-----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, KQCkOCafxtdu19sg0kj5f4YEJwoqPLdQMb7b3ZKOIxqe0hsYBlHCPZRfSqY6hOCW ZwH2ahyJzyY5EyvRPSd/+w== 0000736980-01-500006.txt : 20010815 0000736980-01-500006.hdr.sgml : 20010815 ACCESSION NUMBER: 0000736980-01-500006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTENNIAL MORTGAGE INCOME FUND CENTRAL INDEX KEY: 0000736980 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 330053488 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-88588 FILM NUMBER: 1710188 BUSINESS ADDRESS: STREET 1: 1540 S LEWIS STREET CITY: ANAHEIM STATE: CA ZIP: 92805 BUSINESS PHONE: 7145028484225 MAIL ADDRESS: STREET 2: 1540 S LEWIS STREET CITY: ANAHEIM STATE: CA ZIP: 92805 10-Q 1 cmif-630.txt FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from N/A to N/A Commission File Number: 0-22520 CENTENNIAL MORTGAGE INCOME FUND (Exact name of registrant as specified in its charter) California 33-0053488 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1540 South Lewis Street, Anaheim, California 92805 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (714)502-8484 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO PART I ITEM 1. FINANCIAL STATEMENTS CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES A Limited Partnership Consolidated Balance Sheets June 30, 2001 and December 31, 2000
June 30, December 31, ASSETS 2001 2000 (Unaudited) - ------------------------------------------------------------------------------ Cash and cash equivalents $ 1,556,000 $ 1,599,000 Other assets, net 9,000 --- - ------------------------------------------------------------------------------ $ 1,565,000 $ 1,599,000 ============================================================================== LIABILITIES AND PARTNERS' EQUITY - ------------------------------------------------------------------------------ Accounts payable and accrued liabilities $ 5,000 $ 10,000 - ------------------------------------------------------------------------------ Total liabilities 5,000 10,000 - ------------------------------------------------------------------------------ Partners' equity (deficit) -- 38,729 limited partnership units outstanding at June 30, 2001 and December 31, 2000 General partners (132,000) (132,000) Limited partners 1,692,000 1,721,000 - ------------------------------------------------------------------------------ Total partners' equity 1,560,000 1,589,000 Contingencies (note 4) Subsequent event (note 5) - ------------------------------------------------------------------------------ $ 1,565,000 $ 1,599,000 ==============================================================================
See accompanying notes to consolidated financial statements 1 CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES A Limited Partnership Consolidated Statements of Operations (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, 2001 2000 2001 2000 - ------------------------------------------------------------------------ Revenue: Interest income loans to nonaffiliates, including fees $ --- $ 21,000 $ --- $ 10,000 Interest on interest- bearing deposits 36,000 27,000 16,000 15,000 Other 4,000 5,000 2,000 2,000 - ------------------------------------------------------------------------- Total revenue 40,000 53,000 18,000 27,000 - ------------------------------------------------------------------------- Expenses: General and administrative affiliates 36,000 40,000 14,000 17,000 General and administrative nonaffiliates 33,000 37,000 20,000 22,000 - ------------------------------------------------------------------------- Total expenses 69,000 77,000 34,000 39,000 - ------------------------------------------------------------------------- Net loss $ (29,000) $ (24,000) $ (16,000) $ (12,000) ========================================================================= Net loss per limited partnership unit -basic and diluted $ (.75) $ (.62) $ (.41) $ (.31) =========================================================================
See accompanying notes to consolidated financial statements 2 CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES A Limited Partnership Consolidated Statement of Partners' Equity For the six months ended June 30, 2001
Total General Limited Partners' Partners Partners Equity (Unaudited) (Unaudited) (Unaudited) - --------------------------------------------------------------------------- Balance at December 31, 2000 $ (132,000) $ 1,721,000 $ 1,589,000 Net loss --- (29,000) (29,000) - --------------------------------------------------------------------------- Balance at June 30, 2001 $ (132,000) $ 1,692,000 $ 1,560,000 ==========================================================================
See accompanying notes to consolidated financial statements 3 CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES A Limited Partnership Consolidated Statements of Cash Flows For the six months ended June 30, 2001 and 2000
2001 2000 (Unaudited) (Unaudited) - ----------------------------------------------------------------------- Cash flows from operating activities: Net loss $ (29,000) $ (24,000) Adjustments to reconcile net loss to net cash used in operating activities: Changes in assets and liabilities: Interest accrued to principal on loans receivable --- (7,000) Increase in other assets (9,000) (12,000) Increase in due from unconsolidated investee --- (1,000) Increase (decrease) in accounts payable and accrued liabilities (5,000) 1,000 - ----------------------------------------------------------------------- Net cash used in operating activities (43,000) (43,000) - ----------------------------------------------------------------------- Net decrease in cash and cash equivalents (43,000) (43,000) Beginning cash and cash equivalents 1,599,000 1,124,000 - ----------------------------------------------------------------------- Ending cash and cash equivalents $ 1,556,000 $ 1,081,000 =======================================================================
