<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended September 30, 1996 Commission File Number 33-62228
--------
TELECOMMUNICATIONS INCOME FUND X, L.P.
--------------------------------------
(Exact name of Registrant as specified in its charter)
Iowa 42-1401715
------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
425 Second Street S.E., Suite 600 Cedar Rapids, Iowa 52401
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (319) 365-2506
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interest (the "Units")
------------------------------------------
Title of Class
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
filings requirements for the past 90 days.
Yes X No
----- -----
As of October 31, 1996, 90,470 Units were issued and outstanding. Based on
sales prices of $250 per Unit, the aggregate market value at October 31, 1996
was $22,617,500.
<PAGE> 2
TELECOMMUNICATIONS INCOME FUND X, L.P.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited).
Balance sheets - September 30, 1996 and December 31, 1995.
Statements of income - three months ended September 30, 1996 and
three months ended September 30, 1995. Nine months ended September
30, 1996 and nine months ended September 30, 1995.
Statement of changes in partners' equity - nine months ended
September 30, 1996.
Statements of cash flows - nine months ended September 30, 1996
and nine months ended September 30, 1995.
Item 2. Management's discussion and analysis of financial condition and
results of operations.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE> 3
TELECOMMUNICATIONS INCOME FUND X, L.P.
BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
September 30 December 31
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and cash equivalents $ -0- $ 262,963
Net investment in direct financing leases
(Note B) 23,267,559 24,672,439
Equipment, less accumulated depreciation
of $250,512 at September 30, 1996 and
$170,646 at December 31, 1995 (Note C) 1,470,493 2,451,145
Due from affliate (Note D) 205,395 -0-
Other assets 711,826 277,701
----------- -----------
Total assets $25,655,273 $27,664,248
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Payable to affiliates $ 35,410 $ 252,192
Trade accounts payable 55,328 -0-
Outstanding checks in excess of cash balances 6,400 -0-
Other accrued expenses 47,738 113,231
Deferred gain on lease restructuring 60,770 -0-
Distributions payable to partners 203,558 203,558
Lease security deposits 528,838 651,564
Long term debt (Note D) 1,576,172 2,119,863
Line of credit agreement (Note D) 5,730,707 5,685,953
----------- -----------
Total liabilities 8,244,921 9,026,361
Partners' equity, 100,000 units authorized
General partner, 40 units issued and
outstanding 10,644 11,187
Limited partners:
90,430 units issued and outstanding 17,399,708 18,626,700
----------- -----------
Total partners' equity 17,410,352 18,637,887
----------- -----------
Total liabilities and partners' equity $25,655,273 $27,664,248
=========== ===========
</TABLE>
See accompanying notes.
<PAGE> 4
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
September 30 September 30
1996 1995
-------- ---------
<S> <C> <C>
INCOME:
Lease income $840,862 $ 945,548
Gain (loss) on lease terminations (32,312) 81,565
Other 10,830 5,754
-------- ---------
Total Income 819,380 1,032,867
EXPENSES:
Management fees 95,469 108,590
Administrative services 21,466 23,709
Interest 174,732 176,227
Professional fees 36,616 5,766
Provision for possible losses (Note B) 154,432 9,938
Depreciation 119,625 85,324
Other 16,558 20,560
-------- ---------
Total expenses 618,898 430,11
-------- ---------
Net income $200,482 $ 602,753
======== =========
Net income
per partnership unit $ 2.22 $ 6.66
======== =========
</TABLE>
See accompanying notes.
<PAGE> 5
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30
September 30
1996 1995
---------- ----------
<S> <C> <C>
INCOME:
Lease income $ 2,540,383 $2,804,524
Gain on lease terminations 198,437 81,565
Other 44,424 34,245
----------- ----------
Total Income 2,783,244 2,920,334
EXPENSES:
Management fees 273,111 314,615
Administrative services 58,397 71,127
Interest 515,880 465,252
Professional fees 131,292 35,803
Provision for possible losses (Note B) 828,182 75,041
Depreciation 301,706 85,324
Other 70,192 63,252
---------- ----------
Total expenses 2,178,760 1,110,414
----------- ----------
Net income $ 604,484 $1,809,920
=========== ==========
Net income per partnership unit $ 6.68 $ 20.01
=========== ==========
</TABLE>
See accompanying notes.
