-----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, TMMWy+A9Gzfa4hLrHN3zML28KGAi9h8n76IUwvX6dE+eytQY/M7k28kaXAiUfnGv SvMcionEDc/G3tr7Ndg93A== 0000740156-97-000002.txt : 19970806 0000740156-97-000002.hdr.sgml : 19970806 ACCESSION NUMBER: 0000740156-97-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970805 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES GROWTH FUND XXII CENTRAL INDEX KEY: 0000740156 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942939418 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13418 FILM NUMBER: 97651194 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: C/O INSIGNIA FINANCIAL GROUP STREET 2: ONE INSIGNIA FINANCIAL PLZ 14TH FL CITY: GREENVILLE STATE: SC ZIP: 29602 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY PROPERTIES FUND XXI DATE OF NAME CHANGE: 19840918 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1997 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 0-13418 CENTURY PROPERTIES GROWTH FUND XXII (Exact name of small business issuer as specified in its charter) California 94-2939418 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Exchange Act 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) CENTURY PROPERTIES GROWTH FUND XXII CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1997 Assets Cash and cash equivalents $ 2,325 Restricted cash 500 Receivables and deposits 2,296 Other assets 1,859 Investment properties: Land $ 14,396 Buildings and related personal property 115,860 130,256 Less accumulated depreciation (50,099) 80,157 $ 87,137 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 202 Tenant security deposits payable 373 Accrued property taxes 951 Other liabilities 658 Mortgage notes payables 72,890 Partners' Capital (Deficit) Limited partners' (82,848 units issued and outstanding) $ 19,419 General partner's (7,356) 12,063 $ 87,137 See Accompanying Notes to Consolidated Financial Statements b) CENTURY PROPERTIES GROWTH FUND XXII CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Revenues: Rental income $ 4,886 $ 4,778 $ 9,740 $ 9,627 Other income 322 283 597 477 Total revenues 5,208 5,061 10,337 10,104 Expenses: Operating 2,454 2,516 4,794 5,021 Interest 1,497 1,635 2,986 3,462 Depreciation 990 959 1,961 1,901 General and administrative 93 119 165 229 Total expenses 5,034 5,229 9,906 10,613 Income (loss) before extraordinary loss 174 (168) 431 (509) Extraordinary loss on extinguishment of debt -- -- -- (481) Net income (loss) $ 174 $ (168) $ 431 $ (990) Net income (loss) allocated to general partner $ 21 $ (20) $ 51 $ (117) Net income (loss) allocated to limited partners 153 (148) 380 (873) $ 174 $ (168) $ 431 $ (990) Net income (loss) per limited partnership unit: Income (loss) before extraordinary loss $ 1.85 $ (1.79) $ 4.59 $ (5.42) Extraordinary loss -- -- -- (5.12) Net income (loss) per limited partnership unit $ 1.85 $ (1.79) $ 4.59 $(10.54) Distribution per limited partnership unit $ -- $ -- $ -- $ 30.76 See Accompanying Notes to Consolidated Financial Statements
c) CENTURY PROPERTIES GROWTH FUND XXII CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner's Partners' Total Partners' (deficit) capital at December 31, 1996 82,848 $(7,407) $19,039 $11,632 Net income for the six months ended June 30, 1997 -- 51 380 431 Partners' (deficit) capital at June 30, 1997 82,848 $(7,356) $19,419 $12,063 See Accompanying Notes to Consolidated Financial Statements
d) CENTURY PROPERTIES GROWTH FUND XXII CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net income (loss) $ 431 $ (990) Adjustments to reconcile net income (loss) to cash provided by operating activities: Depreciation 1,961 1,901 Amortization of loan costs 105 136 Extraordinary loss on extinguishment of debt -- 481 Loss on disposal of property 78 -- Change in account: Receivables and deposits 301 (40) Other assets (111) 1 Accounts payable (110) 253 Tenant security deposits payable 4 (6) Accrued property taxes (241) 375 Other liabilities (41) 455 Net cash provided by operating activities 2,377 2,566 Cash flows from investing activities: Deposits to restricted escrow (345) (296) Withdrawals from restricted escrow 122 233 Property improvements and replacements (649) (312) Net cash used in investing activities (872) (375) Cash flows from financing activities: Mortgage principal payments (274) (262) Repayment of mortgage notes payable -- (48,018) Proceeds from long-term borrowings -- 47,575 Loan costs (17) (1,412) Debt extinguishment costs -- (402) Distributions paid to partners -- (2,601) Net cash used in financing activities (291) (5,120) Net increase (decrease) in cash and cash equivalents 1,214 (2,929) Cash and cash equivalents at beginning of period 1,111 4,717 Cash and cash equivalents at end of period $2,325 $ 1,788 Supplemental information: Cash paid for interest $2,885 $ 3,139 See Accompanying Notes to Consolidated Financial Statements