See accompanying notes to consolidated financial statements 4 CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES A Limited Partnership Notes to Consolidated Financial Statements (Unaudited) June 30, 2001 and 2000 (1) BUSINESS Centennial Mortgage Income Fund (the "Partnership") initially invested in commercial, industrial and residential income-producing real property through mortgage investments consisting of participating first mortgage loans, other equity participation loans, construction loans, and wrap-around and other junior loans. The Partnership's underwriting policy for granting credit was to fund loans secured by first and second deeds of trust on real property. The Partnership's area of concentration is in California. In the normal course of business, the Partnership participated with other lenders in extending credit to single borrowers; the Partnership did this in an effort to decrease credit concentrations and provide a greater diversification of credit risk. As of June 30, 2001, all of the loans secured by properties have been repaid or charged off. As required by the Partnership Agreement, the Partnership is currently in the repayment stage, and as a result, cash proceeds from mortgage investments are no longer available for reinvestment. (2) BASIS OF PRESENTATION The consolidated financial statements are unaudited and reflect all adjustments, consisting only of normal recurring accruals, which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods. Results for the six and three months ended June 30, 2001 and 2000 are not necessarily indicative of results which may be expected for any other interim period, or for the year as a whole. Information pertaining to the six and three months ended June 30, 2001 and 2000 is unaudited and condensed inasmuch as it does not include all related footnote disclosures. The consolidated financial statements do not include all information and footnotes necessary for fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Notes to consolidated financial statements included in Form 10-K for the year ended December 31, 2000 on file with the Securities and Exchange Commission, provide additional disclosures and a further description of accounting policies. Financial Information about Industry Segments Given that the Partnership is in the process of liquidation, the Partnership has identified only one operating business segment which is the business of asset liquidation. 5 Net loss per Limited Partnership Unit Net loss per limited partnership unit for financial statement purposes was based on the weighted average number of limited partnership units outstanding of 38,729 for all periods presented. (3) TRANSACTIONS WITH AFFILIATES Under the provisions of the Partnership Agreement, the general partners are to receive compensation for their services in supervising the affairs of the Partnership. This partnership management compensation shall be equal to 10 percent of the cash available for distribution, as defined in the Partnership Agreement. The general partners will not receive this compensation until the limited partners have received a 12 percent per annum cumulative return on their adjusted invested capital but are entitled to receive a 5 percent interest in cash available for distribution in any year until this provision has been met. Adjusted invested capital is defined as the original capital invested less distributions from mortgage reductions. Payments to the general partners have been limited to 5 percent of cash available for distribution as the limited partners have not yet received their 12 percent per annum cumulative return. Under this provision of the Partnership Agreement, no distributions were paid to the general partners during the six months ended June 30, 2001 or 2000. (4) CONTINGENCIES The Partnership has disclosed in previous reports certain litigation related to the Partnership's shopping center in Upland, California. The Partnership's insurance company settled this litigation with the plaintiffs during the three months ended June 30, 2001 at no cost to the Partnership (5) SUBSEQUENT EVENT The Partnership declared a distribution payable to limited partners who were holders of record on July 15, 2001 in the amount of $15 per limited partnership unit. The distribution totaled approximately $581,000. This distribution was paid on August 1, 2001. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. GENERAL The Partnership had net losses and net losses per limited partnership unit of $(29,000) and $(.75) for the six months ended June 30, 2001 and $(24,000) and $(.62) for the six months ended June 30, 2000, respectively. Cautionary Statements Regarding Forward-Looking Information The Partnership wishes to caution readers that the forward-looking statements contained in this Form 10-Q under "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Form 10-Q involve known and unknown risks and uncertainties which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by any forward-looking statements made by or on behalf of the Partnership. In connection with the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, the Partnership is filing the following cautionary statements identifying important factors that in some cases have affected, and in the future could cause the Partnership's actual results to differ materially from those expressed in any such forward-looking statements. The factors that could cause the Partnership's results to differ materially include, but are not limited to, general economic and business conditions, including interest rate fluctuations; success of operating initiatives; adverse publicity; changes in business strategy; quality of management; business abilities and judgment of personnel; availability of qualified personnel; employee benefit costs and changes in, or the failure to comply with government regulations. LIQUIDITY AND CAPITAL RESOURCES At June 30, 2001, the Partnership had $1,556,000 in cash and interest-bearing deposits. The Partnership had no unfunded loan commitments at June 30, 2001. During the first two quarters of 2001, the Partnership's principal source of cash was $36,000 in interest income on interest bearing deposits. The Partnership's principal uses of cash during the