<PAGE> 6
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
General Limited Partners
Partner ----------------
(40 Units) Units Amount Total
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance at December 31, 1995 $11,187 90,430 $18,626,700 $18,637,887
Distributions (270) -0- (610,403) (610,673)
Net income 1st quarter 1996 329 -0- 744,733 745,062
---------------------------------------------------------------------
Balance at March 31, 1996 11,246 90,430 18,761,030 18,772,276
Distributions (270) -0- (610,403) (610,673)
Net loss 2nd quarter 1996 (151) -0- (340,909) (341,060)
---------------------------------------------------------------------
Balance at June 30, 1996 10,825 90,430 17,809,718 17,820,543
Distributions (270) -0- (610,403) (610,673)
Net income 3rd quarter 1996 89 -0- 200,393 200,482
---------------------------------------------------------------------
Balance at September 30, 1996 $10,644 90,430 $17,399,708 $17,410,352
=====================================================================
</TABLE>
See accompanying notes.
<PAGE> 7
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
------------
1996 1995
----------- ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 604,484 $ 1,809,920
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization 17,696 23,078
Provision for possible losses 828,182 75,041
Gain on lease terminations (231,084) (81,565)
Depreciation 301,706 85,324
Changes in operating assets and liabilities:
Other assets (254,339) (93,238)
Outstanding checks in excess of cash balances 6,400 -0-
Trade accounts payable, excluding
equipment purchase costs accrued (12,213) (8,639)
Due to affiliates (216,782) (1,562)
Accrued expenses and other liabilities (1,678) (11,749)
----------- ------------
Net cash provided by operating activities 1,042,372 1,796,610
INVESTING ACTIVITIES
Acquisitions of, and purchases of equipment for,
direct financing leases (4,365,674) (8,143,842)
Repayments of direct financing leases 2,902,398 3,489,703
Purchase of equipment for an operating lease (44,076) (227,981)
Proceeds from early termination of
direct financing leases 2,553,602 815,789
Repayments of notes receivable -0- 9,615
Net lease security deposits collected(repaid) (21,439) 87,839
----------- ------------
Net cash provided by (used in) investing activities $ 1,024,811 $ (3,968,877)
</TABLE>
<PAGE> 8
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCING ACTIVITIES
Net proceeds from (repayments of) line-of-credit 44,754 487,602
Proceeds from long term debt -0- 2,350,000
Repayments of long term debt (543,691) (56,601)
Deferred costs incurred -0- (41,500)
Syndication costs incurred -0- (675)
Distributions paid to partners (1,831,209) (1,816,672)
------------ ----------
Net cash provided by (used in) financing activities (2,330,146) 922,154
Net increase (decrease) in cash and (262,963) (1,250,113)
cash equivalents
Cash and cash equivalents at beginning of period 262,963 1,457,429
----------- ------------
Cash and cash equivalents at end of period $ -0- $ 207,316
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Interest paid $ 517,558 $ 471,675
Noncash investing and financing activities:
Forfeiture of security deposit upon lease
write-off $ 101,287 $ -0-
Reclassification of direct financing lease to
equipment $ 686,037 $ -0-
Publicly traded common stock received
in lease restructuring $ 203,837 $ -0-
Reclassification of operating lease
to direct financing lease $ 1,210,110 $ -0-
Deferred gain recorded on lease
restructuring $ 0,770 $ -0-
Increase (decrease) in trade accounts payable
attributed to equipment purchase costs $ -0- $ (586,300)
Increase in accrued distributions to partners $ -0- $ 15,347
Reclassification of direct financing lease to
operating lease $ -0- $ 2,137,181
Reclassification of note receivable to other receivable $ -0- $ 130,943
</TABLE>
See accompanying notes.
