-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W1AmX97g8HLPbcemy1zClEurl4HWgmWWxkeoyZTV2rSBvTPFUmUF6NiNH9szyZD/ lGc3A9VjNUhhKxUwkyrbfA== 0000889812-95-000635.txt : 19951119 0000889812-95-000635.hdr.sgml : 19951119 ACCESSION NUMBER: 0000889812-95-000635 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XI CENTRAL INDEX KEY: 0000215406 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 946401363 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08440 FILM NUMBER: 95589707 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: POST & HYMANN STREET 2: 5665 NORTHSIDE DRIVE NW CITY: ATLANTA STATE: GA ZIP: 30328 10-Q 1 QUARTERLY REPORT 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 September 30, 1995 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 0-8440 Century Properties Fund XI (Exact name of Registrant as specified in its charter) California 94-6401363 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (770) 916-9090 N/A Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether 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_____ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant (1) has filed all 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 No _____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date __________________. 1 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Balance Sheets September 30, December 31, 1995 1994 Assets Cash and cash equivalents $ 4,801,000 $ 3,268,000 Receivables and other assets 54,000 45,000 Real Estate: Real estate 2,276,000 7,161,000 Accumulated depreciation (136,000) (2,073,000) ------------- ------------- Real estate, net 2,140,000 5,088,000 Deferred costs, net 19,000 111,000 ------------- ------------- Total assets $ 7,014,000 $ 8,512,000 ============= ============= Liabilities and Partners' Equity Notes payable $ - $ 2,077,000 Accrued expenses and other liabilities 53,000 301,000 ------------- ------------- Total liabilities 53,000 2,378,000 ------------- ------------- Commitments and Contingencies Partners' Equity: General partner 60,000 57,000 Limited partners (29,982 units outstanding at September 30, 1995 and December 31, 1994) 6,901,000 6,077,000 ------------- ------------- Total partners' equity 6,961,000 6,134,000 ------------- ------------- Total liabilities and partners' equity $ 7,014,000 $ 8,512,000 ============= ============= See notes to financial statements. 2 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Nine Months Ended September 30, September 30, 1995 1994 Revenues: Rental $1,539,000 $2,046,000 Interest income 132,000 102,000 Gain on sale of properties 502,000 - ---------- ---------- Total revenues 2,173,000 2,148,000 ---------- ---------- Expenses: Operating 810,000 975,000 Interest 120,000 753,000 General and administrative 264,000 361,000 Depreciation 152,000 314,000 ---------- ---------- Total expenses 1,346,000 2,403,000 ---------- ---------- Income (loss) before extraordinary item 827,000 (255,000) Extraordinary item: Gain on extinguishment of debt - 798,000 ---------- ---------- Net income $ 827,000 $ 543,000 ========== ========== Net income per limited partnership unit: Net income (loss) before extraordinary item $ 27.48 $ (8.41) Extraordinary item - 26.35 ---------- ---------- Net income $ 27.48 $ 17.94 ========== ========== Distributions per limited partnership unit $ - $ 74.28 ========== ========== See notes to financial statements. 3 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Three Months Ended September 30, September 30, 1995 1994 Revenues: Rental $412,000 $573,000 Interest income 59,000 48,000 Gain on sale of properties 502,000 - -------- -------- Total revenues 973,000 621,000 -------- -------- Expenses: Operating 269,000 350,000 Interest 24,000 188,000 General and administrative 90,000 115,000 Depreciation 31,000 98,000 -------- -------- Total expenses 414,000 751,000 -------- -------- Income (loss) before extraordinary items 559,000 (130,000) Extraordinary item: Gain on extinguishment of debt - 798,000 -------- -------- Net income $559,000 $668,000 ======== ======== Net income per limited partnership unit: Net income (loss) before extraordinary items $ 18.61 $ (4.30) Extraordinary item - 26.35 -------- -------- Net income $ 18.61 $ 22.05 ======== ======== See notes to financial statements. 