first two quarters of 2001 were approximately $83,000 in general and administrative costs. The Partnership's principal future capital requirements are expected to be general and administrative costs. Effective with the third quarter of 1991, the Partnership had suspended making any cash distributions to partners due to a decline in liquidity and the uncertainty of the cash requirements for existing and potential real estate owned. Pursuant to the Partnership Agreement, 60 months after the closing of the offering, cash proceeds from mortgage investments are no longer available for reinvestment by the Partnership. The Partnership declared a distribution payable to limited partners who were holders of record on July 15, 2001 in the amount of $15 per limited partnership unit. The distribution totaled approximately $581,000. This distribution was paid on August 1, 2001. The general partners have had discussions with legal counsel regarding the 7 amounts of cash balances that would be prudent to be retained by the Partnership at this time. In light of the substantial amount of real estate that the Partnership has held an interest in over the years, there is always the potential for future litigation to arise, particularly in the area of toxic contamination. Although the general partners are not aware of any threatened litigation, or litigation that is likely to arise, they have determined that the Partnership should retain at least $1,000,000 in cash balances to be available to defend the Partnership in any future litigation which may arise. It is expected that these cash balances will be retained until such time as legal counsel advises the general partners that the potential for any future litigation is remote. RESULTS OF OPERATIONS INTEREST INCOME Interest income on loans to nonaffiliates decreased from $21,000 and $10,000 during the six and three months ended June 30, 2000, respectively, to $-0- during the six months ended June 30, 2001. The decrease was attributable to the payoff of the last remaining Partnership loans receivable during the three months ended December 31, 2000. Interest earned on interest-bearing deposits totaled $36,000 and $16,000 for the six and three months ended June 30, 2001, respectively. Interest earned on interest-bearing deposits totaled $27,000 and $15,000 for the six and three months ended June 30, 2000, respectively. Interest on interest-bearing deposits represents interest earned on Partnership funds invested, for liquidity, in time certificate and money market deposits. The increase in income on interest-bearing deposits is due to increased average cash balances for the six months ended June 30, 2001 and an increase in the average interest rates earned on deposits. The increase in average cash balances resulted from the payoff of the last remaining Partnership loans receivable in October 2000. GENERAL AND ADMINISTRATIVE EXPENSES General and administrative expenses, affiliates totaled $36,000 and $14,000, respectively, for the six and three months ended June 30, 2001. General and administrative expenses, affiliates totaled $40,000 and $17,000, respectively, for the six and three months ended June 30, 2000. These expenses are primarily salary allocation reimbursements paid to affiliates. General and administrative expenses, nonaffiliates totaled $33,000 and $20,000 for the six and three months ended June 30, 2001, respectively. General and administrative expenses, nonaffiliates totaled $37,000 and $22,000 for the six and three months ended June 30, 2000, respectively. These expenses consist of other costs associated with the administration of the Partnership. The decrease for 2001 is primarily due to a decrease in professional fees and office expense. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Since the Partnership does not invest in any derivative financial instruments or enter into any activities involving foreign currencies, its market risk associated with financial instruments is limited to the effect that changing domestic interest rates might have on the fair value of its bank deposits and notes receivable. As of June 30, 2001, the Partnership held only cash in checking accounts of $3,000, fixed rate bank deposits with carrying values 8 totaling $1,553,000 and $9,000 in other prepaid expenses. The bank deposits and fixed rate bank deposits all had maturities of less than ninety days. The estimated fair value of all of these assets was estimated to be equal to their carrying values as of June 30, 2001. Management currently intends to hold the remaining fixed rate assets until their respective maturities. Accordingly, the Partnership is not exposed to any material cash flow or earnings risk associated with these assets. Given the relatively short-term maturities of these assets, management does not believe the Partnership is exposed to any significant market risk related to the fair value of these assets. The Partnership had no interest bearing indebtedness outstanding as of June 30, 2001. Accordingly, the Partnership is not exposed to any market risk associated with its liabilities. PART II OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a Vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a)Exhibits (3) & (4) Articles of Incorporation and Bylaws The Amended Limited Partnership Agreement Incorporated by reference to Exhibit A to the Partnership's Prospectus contained in the Partnership's registration Statement on Form Form S-11 (Commission File No. 0-22520) Dated June 8, 1984, as supplemented and filed under the Securities Act of 1933 (b) None 9 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. CENTENNIAL MORTGAGE INCOME FUND AND SUBSIDIARIES A California Limited Partnership By:/s/John B. Joseph _________________________________ John B. Joseph General Partner August 14, 2001 By:/s/Ronald R. White _________________________________ Ronald R. White General Partner August 14, 2001 By: CENTENNIAL CORPORATION General Partner By:/s/Joel H. Miner _________________________________ Joel H. Miner Chief Financial Officer August 14, 2001 -----END PRIVACY-ENHANCED MESSAGE-----