<PAGE> 9
TELECOMMUNICATIONS INCOME FUND X, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1996
NOTE A -- BASIS OF PRESENTATION
The accompanying unaided financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine months ended September 30, 1996 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1996. For further information, refer to the financial statements
and footnotes thereto included in the Partnership's annual report on Form 10-K
for the year ended December 31, 1995.
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 the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ significantly from those
estimated. Material estimates that are particularly susceptible to significant
change in the near-term relate to the determination of the allowance for
possible loan and lease losses and the estimated unguaranteed residual values
of the Partnership's leased equipment.
Most of the Partnership's leases and finance contracts are with customers that
are in the entrepreneurial stage and, therefore, are highly leveraged and
require lease or other financing in place of or to supplement financing from
banks. Although the Partnership attempts to mitigate its credit risk through
the use of a variety of commercial credit reporting agencies when processing
the applications of its customers, failure of the Partnership's customers to
make scheduled payments under their equipment leases and finance contracts
could have a material near-term impact on the allowance for possible lease and
loan losses.
Realization of residual values depends on many factors, several of which are
not within the Partnership's control, including general market conditions at
the time of the original lease contract's expiration, whether there has been
unusual wear and tear on, or use of, the equipment, the cost of comparable new
equipment, the extent, if any, to which the equipment has become
technologically or economically obsolete during the contract term and the
effects of any additional or amended government regulations. These factors,
among others, could have a material near-term impact on the estimated
unguaranteed residual values.
<PAGE> 10
TELECOMMUNICATIONS INCOME FUND X, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
SEPTEMBER 30, 1996
NOTE B -- NET INVESTMENT IN DIRECT FINANCING LEASES
Components of the net investment in direct financing leases are as follows:
<TABLE>
<CAPTION>
September 30, 1996 December 31, 1995
------------------ ----------------
<S> <C> <C>
Lease payments receivable $28,349,788 $31,717,972
Acquisition costs 233,797 500,113
Estimated residual values of leased equip. 3,078,313 3,033,772
Unearned lease income (7,781,893) (9,390,507)
Allowance for possible losses (612,446) (1,188,911)
----------- -----------
Net investment in direct financing leases $23,267,559 $24,672,439
=========== ===========
</TABLE>
In October, 1995, a lessee of the Partnership, Value-Added Communications
("VAC"), filed a Voluntary Petition for Relief under Chapter 11 of the
Bankruptcy Code. At the time of the bankruptcy filing, the Partnership's net
investment in direct financing leases with VAC totaled approximately $2.1
million which amount was reduced to approximately $1.8 million by March, 1996
through court ordered lease payments which payment order then expired. At
December 31, 1995, the Partnership wrote down its investment in the VAC leases
by $721,000 to a balance of approximately $1.1 million based upon the VAC
reorganization plans in place at that time and thus, Partnership management's
best estimate of recovery. In July, 1996, the reorganization plans of VAC
changed such that the Partnership would recognize a larger loss than originally
estimated. The Partnership received $400,000 cash by parties to the bankruptcy
for the equipment leased to VAC as final settlement of the Partnership's claim
to the assets under lease. An additional loss of $646,307, therefore, was
recognized in the second quarter of 1996.
NOTE C -- EQUIPMENT
In 1995, the Partnership exercised its right to manage the assets leased to a
customer due to nonpayment of lease receivables. At the time the Partnership
assumed management of these assets, its net investment in the leases
approximated $2.4 million and the Partnership subsequently purchased
approximately $200,000 of additional equipment. Effective July 1, 1995, a new
lease was executed for this equipment with a new lessee, Payphones of America.
The terms of this new lease are such that it meets the criteria of an operating
lease. The equipment under lease is being depreciated under the straight-line
method over its estimated remaining life.
