-----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, JQDSDCkTNsxMn5omdYwkLTNFAmpIiwrIsBmj1c4y5Kh/nnPET8sJnHlj13PCuvzI SESzrrJoJZbgtPGmBoA4ww== 0000711642-97-000014.txt : 19970812 0000711642-97-000014.hdr.sgml : 19970812 ACCESSION NUMBER: 0000711642-97-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PENSION INCOME FUND XXIII CENTRAL INDEX KEY: 0000764543 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942963120 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 002-96389 FILM NUMBER: 97655895 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 DR NW CITY: ATLANTA STATE: GA ZIP: 30328 10-Q 1 FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES 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 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 0-14528 CENTURY PENSION INCOME FUND XXIII (Exact name of registrant as specified in its charter) California 94-2963120 (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) (864) 239-1000 (Registrant's telephone number, including area code) 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 PENSION INCOME FUND XXIII CONSOLIDATED BALANCE SHEETS (in thousands, except unit data) June 30, December 31, 1997 1996 (Unaudited) (Note) Assets Cash and cash equivalents $ 8,907 $ 8,289 Restricted cash -- 80 Receivables and other assets, net 1,718 2,011 Deferred charges 1,533 1,643 Mortgage loan receivable 1,137 1,137 Investment properties: Land 16,384 18,165 Buildings and related personal property 63,929 69,172 80,313 87,337 Less accumulated depreciation (21,180) (21,604) 59,133 65,733 $ 72,428 $ 78,893 Liabilities and Partners' Deficit Liabilities Deferred income, accrued expenses and other liabilities $ 1,232 $ 1,189 Accrued interest - promissory notes 1,048 1,048 Deferred interest - notes payable 149 1,499 Notes payable, $10,100 in default at December 31, 1996, (Note C) 6,856 16,956 Non-recourse promissory notes: Principal 41,939 41,939 Deferred interest payable 33,193 31,810 Minority interest in consolidated joint ventures 8,021 7,844 Partners' Deficit General partner's (1,199) (2,206) Limited partners' (95,789 units issued and outstanding at June 30, 1997 and December 31, 1996) (18,811) (21,186) (20,010) (23,392) $ 72,428 $ 78,893 Note: The balance sheet at December 31, 1996, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. See Accompanying Notes to Consolidated Financial Statements b) CENTURY PENSION INCOME FUND XXIII 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 $ 2,575 $ 2,692 $ 5,339 $ 5,527 Interest income on mortgage loans 21 21 41 41 Other income 133 132 267 271 Total revenues 2,729 2,845 5,647 5,839 Expenses: Interest to promissory note holders 1,215 1,215 2,431 2,431 Amortization of sales commissions and organizational costs 105 103 210 207 Operating 1,150 1,292 2,407 2,396 Depreciation 585 572 1,206 1,215 Interest on notes payable 207 433 639 865 General and administrative 264 251 511 546 Total expenses 3,526 3,866 7,404 7,660 Loss before minority interest in joint ventures' operations and extraordinary gain on foreclosure (797) (1,021) (1,757) (1,821) Minority interest in joint ventures' operations (90) (92) (177) (156) Loss before extraordinary gain (887) (1,113) (1,934) (1,977) Extraordinary gain on foreclosure -- -- 5,337 -- Net (loss) income $ (887) $ (1,113) $ 3,403 $ (1,977) Net (loss) income allocated to general partner $ (18) $ (22) $ 1,028 $ (40) Net (loss) income allocated to limited partners (869) (1,091) 2,375 (1,937) $ (887) $ (1,113) $ 3,403 $ (1,977) Net (loss) income per limited partnership unit: Loss before extraordinary gain $ (9.07) $ (11.39) $ (19.78) $ (20.23) Extraordinary gain on foreclosure -- -- 44.58 -- Net (loss) income per Limited Partnership Unit $ (9.07) $ (11.39) $ 24.80 $ (20.23) See Accompanying Notes to Consolidated Financial Statements
c) CENTURY PENSION INCOME FUND XXIII CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners' Total Original capital contributions 95,789 $ 958 $ 47,894 $ 48,852 Partners' deficit at December 31, 1995 95,789 $(2,089) $(17,579) $(19,668) Distributions to partners -- (21) -- (21) Net loss for the six months ended June 30, 1996 -- (40) (1,937) (1,977) Partners' deficit at June 30, 1996 95,789 $(2,150) $(19,516) $(21,666) Partners' deficit at December 31, 1996 95,789 $(2,206) $(21,186) $(23,392) Distributions to partners -- (21) -- (21) Net income for the six months ended June 30, 1997 -- 1,028 2,375 3,403 Partners' deficit at June 30, 1997 95,789 $(1,199) $(18,811) $(20,010) See Accompanying Notes to Consolidated Financial Statements
d) CENTURY PENSION INCOME FUND XXIII CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net income (loss) $ 3,403 $ (1,977) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 1,206 1,215 Amortization of deferred charges 326 337 Minority interest in joint ventures' operations 177 156 Deferred interest on non-recourse promissory notes 1,383 1,384 Extraordinary gain on foreclosure (5,337) -- Casualty gain (37) -- Change in accounts: Restricted cash 13 158 Receivables and other assets (170) (414) Deferred charges (243) (111) Deferred income, accrued expenses and other liabilities (51) 469 Deferred interest - notes payable 241 303 Net cash provided by operating activities 911 1,520 Cash flows from investing activities: Property replacements and improvements (272) (511) Net cash used in investing activities (272) (511) Cash flows from financing activities: Joint venture partner contributions -- 38 Cash distributions to general partner (21) (21) Net cash (used in) provided by financing activities (21) 17 Net increase in cash and cash equivalents 618 1,026 Cash and cash equivalents at beginning of period 8,289 6,378 Cash and cash equivalents at end of period $ 8,907 $ 7,404 Supplemental disclosure of cash flow information: Cash paid for interest - notes payable $ 398 $ 562 Cash paid for interest - non-recourse promissory notes $ 1,048 $ 1,048 See Accompanying Notes to Consolidated Financial Statements
