-----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, GVTQ+bYK3Gyklu6w/sLUrbZgIOyrHk1Y7AVx8IA59TTCqWgzOnzNlTrq1lQPrCqN 8z50YVomtoC8iL6B8eK4KA== 0000889812-95-000644.txt : 19951119 0000889812-95-000644.hdr.sgml : 19951119 ACCESSION NUMBER: 0000889812-95-000644 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 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13408 FILM NUMBER: 95589832 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: POST & HEYMANN 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 0-13408 Century Properties Fund XX (Exact name of Registrant as specified in its charter) California 94-2930770 (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 XX - 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 $ 5,650,000 $ 4,226,000 Other assets 632,000 340,000 Real Estate: Real estate 54,335,000 53,835,000 Accumulated depreciation (14,207,000) (12,835,000) Allowance for impairment of value (6,296,000) (6,296,000) ------------- ------------- Real estate, net 33,832,000 34,704,000 Deferred sales commissions, net 610,000 755,000 Deferred organization expenses, net 419,000 519,000 Deferred costs, net 395,000 427,000 ------------- ------------- Total assets $ 41,538,000 $ 40,971,000 ============= ============= Liabilities and Partners' (Deficit) Accrued expenses, deferred income and other liabilities $ 1,661,000 $ 868,000 Non-recourse Promissory Notes: Principal 31,386,000 31,386,000 Deferred interest payable 13,543,000 12,601,000 ------------- ------------- Total liabilities 46,590,000 44,855,000 ------------- ------------- Commitments and Contingencies Partners' (deficit): General partner (1,349,000) (1,313,000) Limited partners (61,814 units outstanding at September 30, 1995 and December 31, 1994) (3,703,000) (2,571,000) ------------- ------------- Total partners' (deficit) (5,052,000) (3,884,000) ------------- ------------- Total liabilities and partners' (deficit) $ 41,538,000 $ 40,971,000 ============= ============= See notes to financial statements. 2 of 14 CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Nine Months Ended September 30, September 30, 1995 1994 Revenues: Rental $ 5,251,000 $ 4,767,000 Interest income 182,000 110,000 ------------- ------------- Total revenues 5,433,000 4,877,000 ------------- ------------- Expenses: Interest to Promissory Note Holders 1,883,000 1,883,000 Amortization 244,000 244,000 Interest - 50,000 Operating 2,546,000 2,580,000 Depreciation 1,372,000 1,371,000 General and administrative 543,000 570,000 ------------- ------------- Total expenses 6,588,000 6,698,000 ------------- ------------- Net loss $ (1,155,000) $ (1,821,000) ============= ============= Net loss per individual investor unit $ (18.31) $ (28.88) ============= ============= See notes to financial statements. 3 of 14 CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Three Months Ended September 30, September 30, 1995 1994 Revenues: Rental $ 1,699,000 $ 1,698,000 Interest income 64,000 27,000 ------------- ------------- Total revenues 1,763,000 1,725,000 ------------- ------------- Expenses: Interest to Promissory Note Holders 628,000 628,000 Amortization 81,000 81,000 Interest - 5,000 Operating 854,000 831,000 Depreciation 457,000 457,000 General and administrative 157,000 158,000 ------------- ------------- Total expenses 2,177,000 2,160,000 ------------- ------------- Net loss $ (414,000) $ (435,000) ============= ============= Net loss per individual investor unit $ (6.57) $ (6.89) ============= ============= See notes to financial statements. 4 of 14 CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Cash Flows For the Nine Months Ended September 30, September 30, 1995 1994 Operating Activities: Net loss $ (1,155,000) $ (1,821,000) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,760,000 1,741,000 Provision for doubtful receivable - 7,000 Deferred costs paid (111,000) (131,000) Deferred interest on non-recourse promissory notes 942,000 941,000 Changes in operating assets and liabilities: Other assets (292,000) (389,000) Accrued expenses, deferred income and other liabilities 793,000 403,000 ------------- ------------- Net cash provided by operating activities 1,937,000 751,000 ------------- ------------- Investing Activities: Additions to real estate (500,000) (308,000) Proceeds from cash investments - 3,652,000 ------------- ------------- Net cash (used in) provided by investing activities (500,000) 3,344,000 ------------- ------------- Financing Activities: Repayment of notes payable - (986,000) Notes payable principal payments - (43,000) Cash distributions to the general partner (13,000) (13,000) ------------- ------------- Cash (used in) financing activities (13,000) (1,042,000) ------------- ------------- Increase in Cash and Cash Equivalents 1,424,000 3,053,000 Cash and Cash Equivalents at Beginning of Period 4,226,000 1,379,000 ------------- ------------- Cash and Cash Equivalents at End of Period $ 5,650,000 $ 4,432,000 ============= ============= Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period - notes payable $ - $ 40,000 ============= ============= Interest paid in cash during the period - non-recourse promissory notes $ 942,000 $ 942,000 ============= ============= See notes to financial statements. 5 of 14 CENTURY PROPERTIES FUND XX - 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 balance sheet accounts have been reclassified in order to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature. 