During the third quarter of 1996, Payphones of America was sold and the sale
included those pay telephones under operating lease as discussed above and
others that the Partnership had financed under direct financing leases. The
Partnership financed this purchase for the purchaser, Phone-Tel
Technologies("Phone-Tel"), via a direct financing lease which included the
Partnership receiving $151,997 from Berthel Fisher & Company Leasing, Inc. for
its
<PAGE> 11
TELECOMMUNICATIONS INCOME FUND X, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
SEPTEMBER 30, 1996
participation in the restructuring to alleviate customer concentration risks
resulting in the Partnership having a direct financing lease with Phone-Tel of
$3,375,000. Also as part of this transaction, the Partnership received 47,962
shares of publicly traded common stock of Phone-Tel and was owed $53,398 by the
General Partner in addition to the $151,997 previously noted for monies
received by the General Partner on behalf of the Partnership. These funds were
repaid in October, 1996. The Partnership recorded a deferred gain of
approximately $60,000 on this transaction. This deferred gain will be
recognized over the life of the lease with Phone-Tel.
The remaining net equipment cost of the assets which continue under operating
lease approximates $830,000 and relates primarily to hotel satellite television
equipment which the former owners of Payphones of America maintained in a new
company they continue to own and operate under the name of Visioncomm, Inc.
This remaining amount is expected to be recovered by the Partnership through a
direct financing lease for this equipment or through a purchase option which
exists in the operating lease. The possibility exists that this transaction
will not materialize, however, management's best current information indicates
that this transaction will be completed.
In May, 1996, the partnership exercised its right to manage the assets leased
to a customer, United Tele-System of Virginia, due to default under the lease
agreement. The Partnership's net investment in the leases at the time the
assets were repossessed approximated $686,000. This equipment is currently
being serviced for the Partnership under a short-term management agreement.
The Partnership's intent is to sell the equipment or re-lease the equipment to
a new lessee. The Partnership expects to incur a loss upon the sale or
re-lease of this equipment. Due to the lower than expected offers received by
the Partnership to sell the pay telephones, the Partnership charged its
provision for possible losses an additional $150,000 specifically related to
these pay telephones which represents management's best estimate of the amount
of losses to be expected on the ultimate sale or re-lease of these pay
telephones. There can be no assurances, however, that the ultimate loss on
these pay telephones will not exceed $150,000 due to the uncertainty of the
ultimate selling price of the pay telephones at issue.
Note D -- CREDIT ARRANGEMENTS
The Partnership has a line-of-credit agreement with a bank that carries
interest (9.25% at September 30, 1996) at 1% over prime, with a minimum
interest charge of $7,500 per month. The line-of-credit agreement allows the
Partnership to borrow to the lesser of $7.25 million, or 32% of the
Partnership's Qualified Accounts, as defined in the agreement. The agreement,
which expires November 30, 1997, is cancelable by the lender after giving a
90-day notice and is secured by substantially all assets of the Partnership.
This line-of-credit is guaranteed by the General Partner and certain affiliates
of the General Partner.
<PAGE> 12
TELECOMMUNICATIONS INCOME FUND X, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)(CONTINUED)
SEPTEMBER 30, 1996
The Partnership also has an installment loan agreement which bears interest at
8.91% and is due in monthly installments through November, 1998. The agreement
is collateralized by certain direct financing leases and a second interest in
all other Partnership assets. The agreement is also guaranteed by the General
Partner. Covenants under the agreement require the Partnership, among other
things, to be profitable, not exceed 40% debt to original equity raised ratio,
and not sell a material portion of its assets.
<PAGE> 13
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Discussions herein about future performance of the Partnership are based upon
management's best expectations and estimates, given management's experience and
status. Accordingly, such discussions should not be deemed to be predictions
of performance of the Partnership.
