINANCING STRATEGY
The Partnership seeks to minimize the cost of financing its properties and will
refinance existing loans from time to time to take advantage of prevailing
market conditions. The Mission Park and Shadowridge Meadows properties were
refinanced to prevailing rates during 1995 and 1997, respectively.
COMPETITIVE CONDITIONS
Changes in the national and regional economic climates, changes in local real
estate conditions such as the oversupply of apartments or a reduction in demand
for apartments, competition from single-family housing, apartment properties and
other forms of multifamily residential housing, the inability to provide
adequate maintenance and to obtain adequate insurance, increased operating
costs, changes in zoning, building, environmental, rent control and other laws
and regulations, the costs of compliance with current and future laws, changes
in real property taxes and unusual occurrences (such as earthquakes and floods)
and other factors beyond the control of the Partnership may adversely affect the
income from, and value of, the Partnership's properties.
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ITEM 1. BUSINESS, CONTINUED
LEASES AND INFLATION
Substantially all of the leases at the Partnership's apartment properties are
for a period of six months or less, allowing, at the time of renewal, for
adjustments in the rental rate and the opportunity to release the apartment unit
at the prevailing market rate. The short-term nature of these leases generally
serves to minimize the risk to the Partnership of the adverse effect of
inflation and the Partnership does not believe that inflation has had a material
adverse impact on its revenues.
RESTRICTIONS IMPOSED BY LAWS BENEFITING DISABLED PERSONS
Under the Americans with Disabilities Act of 1990 (the "ADA"), all places of
public accommodation are required to meet certain federal requirements related
to access and use by disabled persons. These requirements became effective in
1992. A number of additional federal, state and local laws exist which also may
require modifications to the properties, or restrict certain further renovations
thereof, with respect to access thereto by disabled persons. For example, the
Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment properties
first occupied after March 13, 1990 to be accessible to the handicapped.
Noncompliance with the ADA or the FHAA could result in an order to correct any
noncomplying feature, which could result in substantial capital expenditures.
Although management of the Partnership believes that the properties are
substantially in compliance with present requirements, if the properties are not
in compliance, the Partnership is likely to incur additional costs to comply
with the ADA and the FHAA.
During 1995, on a tax free basis, the Limited Partnership exchanged the Mission
Park property for a 99% interest in IGP X Mission Park Associates, L.P., a newly
formed California limited partnership (the "Mission Park Subsidiary"). The
Mission Park Subsidiary is separate and distinct from the Partnership, having
separate assets, liabilities and business operations.
During 1997, on a tax free basis, the Limited Partnership exchanged the
Shadowridge Meadows property for a 99% interest in IGP X Shadowridge Meadows,
Ltd., a newly formed California limited partnership (the "Shadowridge Meadows
Subsidiary"). The Shadowridge Meadows Subsidiary is also separate and distinct
from the Partnership, having separate assets, liabilities and business
operations.
Formation of the Mission Park Subsidiary and the Shadowridge Subsidiary had no
impact on the Partnership's overall financial condition, results of operations,
allocation of net income/loss, cash distributions or Partnership assets.
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ITEM 2. PROPERTIES
The Partnership, through its subsidiaries, presently owns two properties, as
follows:
MISSION PARK:
Date of purchase: August 1989
Purchase price: $17,100,000
Property Description: A 264-unit apartment complex located in San
Marcos, California. The property includes two full-size recreation
rooms, two heated swimming pools and spas, night-lighted tennis courts,
a satellite cable TV system and covered parking. The building is
approximately eight years old. The property contains 215,292 square
feet.
SHADOWRIDGE MEADOWS:
Date of purchase: November 1988
Purchase price: $12,700,000
Property Description: A 184-unit apartment complex located in Vista,
California. The property includes a large recreation center, a heated
swimming pool and spa, five laundry facilities, a satellite cable TV
system and covered parking. The building is approximately eleven years
old. The property contains 127,197 square feet.
ITEM 3. LEGAL PROCEEDINGS
The Partnership is not a party to any legal proceedings other than various
claims and lawsuits arising in the normal course of its business which, in the
opinion of the Partnership's management, are not individually or in the
aggregate material to its business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
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PART II
ITEM 5. MARKET FOR REGISTRANT'S UNITS AND RELATED SECURITY HOLDER MATTERS
(a) Market Information
As of December 31, 1998, the outstanding securities of the Partnership
included the Original Units and Class A Units held by the limited
partners. The Partnership's Amended and Restated Agreement of
Partnership substantially restricts transfers of all units and no public
trading market for the units exists or is intended or expected to
develop.
(b) Holders
As of December 31, 1998, the Partnership's 18,826.5 outstanding Original
Units and 8,100 Class A Units were held by an aggregate of 2,082 Limited
Partners.
(c) Dividends
As a limited partnership, the Partnership does not pay dividends.
The amended partnership agreement provides that any distributions of
cash from operations will be made in the following order of priority:
First, each Class A Unit receives a 12% cumulative noncompounded annual
return on the balance of actual funds invested in Class A Units ("Class
A Preferred Return"). Second, each Class A Unit receives a total return
of original invested capital. Third, each Class A Unit receives a $500
bonus. Fourth, each Original Unit holder receives a 10% noncumulative
return on the adjusted balance of original invested capital. Thereafter,
90% of distributions on cash from operations will be made to the
Original Unit holders and 10% to the general partner.
The Partnership distributed approximately $312,000 to the holders of the
Class A Units during 1998. Cumulative unpaid distributions on the Class
A Preferred Return were approximately $559,000 as of December 31, 1998.
