-----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, GUabCs94dtpApzWe23d/HhhA8TllkYb3HlHhLkPPrAEvmncjH+77waSsgxGCtvDm Jyge7sFG5MURuAIXmOjRXg== 0000839705-96-000008.txt : 19960517 0000839705-96-000008.hdr.sgml : 19960517 ACCESSION NUMBER: 0000839705-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 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: 96566444 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 (As last amended in Rel. No. 312905, eff. 4/26/93.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 For the quarterly period ended March 31, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... (Amended by Exchange Act Rel. No. 312905, eff. 4/26/93.) 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 29615 (Address of principal executive offices) (Zip Code) Registrant'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 PENSION INCOME FUND XXIII CONSOLIDATED BALANCE SHEETS (in thousands, except unit data) March 31, December 31, 1996 1995 (Unaudited) (Note) Assets Cash and cash equivalents $ 6,425 $ 6,378 Restricted cash -- 158 Other assets 1,379 894 Mortgage loans receivable, net 1,137 1,137 Deferred sales commissions, net 758 823 Deferred organization expenses, net 451 489 Deferred costs, net 835 857 Investment properties: Land 18,436 18,436 Buildings and related personal 68,404 68,076 86,840 86,512 Less accumulated depreciation (19,737) (19,094) 67,103 67,418 $ 78,088 $ 78,154 Liabilities and Partners' Deficit Liabilities Accrued expenses and other liabilities $ 1,217 $ 738 Accrued interest - notes payable 784 714 Notes payable 16,956 16,956 Non-recourse promissory notes: Principal 41,939 41,939 Deferred interest payable 30,260 30,092 Minority interest in consolidated joint ventures 7,485 7,383 Partners' Deficit General partner (2,127) (2,089) Limited partners (95,789 units issued and outstanding at March 31, 1996 and December 31, 1995) (18,426) (17,579) (20,553) (19,668) $ 78,088 $ 78,154 Note: The balance sheet at December 31, 1995, 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 per unit data)
Three Months Ended March 31, 1996 1995 Revenues: Rental $ 2,862 $ 2,928 Interest income on mortgage loans 20 20 Interest income 112 66 Total revenues 2,994 3,014 Expenses: Interest to promissory note holders 1,216 1,216 Amortization 166 169 Operating 1,042 996 Depreciation 643 629 Interest 432 408 General and administrative 295 256 Provision for impairment of value -- 978 Total expenses 3,794 4,652 Loss before minority interest in joint ventures' operations (800) (1,638) Minority interest in joint ventures (64) (96) Net loss $ (864) $(1,734) Net loss allocated to general partners $ (17) $ (35) Net loss allocated to limited partners (847) (1,699) $ (864) $(1,725) Net loss per Limited Partner Unit $ (8.84) $(17.74) See Accompanying Notes to Consolidated Financial Statements
c) CENTURY PENSION INCOME FUND XXIII STATEMENT OF PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners' 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 -- (21) -- (21) Net loss for the three months ended March 31, 1996 -- (17) (847) (864) Partners' deficit at March 31, 1996 95,789 $(2,127) $ (18,426) $ (20,553) See Accompanying Notes to Consolidated Financial Statements
d) CENTURY PENSION INCOME FUND XXIII CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 Operating activities: Net loss $ (864) $ (1,734) Adjustments to reconcile net loss to cash provided by operating activities: Depreciation 643 629 Amortization 166 169 Provision for impairment of value -- 978 Minority interest in joint ventures 64 96 Deferred interest added to note payable principal 70 5 Deferred costs paid -- (43) Deferred interest on non-recourse promissory notes 692 692 Change in accounts: Receivables and other assets (526) 340 Accrued expenses and other liabilities (45) (123) Net cash provided by operating activities 200 1,009 Investing activities: Property replacements and improvements (328) (114) Restricted cash 158 26 Net cash used in investing activities (170) (88) Financing activities: Contribution from minority interest in joint venture 38 -- Cash distribution to general partner (21) (21) Net cash provided by (used in) financing activities 17 (21) Increase in cash and cash equivalents 47 900 Cash and cash equivalents at beginning of period 6,378 5,202 Cash and cash equivalents at end of period $ 6,425 $ 6,102 Supplemental disclosure of cash flow information: Cash paid for interest - notes payable $ 164 $ 400 Cash paid for interest - non-recourse promissory notes $ 1,048 $ 1,048 Supplemental Disclosure of non-cash investing and financing activities: Deferred interest added to note payable principal $ -- $ 3 See Accompanying Notes to Consolidated Financial Statements