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
June 30 June 30 June 30 June 30
1996 1995 1996 1995
------ ------ ------ ------
Results of Operations:
Description
- -----------
<S> <C> <C> <C> <C>
Lease income $ 840,862 $945,548 $2,540,383 $2,804,524
Gain (loss) on lease terminations $ (32,312) $ 81,565 $ 198,437 $ 81,565
Management fee expense $ 95,469 $108,590 $ 273,111 $ 314,615
Interest expense $ 174,732 $176,227 $ 515,880 $ 465,252
Professional fees $ 36,616 $ 5,766 $ 131,292 $ 35,803
Provision for possible losses $ 154,432 $ 9,938 $ 828,182 $ 75,041
Depreciation $ 119,625 $ 85,324 $ 301,706 $ 85,324
</TABLE>
Lease income declined slightly during the nine month and three month periods
ended September 30, 1996 as compared to the same periods in 1995 due to the
decrease in net investment in direct financing leases. The decrease in net
investment in direct financing leases is attributable to the early termination
of certain leases thus far in 1996 at the request of the lessee as well as the
termination of leases due to lease defaults which enabled the Partnership to
recognize a net total gain on those terminations of $198,437. The Partnership
will reinvest the proceeds from these sales and proceeds from regular lease
payments in new equipment and continue to increase its lease portfolio. In
addition, the equipment leased under an operating lease since July 1, 1995 has
not generated income for the Partnership since its inception. The Partnership
repossessed this equipment due to a default under the original direct financing
lease agreement and subsequently re-leased the equipment under this operating
lease in order to recover its investment. The Partnership has restructured a
portion of this equipment under operating lease to a direct financing lease as
further discussed in note C. See Note C for further discussion and the
Partnership's plans with respect to this equipment. Further, as discussed
below, the bankruptcy of a lessee, Value-Added Communications, Inc. resulted in
the Partnership not receiving lease payments and thus, not recognizing lease
income since March, 1996 on over $1.8 million of leases.
Management fees are paid to the General Partner and represent 5% of the gross
rental payments received. Rental payments decreased from $6,292,300 in the
nine months ended September 30, 1995 to $5,462,220 for the nine months ended
September 30, 1996. These decreases are primarily attributable to the early
termination of certain leases as described above and other lessees being 10-30
days delinquent in making their lease payments as of September
<PAGE> 14
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued):
30, 1996. Although there can be no assurances, the Partnership expects these
delinquent payments to be fully collected and all future lease payments to be
fully collected.
The increase in interest expense is a result of the Partnership borrowing funds
to acquire equipment for investment in direct financing leases. During the six
month period ended September 30, 1995, the Partnership still had available
funds from limited partnership unit sales to invest in equipment whereas during
the same period in 1996, new equipment purchases were made primarily with
reinvested funds and new borrowings. (See Notes to Financial Statements - Note
D)
As discussed in Note C to the financial statements, the Partnership repossessed
certain equipment formerly under lease in the third quarter of 1995 and also in
the second quarter of 1996. This equipment is now under terms of an operating
lease or is being operated by the Partnership. As such, depreciation began to
be charged on this equipment in the third quarter of 1995 but has been present
the entire nine months of 1996.
The following table represents lease payments thirty one days or more past due
on September 30, 1996.
<TABLE>
<CAPTION> 31-60 61-90 OVER 90
LESSEE DAYS DAYS DAYS TOTAL
- ------ -------- ------- ---- --------
<S> <C> <C> <C> <C>
Hotelco Telecommunications $ 31,731 $ -0- $-0- $ 31,731
Murdock Communications Corp. 43,589 -0- -0- 43,589
North American Communication 53,248 29,291 -0- 82,539
Various 150 -0- -0- 150
-------- ------- ---- --------
Total $128,718 $29,291 $-0- $158,009
======== ======= ==== ========
</TABLE>
The total over 30 days past due represents .6% of the Partnership's lease
payments receivable.