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 managing general partner of the Partnership's general partner, 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 (a) An affiliate of NPI, Inc. received reimbursements of administrative expenses amounting to $117,000 and $102,000 during the nine months ended September 30, 1995 and 1994, respectively. These reimbursements are included in general and administrative expenses. (b) An affiliate of NPI, Inc. is entitled to receive a management fee equal to 5% of gross receipts from certain properties it manages. For the nine months ended September 30, 1995 and 1994, affiliates of NPI, Inc. received $102,000 and $75,000, respectively. These fees are included in operating expenses. (c) In accordance with the Partnership Agreement, the general partner is entitled to receive a partnership management fee based on cash available for distribution. For the nine month periods ended September 30, 1995 and 1994, these fees totaled $36,000. These fees are included in general and administrative expenses. In addition, a $13,000 distribution was made to the general partner during the nine month periods ended September 30, 1995 and 1994. 3. 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 obligors 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 6 of 14 CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995 NOTES TO FINANCIAL STATEMENTS 3. Contingency (Continued) 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. 4. 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 Diego, Case No. 673150. On January 20, 1995, the Court sustained the Partnership's motion that the plaintiff's case did not set forth the cause of action upon which relief could be granted and again granted the plaintiff leave to file an amended complaint. On June 21, 1995, the demurrer previously granted by the Court was overruled. Registrant has filed its answer in the case and intends to vigorously defend this action. The ultimate outcome of the litigation cannot presently be determined, however, MGP does not believe that the litigation will have a material adverse effect to the Partnership. 7 of 14 CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995 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 real estate properties consist of 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 properties are leased to tenants subject to leases with original lease terms ranging from six months to one year for the residential properties and with remaining lease terms of up to six years for the commercial properties. Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. All seven of Registrant's properties generated positive cash flow from operations during the nine months ended September 30, 1995. Registrant uses working capital reserves from any undistributed cash flow from operations and proceeds from cash investments as its primary source of liquidity. For the long term, cash from operations will remain Registrant's primary source of liquidity. Excess cash from operations was not distributed for the nine months ended September 30, 1995. Cash generated from operations will continue to be used to make the required payments to the Promissory Note Holders and for working capital reserves. It is not currently anticipated that Registrant will make any distributions from operations in the near future. Liquidity based on cash and cash equivalents improved by $1,424,000 at September 30, 1995, as compared to December 31, 1994. Registrant's $1,937,000 of net cash provided by operating activities was only partially offset by $500,000 of cash used for improvements to real estate (investing activities) and $13,000 of cash distributions to the general partner (financing activities). Net cash provided by operating activities increased, as compared to the prior year comparative period, partially due to the receipt of $470,000 of prepaid rent (through October 1996) from a significant tenant occupying 25,000 square feet at Registrant's Linpo Park property. Registrant has no plans for major capital improvements. All other increases (decreases) in certain assets and liabilities are the result of the timing of the receipt and payment of various operating activities. Working capital reserves are being invested in a money market account or 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 capital improvements and required interest payments to the Promissory Note Holders until November 30, 1998, the maturity date of the notes. At that time Registrant will have to extend the due dates of these notes, find replacement financing, or sell properties. With respect to Limited Partners, it appears that the investment objective of capital growth will not be attained and that a significant portion of invested capital will not be returned to investors and any portions that are returned will come from cash flow. The extent to which invested capital is returned to investors is dependent upon the success of the performance of Registrant's properties and the markets in which such properties are located. It is anticipated that many of the properties will continue to be held longer than originally expected. The ability to hold and operate theses properties is dependent on Registrant's ability to obtain additional financing, refinancing, or debt restructuring as required. 8 of 14 CENTURY PROPERTIES FUND XX - 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, Insignia Financial Group, Inc. and certain of its affiliates (collectively, "Insignia") entered into agreements pursuant to which (i) 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., and (ii) Insignia would acquire all of the interests in NPI- AP Management, L.P., the property manager at Registrant's residential properties. The consummation of these transactions 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. Insignia is a fully integrated real estate service company specializing in the ownership and operation of securitized real estate assets. According to Commercial Property News and the National Multi-Housing Council, since 1992 Insignia has been the largest property manager in the United States. The Managing General Partner does not believe these transactions will have a significant effect on Registrant's liquidity or results of operation. 