-----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, S7mTJALoCRn3y26tl4fm+2SIWjJZkNMyWNVVMrDf7OIzrfwTZU8DDYezLtdCEEkA QWbNsNEenxzpCPr40Uyw2w== 0000764543-96-000001.txt : 19960816 0000764543-96-000001.hdr.sgml : 19960816 ACCESSION NUMBER: 0000764543-96-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96612065 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 (As last amended in Rel. No. 312905, eff. 4/26/93.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 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) (Zip Code) Issuer's telephone number (864) 239-1000 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 - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) CENTURY PROPERTIES GROWTH FUND XXII CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands) June 30, 1996
Assets Cash and cash equivalents $ 1,788 Restricted cash 500 Other assets 1,411 Investment properties: Land $ 14,396 Buildings and related personal property 114,310 128,706 Less accumulated depreciation (46,244) 82,462 Deferred financing costs, net 1,841 $ 88,002 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable and accrued expenses $ 2,416 Mortgages payables 73,405 Partners' Capital (Deficit): Limited partners $ 19,523 General partners (7,342) 12,181 $ 88,002 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, 1996 1995 1996 1995 Revenues: Rental income $ 4,778 $ 5,071 $ 9,627 $ 10,141 Other income 283 205 477 360 Total revenues 5,061 5,276 10,104 10,501 Expenses: Operating 2,516 2,653 5,021 5,098 Interest 1,635 1,889 3,462 3,815 Depreciation 959 1,030 1,901 2,059 General and administrative 119 59 229 120 Total expenses 5,229 5,631 10,613 11,092 Loss before extraordinary item (168) (355) (509) (591) Extraordinary loss on extinguishment of debt -- -- (481) -- Net loss $ (168) $ (355) $ (990) $ (591) Net loss allocated to general partners $ (20) $ (42) $ (117) $ (70) Net loss allocated to limited partners (148) (313) (873) (521) Net loss $ (168) $ (355) $ (990) $ (591) Net loss per limited partnership unit: Net loss before extraordinary loss $ (1.79) $ (3.78) $ (5.42) $ (6.29) Extraordinary loss -- -- (5.12) -- Net loss per limited partnership unit $ (1.79) $ (3.78) $ (10.54) $ (6.29) Distribution per limited partership unit $ -- $ -- $ 30.75 $ -- See Accompanying Notes to Consolidated Financial Statements
c) CENTURY PROPERTIES GROWTH FUND XXII CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited General Limited Partnership Partners' Partners' Total Units Deficit Capital Capital Partners' (deficit) capital at December 31, 1995 82,848 $ (7,173) $ 22,945 $ 15,772 Net loss for the six months ended June 30, 1996 -- (117) (873) (990) Distributions to partners -- (52) (2,549) (2,601) Partners' (deficit) capital at June 30, 1996 82,848 $ (7,342) $ 19,523 $ 12,181 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, 1996 1995 Operating activities: Net loss $ (990) $ (591) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation 1,901 2,059 Amortization of mortgage costs 136 72 Extraordinary loss on refinancing 481 -- Change in account: Other assets (93) (687) Accounts payable and accrued expenses 1,068 857 Net cash provided by operating activities 2,503 1,710 Cash flows from investing activities: Property improvements and replacements (312) (252) Net cash used in investing activities (312) (252) Cash flows from financing activities: Mortgage principal payments (262) (313) Repayment of mortgage notes payable (48,018) -- Proceeds from long-term borrowings 47,575 -- Loan costs (1,412) (13) Debt extinguishment costs (402) -- Distributions paid to partners (2,601) -- Net cash used in financing activities (5,120) (326) Net (decrease) increase in cash and cash equivalents (2,929) 1,132 Cash and cash equivalents at beginning of period 4,717 475 Cash and cash equivalents at end of period $ 1,788 $ 1,607 Supplemental information: Interest paid $ 3,139 $ 3,492 See Accompanying Notes to Consolidated Financial Statements
e) CENTURY PROPERTIES GROWTH FUND XXII NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A - Basis of Presentation The accompanying unaudited financial statements 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"), 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, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ended December 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - Transactions with Affiliated Parties Century Properties Growth Fund XXII (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. The following transactions with affiliates of Insignia Financial Group, Inc.("Insignia"), National Property Investors, Inc.("NPI, Inc."), and affiliates of NPI, Inc. were charged to expense in 1996 and 1995:
For the Six Months Ended June 30, 1996 1995 Property management fees (included in operating expenses) $501,000 $510,000 Reimbursement for services of affiliates (included in general and administrative expenses) 125,000 80,000