Cash distributions are determined at the discretion of the general
partner. Any future distributions are largely dependent on future
income, expenses, debt service and operating reserves and there can be
no assurance that future distributions will be paid.
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ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in conjunction
with the financial statements and the related notes described in Item 8 herein:
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total assets $ 20,513,980 $ 21,225,719 $ 21,476,918 $ 22,153,868 $ 28,945,057
Long-term obligations 19,579,523 19,765,202 19,788,869 19,966,935 29,426,708
Total revenue 4,148,324 3,791,975 3,576,981 3,896,384 4,344,717
Total expenses (4,331,753) (4,163,361) (4,063,509) (4,584,674) (9,413,282)
Write-down of land and building -- -- -- -- 3,900,000
Loss before extraordinary item (183,429) (371,386) (486,528) 3,757,729 (5,322,740)
Extraordinary item: gain on -- -- -- 4,446,019 --
forgiveness of debt
Net income (loss) (183,429) (371,386) (486,528) 3,757,729 (5,322,740)
Net loss per partnership unit (6.81) (13.79) (18.06) (28.48) (282.73)
before extraordinary gain
Extraordinary gain per partnership unit -- -- -- 184.01 --
Basic and diluted net
income (loss) per partnership unit (6.81) (13.79) (18.06) 155.53 (282.73)
Weighted average limited partnership units 26,926 26,926 26,926 24,161 18,826
</TABLE>
There had been no cash distributions to partners up until December 31, 1997. The
Partnership distributed approximately $312,000 to the holders of the Class A
Units during 1998.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS:
The following Management's Discussion and Analysis of Financial Condition and
Results of Operations should be read in conjunction with the financial
statements and notes thereto filed herewith. Historical results and percentage
relationships set forth in the consolidated statement of operations in the
financial statements, including trends which might appear, should not be taken
as indicative of future operations.
(a) Liquidity and Capital Resources
In January 1994, the Limited Partnership filed a voluntary petition for
relief under Chapter 11 of the federal bankruptcy laws in the United
States Bankruptcy Court for the Southern District of California.
Under the provisions of the Plan of Reorganization (the "Plan"), the
Limited Partnership was allowed to retain ownership of the Mission Park
and Shadowridge Meadows properties. Despite $2,025,000 in additional
capital from existing investors in the form of Class A Units, the
Limited Partnership was unable to raise the necessary capital to retain
ownership of its third property, Margarita Summit.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED:
The Limited Partnership emerged from Chapter 11 effective in May 1995
having fully satisfied all claims in accordance with the Plan.
Prior to 1996, the Partnership's operating and debt service obligations
have been financed through the sale of Partnership Units, cash provided
by operating activities, and 1995 debt restructuring activities. During
1996 through 1998, all of the Partnership's operating and debt service
cash requirements have been met through cash generated from operations.
The Mission Park mortgage was refinanced in December 1995 at a fixed
interest rate of 7.76%. The Shadowridge Meadows mortgage was refinanced
in October 1997 at a fixed interest rate of 7.49%.
Despite the refinancings, mortgage indebtedness on the properties
remains high, which may make it difficult for the properties to service
their debt through Partnership operations. In the event that one or more
of the properties is unable to support its debt service and the
Partnership is unable to cover operational shortfalls from cash
reserves, the Partnership may have to take one or more alternative
courses of action. The general partners would then determine, based on
their analysis of relevant economic conditions and the status of the
properties, a course of action intended to be consistent with the best
interests of the Partnership. Possible courses of action might include
the sacrifice, sale or refinancing of one or more of the properties, the
entry into one or more joint venture partnerships with other entities,
or the filing of another bankruptcy petition.
Prior period amounts have been reclassified to conform with the current
year presentation.
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER
31, 1997.
Net cash provided by operating activities for the year ended December
31, 1998 was $871,000 compared to $594,000 for the same period in 1997.
The principal reason for this difference is a decrease in net loss of
approximately $188,000, a decrease in prepaid expenses and other assets
and an increase in accounts payable resulting from the timing of
payments.
Net cash used in investing activities for the year ended December 31,
1998 was $156,000 compared to $252,000 for the same period in 1997. The
decrease in cash used in investing activities is due primarily to
decreases in improvements as compared to the prior year.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED:
Net cash used in financing activities for the year ended December 31,
1998 was $555,000 compared to $305,000 for the same period in 1997. The
increase is primarily due to an increase in the principal payments under
mortgage debt of approximately $162,000, distributions paid of
approximately $312,000 during 1998, the decrease of loan fees of
approximately $338,000 from the refinance of the Shadowridge Meadows
Property in 1997, and a decrease in the proceeds received from an
affiliate of approximately $62,000.
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED DECEMBER
31, 1996.
Net cash provided by operating activities for the year ended December
31, 1997 was $594,000 compared to $360,000 for the same period in 1996.
The principal reason for this difference is a decrease in net loss of
approximately $115,000 and an increase in accounts payable resulting
from the timing of payments.
Net cash used in investing activities for the year ended December 31,
1997 was $252,000 compared to $44,000 for the same period in 1996. The
increase in cash used in investing activities is due primarily to
increases in improvements made possible by increased rental revenues.
Net cash used in financing activities for the year ended December 31,
1997 was $305,000 compared to $225,000 for the same period in 1996. The
increase is primarily due to debt issue costs related to the refinancing
of the Shadowridge Meadows property.