4 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Cash Flows For the Nine Months Ended September 30, September 30, 1995 1994 Operating Activities: Net income $ 827,000 $ 543,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Gain on extinguishment of debt - (798,000) Gain on sale of properties (502,000) - Depreciation and amortization 181,000 357,000 Deferred costs paid (42,000) (50,000) Provision for doubtful receivables - 5,000 Changes in operating assets and liabilities: Receivables and other assets (9,000) 52,000 Accrued expenses and other liabilities (248,000) (513,000) ---------- ---------- Net cash provided by (used in) operating activities 207,000 (404,000) ---------- ---------- Investing Activities: Net proceeds from sale of properties 3,486,000 - Restricted cash decrease - 23,000 Additions to real estate (83,000) (90,000) ---------- ---------- Net cash provided by (used in) investing activities 3,403,000 (67,000) ---------- ---------- Financing Activities: Satisfaction of mortgages payable (2,032,000) (2,758,000) Cash distributions to partners - (2,549,000) Notes payable principal payments (45,000) (124,000) ---------- ---------- Cash (used in) financing activities: (2,077,000) (5,431,000) ---------- ---------- Increase (Decrease) in Cash and Cash Equivalents 1,533,000 (5,902,000) Cash and Cash Equivalents at Beginning of Period 3,268,000 7,710,000 ---------- ---------- Cash and Cash Equivalents at End of Period $4,801,000 $1,808,000 ========== ========== Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period $ 137,000 1,265,000 ========== ========== Supplemental Disclosure of Non-cash Investing and Financing Activities: Foreclosure of property and extinguishment of debt in 1994 - See Note 5. See notes to financial statements. 5 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 NOTES TO FINANCIAL STATEMENTS 1. General The accompanying financial statements, footnotes and discussions should be read in conjunction with the financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1994. Certain accounts have been reclassified to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, however, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature, except as described in Notes 4 and 5. The results of operations for the nine and three months ended September 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. On August 17, 1995, the stockholders of National Property Investors, Inc. ("NPI, Inc."), the sole shareholder of NPI Equity Investments II, Inc. ("NPI Equity"), the entity which controls Fox Capital Management Corporation, the general partner of the Partnership, entered into an agreement to sell to IFGP Corporation, an affiliate of Insignia Financial Group, Inc. ("Insignia"), all of the issued and outstanding stock of NPI, Inc. The sale of the stock is subject to the satisfaction of certain conditions and is scheduled to close in January 1996. 2. Transactions with Related Parties An affiliate of NPI, Inc. was entitled to receive reimbursements of administrative expenses amounting to $108,000 and $104,000 during the nine months ended September 30, 1995 and 1994, respectively. These reimbursements are included in general and administrative expenses. During the nine months ended September 30, 1995, an affiliate of the general partner was paid $129,000 in connection with the sale of Executive Center East, Executive Center West and the attached parcel of land (see Note 4). This fee is included in the gain on sale of properties. 3. Cash Distributions to Partners In February 1994, the Partnership distributed $322,000 to the general partner and 74.28 per unit ($2,227,000 in total) to the limited partners resulting from collection of the Foxwood Village Apartments note receivable. 4. Sale of Properties On July 26, 1995, the Partnership sold its Executive Center East, Executive Center West and the attached parcel of land to an unaffiliated third party for $3,770,000. After debt repayment in the amount of $2,032,000 and expenses, the Partnership received net proceeds of approximately $1,454,000. For financial statement purposes, the Partnership recognized a gain on the sale of properties of $502,000 for the period ended September 30, 1995. 6 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 NOTES TO FINANCIAL STATEMENTS 5. Gain on Extinguishment of Debt The extraordinary gain on extinguishment of debt for the periods ended September 30, 1994 is comprised of $251,000 from Manana/Dunn Business Park, which was lost through foreclosure in July 1994, and the payoff of the mortgage encumbering Shadle Shopping Center. 6. Notes Payable On September 16, 1994, the Partnership repaid the $2,758,000 first mortgage encumbering Shadle Shopping Center. 