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Table of Contents
 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
Form 10-Q
 
(Mark One)
 
        x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
              SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended June 30, 2002
 
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 0-23719
 
 
WELLS REAL ESTATE FUND X, L.P.
(Exact name of registrant as specified in its charter)
 
Georgia
  
58-2250093
(State of other jurisdiction of incorporation or organization)
  
(I.R.S. Employer Identification No.)
     
6200 The Corners Pkwy., Norcross, Georgia
  
30092
(Address of principal executive offices)
  
(Zip Code)
     
Registrant’s telephone number, including area code (770) 449-7800
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Yes  x    No  ¨
 
 

Table of Contents
FORM 10-Q
WELLS REAL ESTATE FUND X, L.P.
(A Georgia Public Limited Partnership)
 
INDEX
 
           
Page No.
PART I.
          
Item 1.
        
  3
         
  4
         
  5
         
  6
         
  7
         
  8
Item 2.
        
12
PART II.
        
15
Exhibit Index
     
16
Exhibit 99.1—Certification of Chief Executive Officer
       
Exhibit 99.2—Certification of Chief Financial Officer
       
             

2

Table of Contents
PART I.    FINANCIAL INFORMATION
 
Effective July 3, 2002, Wells Real Estate Fund X (the “Partnership”) engaged Ernst & Young LLP (“Ernst & Young”) as its principal accountants to audit the Partnership’s financial statements. In accordance with the relief granted to former auditing clients of Arthur Andersen LLP in SEC Release No. 34-45589, Ernst & Young completed its review of the unaudited financial statements of the Partnership for the quarter ended March 31, 2002 pursuant to Rule 10-01(d) of Regulation S-X within the 60-day period allowed pursuant to the SEC Release, and no material modifications to the previously reported financial information were required.
 

3

Table of Contents
 
WELLS REAL ESTATE FUND X, L.P.
(A Georgia Public Limited Partnership)
 
BALANCE SHEETS
 
    
(unaudited)
June 30,
2002
   
December 31, 2001
ASSETS:
              
Investments in joint ventures (Note 2)
   
$
19,647,760
   
$
19,961,284
Cash and cash equivalents
   
 
139,299
   
 
201,387
Due from affiliates
   
 
491,116
   
 
560,976
Deferred project costs
   
 
15,088
   
 
15,088
    
  
Total assets
   
$
20,293,263
   
$
20,738,735
    
  
LIABILITIES AND PARTNERS’ CAPITAL:
              
Liabilities:
              
Accounts payable
   
$
6,749
   
$
10,645
Partnership distribution payable
   
 
494,619
   
 
564,678
    
  
Total liabilities
   
 
501,368
   
 
575,323
    
  
Partners’ capital:
              
Limited partners:
              
Class A—2,327,614 units and 2,316,618 units outstanding as of June 30, 2002 and December 31, 2001, respectively
   
 
19,477,674
   
 
19,407,691
Class B—385,277 units and 396,273 units outstanding as of June 30, 2002 and December 31, 2001, respectively
   
 
314,221
   
 
755,721
    
  
Total partners’ capital
   
 
19,791,895
   
 
20,163,412
    
  
Total liabilities and partners’ capital
   
$
20,293,263
   
$
20,738,735
    
  
 
The accompanying notes are an integral part of these balance sheets.

4

Table of Contents
 
WELLS REAL ESTATE FUND X, L.P.
(A Georgia Public Limited Partnership)
 
STATEMENTS OF INCOME
 
    
(unaudited)
Three Months Ended
     
(unaudited)
Six Months Ended
  
    
 
 
June 30,
2002
 
 
   
 
 
June 30,
2001
 
 
   
 
 
June 30,
2002
 
 
   
 
 
June 30,
2001
 
 
REVENUES:
                                    
Equity in income of joint ventures
   
$
363,478
 
   
$
415,437
 
   
$
691,518
 
   
$
786,138
 
Interest income
   
 
460
 
   
 
2,507
 
   
 
1,800
 
   
 
6,293
 
    
  
  
  
    
 
363,938
 
   
 
417,944
 
   
 
693,318
 
   
 
792,431
 
    
  
  
  
EXPENSES:
                                    
Partnership administration
   
 
49,786
 
   
 
22,687
 
   
 
62,676
 
   
 
32,555
 
Legal and accounting
   
 
2,992
 
   
 
3,330
 
   
 
10,301
 
   
 
13,045
 
Computer costs
   
 
1,787
 
   
 
4,707
 
   
 
3,839
 
   
 
5,508
 
    
  
  
  
    
 
54,565
 
   
 
30,724
 
   
 
76,816
 
   
 
51,108
 
    
  
  
  
NET INCOME
   
$
309,373
 
   
$
387,220
 
   
$
616,502
 
   
$
741,323
 
    
  