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 refinance or sell its existing properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties for residential properties are relatively low interest rates, which encourage existing and potential residential tenants to purchase homes. In addition, there has been a significant decline nationally in new household formation. Management believes, however, 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 properties in the future. Results of Operations Nine Months Ended September 30, 1995 vs. September 30, 1994 Operating results improved by $666,000 for the nine months ended September 30, 1995, as compared to September 30, 1994, as revenues increased by $556,000 and expenses decreased by $110,000. Revenues increased by $556,000 due to increases in rental income of $484,000 and interest income of $72,000. Rental revenues increased due to an increase in occupancy and rental rates during the period at Registrant's Crabtree Office Center, Highland Park Commerce Center, and Metcalf 103 Office Park properties, which was partially offset by decreased occupancy at Registrant's Commonwealth Centre. Occupancy remained relatively constant at Registrant's remaining properties. Interest income increased due to an increase in average working capital reserves available for investment, coupled with an increase in interest rates. 9 of 14 CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Nine Months Ended September 30, 1995 vs. September 30, 1994 (Continued) Expenses decreased by $110,000 due to decreases in operating expenses of $34,000, interest expense of $50,000 and general and administrative expenses of $27,000, which were slightly offset by an increase in depreciation expense of $1,000. Operating expenses declined primarily due to a decrease in legal expenses incurred at Commonwealth Centre in connection with a settlement with a tenant in the prior year comparative period. Interest expense declined due to the satisfaction of the note payable encumbering Registrant's Corners Apartments property in June 1994. General and administrative expenses declined due to a decrease in asset management fees effective July 1, 1994. All other expenses remained relatively constant. Three Months Ended September 30, 1995 vs. September 30, 1994 Operating results improved by $21,000 for the three months ended September 30, 1995, as compared to September 30, 1994, as the increase in revenues of $38,000 was partially offset by an increase in expenses of $17,000. Revenues increased by $38,000 due to increases in rental income of $1,000 and interest income of $37,000. Rental revenues increased due to an increase in occupancy and rental rates during the period at Registrant's Highland Park Commerce Center, Metcalf 103 Office Park and the Corners Apartments, which was offset by an over accrual of escalation billbacks at September 30, 1994 and reduced occupancy at Registrant's Commonwealth property. Occupancy remained relatively constant at Registrant's remaining properties. Interest income increased due to an increase in average working capital reserves available for investment, coupled with an increase in interest rates. Expenses increased by $17,000 due to an increase in operating expenses of $23,000, which was slightly offset by decreases in interest expense of $5,000 and in general and administrative expenses of $1,000. Operating expenses increased primarily due to increased repairs and maintenance expenses at Registrant's Metcalf 103 Office Park, Highland Park Commerce Center and Crabtree Office Center properties. Interest expense, general and administrative expenses, depreciation and amortization remained relatively constant. All other expenses remained relatively constant. 10 of 14 CENTURY PROPERTIES FUND XX - 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 XX OCCUPANCY SUMMARY Average Occupancy Rate (%) Nine Months Three Months Ended Ended Date of September 30, September 30, Name and Location Purchase Type Size 1995 1994 1995 1994 Commonwealth Centre 10/84 Business 109,000 84 91 76 88 Dallas, Texas Park sq. ft. Crabtree Office Center 12/84 Office 57,000 99 92 99 99 Raleigh, North Carolina Building sq. ft. Linpro Park I 03/85 Office 79,000 100 100 100 100 Reston, Virginia Building sq. ft. Metcalf 103 Office Park(2) 04/91 Office 60,000 93 90 96 92 Overland Park, Kansas Building sq. ft. Highland Park Commerce Center - Phase I and The Goodyear and Digital Buildings (1) Business 107,000 82 77 85 79 Charlotte, North Carolina Park sq. ft. Harbor Club Downs (3) 05/92 Apartment 272 97 96 98 97 Palm Harbor, Florida Building units The Corners Apartments (4) 11/92 Apartment 176 96 95 97 95 Spartanburg, South Carolina Building units (1) Phase I and the two buildings were acquired in separate transactions on November 5, 1985 and February 12, 1986, respectively. (2) Registrant acquired the property through foreclosure of a mortgage loan receivable in April 1991. (3) Registrant acquired the property through foreclosure of a mortgage loan receivable in May 1992. (4) Registrant acquired the property through foreclosure of a mortgage loan receivable in November 1992. 11 of 14 CENTURY PROPERTIES FUND XX - 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 XX - 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 XX By: FOX PARTNERS III, Its General Partner 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 XX - 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 XX and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 5,650,000 0 0 0 0 0 54,335,000 (20,503,000) 41,538,000 0 44,929,000 0 0 0 (5,052,000) 41,538,000 0 5,251,000 0 3,918,000 0 0 1,883,000 (1,155,000) 0 (1,155,000) 0 0 0 (1,155,000) (18.31) (18.31) Depreciation includes a $6,296,000 allowance for impairment of value. Bonds include $13,543,000 of deferred interest payable.
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