<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, 1999 Commission File Number 0-25574
-------
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.)
100 Second Street S.E., 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 November 2, 1999, 89,103 units were issued and outstanding. Based on the
book value of $117.29 per unit, the aggregate market value at November 2, 1999
was $10,450,891.
<PAGE> 2
TELECOMMUNICATIONS INCOME FUND X, L.P.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited).
Balance Sheets - September 30, 1999 and December 31, 1998 3
Statements of Income and Comprehensive Income -
Three months ended September 30, 1999 and
three months ended September 30, 1998 4
Nine months ended September 30, 1999 and
nine months ended September 30, 1998 5
Statement of Changes in Partners' Equity -
nine months ended September 30, 1999 6
Statements of Cash Flows - nine months ended September 30, 1999
and nine months ended September 30, 1998 7
Notes to Financial Statements 8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative of Disclosures About Market Risk 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Signatures 14
</TABLE>
2
<PAGE> 3
TELECOMMUNICATIONS INCOME FUND X, L.P.
BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999 DECEMBER 31, 1998
------------------ -----------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 128,254 $ 67,570
Available-for-sale securities 1,480,800 1,451,946
Net investment in direct financing leases
and notes receivable (Note B) 12,788,330 11,475,014
Allowance for possible losses (545,464) (445,718)
------------ ------------
Direct financing leases and notes receivable, net 12,242,866 11,029,296
Equipment held for sale (Note D) 57,776 57,776
Other assets 34,075 8,809
------------ ------------
TOTAL ASSETS $ 13,943,771 $ 12,615,397
============ ============
LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
Line of credit agreement (Note C) $ 2,971,062 $ 15,433
Outstanding checks in excess of bank balance -0- 436,199
Due to affiliates 18,686 24,602
Distributions payable to partners 200,482 201,719
Accrued expenses and other liabilities 130,251 110,868
Lease security deposits 172,644 170,958
------------ ------------
TOTAL LIABILITIES 3,493,125 959,779
------------ ------------
PARTNERS' EQUITY, 100,000 units authorized:
General partner, 40 units issued and outstanding 7,401 7,934
Limited partners, 89,063 and 89,613 units issued
and outstanding at September 30, 1999 and
December 31 1998, respectively 9,905,956 11,139,249
Unrealized gain on available-for-sale securities 537,289 508,435
------------ ------------
TOTAL PARTNERS' EQUITY 10,450,646 11,655,618
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ 13,943,771 $ 12,615,397
============ ============
</TABLE>
See accompanying notes.
3
<PAGE> 4
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
INCOME:
Lease income $ 294,036 $ 397,386
Interest income 45,163 31,745
Gain on lease terminations 1,493 318,827
Other 20,426 19,780
--------- ---------
Total income 361,118 767,738
--------- ---------
EXPENSES:
Management fees 62,393 44,273
Administrative services 21,000 20,999
Interest 61,684 27,318
Professional fees 35,018 25,948
Provision for possible losses -0- 54,056
Impairment loss on equipment -0- 24,368
Other 22,466 40,814
--------- ---------
Total expenses 202,561 237,776
--------- ---------
Net income 158,557 529,962
Other comprehensive income/(loss):
Unrealized gain/(loss) on available-
-for-sale securities 30,744 (115,408)
--------- ---------
Comprehensive income $ 189,301 $ 414,554
========= =========
Net income per partnership unit $ 1.78 $ 5.91
========= =========
Weighted average partnership units outstanding 89,166 89,680
</TABLE>
See accompanying notes.
4
<PAGE> 5
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
INCOME:
Lease income $ 1,043,234 $ 1,480,287
Interest income 137,275 106,981
Gain on lease terminations 32,102 769,824
Other 33,994 53,559
----------- -----------
Total income 1,246,605 2,410,651
----------- -----------
EXPENSES:
Management fees 162,806 157,665
Administrative services 63,000 67,777
Interest 146,690 252,634
Professional fees 96,118 114,576
Provision for possible losses 76,954 73,059
Impairment loss on equipment -0- 73,102
Other 76,602 138,855
----------- -----------
Total expenses 622,170 877,668
----------- -----------
Net income 624,435 1,532,983
Other comprehensive income/(loss):
Unrealized gain/(loss) on available-
-for-sale securities 28,854 (136,392)
----------- -----------
Comprehensive income $ 653,289 $ 1,396,591
=========== ===========
Net income per partnership unit $ 6.99 $ 17.07
=========== ===========
Weighted average partnership units outstanding 89,305 89,800
</TABLE>
See accompanying notes.