7 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30,1994 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources Registrant's remaining real estate property is a shopping center located in Spokane, Washington. The property is leased to tenants subject to leases with remaining lease terms currently ranging from approximately one to eleven years. Registrant's remaining property generated positive cash flow from operations during the nine months ended September 30, 1995. Registrant receives rental income from commercial spaces and is responsible for operating expenses, administrative expenses and capital improvements. Registrant is currently in its property sales phase. As of November 1, 1995, Registrant has sold eleven properties and lost Manana/Dunn Business Park through foreclosure. As described in Item 1, Note 4, on July 26, 1995 Registrant sold its Executive Center East, Executive Center West and the attached parcel of land. Registrant received net proceeds of $1,454,000. Registrant's remaining property, Shadle Shopping Center, was re-acquired through foreclosure during 1993. Registrant uses working capital reserves provided from any undistributed cash flow from operations as its primary source of liquidity. In order to preserve working capital reserves required for necessary capital improvements at Shadle Shopping Center (see below), cash distributions remain suspended. It is anticipated that cash distributions will continue to be suspended until the remaining property is sold. A tenant occupying approximately 19% of current leasable space at Shadle Shopping Center, who has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, continues to make its rent payments. The level of liquidity based upon cash and cash equivalents experienced a $1,533,000 increase at September 30, 1995, as compared to December 31, 1994. Registrant's $207,000 of net cash from operating activities and $3,403,000 of net cash from investing activities were partially offset by $2,077,000 of cash used in financing activities. Cash provided by investing activities consisted of $3,486,000 of net proceeds from the sale of Registrant's Executive Center East, Executive Center West and the attached parcel of land, were only slightly offset by $83,000 of improvements to real estate. Cash used in financing activities consisted of $2,032,000 of cash used in satisfaction of the notes encumbering Registrant's Executive Center East and Executive Center West properties and $45,000 of note payable principal payments. Registrant has commenced a major redevelopment project at Shadle Shopping Center to enhance the property value. The cash required to complete the renovation will come from working capital reserves, which include net proceeds from the sale of Executive Center East, Executive Center West and the attached parcel of land. Once the redevelopment project is completed, the property will be marketed for sale. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are being invested in a money market account or in repurchase agreements secured by United States Treasury obligations. The Managing General Partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements for the remainder of 1995 and the foreseeable future. 8 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources (Continued) On August 17, 1995, the stockholders of NPI, Inc., the sole shareholder of NPI Equity, agreed to sell to Insignia all of the issued and outstanding stock of NPI, Inc. The consummation of this transaction is subject to the satisfaction of certain conditions (including, third party consents and other conditions not within the control of the parties to the agreement) and is scheduled to close in January 1996. Upon closing, it is expected that Insignia will elect new officers and directors of NPI Equity. The Managing General Partner does not believe these transactions will have a significant effect on Registrant's liquidity or results of operation. To date, investors have received cash substantially in excess of their original investment. Any additional return of cash is dependent upon operating results and sales proceeds from Registrant's remaining asset. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including, but not limited to, a downward trend in market values of existing properties. In addition, the bailout of the savings and loan associations and sales of foreclosed properties by auction reduced market values and caused a further restriction on the ability to obtain credit. As a result, Registrant's ability to sell its remaining property may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies should create a more favorable market value for Registrant's remaining property in the future. Results of Operations Nine Months Ended September 30, 1995 vs. September 30, 1994 Operating results, before the extraordinary gain on extinguishment of debt, improved by $1,082,000 for the nine months ended September 30, 1995, as compared to 1994. Manana/Dunn Business Park was lost through foreclosure in July 1994, Evergreen Plaza Shopping Center was sold in December 1994 and Executive Center East, Executive Center West and the attached parcel of land