e) CENTURY PENSION INCOME FUND XXIII NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements of Century Properties 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 NPI Equity Investment II, Inc. ("NPI Equity" 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 month period ended March 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending 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 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 Insignia Financial Group, Inc. ("Insignia"), National Property Investors, Inc. ("NPI Inc."), and affiliates were charged to expense in 1996 and 1995:
For the Three Months Ended March 31, 1996 1995 (in thousands) Property management fees (included in operating expense) $ 19 $ 25 Reimbursement for services of affiliates (included in general and administrative expenses) 41 24 Services relating to successful real estate tax appeals (included in operating expenses) -- 16 Partnership management fee (included in general and administrative expenses) 55 55
For the period from January 19, 1996, to March 31, 1996, the Partnership insured its property 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. An affiliate of the general partner is entitled to receive a partnership management fee in an amount equal to 10 percent of cash available for distribution before interest payments to the Promissory Note Holders. The general partner received cash distributions totaling $21,000 which is equal to 2 percent of interest paid to Promissory Note holders, during the three month periods ended March 31, 1996 and 1995. The general partner of the Partnership is Fox Partners V, a California general partnership, whose general partners are Fox Capital Management Corporation ("FCMC"), a California corporation and Fox Realty Investors ("FRI"), a California general partnership. On December 6, 1993, the shareholders of the FCMC entered into a Voting Trust Agreement with NPI Equity II pursuant to which NPI Equity II was granted the right to vote 100% of the outstanding stock of FCMC and NPI Equity II became the Managing General Partner of FRI. As a result, NPI Equity II became responsible for the operation and management of the business and affairs of the Partnership and the other investment partnerships originally sponsored by FCMC and/or FRI. NPI Equity is a wholly-owned subsidiary of NPI, Inc. The shareholders of FCMC and the partners in FRI retained indirect economic interests in the Partnership and such other investment limited partnerships, but have ceased to be responsible for the operation and management of the Partnership and such other partnerships. On August 17, 1995, the stockholders of NPI, Inc. entered into an agreement to sell to IFGP corporation, a Delaware corporation, an affiliate of Insignia, a Delaware corporation, all of the issued and outstanding common stock of NPI, Inc., for an aggregate purchase price of $1,000,000. The closing of the transactions contemplated by the above mentioned agreement (the "Closing") occurred on January 19, 1996. Upon the Closing, the officers and directors of NPI, Inc. and the Managing General partner resigned and IFGP Corporation caused new officers and directors of each of those entities to be elected. Note C - Subsequent Event The Sunnymead Towne Shopping Center ("Sunnymead") located in Moreno Valley, California, 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 and does not intend to make any future payments as the value of Sunnymead is less than the debt. At March 31, 1996, the note had a principal balance of approximately $10,100,000 with accrued interest of approximately $675,000. The lender has notified the Partnership of its intent to foreclose on the property. The Partnership does not plan to challenge the foreclosure proceedings, which are expected to be concluded during the three months ended September 30, 1996. The property was placed in receivership on May 1, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of one apartment complex, three business parks and three shopping centers, as well as three business parks and a shopping center owned by two consolidated joint ventures between the Registrant and an affiliated partnership. The following table sets forth the average occupancy for the three months ended March 31, 1996 and 1995: Average Occupancy Property 1996 1995 Commerce Plaza 92% 100% Tampa, Florida Regency Centre 99% 99% Lexington, Kentucky Highland Park Commerce Center - Phase III 97% 92% Charlotte, North Carolina Interrich Plaza 64% 98% Richardson, Texas Centre Stage Shopping Center 96% 96% Norcross, Georgia Sunnymead Towne Center (1) 83% 91% Moreno Valley, California The Enclaves 95% 96% Atlanta, Georgia Coral Palm Plaza Joint Venture: Coral Palm Plaza 76% 68% Coral Springs, Florida Minneapolis Business Parks Joint Venture: Alpha Business Center 93% 95% Bloomington, Minnesota Plymouth Service Center 100% 100% Plymouth, Minnesota Westpoint Business Center 96% 91% Plymouth, Minnesota (1) Vacated tenant, which previously occupied 98,000 square feet, continues to make lease payments. Property is physically 