CENTURY PENSION INCOME FUND XXIII SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES Foreclosure: During the six months ended June 30, 1997, Sunnymead Towne Center was foreclosed upon by the lender. In connection with this foreclosure, approximately $67,000 in cash was transferred to the lender as partial settlement on the outstanding debt. This cash was previously classified as restricted cash on the Partnership's balance sheet. In addition, the following balance sheet accounts were adjusted by the non-cash amounts noted below (in thousands): 1997 Receivables and deposits $ (596) Other assets (27) Investment properties (5,713) Tenant security deposit liabilities 42 Accrued interest on notes payable 1,591 Other liabilities 7 Notes payable 10,100 Casualty Loss: The Partnership recorded a net casualty gain during the six months ended June 30, 1997, resulting from a fire at The Enclaves which destroyed six apartment units. The damage resulted in a net gain of approximately $37,000. The following balance sheet accounts were adjusted by the non-cash amounts noted below (in thousands): 1997 Receivables and other assets $133 Building and related personal property 143 Other liabilities (143) e) CENTURY PENSION INCOME FUND XXIII NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Century Pension Income Fund XXIII (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. 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 ending December 31, 1997. 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, 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. The general partner of the Partnership is Fox Partners V, a California general partnership, whose general partners are FCMC and Fox Realty Investors ("FRI"), a California general partnership. Pursuant to a series of transactions which closed during the first half of 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): 1997 1996 Property management fees (included in operating expenses) $ 76 $ 58 Reimbursement for services of affiliates (included in general and administrative expenses) 98 148 Partnership management fee (included in general and administrative expenses) 55 55 Affiliates of the Managing General Partner performed property management services for The Enclaves during 1996 and 1997. Effective May 1, 1996, an affiliate of Insignia began performing property management services for Coral Palm Plaza. 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. The Managing General Partner received cash distributions totaling approximately $21,000 during each of the six month periods ended June 30, 1997 and 1996. NOTE C - FORECLOSURE OF SUNNYMEAD'S TOWNE SHOPPING CENTER On March 27, 1997, the Sunnymead Towne Shopping Center ("Sunnymead") located in Moreno Valley, California, was foreclosed on. Sunnymead had a significant tenant, which occupied 98,000 square feet, vacate in 1995. During February 1996, another major tenant vacated 11,000 square feet, leaving the property approximately 25% physically occupied. Effective March 1, 1996, the Partnership ceased making debt service payments, as the value of Sunnymead was estimated at less than the debt. The property was placed in receivership on May 1, 1996. In 1995, a $2,900,000 provision for impairment of value was recorded on the Sunnymead property. The Partnership determined that, based on economic conditions at the time as well as projected future operational cash flows, the decline in value was other than temporary and recovery of the carrying value was not likely. Accordingly, the property's carrying value was reduced to an amount equal to its estimated fair value. In the Managing General Partner's opinion, it was not in the Partnership's best interest to contest the foreclosure action. As a result of the foreclosure, the Partnership recorded a gain on foreclosure of approximately $5,337,000. Prior to the foreclosure, the outstanding debt on the property was a note payable with a principal balance of $10,100,000 and accrued interest of approximately $1,591,000. NOTE D - RESTRICTED CASH Restricted cash at December 31, 1996 represents cash partially securing the Sunnymead note payable, which was restricted as to its use pursuant to a court approved reorganization plan and the modified note agreements (see "Note C"). ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's remaining investment properties consist of one apartment complex, four business parks and two shopping centers, as well as three business parks and a shopping center owned by two consolidated joint ventures between the Partnership and an affiliated partnership. The following table sets forth the average physical occupancy for the six months ended June 30, 1997 and 1996: Average Occupancy Property 1997 1996 Commerce Plaza 100% 96% Tampa, Florida Regency Centre 95% 97% Lexington, Kentucky Highland Park Commerce 89% 95% Center - Phase II Charlotte, North Carolina Interrich Plaza 64% 64% Richardson, Texas Centre Stage Shopping Center 99% 98% Norcross, Georgia The Enclaves 92% 96% Atlanta, Georgia Medtronics 100% 100% Irvine, California Coral Palm Plaza Joint Venture: Coral Palm Plaza 74% 74% Coral Springs, Florida Minneapolis Business Parks Joint Venture: Alpha Business Center 91% 92% Bloomington, Minnesota Plymouth Service Center 100% 100% Plymouth, Minnesota Westpoint Business Center 97% 96% Plymouth, Minnesota The Managing General Partner attributes the increase in occupancy at Commerce Plaza to the leasing of the remaining available space to a new tenant during the second quarter of 1996. Occupancy at Highland Park decreased as a result of two tenants vacating the property in 1996. Occupancy at The Enclaves has decreased as a result of upgrades and concessions offered at competing apartment complexes. The Partnership's net income for the six months ended June 30, 1997, was approximately $3,403,000 compared to a net loss of approximately $1,977,000 for the corresponding period of 1996. The Partnership's net loss for the three months ended June 30, 1997, was approximately $887,000 compared to a net loss of approximately $1,113,000 for the corresponding period of 1996. The increase in net income for the six months ended June 30, 1997, is primarily attributable to the gain on foreclosure of Sunnymead Towne Shopping Center during the first quarter of 1997. The Partnership recognized an extraordinary gain on foreclosure of approximately $5,337,000. The Partnership's loss before extraordinary gain for the three and six month periods ended June 30, 1997 was approximately $1,934,000 compared to approximately $1,977,000 for the corresponding period of 1996. The decrease in net loss before extraordinary gain for the three and six month periods ended June 30, 1997 was primarily due to a decrease in interest on notes payable. The decrease in interest on notes payable is a result of the foreclosure on the Sunnymead Towne Center property as discussed above. This decrease in interest on notes payable was partially offset by a decrease in rental income, which was also the result of the Sunnymead Towne Center foreclosure. Despite the foreclosure on the Sunnymead Towne Center operating expenses increased due to increases in these expenses at The Enclaves and Medtronics. The increase in operating expense at The Enclaves is the result of increased sewer expenses, business license and permits, interior and exterior building improvements and tax expenses. Tax expenses increased due to an increased assessment from the taxing authorities. 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 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. At June 30, 1997, the Partnership had unrestricted cash of approximately $8,907,000 compared to approximately $7,404,000 at June 30, 1996. Net cash provided by operating activities decreased primarily as a result of decreases in tax accruals and interest accruals on notes payable. Also contributing to the decrease in net cash provided by operating activities is an increase in cash used for other liabilities. Net cash used in investing activities decreased due to decreased property improvements and replacements in the second quarter of 1997. Net cash used in financing activities increased due to a contribution from the minority interest in the joint venture 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 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 $6,856,000, requires interest only payments with a balloon payment due in 2001. Also, the Partnership's Non- Recourse Promissory Notes of approximately $75,132,000, including deferred interest of approximately $33,193,000, require minimum interest payments of 5% on principal per year and mature on February 15, 1999, at which time the Partnership will have to extend the due dates of these notes, find replacement funding, or sell properties. Future cash distributions will depend on the levels of cash generated from operations and the availability of cash reserves. No cash distributions to the limited partners were made in 1996 or during the six months ended June 30, 1997. Currently, the Managing General Partner is evaluating the feasibility of a distribution from cash reserves in 1997. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: 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. SIGNATURES 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 PENSION INCOME FUND XXIII By: FOX PARTNERS V, 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 By: /s/Ronald Uretta Ronald Uretta Vice President and Treasurer Date: August 11, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Century Pension Income Fund XXII 1997 Second Quarter 10-Q and is qualified in its entirety by reference to such 10-Q filing. 0000764543 CENTURY PENSION INCOME FUND XXIII 1,000 6-MOS DEC-31-1997 JUN-30-1997 8,907 0 1,718 0 0 0 80,313 (21,180) 72,428 0 48,795 0 0 0 (20,010) 72,428 0 5,647 0 0 7,404 0 639 0 0 0 0 5,337 0 3,403 24.80 0 Registrant has an unclassified balance sheet. Multiplier is 1.
-----END PRIVACY-ENHANCED MESSAGE-----