-----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, FlFJ5s/ffd/V6Jlcy6IdI9oJ0EoqefEUSkf7rWHBlVE8cxo3pyQISNHzZERQs3JB GYt/2fu5Hgxt+dTHUGxPAA== 0000736909-97-000001.txt : 19970326 0000736909-97-000001.hdr.sgml : 19970326 ACCESSION NUMBER: 0000736909-97-000001 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970325 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XX CENTRAL INDEX KEY: 0000736909 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942930770 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13408 FILM NUMBER: 97562817 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 C/O INSIGNIA FINANCIAL GROUP CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DRIVE NW CITY: ATLANTA STATE: GA ZIP: 30328 10KSB 1 FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(D) (As last amended by 34-31905, eff. 4/26/93) FORM 10-KSB [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the fiscal year ended December 31, 1996 or [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 [No Fee Required] For the transition period from.........to......... Commission file number 0-13408 CENTURY PROPERTIES FUND XX (Name of small business issuer in its charter) California 94-2930770 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Units of Limited Partnership Interest (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 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 __ Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] State issuer's revenues for its most recent fiscal year. $7,625,000. State the aggregate market value of the voting partnership interests by non- affiliates computed by reference to the price at which the partnership interests were sold, or the average bid and asked prices of such partnership interests, as of a specified date within the past 60 days. Market value information for the Registrant's partnership interests is not available. Should a trading market develop for these interests, it is the Managing General Partners belief that such trading would not exceed $25,000,000. DOCUMENTS INCORPORATED BY REFERENCE None. PART I ITEM 1. DESCRIPTION OF BUSINESS Century Properties Fund XX (the "Registrant" or the "Partnership") was organized in December 1983, as a California limited partnership under the Uniform Limited Partnership Act of the California Corporations Code. Fox Partners III, a California general partnership, is the general partner of the Partnership. Fox Capital Management Corporation ("FCMC" or the "Managing General Partner") a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners '84, a California general partnership, are the general partners of Fox Partners III. The Partnership's Registration Statement, filed pursuant to the Securities Act of 1933 (No. 2-88615), was declared effective by the Securities and Exchange Commission (the "Commission") on February 22, 1984. The Partnership marketed its securities pursuant to its Prospectuses dated February 22, 1984, and November 8, 1984, which were thereafter supplemented (hereinafter the "Prospectus"). The Prospectus was filed with the Commission pursuant to Rule 424(b) of the Securities Act of 1933. Beginning in February 1984 through April 1985, the Partnership offered $35,000,000 in Individual Investor Units and $65,000,000 in Pension Investors Notes ("Non-Recourse Promissory Notes" or "Promissory Notes"), and sold $30,907,000 and $49,348,500, respectively. The net proceeds of this offering were used to purchase four income-producing real properties including one property which was acquired in two phases, and to fund seven mortgage loans totaling $31,568,000. The Partnership's original property portfolio was geographically diversified with properties acquired and properties on which mortgage loans have been funded in seven states. The Partnership's acquisition and mortgage loan funding activities were completed in February 1986 and since then the principal activity of the Partnership has been managing its portfolio. Two mortgage loans were prepaid in 1989, one was prepaid in 1991, and another was satisfied in 1994. In April 1991, the Partnership finalized foreclosure proceedings on Metcalf 103 Office Park which secured a mortgage loan and during 1992 finalized foreclosure proceedings against the borrowers on two additional mortgage loans (Harbor Club Downs and The Corners Apartments). The remaining mortgage loan was prepaid in 1992. See, "Item 2, Description of Properties" below for a description of the Partnership's properties. The Managing General Partner of the Partnership intends to maximize the operating results and, ultimately, the net realizable value of each of the Partnership's properties in order to achieve the best possible return for the investors. Such results may best be achieved through property sales, refinancings, debt restructurings or relinquishment of the assets. The Partnership intends to evaluate each of its holdings periodically to determine the most appropriate strategy for each of the assets. The Partnership has no full time employees. The Managing General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership. Limited partners have no right to participate in the management or conduct of such business and affairs. NPI-AP Management L.P. ("NPI-AP"), an affiliate of the Managing General Partner, provides day-to-day management services for the Partnership's residential investment