(b) Results of Operations
COMPARISON OF YEAR ENDED DECEMBER 31, 1998 TO THE YEAR ENDED DECEMBER
31, 1997.
Rental revenue for the year ended December 31, 1998 was $3,944,000, an
increase of 8% over rents of $3,656,000 in the comparable period in
1997. The increase is primarily attributable to an increase in monthly
tenant rental rates and occupancy rates.
Interest expense for the year ended December 31, 1998 was $1,489,000, a
decrease of 4% over interest expense of $1,544,000 in the comparable
period in 1997. The decrease is primarily attributable to the
refinancing on the Shadowridge Meadows Property, as well as the increase
in the principal payments on the existing mortgage loans. The increase
is also attributable to amortization of loan fees related to the
refinancing of the Shadowridge Meadows Property.
Operating expense for the year ended December 31, 1998 was $1,929,000,
an increase of 8% over operating expense of $1,782,000 in the comparable
period in 1997. The increase is primarily attributable to higher
management fees related to the increase in rental revenue.
Depreciation expense for the year ended December 31, 1998 was $914,000,
an increase of 9% over depreciation expense of $837,000 in the
comparable period in 1997. The increase is primarily attributable to
consistent yearly increases in total capitalized fixed asset
expenditures.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS, CONTINUED:
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO THE YEAR ENDED DECEMBER
31, 1996.
Rental revenue for the year ended December 31, 1997 was $3,656,000, an
increase of 7% over rents of $3,430,000 in the comparable period in
1996. The increase is primarily attributable to an increase in monthly
tenant rental rates and occupancy rates.
Interest expense for the year ended December 31, 1997 was $1,544,000, an
increase of 1% over interest expense of $1,527,000 in the comparable
period in 1996. The increase is primarily attributable to the variable
interest rate on the Shadowridge Meadows Property. The increase is also
attributable to amortization of loan fees related to the refinancing of
the Shadowridge Meadows Property.
Operating expense for the year ended December 31, 1997 was $1,782,000,
an increase of 3% over operating expense of $1,726,000 in the comparable
period in 1996. The increase is primarily attributable to an increase in
refurbishment expenses in 1997 over 1996. The increase is also
attributable to higher expenses related to increases in occupancy rates.
Depreciation expense for the year ended December 31, 1997 was $837,000,
an increase of 3% over depreciation expense of $810,000 in the
comparable period in 1996. The increase is primarily attributable to an
increase in capitalized fixed asset expenditures in 1997 over 1996.
(c) Year 2000
The Partnership is currently addressing a universal situation commonly
referred to as the "Year 2000 Problem." The year 2000 problem relates to
the inability of certain computer software programs and computer
hardware to properly recognize and process data-sensitive information
relative to the Year 2000 and beyond.
During fiscal 1998, the Partnership developed a plan to devote the
necessary resources to identify and modify internal systems impacted by
the Year 2000 Problem, or implement new systems to become Year 2000
compliant in a timely manner. This compliance plan consists of two major
areas of focus: software systems and hardware. An area of lessor focus
has been supplier management. The total cost of executing this plan is
estimated to be $10,000.
The Partnership has substantially completed the initial phases of the
software systems portion of the compliance plan. The initial phases
include completing an inventory of all software programs operating on
Partnership systems, identifying year 2000 problems and developing
contingency pans. Subsequent phases of the systems portion of the
compliance plan involve execution of testing and the installation of
Year 2000 compliant software into the operating environment, which will
be complete as of the end of the second quarter of fiscal 1999.
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The Partnership has conducted an inventory of all hardware. All desktop
systems critical to the Partnership's overall business are being
evaluated under the method described above. As of March 1, 1999, this
process was approximately 10% complete. The Partnership expects the
execution of this portion of the plan to be substantially complete by
the end of the second quarter of fiscal 1999. Desktop infrastructure is
also being tested. The Company expects the testing of desktop
infrastructure to be substantially complete during the second quarter of
fiscal 1999.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Company has no market-risk sensitive financial instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and supplementary data required by
this Item are set forth at the pages indicated in Item 14(a).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
PART III
ITEM 10. GENERAL PARTNER AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The general partner of the Partnership is Income Growth Management, Inc.
("IGM"), a California corporation. The executive officers of IGM do not
receive compensation from the Partnership.
The names, ages and positions of responsibility held by the executive
officers and directors of IGM are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
David Maurer 46 President and Director
Timothy Maurer 49 Secretary and Director
Robert Green 41 Vice President of Operations and Director
</TABLE>
FAMILY RELATIONSHIPS
David Maurer and Timothy Maurer are brothers.
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BUSINESS EXPERIENCE
The following is a brief background of the directors and executive
officers of IGM:
DAVID MAURER has served as President and Director of IGM since 1992, and
as President and Director of ENA Corporation ("ENA"), an affiliate of
IGM, since 1979. He has been involved in real estate syndication and
property management since 1980, and in real estate development and
construction since 1974. David was educated at the University of
California, San Diego (B.A. 1974).
TIMOTHY MAURER has served as Chief Financial Officer, Secretary and
Director of IGM since 1979. He has been involved in real estate
syndication, development, design and construction since 1975. Timothy
was educated at the California College of Arts and Crafts, Oakland
(B.F.A. 1972).