25 percent occupied at March 31, 1996. Occupancy at Commerce Plaza declined due to a major tenant's reduction of its leased space during the second quarter of 1995. Occupancy at Interrich Plaza declined due to a major tenant vacating its space during the second quarter of 1995. Occupancy at Coral Palm Plaza increased due to the Partnership's ability to re-lease space vacated by a lease buyout from a major tenant in December 1994. Occupancy at Sunnymead Town Center has decreased due to tenants vacating their space and poor economic conditions in the local area. Occupancy at Westpoint Business Center increased due to the execution of new leases and lease renewals during the second quarter of 1995. Occupancy at Highland Park Commerce Center increased due to the execution of new leases and lease renewals during the third quarter of 1995. The Partnership's net loss for the three months ended March 31, 1996, was approximately $864,000 versus a net loss of approximately $1,734,000 for the same period of 1995. The decrease in the net loss is attributable to an increase in interest income and a decrease in the provision for impairment of value expense. The increase in interest income is due to an increase in cash reserves as compared to the first quarter of 1995. The provision for impairment of value expense decreased due to the write-down in the three months ended March 31, 1995. Partially offsetting the decrease in net loss was an increase in general and administrative expense due to increased costs associated with the operation of two partnership administration offices and the relocation of the partnership administration offices during the three months ended March 31, 1996. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of its investment property 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 March 31, 1996, the Partnership had unrestricted cash of $6,425,000 as compared to $6,102,000 at March 31, 1995. Net cash provided by operating activities decreased primarily as a result of the increase in receivables and other assets. Receivables and other assets increased due to an increase in tenant reimbursements, receivables and tax escrows. Net cash used in investing activities increased due to increased property replacements and improvements. Net cash provided by financing activities increased due to a contribution from the minority interest in the joint venture. The Sunnymead Towne Shopping Center ("Sunnymead") located in Moreno Valley, California, 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 and does not intend to make any future payments as the value of Sunnymead is less than the debt. At March 31, 1996, the note had a principal balance of approximately $10,100,000 with accrued interest of approximately $675,000. The lender has notified the Partnership of its intent to foreclose on the property. The Partnership does not plan to challenge the foreclosure proceedings, which are expected to be concluded during the three months ended September 30, 1996. The property was placed in receivership on May 1, 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 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 $6,856,000, excluding the Sunnymead indebtedness, requires interest only payments with a balloon payment due in 2001. Also, the Partnership's Non-Recourse Promissory Notes of $72,199,000, including deferred interest of $30,260,000, require minimum interest payments of 5% on principal per year and mature on February 15, 1999. Future cash distributions will depend on the levels of cash generated from operations, property sales, and the availability of cash reserves. Cash distributions totaling approximately $21,000, which were equal to 2 percent of interest paid to Promissory Note holders, were paid to the general partner during the three months ended March 31, 1996 and 1995. 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 their invested capital. 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: A Form 8-K dated January 19, 1996, was filed reporting the change in control of the registrant. 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, A California Limited Partnership By: FOX PARTNERS V Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION, A General Partner /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director /s/Ronald Uretta Ronald Uretta Principal Financial Officer and Principal Accounting Officer Date: May 15, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Century Pension Income Fund XXIII 1996 First Quarter 10-Q and is qualified in its entirety by reference to such 10-Q filing. 0000764543 CENTURY PENSION INCOME FUND XXIII 1,000 3-MOS DEC-31-1996 MAR-31-1996 6,425 0 0 0 0 0 86,840 19,737 78,088 0 58,895 0 0 0 (20,553) 78,088 2,994 0 0 0 3,794 0 1,648 0 0 0 0 0 0 (864) (8.84) 0 The Partnership has an unclassified balance sheet.
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