5
<PAGE> 6
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENT OF CHANGES IN PARTNERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
General Unrealized Gain/ Total
Partner Limited Partners (Loss) on Available Partners'
(40 Units) Units Amount for-Sale Securities Equity
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $ 7,934 89,613 $11,139,249 $ 508,435 $11,655,618
Net income 101 -0- 225,430 -0- 225,531
Distributions (270) -0- (603,977) -0- (604,247)
Withdrawal of limited partners -0- (286) (22,054) -0- (22,054)
Change in unrealized gain/(loss)
on available-for-sale securities -0- -0- -0- 564,691 564,691
------------------------------------------------------------------------
Balance at March 31, 1999 7,765 89,327 10,738,648 1,073,126 11,819,539
Net income 107 -0- 240,240 -0- 240,347
Distributions (270) -0- (602,282) -0- (602,552)
Withdrawal of limited partners -0- (100) (7,078) -0- (7,078)
Change in unrealized gain/(loss)
on available-for-sale securities -0- -0- -0- (566,581) (566,581)
------------------------------------------------------------------------
Balance at June 30, 1999 7,602 89,227 10,369,528 506,545 10,883,675
Net income 69 -0- 158,488 -0- 158,557
Distributions (270) -0- (601,410) -0- (601,680)
Withdrawal of limited partners -0- (164) (20,650) -0- (20,650)
Change in unrealized gain/(loss)
on available-for-sale securities -0- -0- -0- 30,744 30,744
------------------------------------------------------------------------
Balance at September 30, 1999 $ 7,401 89,063 $9,905,956 $ 537,289 $10,450,646
========================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 7
TELECOMMUNICATIONS INCOME FUND X, L.P.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 624,435 $ 1,532,983
Adjustments to reconcile net income to net cash from operating activities:
Amortization 5,729 6,647
Provision for possible losses 76,954 73,059
Gain on lease terminations (32,102) (769,823)
Impairment loss on equipment -0- 73,102
Changes in operating assets and liabilities:
Other assets (25,268) 9,349
Outstanding checks in excess of bank balance (436,199) -0-
Due to affiliates (5,916) 257,153
Accrued expenses and other liabilities 19,383 (71,107)
----------- -----------
Net cash from operating activities 227,016 1,111,363
----------- -----------
INVESTING ACTIVITIES
Acquisitions of, and purchases of equipment for, direct financing leases (3,111,464) (2,668,204)
Issuance of notes receivable (997,082) -0-
Repayments of direct financing leases 1,912,706 1,429,792
Repayments of notes receivable 214,071 -0-
Proceeds from early termination of direct financing leases 467,813 8,896,024
Proceeds from early termination of notes receivable 249,806
Net lease security deposits collected/(repaid) 1,687 (337,077)
----------- -----------
Net cash from investing activities (1,262,463) 7,320,535
----------- -----------
FINANCING ACTIVITIES
Borrowings from line-of-credit 5,282,550 -0-
Net repayments of line-of-credit (2,326,921) (5,354,801)
Repayments of long term debt -0- (583,233)
Distributions paid to partners (1,809,717) (1,818,462)
Redemption of partnership units (49,781) (29,563)
----------- -----------
Net cash from financing activities 1,096,131 (7,786,059)
----------- -----------
Net increase in cash and cash equivalents 60,684 645,839
Cash and cash equivalents at beginning of period 67,570 5,928
----------- -----------
Cash and cash equivalents at end of period $ 128,254 $ 651,767
=========== ===========
SUPPLEMENTAL DISCLOSURES
Interest paid $ 125,537 $ 295,139
North American miscellaneous receivable written off -0- 493,913
North American security deposits of leases written off -0- 99,071
Crescent note conversion of all Digital leases -0- 2,631,890
Unrealized gain/(loss) on available-for-sale securities 28,854 (136,392)
</TABLE>
See accompanying notes
7
<PAGE> 8
TELECOMMUNICATIONS INCOME FUND X, L.P.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
SEPTEMBER 30, 1999
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited 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, 1999 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1999. 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, 1998.