were sold July 1995. With respect to the remaining property, rental revenues increased by $192,000 primarily due to an increase in rental rates and underaccrual of tenant billbacks in the prior comparative period, which was slightly offset by a decrease in occupancy at Registrant's remaining property. Interest income increased by $30,000 due to an increase in average working capital reserves available for investment and the effect of higher interest rates. With respect to the remaining property, interest expense was eliminated during the 1995 period due to the repayment of the mortgage encumbering Shadle Shopping Center in September 1994. Operating expense and depreciation expense remained relatively constant. In addition, general and administrative expenses decreased by $97,000 due to a reduction in asset management fees effective July 1, 1994. 9 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Three Months Ended September 30, 1995 vs. September 30, 1994 Operating results, before the gain on extinguishment of debt, improved by $689,000 for the three months ended September 30, 1995, as compared to 1994. Manana/Dunn Business Park was lost through foreclosure in July 1994 and Evergreen Plaza Shopping Center was sold in December 1994 and Executive Center East, Executive Center West and the attached parcel of land were sold July 1995. With respect to the remaining property, rental revenues increased by $152,000 primarily due to an increase in rental rates and underaccrual of tenant billbacks in the three months ended September 30, 1994, which was slightly offset by a decrease in occupancy at Registrant's remaining property. Interest income increased by $11,000 primarily due to a increase in average working capital reserves available for investment and the effect of higher interest rates. With respect to the remaining property, interest expense was eliminated during the 1995 due to the repayment of the mortgage encumbering Shadle Shopping Center in September 1994. Operating expenses decreased by $26,000 due to extensive legal fees relating to Shadle Shopping Center in the prior year comparative period. Depreciation expense remained constant. In addition, general and administrative expenses decreased by $25,000 due to higher general and administrative expenses in the prior year comparative period. 10 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30,1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Properties A description of the properties in which Registrant has an ownership interest during the period covered by this Report, along with occupancy data, follows: CENTURY PROPERTIES FUND XI OCCUPANCY SUMMARY Average Occupancy Rate (%) ------------------------ Nine Months Three Months Date Ended Ended Square of September 30, September 30, Name and Location Footage Purchase 1995 1994 1995 1994 - ----------------- ------- -------- ---- ---- ---- ---- Executive Center East (2) 48,000 12/76 - 93 - 91 Las Vegas, Nevada Executive Center West (2) 34,000 04/78 - 92 - 91 Las Vegas, Nevada Shadle Shopping Center 278,000 (1) 74 78 74 76 Spokane, Washington (1) The property (originally sold in October 1985) securing one of Registrant's notes receivable, was re-acquired through foreclosure in September 1993. (2) On July 26, 1995, Registrant's Executive Center East and West properties were sold. 11 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30,1995 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 2. NPI, Inc. Stock Purchase Agreement dated as of August 17, 1995 incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. (b) Report on Form 8-K On August 24, 1995, Registrant filed a Current Report on Form 8-K with the Securities and Exchange Commission with respect to the sale of the stock of NPI, Inc. (Item 1, Change in Control). 12 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30,1995 SIGNATURE 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. CENTURY PROPERTIES FUND XI By: FOX CAPITAL MANAGEMENT CORPORATION, A General Partner /S/ ARTHUR N. QUELER Secretary/Treasurer and Director (Principal Financial Officer) 13 of 14 CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30,1995 EXHIBIT INDEX Exhibit Page No. - ------- -------- 2. NPI, Inc. Stock Purchase Agreement * dated August 17, 1995 * Incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. 14 of 14 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Properties Fund XI and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 4,801,000 0 54,000 0 0 0 2,276,000 (136,000) 7,014,000 0 0 0 0 0 6,961,000 7,014,000 0 2,041,000 0 962,000 0 0 120,000 827,000 0 827,000 0 0 0 827,000 27.48 27.48 Revenues include gain on sale of properties of $502,000.
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