properties. With respect to the Partnership's commercial properties, management is performed by an unaffiliated third party management company. The business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in its industry. Each of its apartment properties is located in or near a major urban area and, accordingly, competes for rentals not only with similar apartment properties in its immediate area but with hundreds of similar apartment properties throughout the urban area. Such competition is primarily on the basis of location, rents, services and amenities. In addition, the Partnership competes with significant numbers of individuals and organizations (including similar partnerships, real estate investment trusts and financial institutions) with respect to the sale of improved real properties, primarily on the basis of the prices and terms of such transactions. Change in Control On December 6, 1993, the shareholders of the Managing General Partner entered into a Voting Trust Agreement with NPI Equity Investments II, Inc. ("NPI Equity") pursuant to which NPI Equity was granted the right to vote 100% of the outstanding stock of the Managing General Partner. In addition, NPI Equity became the managing partner of FRI. The individuals who had served previously as partners of FRI and as officers and directors of the Managing General Partner contributed their general partnership interests in FRI to a newly formed limited partnership, Portfolio Realty Associates, L.P. ("PRA"), in exchange for limited partnership interests in PRA. The shareholders of the Managing General Partner and the prior partners of FRI, in their capacity as limited partners of PRA, continue to hold indirectly certain economic interests in the Partnership and such other investment limited partnerships, but have ceased to be responsible for the operation and management of the Partnership and such other partnerships. On August 10, 1994, an affiliate of Apollo Real Estate Advisors, L.P. ("Apollo") obtained general and limited partnership interests in NPI-AP. On October 12, 1994, Apollo acquired one-third of the stock of National Property Investors, Inc. ("NPI"), the parent corporation of NPI Equity. Pursuant to the terms of the stock acquisition, Apollo was entitled to designate three of the seven directors of the Managing General Partner and NPI Equity. In addition, the approval of certain major actions on behalf of the Partnership required the affirmative vote of at least five directors of the Managing General Partner. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control of NPI Equity and (ii) all of the issued and outstanding shares of stock of FCMC. In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity and FCMC. ITEM 2. DESCRIPTION OF PROPERTIES The following table sets forth the Partnership's investments in properties: Date of Property Purchase Type of Ownership (2) Use Crabtree Office Center 12/84 Fee Ownership Office Building Raleigh, North Carolina 59,000 sq. ft. Linpro Park I 3/85 Fee Ownership Office Building Reston, Virginia 75,000 sq. ft. Metcalf 103 Office Park 4/91 Fee Ownership Office Building Overland Park, Kansas 62,000 sq. ft. Commonwealth Centre 10/84 Fee Ownership Business Park Dallas, Texas 109,000 sq. ft. Highland Park Commerce Center(1) Fee Ownership Business Park Charlotte, North Carolina 106,000 sq. ft. Harbor Club Downs 5/92 Fee Ownership Apartment Palm Harbor, Florida 272 units The Corners Apartments 11/92 Fee Ownership Apartment Spartanburg, South Carolina 176 units (1) Highland Park Commerce Center was acquired in separate transactions on November 5, 1985 and February 12, 1986, respectively. (2) The Non-Recourse Promissory Notes are secured by a deed of trust on all properties owned by the Partnership. SCHEDULE OF PROPERTIES (IN THOUSANDS): Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Crabtree $ 8,598 $ 3,035 5-39 yrs S/L $ 3,982 Linpro 7,862 4,211 5-39 yrs S/L 4,878 Metcalf 2,893 498 5-39 yrs S/L 2,614 Commonwealth 6,311 3,522 5-39 yrs S/L 5,690 Highland Park 10,414 3,282 5-39 yrs S/L 5,851 Harbor Club 8,871 1,291 5-30 yrs S/L 7,576 The Corners 3,854 564 5-30 yrs S/L 3,239 Total $ 48,803 $ 16,403 $ 33,830 See "Note A" to financial statements in "Item 7" for a description of the Partnership's depreciation policy. The Partnership has non-Recourse Promissory Notes secured by a deed of trust on all properties owned by the Partnership. The Notes bear interest at eight percent per annum except that interest of up to four percent may be deferred, provided the Partnership makes interest payments on the unpaid principal balance of at least four percent per annum. The deferred interest does not bear interest. The Notes are due November 30, 1998. In accordance with the Partnership Agreement and the Trust Indenture, upon the sale, repayment or other disposition of any Partnership properties or Partnership mortgage loans, 98 percent of the resulting cash proceeds are first allocated to the payment of Promissory Notes until such Notes are repaid. Note holders are also entitled to the payment of residual interest after specified payments to the general partner and Individual Unit holders as set forth in the Trust Indenture. SCHEDULE OF RENTAL RENTS AND OCCUPANCY: Average Annual Rental Rates Average Occupancy Property 1996 1995 1996 1995 Crabtree $ 15.43/sq. ft. $ 14.52/sq. ft. 98% 98% Linpro 16.50/sq. ft. 