For the period from January 19, 1996, to June 30, 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. 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 of the Partnership, received $192,000 in January 1996. Fox Partners IV, a California general partnership, is the general partner of the Partnership. The general partners of Fox Partners IV are: FCMC, a California corporation, 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 the first half of 1996, affiliates of Insignia acquired (i) control of NPI Equity Investments II, Inc., the managing general partner of FRI, 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 Investments II, Inc. and FCMC. 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 carries a stated interest rate of 8% through July 1, 1996, and a rate equal to 2.50% plus the LIB0 Rate thereafter. The new mortgage matures October 1, 1996. 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 early 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. 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. 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 early extinguishment of debt resulted in an extraordinary loss of $131,000, arising from prepayment penalties and the write-off of unamortized loan costs. 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 were $108,000. 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 months ended June 30, 1996 and 1995: Average Occupancy Property 1996 1995 Cooper's Pointe Apartments North Charleston, South Carolina 98% 93% Copper Mill Apartments Richmond, Virginia 95% 97% Four Winds Apartments Overland Park, Kansas 97% 97% Autumn Run Apartments Naperville, Illinois 91% 96% Plantation Creek Apartments Atlanta, Georgia 97% 95% Wood Creek Apartments Mesa, Arizona 96% 97% Promontory Point Apartments Austin, Texas 89% 98% Hampton Greens Apartments Dallas, Texas 95% 98% Stoney Creek Apartments Dallas, Texas 92% 95% The Managing General Partner attributes the increase in occupancy at Cooper's Pointe to strong marketing efforts by the property management personnel. The decrease in occupancy at Autumn Run is attributable to residents buying homes and relocating due to job transfers. The decrease in occupancy at Promontory Point is attributable to residents buying homes. In addition, new growth in Austin is taking place in the south area of town and this property is located in the north area. The Partnership's net loss for the three and six month periods ended June 30, 1996, was approximately $168,000 and $990,000. The Partnership reported losses of approximately $355,000 and $591,000 for the corresponding periods of 1995. The increase in the net loss for the six month period is primarily attributable to the loss on early extinguishment of debt in 1996 due to the refinancing of Wood Creek and Plantation Creek as discussed in "Item 1, Note C - Refinancing and Extraordinary Loss." Also contributing to the increase in net loss is an increase in general and administrative expense and a decrease in rental revenue. The increase in general and administrative expense is due to an increase in the reimbursement for services of affiliates related to the transition of the Partnership administration function during the six months ended June 30, 1996. These cost reimbursements are expected to decrease for the remainder of the year. General and administrative expenses also increased during the six months ended June 30, 1996, due to additional professional fees, including audit and legal. The decrease in rental revenue is due to the sale of Monterey Village Apartments in August 1995. This decrease in rental revenue was partially offset by increased rental rates at several of the Partnership's properties. Offsetting the above changes is an increase in other income and a decrease in interest expense. The increase in other income is due to the additional cash invested prior to the first quarter distribution to the partners from proceeds from the sale of Monterey Village. The decrease in interest expense is due to the refinancings as discussed in "Item 1, Note C - Refinancing and Extraordinary Loss." 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 rentals 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, 1996, the Partnership had unrestricted cash of $1,788,000 as compared to $1,607,000 at June 30, 1995. Net cash provided by operating activities increased primarily as a result of the change in accounts receivable due to the timing of receipts and the change in escrow funds due to the new financing agreements. The increase in cash used in investing activities is due to an increase in property replacements. The increase in cash used in financing activities is due to the Partnership obtaining new financing on four of its properties in 1996. In addition, the Partnership paid a distribution of approximately $2,601,000 to its partners in the first quarter 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 property 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 $73,405,000 is amortized over varying periods with balloon payments ranging from October 1, 1996, to February 1, 2006. The Partnership is attempting to obtain new financing for Autumn Run which has debt maturing October 1, 1996. Future cash distributions will depend on the levels of cash generated from operations, a property sale, and the availability of cash reserves. No cash distributions were paid in 1995. During the first three months of 1996, the Partnership distributed $2,549,000 to the limited partners and $52,000 to the general partners from the proceeds received from the sale of the Partnership's Monterey Village property. At this time, it appears that the original investment objective of capital growth will not be attained and that investors will not receive a return of all of their invested capital. 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, 1996. SIGNATURE In accordance with the requirement of the Exchange Act, the Registrant 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 Principal Financial Officer and Principal Accounting Officer Date: August 14, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Growth Fund XXII 1996 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000740156 CENTURY PROPERTIES GROWTH FUND XXII 1,000 6-MOS DEC-31-1996 JUN-30-1996 1,788 0 0 0 0 0 128,706 (46,244) 88,002 0 73,405 0 0 0 12,181 88,002 0 10,104 0 0 10,613 0 3,462 (509) 0 0 0 (481) 0 (990) (10.54) 0 The Registrant has an unclassified balance sheet. Multiplier is 1.
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