ROBERT GREEN has served as Vice President of Operations and Director
since 1988. He has also been the Director of Property Management of ENA
since 1988. He has been directly involved in property management since
1980. Robert worked for four years with Coldwell Banker Real Estate
Management Services in San Diego managing both commercial and
residential property. He also worked for four years with C&R Realty
Company managing over 75 residential properties in Oregon and
Washington. Robert was educated at Pacific University in Forest Grove,
Oregon (B.A. 1980).
ITEM 11. EXECUTIVE COMPENSATION
The Partnership has no executive officers and has not paid nor proposes
to pay any compensation or retirement benefits to the directors or
executive officers of Income Growth Management, Inc., the general
partner. See Item 13 for compensation to the general partner.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
-------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Class A Units John W. Baer 609.0000 7.5%
1091 Valley View Court
Los Altos, CA 94024
</TABLE>
No other person or group is known by the Partnership to own beneficially
more than 5% of the outstanding Original Units or Class A Units.
10
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(b) Security Ownership of Management
None of the officers and directors of the Partnership's corporate
general partners are the beneficial owners of any Original Units or
Class A Units.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Partnership is entitled to engage in various transactions involving
its general partners and its affiliates as described in the Partnership
Agreement.
The table below reflects amounts paid to the general partner or its
affiliates during the following years:
<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Management fees $207,300 $179,000 $167,000
Administrative fees -- 113,000 68,600
Loan origination fees 10,000 97,500 --
</TABLE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Documents filed as part of this report:
(1) Financial Statements
The following financial statements of the Partnership and
related notes to financial statements and accountants' report
are filed herewith:
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1998 and
1997
Consolidated Statements of Operations for the years
ended December 31, 1998, 1997 and 1996
Consolidated Statements of Partners' Capital (Deficit)
for the years ended December 31, 1998, 1997 and 1996
Consolidated Statements of Cash Flows for the years
ended December 31, 1998, 1997 and 1996
Notes to Consolidated Financial Statements
(2) Financial Statement Schedule
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Schedule III - Real Estate and Accumulated Depreciation
Schedule IV - Mortgage Loans on Real Estate
All other schedules are either not required, or the information
therein is included in the notes to the audited financial
statements.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the fiscal
year covered by this report.
(c) Exhibits
The following Exhibit Index lists the exhibits that are either filed as
part of this report or incorporated herein by reference from a prior
filing.
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION LOCATION
- ----------- ----------- --------
<S> <C> <C>
2.2 Second Amended Disclosure Statement to Debtor's Second (1)
Amended Plan of Reorganization, As Revised (with
Second Amended Plan of Reorganization attached as
Exhibit 1) filed with the Bankruptcy Court on October
25, 1994;
Order Approving Second Amended Disclosure
Statement to Debtor's Second Amended Plan of
Reorganization, Approving Ballots and Fixing
Dates for Filing Acceptances or Rejections of
Plan and for Confirmation Hearing, Combined
with Notice Thereof;
Equity Interest Holder Ballot for Accepting or
Rejecting Debtor's Second Amended Plan of
Reorganization;
Offering Memorandum for Income Growth
Partners, Ltd. X Class A Units dated October
27, 1994 (with Amended and Restated Agreement
of Limited Partnership attached as Exhibit B).
3.1 Articles of Incorporation of IGP X Mission Park, Inc. (2)
4.2 Amended and Restated Agreement of Limited Partnership (3)
4.3 Agreement of Limited Partnership of IGP X Mission Park (2)
Associates, L.P., A California Limited Partnership
4.4 Agreement of Limited Partnership of IGP X Shadowridge (6)
Meadows, Ltd., A California Limited Partnership
27.6 Financial Data Schedule (7)
28.1 Prospectus dated January 3, 1991 (4)
28.4 Letter regarding resignation of General Partner (5)
</TABLE>
- ----------------
(1) Incorporated by reference from the Partnership's Quarterly Report on
Form 10-Q for the third quarter ended September 30, 1994 (Commission
File Number 0-18528).
(2) Incorporated by reference from the Partnership's Current Report on Form
8-K dated December 27, 1995 (Commission File Number 0-18528).
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(3) Included as Exhibit "B" to the Partnership's Offering Memorandum for
Income Growth Partners, Ltd. X Class A Units dated October 27, 1994,
included in Exhibit 2.2 incorporated by reference from the Partnership's
Quarterly Report on Form 10-Q for the third quarter ended September 30,
1994 (Commission File Number 0-18528).
(4) Incorporated by reference from the Partnership's Annual Report on Form
10-K for the Fiscal Year ended December 31, 1992 (Commission File Number
0-18528).
(5) Incorporated by reference from the Partnership's Annual Report on Form
10-K for the Fiscal Year ended December 31, 1993 (Commission File Number
0-18528).
(6) Incorporated by reference from the Partnership's Annual Report on Form
10-K for the Fiscal Year ended December 21, 1997 (Commission File Number
0-18528).
(7) Filed herewith
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Date: March 29, 1999
INCOME GROWTH PARTNERS, LTD. X
(a California Limited Partnership)
By: Income Growth Management, Inc.