15.84/sq. ft. 98% 100% Metcalf 10.85/sq. ft. 10.85/sq. ft. 98% 95% Commonwealth 4.77/sq. ft. 5.03/sq. ft. 79% 82% Highland Park 9.47/sq. ft. 9.25/sq. ft. 94% 83% Harbor Club 7,277/unit 6,888/unit 95% 97% The Corners 5,527/unit 5,266/unit 94% 97% As noted under "Item 1. Description of Business", the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other properties in the area. The Managing General Partner believes that all of the properties are adequately insured. The multi-family residential properties' lease terms are for one year or less. No individual residential property tenant leases 10% or more of the available rental space. The following is a schedule of the lease expirations for the years 1997-2006: Number of Square Annual % 0f Gross Expirations Feet Rent Annual Rent CRABTREE 1997 4 10,186 $ 155,659 16.3% 1998 3 15,955 256,911 27.0% 1999 3 9,209 148,362 15.6% 2000 4 15,486 253,452 26.6% 2001 1 5,298 84,768 8.9% 2002-2006 0 -- -- -- LINPRO 1997 2 70,283 $1,196,972 100% 1998-2006 0 -- -- -- METCALF 1997 4 10,832 $ 122,640 18.2% 1998 9 15,174 180,898 26.8% 1999 3 8,468 100,180 14.9% 2000 3 24,535 260,237 38.6% 2001 1 1,262 10,188 1.5% 2002-2006 0 -- -- -- COMMONWEALTH 1997 1 2,863 $ 14,316 3.4% 1998 4 26,347 136,518 32.1% 1999 5 30,165 129,444 30.4% 2000 2 5,236 28,798 6.8% 2001 1 2,766 12,447 2.9% 2002 1 7,121 51,627 12.1% 2003-2006 0 -- -- -- HIGHLAND PARK 1997 8 37,108 $ 331,274 34.9% 1998 3 8,896 98,270 10.4% 1999 3 18,362 158,675 16.7% 2000 9 27,208 270,980 28.6% 2001 1 5,201 30,503 3.2% 2002-2006 0 -- -- -- The following schedule reflects information on tenants occupying 10% or more of leasable square footage at December 31, 1996: Nature of Square Footage Annual Rent Per Lease Business Leased Square Foot Expiration CRABTREE Investment Company 7,770 $ 16.91 10/31/2000 Real Estate 7,627 16.00 12/31/1998 Medical Services 6,502 15.97 4/30/1998 LINPRO Government Agency 65,047 16.64 12/31/1997 METCALF Business Offices 14,426 10.62 10/31/2000 Medical Services 8,086 10.35 8/31/2000 COMMONWEALTH Florist 14,580 3.98 4/15/1999 HIGHLAND PARK Software Designer 17,860 9.17 8/31/1997 Bank 15,010 8.75 3/31/1999 Real estate taxes (in thousands) and rates in 1996 for each property were: 1996 1996 Billing Rate Crabtree $46 1.17% Linpro 73 1.29% Metcalf 61 2.66% Commonwealth 67 2.59% Highland Park 69 1.25% Harbor Club 171 2.08% The Corners 79 2.62% ITEM 3. LEGAL PROCEEDINGS Adrian Charles Pastori, on his own behalf and for all others similarly situated vs. Century Properties Fund XX et al., California Superior Court for County of San Francisco, Case No. 960684. In January 1994, an investor in the Partnership filed a putative class action lawsuit for monetary damages in Superior Court of the County of San Diego, California against the Partnership, its general partner, Fox Partners III, the general partners of Fox Partners III, and others. The lawsuit alleges that the prospectus for the Partnership contained material misrepresentations and omissions. In April 1994, the Court granted defendants' motion to have the venue of the case transferred from San Diego County to San Francisco County. Plaintiff's amended complaint alleges causes of action premised on negligence, fraud, and breach of fiduciary duty. The Partnership has filed its answer in the case. In August 1996, the court denied plaintiff's motion to have a class of all unit holders certified. The Plaintiff has appealed this ruling and the trial court has stayed the remainder of the suit. The Partnership intends to vigorously defend this action. The ultimate outcome of the litigation cannot presently be determined, however, the Managing General Partner does not believe that the litigation will have a material adverse effect on the Partnership. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS During the fiscal year ended December 31, 1996, no matter was submitted to a vote of unit holders through the solicitation of proxies or otherwise. PART II ITEM 5. MARKET FOR PARTNERSHIP EQUITY AND RELATED PARTNER MATTERS The Partnership, a publicly-held limited partnership, sold 61,814 Individual Investor Units during its offering period through April 1985. As of January 1, 1997, the number of holders of Individual Investor Units was 1,935. There is no intention to sell additional Individual Investor Units nor is there an established market for these Units. Future cash distributions will depend on the levels of net cash generated from operations, property sales, refinancings, and the availability of cash reserves. No cash distributions were made to the limited partners in 1996 or 1995. Currently, the Managing General Partner is evaluating the feasibility of a distribution of cash reserves in 1997. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF ORGANIZATION This item should be read in conjunction with the financial statements and other items contained elsewhere in this report. Results of Operations The Partnership's net loss for the year ended December 31, 1996, was approximately $1,510,000 versus a net loss of approximately $1,589,000 for the year ended December 31, 1995. The decrease in net loss is primarily attributable to an increase in rental income. The increase in rental income is due to increases in rental rates at most of the Partnership's properties, see "Item 2. Description of Properties, Schedule of Rental Rates and Occupancy." Partially offsetting the increase in rental income was an increase in general and administrative expenses. General and administrative expenses increased primarily due to legal expenses incurred by the Partnership in its own defense, as discussed in "Item 3. Legal Proceedings." In addition, increases in expense reimbursements contributed to the increase in general and administrative expenses in 1996. As noted in "Note D - Transactions with Affiliated Parties," the Partnership reimburses the Managing General Partner and its affiliates for its costs involved in the management and administration of all partnership activities. While overall expense reimbursements have increased for the year ended December 31, 1996, the recurring expenses subsequent to the transition efforts to the new administration are expected to more closely approximate historical levels. The increase in expense reimbursements is directly attributable to the combined efforts of the Greenville, South Carolina, and Atlanta, Georgia, administration offices during the year-end close, preparation of the 1995 10-K and tax return (including the limited partner K-1's), filing of the first two quarterly reports and transition of asset management responsibilities to the new administration. Included in operating expense is approximately $229,000 of major repairs and maintenance comprised primarily of painting, exterior repairs, and major landscaping for the year ended December 31, 1996. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expense. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Liquidity and Capital Resources At December 31, 1996, the Partnership had cash and cash equivalents of approximately $6,274,000 compared to approximately $5,246,000 at December 31, 1995. Net cash provided by operating activities decreased primarily as a result of decreases in accounts payable and accrued expenses related to the timing of payments. The decrease in cash used in investing activities is due to a reduction in property improvements and replacements in 1996. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the various properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness consists of Non-Recourse Promissory Notes totaling $46,498,000 in principal and deferred interest. These notes mature on November 30, 1998, at which time the Partnership will have to extend the due dates of these notes, find replacement financing, or sell properties. Future cash distributions will depend on the levels of net cash generated from operations, property sales, refinancings and the availability of cash reserves. No cash distributions to the limited partners were made in 1995 or 1996. Currently, the Managing General Partner is evaluating the feasibility of a distribution of cash reserves in 1997. ITEM 7. FINANCIAL STATEMENTS CENTURY PROPERTIES FUND XX LIST OF FINANCIAL STATEMENTS Report of Independent Auditors' Balance Sheet - December 31, 1996 Statements of Operations - Years ended December 31, 1996 and 1995 Statements of Changes in Partners' Deficit - Years ended December 31, 1996 and 1995 Statements of Cash Flows - Years ended December 31, 1996 and 1995 Notes to Financial Statements Independent Auditors' Report To the Partners Century Properties Fund XX Greenville, South Carolina We have audited the accompanying balance sheet of Century Properties Fund XX (a limited partnership) (the "Partnership") as of December 31, 1996, and the related statements of operations, changes in partners' deficit and cash flows for each of the two years in the period ended December 31, 1996. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Century Properties Fund XX as of December 31, 1996, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. /s/IMOWITZ KOENIG & CO., LLP Certified Public Accountants New York, NY February 5, 1997 CENTURY PROPERTIES FUND XX BALANCE SHEET December 31, 1996 (in thousands, except unit data) Assets Cash and cash equivalents $ 6,274 Deferred charges 957 Other assets 685 Investment properties (Notes B & F): Land $ 6,495 Buildings and related personal property 42,308 48,803 Less accumulated depreciation (16,403) 32,400 $ 40,316 Liabilities and Partners' Deficit Liabilities Accounts payable and accrued expenses $ 853 Non-Recourse Promissory Notes (Note B): Principal 31,386 Deferred interest payable 15,112 Partners' Deficit General partner's $ (1,427) Limited partners' (61,814 units outstanding) (5,608) (7,035) $ 40,316 See Accompanying Notes to Financial Statements CENTURY PROPERTIES FUND XX STATEMENTS OF OPERATIONS (in thousands, except unit data) Years Ended December 31, 1996 1995 Revenues: Rental income $ 7,350 $ 7,092 Interest income 275 253 Total revenues 7,625 7,345 Expenses: Interest to promissory note holders 2,508 2,511 Operating 3,569 3,545 Depreciation 1,816 1,788 Amortization 325 325 General and administrative 917 765 Total expenses 9,135 8,934 Net loss $ (1,510) $ (1,589) Net loss allocated to general partner (2%) $ (30) $ (32) Net loss allocated to limited partners (98%) (1,480) (1,557) $ (1,510) $ (1,589) Net loss per limited partnership unit $ (23.94) $ (25.19) See Accompanying Notes to Financial Statements CENTURY PROPERTIES FUND XX STATEMENTS OF CHANGES IN PARTNERS' DEFICIT (in thousands, except unit data) Limited Partnership General Limited Units Partner's Partners' Total Original capital contributions 61,814 $ -- $30,907 $30,907 