e) CENTURY PROPERTIES GROWTH FUND XXII NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Century Properties Growth Fund XXII (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a California corporation, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in the annual report of the Partnership on Form 10-KSB for the year ended December 31, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 presentation. NOTE B - 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. Fox Partners IV, a California general partnership, is the general partner of the Partnership. The general partners of Fox Partners IV are: FCMC, Fox Realty Investors ("FRI"), a California general partnership, and Fox Associates 84, a California general partnership. Pursuant to a series of transactions which closed during 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the issued and outstanding shares of stock of FCMC, NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner of FRI, and 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 during the six month periods ended June 30, 1997 and 1996 (in thousands): For the Six Months Ended June 30, 1997 1996 Property management fees (included in operating expenses) $515 $501 Reimbursement for services of affiliates (included In general and administrative expenses) 78 122 For the period from January 19, 1996, to June 30, 1997, 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. Additionally, in connection with the refinancing of Wood Creek, Four Winds, and Plantation Creek (see "Note C"), Insignia Mortgage & Investment Company, an affiliate of the Managing General Partner, received a brokerage fee of $192,000 in January 1996. This amount is included in "Other Assets". On March 29, 1996, an affiliate of Insignia acquired the corporate general partners owning 1% of the subsidiary partnerships which own the Wood Creek Apartments, Four Winds Apartments, Plantation Creek Apartments, Hampton Greens Apartments, Stoney Creek Apartments, Cooper's Pointe Apartments, Copper Mill Apartments and Promontory Point Apartments. NOTE C - REFINANCING AND EXTRAORDINARY LOSS On January 17, 1996, the Partnership refinanced the mortgages encumbering Wood Creek, Four Winds, and Plantation Creek. The new mortgages carry a stated interest rate of 7.93% and are amortized over 30 years with balloon payments due on February 1, 2006. On June 14, 1996, the Partnership refinanced the mortgage encumbering Autumn Run. The new mortgage carried a stated interest rate of 8% through July 1, 1996, and a rate equal to 2.50% plus the LIBO Rate thereafter. The new mortgage matured November 15, 1996, and was refinanced at that time. The current mortgage carries a stated interest rate of 7.33% and matures November 1, 2003. Loan costs are being amortized over the lives of the loans. The refinancing of Wood Creek replaced indebtedness of $12,500,000 with a new mortgage in the amount of $12,900,000. Total capitalized loan costs were $318,000. The extinguishment of debt resulted in an extraordinary loss of $350,000, arising from prepayment penalties and the write-off of unamortized loan costs. Wood Creek was also required to pay a release price of $1,500,000 which was used to paydown the mortgage on Promontory Point. In connection with the refinancing, the Partnership was required to transfer all the assets and liabilities of Wood Creek Apartments to a newly formed subsidiary, Wood Creek CPGF 22, L.P. The refinancing of Four Winds replaced indebtedness of $10,410,000 with a new mortgage in the amount of $9,675,000. Total capitalized loan costs were $296,000. In connection with the refinancing, the Partnership was required to transfer all the assets and liabilities of Four Winds Apartments to a newly formed subsidiary, Four Winds CPGF 22, L.P. The refinancing of Plantation Creek replaced indebtedness of $13,045,000 with a new mortgage in the amount of $15,900,000. Total capitalized loan costs were $413,000. The extinguishment of debt resulted in an extraordinary loss of $131,000, arising from prepayment penalties and the write-off of unamortized loan costs. In connection with the refinancing, the Partnership was required to transfer all the assets and liabilities of Plantation Creek Apartments to a newly formed subsidiary, Plantation Creek CPGF 22, L.P. The refinancing of Autumn Run replaced indebtedness of $10,563,000 with a new mortgage in the amount of $9,100,000. Total capitalized loan costs through June 30, 1996, were $108,000. Additional loan costs of approximately $17,000 were paid during the six months ended June 30, 1997. NOTE D - DISTRIBUTIONS In January, 1996, the Partnership distributed $2,549,000 ($30.76 per limited partnership unit) to the limited partners and $52,000 to the general partner from proceeds from the sale of Monterey Village Apartments in August 1995. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment properties consist of nine apartment complexes. The following table sets forth the average occupancy of the properties for the six month periods ended June 30, 1997 and 1996: Average Occupancy Property 1997 1996 Cooper's Pointe Apartments North Charleston, South Carolina 96% 98% Copper Mill Apartments Richmond, Virginia 95% 95% Four Winds Apartments Overland Park, Kansas 93% 97% Autumn Run Apartments Naperville, Illinois 93% 91% Plantation Creek Apartments Atlanta, Georgia 91% 97% Wood Creek Apartments Mesa, Arizona 95% 96% Promontory Point Apartments Austin, Texas 89% 89% Hampton Greens Apartments Dallas, Texas 92% 95% Stoney Creek Apartments Dallas, Texas 94% 92% The Managing General Partner attributes the decrease in occupancy at Plantation Creek to rehabilitation projects and rent concessions at properties within the vicinity. The decrease in occupancy at Four Winds is attributed to a new apartment complex in the area as well as some residents purchasing houses. The Partnership's net income for the three and six month periods ended June 30, 1997, was approximately $174,000 and $431,000, respectively, compared to net loss of approximately $168,000 and $990,000, respectively, for the same periods of 1996. The increase in net income for the six months ended June 30, 1997 is partially attributable to the extraordinary loss on early extinguishment of debt in 1996 from the refinancing of Plantation Creek and Wood Creek (see "Item 1. Note C - Refinancing and Extraordinary Loss"). The increase in net income is also attributable to an increase in other income and decreases in interest expense and general and administrative expense. The increase in other income is due to increases in corporate units, late charges, and lease cancellation fees at several of the Partnership's investment properties. The decrease in interest expense is due to a lower interest rate on the refinanced mortgages of Autumn Run, Wood Creek, and Four Winds, which occurred in 1996, as well as a pay-down of $1,500,000 on the mortgage encumbering Promontory Point. As noted in "Item 1. Note B - 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. The decrease in general and administrative expense during the three and six month periods ended June 30, 1997, is directly attributable to the transition and relocation of the administrative offices during the first quarter of 1996. Included in operating expense is approximately $163,000 of major repairs and maintenance comprised of exterior painting, major landscaping, exterior building repairs, construction services and pool repairs for the six months ended June 30, 1997. For the six months ended June 30, 1996, $193,000 of major repairs and maintenance is included in operating expense comprised of parking lot repairs, exterior building repairs and major landscaping. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. 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. At June 30, 1997, the Partnership had unrestricted cash of approximately $2,325,000 compared to approximately $1,788,000 at June 30, 1996. Net cash provided by operating activities decreased primarily as a result of the timing of payments for property taxes, accounts payable and other liabilities. Net cash used in investing activities increased due to an increase in property improvements and replacements and a reduction in withdrawals from restricted escrows. Net cash used in financing activities decreased due to the Partnership obtaining new financing on four of its properties during the six month period ended June 30, 1996. In addition, the Partnership paid a distribution of approximately $2,601,000 to its partners during the first half of 1996. An affiliate of the Managing General Partner has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. The Partnership has no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. 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 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 of approximately $72,890,000 is amortized over varying periods with balloon payments ranging from December 1999, to February 2006. Future cash distributions will depend on the levels of cash generated from operations, property sales, and the availability of cash reserves. During the first six months of 1996, the Partnership distributed $2,549,000 ($30.76 per limited partnership unit) to the limited partners and $52,000 to the general partner from the proceeds received from the sale of the Partnership's Monterey Village property. No distributions have been made in 1997. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed during the quarter ended June 30, 1997. 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 GROWTH FUND XXII By: FOX PARTNERS IV Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION, Managing General Partner By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By: /s/Ronald Uretta Ronald Uretta Vice President and Treasurer Date: August 4, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Growth Fund XXII 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000740156 CENTURY PROPERTIES GROWTH FUND 1,000 6-MOS DEC-31-1997 JUN-30-1997 2,325 0 0 0 0 0 130,256 50,099 87,137 0 72,890 0 0 0 12,063 87,137 0 10,337 0 0 9,906 0 2,986 0 0 431 0 0 0 431 4.59 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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