General Partner
By: /s/ David W. Maurer
-------------------------------
David W. Maurer, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signatures Title and Capacity Date
---------- ------------------ ----
<S> <C> <C>
------------------------- -------------------- -------
------------------------- -------------------- -------
</TABLE>
14
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Appendix
Financial Statements
<PAGE> 18
INDEX TO FINANCIAL STATEMENTS - ITEM 14 OF FORM 10-K
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Accountants.........................................................F-2
Consolidated Financial Statements and Notes:
Balance Sheets as of December 31, 1998 and 1997......................................F-3
Statements of Operations for the Years Ended
December 31, 1998, 1997 and 1996.....................................................F-4
Statements of Partners' Capital for the Years Ended
December 31, 1998, 1997 and 1996.....................................................F-5
Statements of Cash Flows for the Years Ended
December 31, 1998, 1997 and 1996.....................................................F-6
Notes to Financial Statements........................................................F-7
Schedule III - Real Estate and Accumulated Depreciation..............................F-14
</TABLE>
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS
Income Growth Partners, Ltd. X,
a California limited partnership
In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of Income
Growth Partners, Ltd. X, as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, in conformity with generally accepted accounting
principles. In addition, in our opinion, the financial statement schedules
listed in the accompanying index present fairly, in all material respects, the
information set forth therein when read in conjunction with the related
consolidated financial statements. These financial statements and financial
statement schedules are the responsibility of the Partnership's management; our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits. We conducted our audits of
these financial statements and financial statement schedules in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
PricewaterhouseCoopers LLP
San Diego, California
February 13, 1999
F-2
<PAGE> 20
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
ASSETS
Rental properties:
Land $ 7,078,365 $ 7,078,365
Buildings and improvements 21,763,241 21,607,078
------------ ------------
28,841,606 28,685,443
Less accumulated depreciation (9,445,320) (8,582,492)
------------ ------------
19,396,286 20,102,951
Cash and cash equivalents 441,909 282,293
Deferred loan fees, net of accumulated amortization
of $132,140 and $80,873, respectively 645,044 689,294
Prepaids and other assets 30,742 151,181
------------ ------------
Total assets $ 20,513,981 $ 21,225,719
------------ ------------
LIABILITIES AND PARTNERS' CAPITAL
Mortgage loans payable $ 19,579,523 $ 19,765,202
Other liabilities:
Loan payable to affiliates 72,640 113,000
Accounts payable and accrued liabilities 170,177 148,501
Accrued interest payable 125,699 125,623
Security deposits 199,177 201,250
------------ ------------
20,147,216 20,353,576
Commitments and contingencies
Partners' capital 376,765 882,143
Note receivable from general partner (10,000) (10,000)
------------ ------------
Total liabilities and parter's capital $ 20,513,981 $ 21,225,719
============ ============
</TABLE>
The accompanying notes are an integral part
of these financial statements.
F-3
<PAGE> 21
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
REVENUES:
Rents $ 3,943,519 $ 3,655,595 $ 3,429,751
Interest 6,710 8,925 6,887
Other 198,095 127,455 140,343
----------- ----------- -----------
Total revenues 4,148,324 3,791,975 3,576,981
EXPENSES:
Operating expenses 1,928,765 1,782,364 1,726,424
Depreciation/amortization 914,095 836,962 810,220
Interest and penalties 1,488,893 1,544,035 1,526,865
----------- ----------- -----------
Total expenses 4,331,753 4,163,361 4,063,509
----------- ----------- -----------
Net loss $ (183,429) $ (371,386) $ (486,528)
=========== =========== ===========
BASIC AND DILUTED PER LIMITED PARTNERSHIP UNIT DATA:
Net loss $ (6.81) $ (13.79) $ (18.06)
=========== =========== ===========
Weighted average limited partnership units 26,926 26,926 26,926
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
F-4
<PAGE> 22
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LIMITED PARTNERS
------------------------
GENERAL ORIGINAL CLASS A
PARTNER PARTNERS PARTNERS TOTAL
------------ ------ ----------- -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 $ (287,663) $ -- $1,541,192 $1,253,529
Net loss (55,708) -- (315,678) (371,386)
----------- ---- ---------- ----------
Balance, December 31, 1997 (343,371) -- 1,225,514 882,143
Distributions -- -- (321,949) (321,949)
Net loss (27,514) -- (155,915) (183,429)
----------- ---- ---------- ----------
Balance, December 31, 1998 $ (370,885) $ -- $ 747,650 $ 376,765
=========== ==== ========== ==========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
F-5
<PAGE> 23
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (183,429) $ (371,386) $ (486,528)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation 862,828 836,961 810,220
Amortization of loan fees 51,267 20,103 27,543
Decrease (increase) in prepaid expenses and other
assets 120,439 22,454 (25,584)
Increase (decrease) in:
Accounts payable and accrued liabilities 21,676 67,028 (49,695)
Security deposits (2,073) 16,895 19,154
Accrued interest payable 76 2,231 64,886
----------- ----------- -----------
Net cash provided by operating activities 870,784 594,286 359,996
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (156,164) (252,031) (44,383)
----------- ----------- -----------
Net cash used in investing activities (156,164) (252,031) (44,383)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under mortgage debt (185,679) (23,667) (178,066)
Loan fees and refinancing costs (7,016) (338,577) --
Principal payments to affiliate (60,360) (14,800) (46,700)
Proceeds from affiliate loan 10,000 72,500 --
Distributions (321,949) -- --
----------- ----------- -----------
Net cash used by financing activities (565,004) (304,544) (224,766)
----------- ----------- -----------
Net increase in cash and cash equivalents 149,616 37,711 90,847
Cash and cash equivalents at beginning of year 282,293 244,582 153,735
----------- ----------- -----------
Cash and cash equivalents at end of year $ 441,909 $ 282,293 $ 244,582
=========== =========== ===========
SUPPLEMENTAL CASH FLOWS INFORMATION:
Cash paid for interest $ 1,448,893 $ 1,337,417 $ 1,434,436
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part
of these financial statements.