Partners' deficit at December 31, 1994 61,814 $(1,313) $(2,571) $(3,884) Net loss for the year ended December 31, 1995 -- (32) (1,557) (1,589) Distributions to general partner -- (26) -- (26) Partners' deficit at December 31, 1995 61,814 (1,371) (4,128) (5,499) Net loss for the year ended December 31, 1996 -- (30) (1,480) (1,510) Distributions to general partner -- (26) -- (26) Partners' deficit at December 31, 1996 61,814 $(1,427) $(5,608) $(7,035) See Accompanying Notes to Financial Statements CENTURY PROPERTIES FUND XX STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 1996 1995 Cash flows from operating activities: Net loss $(1,510) $ (1,589) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,332 2,308 Deferred interest on non-recourse promissory notes 1,256 1,255 Loss on disposal of property 13 -- Change in accounts: Deferred charges (75) (217) Other assets (233) (112) Accounts payable and accrued expenses (119) 104 Net cash provided by operating activities 1,664 1,749 Cash flows from investing activities: Property improvements and replacements (610) (703) Net cash used in investing activities (610) (703) Cash flows from financing activities: Cash distributions to general partner (26) (26) Net cash used in financing activities (26) (26) Net increase in cash and cash equivalents 1,028 1,020 Cash and cash equivalents at beginning of period 5,246 4,226 Cash and cash equivalents at end of period $ 6,274 $ 5,246 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,255 $ 1,256 See Accompanying Notes to Financial Statements CENTURY PROPERTIES FUND XX Notes to Financial Statements December 31, 1996 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: Century Properties Fund XX (the "Partnership") is a limited partnership organized in 1983 under the laws of the State of California to acquire, manage and ultimately sell income-producing real properties, and invest in, service and ultimately collect or dispose of mortgage loans on income-producing real properties. The Partnership currently owns three office buildings located in North Carolina, Virginia and Kansas, two business parks located in Texas and North Carolina, and two apartment complexes located in Florida and South Carolina. The general partner of the Partnership is Fox Partners III, a California general partnership whose general partners are Fox Capital Management Corporation ("FCMC"), a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners 84, a California general partnership. The capital contributions of $30,907,000 ($500 per unit) were made by Individual Investor Unit holders. 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Allocation of Income, Loss, and Distributions: Net income, net loss, and distributions of cash of the Partnership are allocated between general and limited partners in accordance with the provisions of the partnership agreement. Fair Value of Financial Instruments: In 1995, the Partnership implemented "Statement of Financial Accounting Standards ("SFAS") No. 107, Disclosures about Fair Value of Financial Instruments", as amended by "SFAS No. 119, Disclosures about Derivative Financial Instruments and Fair Value of Financial Instruments", which requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined in the SFAS as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments (except for long term debt) approximates their fair value due to the short term maturity of these instruments. The fair value of the Partnership's Non-Recourse Promissory Notes is not practicable to estimate. Investment Properties: Investment properties are stated at the lower of the cost or estimated fair value (if impaired) of the property less accumulated depreciation. Acquisition fees are capitalized as a cost of real estate. In 1995, the Partnership adopted "SFAS No. 121, Accounting For the Impairment of Long-Lived Assets and For Long- Lived Assets to be Disposed Of", which requires impairment losses to be recognized for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows are not sufficient to recover the assets' carrying amounts. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The adoption of the SFAS had no effect on the Partnership's financial statements. Cash and Cash Equivalents: The Partnership considers all highly liquid investments with a maturity, when purchased, of three months or less to be cash equivalents. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Depreciation: Depreciation is computed by the straight-line method over estimated useful lives ranging from 15 to 39 years for buildings and improvements and five to seven years for furnishings. Deferred Charges: Included in deferred charges are sales commissions, organization expenses and lease commissions. Sales commissions and organization expenses related to the Pension Investor Notes ("Non-Recourse Promissory Notes", "Promissory Notes" or "Notes") are deferred and amortized by the straight-line method over the life of the Notes. Leasing commissions are deferred and amortized over the lives of the related leases. Such amortization is charged to operating expense. At December 31, 1996, accumulated amortization of deferred leasing commissions totaled approximately $6,415,000. Income Taxes: Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Reclassifications: Certain reclassifications have been made to the 1995 balances to conform to the 1996 presentation. NOTE