NOTE B - NET INVESTMENT IN DIRECT FINANCING LEASES AND NOTES RECEIVABLE
Components of the net investment in direct financing leases and notes receivable
are as follows:
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
<S> <C> <C>
Lease payments receivable $ 13,273,006 $ 12,713,308
Estimated residual values of leased equipment 802,120 644,853
Unamortized initial direct costs 23,332 22,840
Unearned lease income (2,641,666) (2,704,320)
Notes receivable 1,331,538 798,333
------------ ------------
Net investment in direct financing leases and notes receivable $ 12,788,330 $ 11,475,014
============ ============
</TABLE>
Due to cash flow problems experienced during 1997 by a lessee of the
Partnership, North American Communications Group, Inc. ("NACG"), the
Partnership, in an attempt to protect the assets leased to NACG, advanced funds
to various entities to whom NACG owed money related to the operation of such
leased assets. In addition, the Partnership assisted in arranging a management
agreement between NACG and another entity to attempt to improve NACG's cash flow
generated by the leased assets. In spite of the funds advanced by the
Partnership and the management agreement, the cash flow of NACG continued to
deteriorate. The General Partner actively solicited bids from parties to
purchase the assets associated with the Partnership leases to NACG. Based on the
value of similar assets and contract sites, management believed the equipment
leased to NACG had substantial value. However, the offers received were not
adequate to cover additional funds that were required to be advanced to keep the
equipment sites operating. The General Partner, therefore, determined it was no
longer economically feasible to continue to advance funds on behalf of NACG,
discontinued doing so and informed all site operators of that decision. As a
result, the Partnership decided to provide for a specific allowance of
$3,319,159 at December 31, 1997, which was equal to the carrying value of the
leases and advances associated with NACG. The Partnership foreclosed on the
assets underlying the leases and charged-off the lease receivables to the
specific allowance during 1998.
8
<PAGE> 9
The Partnership and an affiliated partnership, Telecommunications Income Fund
IX, have initiated a foreclosure action against NACG and the guarantors under
the leases and advances seeking the sale of the assets and a judgment against
NACG and the guarantors for any deficiency. The Partnership received $105,000 in
the first quarter of 1999 from the sale of assets recovered to date, and
credited this to the allowance for possible loan and lease losses.
NOTE C - CREDIT ARRANGEMENTS
The Partnership has a line of credit agreement with a bank that carries interest
at 1% over the prime rate. The agreement was amended August 26, 1998 to extend
the maturity date to June 30, 2000, reduce the borrowing amount to the lesser of
$4.0 million, or 40% of the Partnership's Qualified Accounts, as defined in the
agreement, and require minimum monthly interest payments of $4,000 beginning in
December 1998. The agreement is cancelable by the lender after giving a 90-day
notice and is collateralized by substantially all assets of the Partnership.
This line of credit is guaranteed by the General Partner and certain affiliates
of the General Partner. The General Partner believes amounts available under the
line of credit are adequate for the foreseeable future.