F-6
<PAGE> 24
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION:
Income Growth Partners, Ltd. X (a California limited partnership) (the
"Limited Partnership") and subsidiaries (collectively, the
"Partnership") was formed in February 1988, to acquire, operate and hold
for investment one or more parcels of income-producing, multi-family
residential real property. Currently, the Partnership owns a 264 unit
building in San Marcos, California ("Mission Park") and a 184 unit
building in Vista, California ("Shadowridge Meadows").
Income Growth Management, Inc. is the sole general partner. The general
partner has made no cash capital contributions to date. As of December
31, 1998, there were approximately 2,082 limited partners in the
Partnership.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Limited Partnership and its subsidiaries. Subsidiaries consist primarily
of California limited partnerships formed to hold and operate the
Partnership's properties. All significant intercompany balances and
transactions have been eliminated.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash and short-term investments
with original maturities at the date of purchase of 90 days or less.
LAND, BUILDINGS AND IMPROVEMENTS
Land, buildings and improvements are recorded at cost. Buildings and
improvements are depreciated using the straight-line method over the
estimated useful lives of 27.5 and 5 to 15 years, respectively.
Expenditures for maintenance and repairs are charged to expense as
incurred. Significant renovations are capitalized and depreciated over
the remaining life of the property.
The Partnership assesses its property for impairment whenever events or
changes in circumstances indicate that the carrying amount of the
property may not be recoverable. Recoverability of property to be held
and used is measured by a comparison of the carrying amount of the
property to future undiscounted net cash flows expected to be generated
by the property. If the property is considered to be impaired, the
impairment to be recognized is measured by the amount by which the
carrying amount of the property exceeds the fair value of the property.
F-7
<PAGE> 25
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
The cost and related accumulated depreciation of real estate are removed
from the accounts upon disposition. Gains and losses arising from the
dispositions are reported as income or expense.
DEFERRED LOAN FEES
Deferred loan fees represent expenses incurred in obtaining the
Partnership's mortgage loans payable. These fees are being amortized to
interest expense over the initial term of the loan using the
straight-line method which approximates the effective interest method.
REVENUE RECOGNITION
Rental revenues are recognized at the beginning of each month based on
the current occupancy of the apartments. Tenant leases are generally for
a term of six months with an option to renew for an additional six
months or to rent on a month-to-month basis.
ADVERTISING COSTS
Advertising costs are expensed as incurred. Total advertising expense
was approximately $58,000, $52,000 and $56,000 for the years ended
December 31, 1998, 1997 and 1996, respectively.
INCOME TAXES
No provision has been made for federal or state income taxes on the
operations of the Partnership. Such taxes are imposed on the individual
partners for their respective shares of Partnership income or loss. The
tax returns and amounts of allocable Partnership income or loss of the
Partnership are subject to examination by federal and state taxing
authorities. If such examinations result in a change in the Partnership
status, or in changes to allocable Partnership income or loss, the tax
liability of the partners could be changed accordingly.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of
financial statements, and the reported amounts of revenue and expense
during the reporting period. Actual results could differ from estimates.
RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform with the
current year presentation.
COMPREHENSIVE INCOME
Statement of Financial Accounting Standards No. 130, Comprehensive
Income ("SFAS 130") requires the Company to report comprehensive income
and its components in the financial statements. For the periods ending
December 31, 1998, 1997, and 1996, the Partnership's comprehensive
income was equal to the Partnership's net income.
F-8
<PAGE> 26
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
The Partnership adopted Statement of Financial Accounting Standards
("SFAS") No. 131 Disclosures about Segments of an Enterprise and Related
Information during the year ended December 31, 1998. This Statement
supercedes substantially all the reporting requirements previously
required under SFAS No. 14 Financial Reporting for Business Segments of
an Enterprise and establishes standards for reporting information about
operating segments and requires certain disclosures about products and
services, geographic areas and major customers. Under SFAS 131, the
determination of segments to be reported in the financial statements is
to be consistent with the manner in which management organizes and
evaluates the internal organization to make operating decisions and
assess performance. This Statement also allows a Partnership to
aggregate similar segments for reporting purposes. Management has
determined that all of its operating units can be aggregated into one
segment. Therefore, no segment disclosures have been included in the
accompanying notes to the consolidated financial statements.
There are no other recently issued pronouncements for which the
Partnership does not expect a material impact on the Partnership's
results of operations. Disclosures About Fair Value of Financial
Instruments
CASH AND SHORT-TERM INVESTMENTS:
The carrying amount approximates fair value because of the short
maturity of those instruments.
LONG-TERM DEBT:
The fair value of the Partnership's long-term debt is estimated
based on the quoted market prices for the same or similar issues
or on the current rates offered to the Partnership for debt of
the same remaining maturities. The carrying values of the
mortgage loans on both the Mission Park and Shadowridge Meadows
properties approximates their respective fair values.
3. CONCENTRATION OF CREDIT RISK:
UNINSURED CASH
The Partnership maintains cash accounts which may exceed FDIC insured
levels at one financial institution. All of the Partnership's cash
equivalents are held in a U.S. Treasury Money Fund which invests in
short-term U.S. Treasury securities. The Partnership has not experienced
any losses to date on its cash or cash equivalents.