B - NON-RECOURSE PROMISSORY NOTES The Partnership has Non-Recourse Promissory Notes secured by a deed of trust on all properties owned by the Partnership. The Notes bear interest at eight percent per annum except that interest of up to four percent may be deferred, provided the Partnership makes interest payments on the unpaid principal balance of at least four percent per annum. The deferred interest does not bear interest. The Notes are due November 30, 1998. In accordance with the Partnership Agreement and the Trust Indenture, upon the sale, repayment or other disposition of any Partnership properties or Partnership mortgage loans, 98 percent of the resulting cash proceeds are first allocated to the payment of Promissory Notes until such Notes are repaid. Note holders are also entitled to the payment of residual interest after specified payments to the general partner and Individual Unit holders as set forth in the Trust Indenture. NOTE C - INCOME TAXES The differences between the accrual method of accounting for income tax reporting and the accrual method of accounting used in the financial statements are as follows (in thousands, except unit data): 1996 1995 Net loss per financial statements $ (1,510) $ (1,589) Differences resulted from: Original issue discount (571) (446) Depreciation (367) (383) Capitalized expenses 23 42 Deferred and prepaid rent (520) -- Other 16 120 Federal taxable loss $ (2,929) $ (2,256) Federal taxable loss per limited partnership unit $ (46.43) $ (35.77) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets and liabilities (in thousands): Net liabilities as reported $ (7,035) Differences resulted from: Sales commissions 2,482 Organization expenses 2,069 Original issue discount 1,458 Foreclosures of mortgage loan receivable 238 Payments credited to rental property 280 Acquisition costs expensed (34) Depreciation (6,103) Provision for impairment of value 6,296 Capitalized expenses 945 Provision for bad debts 21 Deferred and prepaid rent (520) Other 134 Net assets - tax basis $ 231 NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control of NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI Equity is a wholly-owned subsidiary of National Property Investors, Inc. ("NPI"). In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity and FCMC. The following transactions with affiliates of Insignia, NPI, and affiliates of NPI were incurred in 1996 and 1995 (in thousands): 1996 1995 Property management fees (included in operating expenses) $ 144 $ 138 Reimbursement for services of affiliates (included in general and administrative and operating expenses) 223 174 Partnership management fees (included in general and administrative expenses) 72 72 For the period from January 19, 1996, to December 31, 1996, the Partnership insured its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who received payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. Included in operating expenses for the fiscal year ended December 31, 1995, are insurance premiums of approximately $93,000 which were paid to an affiliate of the Managing General Partner under a master insurance policy arranged for by such affiliate. For the fiscal year ended December 31, 1995, the Partnership paid an affiliate of the Managing General Partner approximately $5,000 relating to successful real estate tax appeals on the Partnership's investment properties. These fees are included in operating expense. In accordance with the partnership agreement, the general partner was allocated its two percent continuing interest in the Partnership's net loss and taxable income. The general partner received two percent of total distributions including cash distributed to Promissory Note holders. In addition, the general partner is entitled to a Partnership management incentive distribution, which together with the Partnership management fee cannot exceed ten percent of cash available for distribution, as defined. No incentive distributions were made in 1996 or 1995. NOTE E - SIGNIFICANT TENANT AND MINIMUM FUTURE RENTAL REVENUES Rental revenue from one tenant at Linpro Park I was 15 percent and 13 percent of total Partnership rental revenue in 1996 and 1995, respectively. The tenant's leases are scheduled to expire in May 1997. The Partnership is currently negotiating an extension of these leases. Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1996, are as follows (in thousands): 1997 $ 3,042 1998 1,957 1999 1,235 2000 787 2001 90 Thereafter 13 $ 7,124 Amortization of deferred leasing commissions totaled approximately $191,000 and $195,000 for the years ended December 31, 1996, and 1995, respectively. NOTE F - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION (IN THOUSANDS) Initial Cost To Partnership Cost Buildings Capitalized and Related (Written Down) Encrum- Personal Subsequent to Description brances(1) Land Property Acquisition Crabtree Office Center $ -- $ 966 $ 6,409 $ 1,223 Raleigh, North Carolina Linpro Park I -- 1,089 7,882 (1,109) Reston, Virginia Metcalf 103 Office Park -- 810 1,565 518 Overland Park, Kansas Commonwealth Center -- 1,929 6,300 (1,918) Dallas, Texas Highland Park -- 1,256 7,884 1,274 Charlotte, North Carolina Harbor Club Downs -- 1,416 6,864 591 Palm Harbor, Florida The Corners Apartments -- 419 3,102 333 Spartanburg, South Carolina Totals $ -- $ 7,885 $ 40,006 $ 912 1) The Non-Recourse Promissory Notes are secured by a deed of trust on all properties owned by the Partnership, see "Note B" for a further discussion.