NOTE D - EQUIPMENT HELD FOR SALE
In May 1995, the Partnership exercised its right to manage the assets leased to
Telecable/Continental due to nonpayment of lease receivables. At the time the
Partnership assumed management of these assets, its net investment in the leases
and notes receivable approximated $2,400,000 and the Partnership subsequently
purchased approximately $200,000 of additional equipment. During 1996,
$1,431,000 of this net investment was leased to an unrelated third party under a
direct financing lease, which was paid off in December 1996. The remaining net
equipment cost, which had been depreciated to $938,693 and relates to hotel
satellite television equipment, is expected by management to be recovered
through the sale of the equipment. Such equipment cost has been adjusted for an
impairment loss of $621,000 in 1996, $205,693 in 1997 and $54,224 in 1998, to
reflect management's estimated fair market value of the equipment. The equipment
was held for sale by the Partnership throughout 1997 and 1998 and no further
decline has occurred in 1999. The Partnership is currently trying to sell the
equipment.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Lease income $ 294,036 $ 397,386 $1,043,234 $1,480,287
Interest income 45,163 31,745 137,275 106,981
Gain on lease terminations 1,493 318,827 32,102 769,824
Management fee expense 62,393 44,273 162,806 157,665
Interest expense 61,684 27,318 146,690 252,634
Impairment loss on equipment -0- 24,368 -0- 73,102
Provision for possible losses -0- 54,056 76,954 73,059
</TABLE>
9
<PAGE> 10
Lease income declined during the three-month period ended September 30, 1999 as
compared to the same period last year, primarily due to the decline in the
Partnership's lease portfolio. The decrease in the lease portfolio is
attributable to the early termination of certain leases in 1998 at the request
of lessees and due to one large customer that is past due for which income
recognition has stopped. The early terminations enabled the Partnership to
recognize gains on lease terminations of $318,827 for the third quarter of 1998
and $769,824 for the first nine months of 1998.
Net Income for the third quarter of 1999 was $158,557, while comprehensive
income was $189,301 for the quarter. The difference of $30,744 is the result of
an unrealized gain on available-for-sale securities held by the Partnership. The
Partnership owns two securities and carries these on the balance sheet at fair
value, recording the unrealized gain (or loss) as an increase (or decrease) to
partners' equity. One security increased in value $31,702 during the quarter,
while the other decreased in value $958. For the first nine months of 1999 net
income was $624,435, while comprehensive income was $653,289 for the same
period. The unrealized gain for the first nine months of 1999 was $28,854. The
fair value of the two securities carried on the balance sheet totalled
$1,480,800 at September 30, 1999.
Management fees are paid to the General Partner and represent 5% of the gross
lease and note payments received. Gross lease and note payments totalled
$1,247,860 for the three months ended September 30, 1999 and $885,460 for the
three months ended September 30, 1998.
Interest expense increased in the third quarter compared to the same period a
year ago as a result of the Partnership utilizing its line of credit agreement
to acquire new direct financing leases and notes receivable. The balance on the
line of credit was $2,971,062 at September 30, 1999. In the first nine months of
1999, the Partnership has acquired $4,108,546 in new leases and notes. Interest
expense for the nine months ended September 30, 1999 is less than the same
period a year ago, however, due to the Partnership using the proceeds of various
lease terminations in 1998 to reduce the balance of its line of credit and notes
payable at that time.
The General Partner has determined all loss reserves are adequate at September
30, 1999, and as such has not accrued any bad debt expense in the third quarter
of 1999. As discussed in Note B to the financial statements, the Partnership
received a settlement from NACG in the amount of $105,000 in the first quarter
of 1999, and credited this to the allowance for possible loan and lease losses.
The Partnership provides for an estimated reserve, which was $545,464 at
September 30, 1999, or 4.3% of the lease and notes receivable portfolio of
$12,788,330. The General Partner has established general and specific loss
reserves as follows:
<TABLE>
<CAPTION>
September 30, 1999 September 30, 1998
------------------ ------------------
<S> <C> <C>
General Reserve $ 428,932 $ 316,819
Specific Reserve - UTS 14,101 -0-
Specific Reserve - TeleCable 50,000 -0-
Specific Reserve - Property Taxes 52,431 21,818
----------- -----------
Total Reserves $ 545,464 $ 338,637
=========== ===========
</TABLE>
At September 30, 1999, there were two customers with payments over 90 days past
due. One customer has four contracts with payments past due over 90 days. The
contract balance remaining on these four contracts
10
<PAGE> 11
totals $3,085,714, while the Partnership's net investment totals $2,443,740. The
other customer, a related party of the first, has one contract with a balance
remaining of $696,256. The Partnership's net investment in this contract is
$532,017. This customer, and it's related party, are in the process of
negotiating financing, and as such, the Partnership has not established reserves
for these customers as of September 30, 1999. When a payment is past due more
than 90 days, the Partnership discontinues recognizing income on the contract.