NATURE OF BUSINESS
The properties are located in San Diego County. Changes in the regional
economic climates, local real estate conditions such as the oversupply
of apartments or a reduction in demand for apartments, competition from
single-family housing, apartment properties and other forms of
multifamily residential housing, the inability to provide adequate
maintenance and to obtain adequate insurance, increased operating costs,
changes in zoning, building, environmental, rent control and other laws
and regulations, the costs of compliance with current and future laws,
changes in
F-9
<PAGE> 27
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
real property taxes and unusual occurrences (such as earthquakes and
floods) and other factors beyond the control of the Partnership may
adversely affect the income from, and value of, the Partnership's
properties.
4. ACTIVITIES OF THE PARTNERSHIP:
The general partner or its affiliates manage and control the affairs of
the Partnership and have general responsibility for supervising the
Partnership's properties and operations. The general partner and
affiliates are compensated for these efforts as explained in Note 7.
The original partnership agreement was amended in October 1994 and
provides that cash distributions from operations are to be determined at
the discretion of the general partner. After adequate working capital
reserves have been met, cash distributions deemed appropriate by the
general partner will be made as set forth, therein.
DISTRIBUTION OF CASH FROM OPERATIONS The amended partnership agreement
provides that any distributions of cash from operations will be made in
the following order of priority:
First, each Class A Unit receives a 12% cumulative noncompounded
annual return on the balance of actual funds invested in Class A
Units ("Class A Preferred Return"). Second, each Class A Unit
receives a total return of original invested capital. Third,
each Class A Unit receives a $500 bonus. Fourth, each Original
Unit holder receives a 10% noncumulative return on the adjusted
balance of original invested capital. Thereafter, 90% of
distributions on cash from operations will be made to the
Original Unit holders and 10% to the general partner.
The Partnership distributed approximately $312,000 to the holders of the
Class A Units during 1998. Cumulative unpaid distributions on the Class
A Preferred Return were approximately $559,000 as of December 31, 1998.
DISTRIBUTION OF CASH FROM SALE OR REFINANCING
The amended partnership agreement provides that any distributions of
sale or refinancing will be made in the following order of priority:
First, each Class A Unit receives a 12% cumulative noncompounded
annual return on the balance of actual funds invested in Class A
Units. Second, each Class A Unit receives a total return of
original invested capital. Third, each Class A Unit receives a
$500 bonus. Fourth, each Original Unit holder receives an amount
equal to the adjusted balance of original invested capital.
Fifth, each Original Unit holder receives a 10%
F-10
<PAGE> 28
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
cumulative return on the adjusted balance of original invested
("the Preferred Return"). Thereafter, 85% of distributions of
cash from operations will be made to the Original Unit holders
and 15% to the general partner.
ALLOCATION OF NET INCOME/LOSS
Net losses are allocated 85% to the limited partners and 15% to the
general partner. Losses in excess of the limited partners' capital
balances are allocated 100% to the general partner. Net income will be
allocated 100% to the general partner until the aggregate net income
allocated is equal to the aggregate net losses allocated to the general
partner in all previous years. The balance of net income after the
initial allocation to the general partner, shall be allocated 85% to the
limited partners and 15% to the general partner.
6. MORTGAGE LOANS AND LOAN PAYABLE TO AFFILIATE:
At December 31, 1998 and 1997, mortgage loans and loan payable to
affiliate consisted of the following:
<TABLE>
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C>
Mission Park - Note dated December 27, 1995,
collateralized by first trust deed on land and
buildings and a guarantee by officers of the general
partner, interest and principal of $73,144 payable
monthly based on 7.76% annual fixed interest rate,
amortized over 30 years, balloon payment of
approximately $8,918,000 due in January 2006 $ 9,917,901 $10,022,451
Shadowridge Meadows - Note dated October 27, 1997,
collateralized by first trust deed on land and
buildings, interest and principal of $68,106 payable
monthly based on 7.49% annual fixed interest rate,
amortized over 30 years, balloon payment of
approximately $8,475,000 due in November 2007 9,661,622 9,742,751
----------- -----------
19,579,523 19,765,202
Note payable to ENA, affiliate of general partner
promissory note dated December 27, 1995, with simple
interest and principal payable from time to time at
the published prime rate, stated as 8.5% and 7.75%
at December 31, 1997, and 1998 respectively, due
upon demand 28,593 40,500
Note payable to Income Growth Property Management,
affiliate of the general partner - promissory note
dated October 23, 1997, with simple interest and
principal payable from time to time at the published
prime rate, stated as 8.5% at December 31, 1997, and
due upon demand 44,047 72,500
----------- -----------
$19,652,163 $19,878,202
=========== ===========
</TABLE>
F-11
<PAGE> 29
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
Future minimum annual principal payments are summarized as follows:
<TABLE>
<S> <C>
1999 $ 282,242
2000 226,176
2001 244,060
2002 263,360
2003 284,186
Thereafter 18,352,139
----------
$19,652,163
==========
</TABLE>
7. RELATED PARTY TRANSACTIONS:
Following is a description of related party transactions for the three
years ended December 31, 1998 that have not otherwise been disclosed:
MANAGEMENT FEES
The Partnership's properties are managed by an affiliate of the general
partner who receives a management fee.
The fee for Mission Park is equal to 5% of the operating revenues
generated by that property. The fee for Shadowridge Meadows was equal to
4% of the operating revenues generated by that property through October
1997 and 5% thereafter.
Management fees aggregated approximately $207,300, $179,000 and $167,000
in 1998, 1997 and 1996, respectively.