Gross Amount At Which Carried At December 31, 1996 Buildings And Related Personal Accumulated Date of Date Depreciable Description Land Property Total Depreciation Construction Acquired Life-Years Crabtree Office Center $ 962 $ 7,636 $8,598 $ 3,035 1983 12/84 5-39 Linpro Park I 693 7,169 7,862 4,211 1982 3/85 5-39 Metcalf 103 Office Park 810 2,083 2,893 498 1973 4/91 5-39 Commonwealth Center 964 5,347 6,311 3,522 1980 10/84 5-39 Highland Park 1,231 9,183 10,414 3,282 1986 11/85- 5-39 2/86 Harbor Club Downs 1,416 7,455 8,871 1,291 1986 5/92 5-30 The Corners Apartments 419 3,435 3,854 564 1974 11/92 5-30 Totals $ 6,495 $ 42,308 $48,803 $ 16,403
Reconciliation of "Investment Properties and Accumulated Depreciation": Years Ended December 31, 1996 1995 Investment Properties Balance at beginning of year $ 48,242 $ 47,539 Property improvements 610 703 Disposals of property (49) -- Balance at end of year $ 48,803 $ 48,242 Accumulated Depreciation Balance at beginning of year $ 14,623 $ 12,835 Additions charged to expense 1,816 1,788 Disposals of property (36) -- Balance at end of year $ 16,403 $ 14,623 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1996 and 1995, respectively, is approximately $56,373,000 and $55,739,000. The accumulated depreciation taken for Federal income tax purposes at December 31, 1996 and 1995, respectively, is approximately $22,543,000 and $20,361,000. NOTE G - CONTINGENCY On January 24, 1990, a settlement agreement was executed by and between the Partnership and certain defendants in connection with legal proceedings at Commonwealth Centre. Lincoln Property Company ("Lincoln"), one of the defendants, provided the Partnership with a deficiency certificate totaling $1,250,000 pursuant to Lincoln's company-wide debt restructuring plan. Effective December 31, 1994, the obligators under this collateral pool agreement exercised their right to extend the maturity date of the deficiency certificates to December 31, 1997. It is anticipated that any payments made to the Partnership on account of its $1,250,000 face amount deficiency certificate will not be made, if at all, until such time. The amount the Partnership will ultimately receive under the certificate, which is subject to contingencies, is uncertain. Accordingly, the certificate will be recorded in the financial statements when payment is received. NOTE H - LEGAL PROCEEDINGS Adrian Charles Pastori, on his own behalf and for all others similarly situated vs. Century Properties Fund XX et al., California Superior Court for County of San Francisco, Case No. 960684. In January 1994, an investor in the Partnership filed a putative class action lawsuit for monetary damages in Superior Court of the County of San Diego, California against the Partnership, its general partner, Fox Partners III, the general partners of Fox Partners III, and others. The lawsuit alleges that the prospectus for the Partnership contained material misrepresentations and omissions. In April 1994, the Court granted defendants' motion to have the venue of the case transferred from San Diego County to San Francisco County. Plaintiff's amended complaint alleges causes of action premised on negligence, fraud, and breach of fiduciary duty. The Partnership has filed its answer in the case. In August 1996, the court denied plaintiff's motion to have a class of all unit holders certified. The Plaintiff has appealed this ruling and the trial court has stayed the remainder of the suit. The Partnership intends to vigorously defend this action. The ultimate outcome of the litigation cannot presently be determined, however, the Managing General Partner does not believe that the litigation will have a material adverse effect on the Partnership. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no disagreements with Imowitz Koenig & Co., LLP regarding the 1996 or 1995 audits of the Partnership's financial statements. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The Partnership does not have any officers or directors. The managing general partner of the Partnership, Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), manages and controls substantially all of the Partnership's affairs and has general responsibility and ultimate authority in all matters affecting its business. The names of the directors and executive officers of the Managing General Partner as of December 31, 1996, their ages and nature of all positions with FCMC presently held by them are as follows: Name Age Position William H. Jarrard, Jr. 50 President and Director Ronald Uretta 41 Vice President and Treasurer John K. Lines 37 Vice President and Secretary Kelley M. Buechler 39 Assistant Secretary William H. Jarrard, Jr. has been President and a Director of the Managing General Partner since June 1996, and Managing Director - Partnership Administration of Insignia Financial Group, Inc. ("Insignia") since January 1991. Mr. Jarrard served as Managing Director-Partnership Administration and Asset Management from July 1994, until January 1996. Ronald Uretta has been Vice President and Treasurer of the Managing General Partner since June 1996, and Insignia's Treasurer since January 1992. Since August 1996, he has served as Insignia's Chief Operating Officer. He also