The Partnership's portfolio of leases and notes receivable are concentrated in
pay telephones, office and computer equipment, and ATM machines, representing
approximately 50%, 20%, and 20%, respectively, of the portfolio at September 30,
1999. Four lessees account for approximately 66% of the Partnership's portfolio
at September 30, 1999. One of those customers is past due over 90 days and has a
contract balance remaining of $3,085,714, as mentioned above. This particular
customer accounts for 20% of the Partnership's portfolio at September 30, 1999.
YEAR 2000 ISSUE
The Partnership recognizes that the arrival of the Year 2000 poses a unique
challenge to the ability of all systems to recognize the date change from
December 31, 1999 to January 1, 2000. The costs of ensuring systems are
compatible with the Year 2000 are not believed to be material. The Partnership
has determined that the software it utilizes in its operations is compatible
with the Year 2000. The Partnership utilizes an unrelated third party for lease
servicing. This third party vendor has been contacted and it has been determined
that their lease servicing application is Year 2000 compliant. A written
confirmation regarding compliance of this application has been received from the
software developer. There are no non-information technology processes that the
Partnership has identified which would affect its operations. An assessment of
the readiness of external entities which it interfaces with, such as vendors,
customers, and others, is ongoing. At present the Partnership does not
contemplate that any specific charges will be incurred for this assessment or
any other costs directly related to fixing Year 2000 issues, and if there are
any related expenditures, does not expect them to be significant.
The Partnership is assessing the impact of the Year 2000 issue on information
technology and non-information technology systems used by lessees. No lessee is
contractually obligated to become Year 2000 compliant or to disclose their
capabilities to the Partnership. The Partnership has not yet determined whether
the Year 2000 issue has been addressed by all of its customers. The Partnership
has contacted some of its customers and will continue to contact its customers
in 1999. In a worst case scenario, the inability of lessees to be Year 2000
compliant could result in delayed or no payment of amounts due to the
Partnership. The Partnership has no contingency plans at this time to alleviate
this worst case scenario should it be encountered.
11
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1999 September 30, 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Major Cash Sources:
- -------------------
Repayments of leases and notes receivable $2,126,777 $1,429,792
Proceeds from early termination of leases
and notes receivable 717,619 8,896,024
Borrowings from line of credit 5,282,550 -0-
Major Cash Uses:
- ----------------
Acquisitions of equipment for direct financing leases 3,111,464 2,668,204
Issuance of notes receivable 997,082 -0-
Payments on line of credit and notes payable 2,326,921 5,938,034
Distributions to partners 1,809,717 1,818,462
- ---------------------------------------------------------------------------------------------
</TABLE>
The Partnership has a line of credit agreement with a bank that carries interest
at 1% over the prime rate. The agreement was amended August 26, 1998 to extend
the maturity date to June 30, 2000, reduce the borrowing amount to the lesser of
$4.0 million, or 40% of the Partnership's Qualified Accounts, as defined in the
agreement, and require minimum monthly interest payments of $4,000 beginning in
December 1998. The agreement is cancelable by the lender after giving a 90-day
notice and is collateralized by substantially all assets of the Partnership. The
line of credit is guaranteed by the General Partner and certain affiliates of
the General Partner. The General Partner believes amounts available under the
line of credit are adequate for the foreseeable future.
The Partnership is required to establish working capital reserves of not 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.
At September 30, 1999, adequate cash is being generated to make projected
distributions, however, net income continues to remain below amounts
distributed.
Effective December 31, 1999, the Partnership will enter the liquidation phase,
and in accordance with the partnership agreement, will cease reinvestment in
equipment and leases.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
EQUITY PRICE SENSITIVITY
The table provides information about the Partnership's marketable equity
securities that are sensitive to changes in prices. The table presents the
carrying amount and fair value at September 30, 1999.