ADMINISTRATIVE COSTS
The Partnership has an agreement with an affiliate of the general
partner (the "Affiliate") who furnishes certain administrative services
and facilities to the Partnership, including accounting, data
processing, duplication and transfer agent expenses, professional
(including, but not limited to, regulatory reporting and legal services)
and recording and partner communication expenses. The agreement provides
for reimbursement to the affiliate for actual costs incurred.
Reimbursements paid to the Affiliate under the provisions of this
agreement aggregated approximately $99,000, $113,000 and $68,600 in
1998, 1997 and 1996, respectively.
NOTE RECEIVABLE FROM GENERAL PARTNER
At December 31, 1998 and 1997, a non-interest bearing note receivable of
$10,000 was due from the general partner for their initial partnership
capital contribution.
DEBT PLACEMENT FEES
During 1997 and 1995, the Partnership issued notes payable to an
affiliate of the general partner for payment of debt placement fees of
$97,500 and $102,000, respectively. Debt placement fees were equal to 1%
of the principal amounts of the new third party financing.
F-12
<PAGE> 30
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998 AND 1997
- --------------------------------------------------------------------------------
At December 31, 1998 and 1997, the aggregate balances of these notes
were $72,640 and $113,000, respectively (See Note 6).
SUBORDINATED REAL ESTATE BROKERAGE COMMISSIONS
If the general partner, or any of its affiliates, render services in
negotiating and implementing the sale of Partnership properties, the
general partner or such affiliates will be paid a real estate brokerage
commission in an amount up to one-half of the commission customarily
charged in arm's-length transactions but not in excess of 3% of the
contract price for the property. Payment of such commission (other than
payments in the form of promissory notes that are subordinated to the
return of capital contributions to limited partners) shall be deferred
until the limited partners have received distributions equal to their
total original invested capital, plus the 10% Preferred Return described
in Note 5. No properties were sold in 1998, 1997 or 1996 and,
accordingly, no brokerage commissions were paid by the Partnership.
8. LOSS PER LIMITED PARTNERSHIP UNIT DISCLOSURES:
In accordance with the disclosure requirements of SFAS 128, a
reconciliation of the numerator and denominator of basic and diluted EPS
is provided as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------
1997 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Numerator - basic and diluted EPS:
Net loss $(183,428) $(371,386) $(486,528)
Denominator - basic and diluted
EPS:
Weighted average limited
partnership units 26,926 26,926 26,926
--------- --------- ---------
Basic and diluted loss per limited
Partnership unit $ (6.81) $ (13.79) $ (18.06)
========= ========= =========
</TABLE>
F-13
<PAGE> 31
SCHEDULE III
INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARIES
A CALIFORNIA LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
FOR THE YEAR ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET CHANGE GROSS AMOUNT AT WHICH
INITIAL COST SUBSEQUENT TO ACQUISITION CARRIED AT CLOSE OF PERIOD
---------------------------- ------------------------------ -----------------------------
BUILDINGS AND BUILDINGS AND BUILDINGS AND
ENCUMBRANCES LAND IMPROVEMENTS LAND IMPROVEMENTS LAND IMPROVEMENTS
------------ ------------ ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Shadowridge Meadows $ 9,742,751 $ 3,294,260 $ 9,821,589 $ (400,000) $ (951,815) $ 2,894,260 $ 8,869,774
Mission Park 10,022,451 4,484,105 13,490,802 (300,000) (597,335) 4,184,105 12,893,467
------------ ------------ ------------ ------------ ------------ ------------ ------------
$ 19,765,202 $ 7,778,36 $ 23,312,391 $ (700,000) $ (1,549,150) $ 7,078,365 $ 21,763,241
============ =========== ============ ============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
LIFE ON WHICH
DEPRECIATION IN
ACCUMULATED DATE OF DATE LATEST STATEMENTS
TOTAL DEPRECIATION CONSTRUCTION ACQUIRED IS COMPUTED
------------ ------------ ------------ --------- -----------------
<S> <C> <C> <C> <C> <C>
Shadowridge Meadows $ 11,764,034 $ 3,566,541 Jan. 1988 Nov. 1988 27.5 years
Mission Park 17,077,572 5,878,779 May 1989 Aug. 1989 27.5 years
------------ ------------
$ 28,841,606 $ 9,445,320
============ ============
</TABLE>
(a) Reconciliation of total real estate carrying value for the three years
ended December 31, 1998:
<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Balance at beginning of year $28,685,443 $28,433,411 $28,389,029
Acquisitions 156,163 252,032 44,382
----------- ----------- -----------
Balance at end of year $28,841,606 $28,685,443 $28,433,411
=========== =========== ===========
</TABLE>
(b) Reconciliation of accumulated depreciation for the three years ended
December 31, 1998:
<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
Balance at beginning of year $8,582,492 $7,745,530 $6,935,310
Expense 862,828 836,962 810,220
---------- ---------- ----------
Balance at end of year $9,445,320 $8,582,492 $7,745,530
========== ========== ==========
</TABLE>
F-14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FILED WITH THE REGISTRANT'S FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 449,909
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 472,651
<PP&E> 28,841,606
<DEPRECIATION> (9,445,320)
<TOTAL-ASSETS> 20,513,981
<CURRENT-LIABILITIES> 567,693
<BONDS> 19,579,523
0
0
<COMMON> 0
<OTHER-SE> 366,765
<TOTAL-LIABILITY-AND-EQUITY> 20,513,981
<SALES> 0
<TOTAL-REVENUES> 4,148,324
<CGS> 0
<TOTAL-COSTS> 1,928,765
<OTHER-EXPENSES> 914,095
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