10-Q 1 a67310e10-q.txt FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2000 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2000 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ COMMISSION FILE NUMBER 0-18528 INCOME GROWTH PARTNERS, LTD. X (Exact name of registrant as specified in its charter) CALIFORNIA 33-0294177 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 11300 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) (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registration (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 [ ] The number of the registrant's Original Limited Partnership Units outstanding as of May 14, 1999 was 18,826.5. The number of the registrant's Class A Units outstanding as of May 14, 1999 was 8,100. 2 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) CONSOLIDATED BALANCE SHEETS PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS

~~June~~September 30 December 31, 2000 1999 unaudited ------------ ------------ ~~unaudited~~ ASSETS Rental properties Land $ 7,078,365 $ 7,078,365 Buildings and improvements 21,992,876 21,907,461 ------------ ------------ 29,071,241 28,985,826 Less accumulated depreciation (10,~~751~~969,~~842~~288) (10,316,949) ------------ ------------ 18,~~319~~101,~~399~~953 18,668,877 Cash and cash equivalents ~~382~~485,~~653~~064 434,712 Deferred loan fees, net of accumulated amortization of $~~214~~227,~~206~~013 and $188,166, respectively ~~562~~550,~~977~~170 589,017 Prepaids and other assets ~~377~~492,~~321~~832 125,864 ------------ ------------ $ 19,~~642~~630,~~350~~019 $ 19,818,470 ============ ============ LIABILITIES AND PARTNERS' CAPITAL (DEFICIT) Mortgage loans payable $ 19,~~314~~263,~~237~~990 $ 19,382,900 Other liabilities Loan payable to affiliates 18,703 48,540 Accounts payable and accrued liabilities ~~173~~288,~~887~~792 172,559 Accrued interest payable 125,699 120,684 Security deposits 231,~~432~~933 217,757 ------------ ------------ 19,~~863~~929,~~958~~117 19,942,440 Commitments and contingencies Partners' capital (deficit) (~~206~~283,~~008~~498) (113,970) Note receivable from general partner (15,600) (10,000) ------------ ------------ $ 19,~~642~~630,~~350~~019 $ 19,818,470 ============ ============

The accompanying notes are an integral part of these financial statements. 2 3 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) CONSOLIDATED STATEMENTS OF OPERATIONS - - UNAUDITED

FOR THE THREE MONTHS FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, ENDED ~~JUNE~~SEPTEMBER 30, ------------------------~~-----~~ ------------------------~~-------~~ 2000 1999 2000 1999 ----------- ---------- ------------ ----------- REVENUES Rents $ 1,~~134~~166,~~018~~752 $ 1,~~067~~081,~~424~~445 $ 23,~~271~~438,~~608~~360 $ 23,~~100~~182,~~987~~432 Other 51134,~~447~~987 4352,~~282~~651 ~~102~~237,~~343~~330 ~~100~~152,~~346~~997 ----------- ---------- ----------- ----------- Total revenues 1,~~185~~301,~~465~~739 1,~~110~~134,~~706~~096 23,~~373~~675,~~951~~690 23,~~201~~335,~~333~~429 ---------- ------------ ----------- ----------- EXPENSES Operating expenses ~~435~~620,~~095~~542 ~~474~~476,~~929~~270 ~~933~~1,~~589~~554,131 1,~~010~~486,~~052~~322 Depreciation and amortization 230,~~253~~254 ~~233~~234,~~319~~551 ~~460~~691,~~933~~187 ~~465~~699,~~117~~668 Interest ~~354~~373,~~853~~507 ~~369~~377,~~879~~478 ~~745~~1,~~878~~119,385 ~~749~~1,~~171~~126,649 ----------- ---------- ------------ ----------- Total expenses 1,~~020~~224,~~201~~303 1,~~078~~088,~~127~~299 23,~~607~~280,~~502~~628 23,~~224~~312,~~340~~639 ----------- ----------- ------------ ----------- Net income (loss) $ ~~165~~77,~~264~~436 $ 3245,~~579~~797 $ ~~233~~310,~~551~~987 $ ~~(23~~22,~~007)~~790 =========== ========== ============ =========== BASIC AND DILUTED PER LIMITED PARTNERSHIP UNIT DATA Net income (loss) per limited partnership unit $ 62.1488 $ 1.2170 $ 811.6755 $ (0.85) =========== =========== =========== =========== Weighted average limited partnership units 26,926 26,926 26,926 26,926 =========== =========== =========== ===========

The accompanying notes are an integral part of these financial statements. 3 4 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) CONSOLIDATED STATEMENTS OF CASH FLOWS -- UNAUDITED

FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, ------------------------- 2000 1999 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ ~~233~~310,~~551~~987 $ ~~(23~~22,~~007)~~790 Adjustments to reconcile net loss to net cash provided by operating activities Depreciation and amortization ~~460~~691,~~933~~187 ~~465~~699,~~117~~668 (Increase) in Prepaid expenses and other assets (~~251~~366,~~457~~968) 915,~~080~~989 ~~(Decrease)~~Increase in Accounts payable, accrued liabilities and accrued interest payable 6121,~~343~~248 (5439,~~173~~803) Security deposits 13,675 1417,~~830~~946 --------- --------- Net cash provided by operating activities ~~463~~770,~~045~~129 ~~411~~716,~~837~~590 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (85,415) (66103,~~094~~531) --------- --------- Net cash used in investing activities (85,415) (66103,~~094~~531) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments under mortgage debt (68118,~~663~~910) (96109,~~488~~627) Principal payments to affiliate (2429,~~237~~837) (11,900) Distributions to Investors (~~336~~485,~~803~~615) (~~200~~351,~~417~~100) --------- --------- Net cash used by financing activities (~~429~~634,~~703~~362) (~~308~~472,~~805~~627) --------- --------- Net increase (decrease) in cash and cash equivalents ~~(52~~50,~~059)~~352 36140,~~938~~432 --------- --------- Cash and cash equivalents at beginning of period 434,712 441,909 --------- --------- Cash and cash equivalents at end of period $ ~~382~~485,~~653~~064 $ ~~478~~582,~~847~~341 ========= =========

The accompanying notes are an integral part of these financial statements 4 5 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY A CALIFORNIA LIMITED PARTNERSHIP 1. BASIS OF FINANCIAL STATEMENT PRESENTATION: The accompanying unaudited consolidated financial statements of Income Growth Partners, Ltd. X, a California limited partnership, and subsidiary (the "Partnership") have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Partnership believes that the disclosures made are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the financial statements and the notes thereto included in the Partnership's latest audited financial statements for the year ended December 31, 1999 filed on Form 10K. The accompanying consolidated financial statements have not been audited by independent public accountants, but include all adjustments (consisting of normal recurring adjustments) which are, in the opinion of the general partners, necessary for a fair presentation of the financial condition, results of operations and cash flows for the periods presented. However, these results are not necessarily indicative of results for a full year. Certain prior period amounts have been reclassified to conform with the current period presentation. 5 6 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A CALIFORNIA LIMITED PARTNERSHIP) ITEM 2. 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. a. Liquidity and Capital Resources: Since inception, 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 the nine months ended September 30, 2000, 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%. 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. Net cash provided by operating activities for the nine months ended September 30, 2000 was approximately $770,000 compared to approximately $717,000 for the same period in 1999. The principal reason for this increase can be attributed to an increase in net income for the period. Net cash used in investing activities for the nine months ended September 30, 2000 was approximately $85,000 compared to approximately $104,000 for the same period in 1999. The principal reason for this decrease was a decrease in capital expenditures. Net cash used in financing activities for the nine months ended September 30, 2000 was approximately $634,000 compared to approximately $473,000 for the same period in 1999. The principal reason for this increase was an increase in distributions to investors. 6 7 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY (A California Limited Partnership) b. Results of Operations: COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2000 TO THE THREE MONTHS ENDED SEPTEMBER 30, 1999. Rental revenue for the three months ended September 30, 2000 was approximately $1,167,000, an increase of 7.96% over rents of approximately $1,081,000 for the comparable period in 1999. The increase is primarily attributable to an increase in monthly tenant rental rates and steady average occupancy rates. Operating expenses for the three months ended September 30, 2000 were approximately $621,000, an increase of 30.46% over operating expenses of approximately $476,000 for the comparable period in 1999. The increase is primarily attributable to an increase in property maintenance costs and in partnership expenses. COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2000 TO THE NINE MONTHS ENDED SEPTEMBER 30, 1999. Rental revenue for the nine months ended September 30, 2000 was approximately $3,438,000, an increase of 8.05% over rents of approximately $3,182,000 for the comparable period in 1999. The increase is primarily attributable to an increase in monthly tenant rental rates and steady average occupancy rates. Operating expenses for the nine months ended September 30, 2000 were approximately $1,554,000, an increase of 4.58% over operating expenses of approximately $1,486,000 for the comparable period in 1999. The increase is primarily attributable to an increase in property maintenance and partnership expenses. 7 8 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY A CALIFORNIA LIMITED PARTNERSHIP PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS: There are no pending legal proceedings, which may have a material adverse effect on the Partnership. However, the Partnership is involved in small claims court proceedings against certain present or former tenants of its apartment complexes with regard to landlord-tenant matters, all of which are considered to be in the ordinary course of its business. ITEM 2. CHANGES IN SECURITIES: None ITEM 3. DEFAULTS UPON SENIOR SECURITIES: None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS: None ITEM 5. OTHER INFORMATION: None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K: 27.1 Financial Data Schedule 8 9 INCOME GROWTH PARTNERS, LTD. X AND SUBSIDIARY A CALIFORNIA LIMITED PARTNERSHIP 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. Date: November 14, 2000 INCOME GROWTH PARTNERS, LTD. X, a California Limited Partnership By: Income Growth Management, Inc. General Partner By: /s/ Timothy C. Maurer ------------------------------------ Timothy C. Maurer Principal Financial Officer AND Duly Authorized Officer of the Registrant 9

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