<TABLE>
<CAPTION>
Carrying Amount Fair Value
--------------- -------------
<S> <C> <C>
Common Stock-Company A $ 1,478,402 $ 1,478,402
Common Stock-Company B 2,398 2,398
-------------- -------------
Total $ 1,480,800 $ 1,480,800
============== =============
</TABLE>
12
<PAGE> 13
The Partnership's primary market risk exposure with respect to marketable equity
securities is equity price. The Partnership's general strategy in owning
marketable equity securities is long-term growth in the equity value of emerging
companies in order to increase the rate of return to the limited partners over
the life of the Partnership. The primary risk of the portfolio is derived from
the underlying ability of the companies invested in to satisfy debt obligations
and their ability to maintain or improve common equity values. Since the
investments are in emerging companies, the equity prices can be volatile. At
September 30, 1999, the amount at risk was $1,480,800.
INTEREST RATE SENSITIVITY
The table below provides information about the Partnership's notes receivable
that are sensitive to changes in interest rates. For notes receivable, the table
presents principal cash flows and related weighted average interest by expected
maturity dates as of September 30, 1999.
<TABLE>
<CAPTION>
Expected Principal Average
Maturity Date Balance Due Interest Rate
------------- ------------ -------------
<S> <C> <C>
1999 $ 94,053 14.6%
2000 408,359 14.7%
2001 470,946 15.2%
2002 212,620 15.7%
2003 and thereafter 145,560 16.5%
-------------
Total $ 1,331,538
=============
Fair Value $ 1,331,538
=============
</TABLE>
The Partnership manages interest rate risk, its primary market risk exposure
with respect to notes receivable, by limiting the terms of notes receivable to
no more than five years and generally requiring full repayment ratably over the
term of the note.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In December 1998, the Partnership, Telecommunications Income Fund IX, the
General Partner, North American Communications Group ("NACG"), and others filed
a suit against Shelby County, Tennessee ("County"). The County removed that suit
from Tennessee State Court to Federal Court. The suit alleges, among other
things, damages for wrongful termination of the pay phone contract between NACG
and Shelby County and racial discrimination by the County against NACG. The
County filed an answer and the initial discovery has been completed. An expert
hired by the Partnership has concluded that based on the facts discovered it is
unlikely that the Partnership and the rest of the plaintiffs would prevail in
the litigation for wrongful termination of the pay phone contract and racial
discrimination against the County. Therefore, it was determined it was not
economical to continue to spend Partnership funds in an effort to obtain
additional information or to continue the lawsuit.
13
<PAGE> 14
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: November 10, 1999 /s/ Ronald O. Brendengen
----------------- ------------------------------------------
Ronald O. Brendengen,
Chief Financial Officer,
Treasurer
Date: November 10, 1999 /s/ Daniel P. Wegmann
----------------- ------------------------------------------
Daniel P. Wegmann, Controller
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED FINANCIAL STATEMENTS OF TELECOMMUNICATIONS INCOME FUND X, L.P. AS OF
SEPTEMBER 30, 1999, AND THE NINE MONTHS ENDED SEPTEMBER 30, 1999, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 128,254
<SECURITIES> 1,480,800
<RECEIVABLES> 12,788,330
<ALLOWANCES> (545,464)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 91,851
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,943,771
<CURRENT-LIABILITIES> 3,493,125
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 10,450,646
<TOTAL-LIABILITY-AND-EQUITY> 13,943,771
<SALES> 0
<TOTAL-REVENUES> 1,246,605
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 398,526
<LOSS-PROVISION> 76,954
<INTEREST-EXPENSE> 146,690
<INCOME-PRETAX> 624,435
<INCOME-TAX> 0
<INCOME-CONTINUING> 624,435
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 624,435
<EPS-BASIC> 6.99<F1>
<EPS-DILUTED> 6.99<F1>
<FN>
<F1>Net Income (Loss) per Partnership Unit
</FN>
</TABLE>