  
  
NET INCOME ALLOCATED TO
    CLASS A LIMITED PARTNERS
   
$
526,938
 
   
$
589,720
 
   
$
1,037,031
 
   
$
1,146,307
 
    
  
  
  
NET LOSS ALLOCATED TO CLASS B
    LIMITED PARTNERS
   
$
(217,565
)
   
$
(202,500
)
   
$
(420,529
)
   
$
(404,984
)
    
  
  
  
NET INCOME PER WEIGHTED
    AVERAGE CLASS A LIMITED
    PARTNER UNIT
   
$
0.23
 
   
$
0.26
 
   
$
0.45
 
   
$
0.51
 
    
  
  
  
NET LOSS PER WEIGHTED
    AVERAGE CLASS B LIMITED
    PARTNER UNIT
   
$
(0.57
)
   
$
(0.45
)
   
$
(1.08
)
   
$
(0.90
)
    
  
  
  
CASH DISTRIBUTION PER
    WEIGHTED AVERAGE CLASS A
    LIMITED PARTNER UNIT
   
$
0.21
 
   
$
0.25
 
   
$
0.43
 
   
$
0.49
 
    
  
  
  
 
The accompanying notes are an integral part of these statements.

5

Table of Contents
 
WELLS REAL ESTATE FUND X, L.P.
(A Georgia Public Limited Partnership)
 
STATEMENTS OF PARTNERS’ CAPITAL
 
FOR THE YEAR ENDED DECEMBER 31, 2001
 
AND THE SIX MONTHS ENDED JUNE 30, 2002 (UNAUDITED)
 
    
Limited Partners
         
    
Class A
     
Class B
     
Total
Partners’
  
    
Units
   
Amounts
     
Units
     
Amounts
     
Capital
  
BALANCE, December 31, 2000
   
2,239,501
   
$
19,104,274
 
   
473,390
 
   
$
1,845,893
 
   
 
$20,950,167
 
                                        
Net income (loss)
   
0
   
 
2,264,351
 
   
0
 
   
 
(814,502
)
   
 
1,449,849
 
Partnership distributions
   
0
   
 
(2,236,604
)
   
0
 
   
 
0
 
   
 
(2,236,604
)
Class B conversions
   
77,117
   
 
275,670
 
   
(77,117
)
   
 
(275,670
)
   
 
0
 
    
  
  
  
  
BALANCE, December 31, 2001
   
2,316,618
   
 
19,407,691
 
   
396,273
 
   
 
755,721
 
   
 
20,163,412
 
                                        
Net income (loss)
   
0
   
 
1,037,031
 
   
0
 
   
 
(420,529
)
   
 
616,502
 
Partnership distributions
   
0
   
 
(988,019
)
   
0
 
   
 
0
 
   
 
(988,019
)
Class B conversions
   
10,996
   
 
20,971
 
   
(10,996
)
   
 
(20,971
)
   
 
0
 
    
  
  
  
  
BALANCE, June 30, 2002
    (unaudited)
   
2,327,614
   
$
19,477,674
 
   
385,277
 
   
$
314,221
 
   
$
19,791,895
 
    
  
  
  
  
 
See accompanying condensed notes to financial statements.
 

6

Table of Contents
 
WELLS REAL ESTATE FUND X, L.P.
(A Georgia Public Limited Partnership)
 
STATEMENTS OF CASH FLOWS
 
    
(unaudited)
Six Months Ended
  
    
June 30, 2002
     
June 30, 2001
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                  
Net income
   
$
616,502
 
   
$
741,323
 
Adjustments to reconcile net income to net cash
used in operating activities:
                  
Equity in earnings of joint ventures
   
 
(691,518
)
   
 
(786,138
)
Changes in assets and liabilities:
                  
Prepaid expenses and other assets
   
 
0
 
   
 
(7,946
)
Accounts receivable
   
 
0
 
   
 
1,198
 
Accounts payable
   
 
(3,896
)
   
 
(13,574
)
    
  
Net cash used in operating activities
   
 
(78,912
)
   
 
(65,137
)
    
  
CASH FLOWS FROM INVESTING ACTIVITIES:
                  
Distributions received from joint ventures
   
 
1,074,902
 
   
 
1,127,010
 
    
  
CASH FLOWS FROM FINANCING ACTIVITIES:
                  
Distributions to partners
   
 
(1,058,078
)
   
 
(1,109,533
)
    
  
NET DECREASE IN CASH AND CASH EQUIVALENTS
   
 
(62,088
)
   
 
(47,660
)
                   
CASH AND CASH EQUIVALENTS, beginning of year
   
 
201,387
 
   
 
227,034
 
    
  
CASH AND CASH EQUIVALENTS, end of period
   
$
139,299
 
   
$
179,374