In October, 1995, a lessee of the Partnership, Value-Added Communications
("VAC"), filed a Voluntary Petition for Relief under Chapter 11 of the
Bankruptcy Code. At the time of the bankruptcy filing, the Partnership's net
investment in direct financing leases with VAC totaled approximately $2.1
million which amount was reduced to approximately $1.8 million by March, 1996
through court ordered lease payments which payment order then expired. At
December 31, 1995, the Partnership wrote down its investment in the VAC leases
by $721,000 to a balance of approximately $1.1 million based upon the VAC
reorganization plans in place at that time and thus, Partnership management's
best estimate of recovery. In July, 1996, the reorganization plans of VAC
changed such that the Partnership would recognize a larger loss than originally
estimated. The Partnership received $400,000 cash by parties to the bankruptcy
for the equipment leased to VAC as final settlement of the Partnership's claim
to the assets
<PAGE> 15
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued):
under lease. An additional loss of $646,307, therefore, was recognized in the
second quarter of 1996.
In May, 1996, the partnership exercised its right to manage the assets leased
to a customer, United Tele-System of Virginia, due to default under the lease
agreement. The Partnership's net investment in the leases at the time the
assets were repossessed approximated $686,000. This equipment is currently
being serviced for the Partnership under a short-term management agreement.
The Partnership's intent is to sell the equipment or re-lease the equipment to
a new lessee. The Partnership expects to incur a loss upon the sale or
re-lease of this equipment. Due to the lower than expected offers received by
the Partnership to sell the pay telephones and the aforementioned lawsuit being
filed against the Partnership, the Partnership charged its reserve for possible
losses an additional $150,000 specifically related to these pay telephones
which represents management's best estimate of the amount of losses to be
expected on the ultimate sale or re-lease of these pay telephones. There can
be no assurances, however, that the ultimate loss on these pay telephones will
not exceed $150,000 due to the uncertainty of the ultimate selling price of the
pay telephones at issue, however, the Partnership's general reserve is
available for any additional losses that may be incurred.
Professional fees increased in 1996 over 1995 due to legal fees with respect to
VAC and United Tele-Systems of Virginia, Inc.
Liquidity and Capital Resources
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30 September 30
1996 1995
- ------------------------------------------------------------------------
<S> <C> <C>
Major Cash Sources:
Principal portion of lease payments
received $2,902,398 $3,489,703
Proceeds received on sale of leases 2,553,602 815,789
Net proceeds from debt -0- 2,837,602
Major Cash Uses:
Purchase of equipment and leases 4,365,674 8,143,842
Net Payments on debt 498,937 -0-
Distributions to partners 1,831,209 1,816,672
- ------------------------------------------------------------------------
</TABLE>
The Partnership is required to establish working capital reserves of no less
than 1% of the proceeds to satisfy general liquidity requirements, operating
costs of equipment, and the maintenance and refurbishment of equipment. These
funds are available under the Partnership's line-of-credit.
<PAGE> 16
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (Continued):
The demand for equipment leases remains strong and the Partnership's available
cash will be used to acquire equipment for investment in direct financing
leases.
At the present time, the Partnership has not encountered any significant
competition. The Partnership, therefore, is able to obtain its desired lease
rates.
At September 30, 1996, adequate cash is being generated to make projected
distributions and allow for reinvestment of a portion of the cash to fund
additional leases. Although there can be no assurances, the General Partner
expects that income from future rentals will provide sufficient cash to
maintain the historic rate of distributions into the foreseeable future.
<PAGE> 17
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
There are no exhibits included with this Form 10-Q.
There were no reports filed on Form 8-K during the third quarter.
<PAGE> 18
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.
TELECOMMUNICATIONS INCOME FUND X, L.P.
--------------------------------------
(Registrant)
Date ___________ ______________________________________
Thomas J. Berthel, President
Date ___________ ______________________________________
Ronald O. Brendengen, Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY OF FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED STATEMENTS OF ASSETS AND LIABILITIES OF TELECOMMUNICATIONS INCOME FUND
X, L.P. AS OF SEPTEMBER 30, 1996, AND THE UNAUDITED STATEMENT OF OPERATIONS OF
TELECOMMUNICATION INCOME FUND X, L.P. FOR THE NINE MONTHS ENDED SEPTEMBER 30,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 0
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0
0
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</TABLE>