served as Insignia's Secretary from January 1992 to June 1994, and as Chief Financial Officer from January 1992 to August 1996. Since September 1990, Mr. Uretta has also served as the Chief Financial Officer and Controller of Metropolitan Asset Group. John K. Lines has been Vice President and Secretary of the Managing General Partner since June 1996, Insignia's General Counsel since June 1994, and General Counsel and Secretary since July 1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen Financial Corporation, West Palm Beach, Florida. From October 1991 until May 1993, Mr. Lines was a Senior Attorney with Banc One Corporation, Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was an attorney with Squire Sanders & Dempsey, Columbus, Ohio. Kelley M. Buechler has been Assistant Secretary of the Managing General Partner since June 1996 and Assistant Secretary of Insignia since 1991. No family relationships exist among any of the officers or directors of the Managing General Partner. ITEM 10. EXECUTIVE COMPENSATION No direct form of compensation or remuneration was paid by the Partnership to any officer or director of the Managing General Partner. The Partnership has no plan, nor does the Partnership presently propose a plan, which will result in any remuneration being paid to any officer or director upon termination of employment. However, reimbursements and other payments have been made to the Partnership's Managing General Partner and its affiliates, as described in "Item 12". ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The Partnership is a limited partnership and has no officers or directors. The Managing General Partner has discretionary control over most of the decisions made by or for the Partnership in accordance with the terms of the Partnership Agreement. The directors and officers of the Managing General Partner and its affiliates, as a group do not own any of the Partnership voting securities. There is no person known to the Partnership who owns beneficially or of record more than five percent of the voting securities of the Partnership. There are no arrangements known to the Partnership, the operating of which may, at a subsequent date, result in a change in control of the Partnership. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS No transactions have occurred between the Partnership and any officer or director of the Managing General Partner. The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control of NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI Equity is a wholly-owned subsidiary of National Property Investors, Inc. ("NPI"). In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity and FCMC. The following transactions with affiliates of Insignia, NPI, and affiliates of NPI were incurred in 1996 and 1995 (in thousands): 1996 1995 Property management fees (included in operating expenses) $ 144 $ 138 Reimbursement for services of affiliates (included in general and administrative and operating expenses) 223 174 Partnership management fees (included in general and administrative expenses) 72 72 For the period from January 19, 1996, to December 31, 1996, the Partnership insured its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner who received payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations is not significant. Included in operating expenses for the fiscal year ended December 31, 1995, are insurance premiums of approximately $93,000 which were paid to an affiliate of the Managing General Partner under a master insurance policy arranged for by such affiliate. For the fiscal year ended December 31, 1995, the Partnership paid an affiliate of the Managing General Partner approximately $5,000 relating to successful real estate tax appeals on the Partnership's investment properties. These fees are included in operating expense. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits: See Exhibit Index contained herein. (b) Reports on Form 8-K filed during the fourth quarter of 1996: None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 XX By: Fox Partners III Its General Partner By: Fox Capital Management Corporation Its Managing General Partner By: /s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director Date: March 25, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. /s/ William H. Jarrard, Jr. President March 25, 1997 William H. Jarrard, Jr. and Director /s/ Ronald Uretta Vice President March 25, 1997 Ronald Uretta and Treasurer EXHIBIT INDEX Exhibit 2. NPI, Inc. Stock Purchase Agreement, dated as of August 17, 1995, incorporated by reference to the Partnership's Current Report on Form 8-K dated August 17, 1995. 3.4 Agreement of Limited Partnership incorporated by reference to Exhibit A to the Prospectus of the Partnership dated February 22, 1984, and November 8, 1984, and thereafter supplemented contained in the Partnership Registration Statement on Form S-11 (Reg. No. 2-88615). 27. Financial Data Schedule. EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Fund XX 1996 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000736909 CENTURY PROPERTIES FUD XX 1,000 12-MOS DEC-31-1996 DEC-31-1996 6,274 0 0 0 0 0 48,803 16,403 40,316 0 31,386 0 0 0 (7,035) 40,316 0 7,625 0 0 9,135 0 2,508 0 0 0 0 0 0 (1,510) (23.94) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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