-----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, QIyDlvwbsZNyBNVliMVe/xEyXOiijJ/J/L5cpSk/NyJbT5K2ihSl6A77kHNi57l8 FO04PFtzL4UlG4FXrv0GxQ== 0000720460-98-000009.txt : 19980813 0000720460-98-000009.hdr.sgml : 19980813 ACCESSION NUMBER: 0000720460-98-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980812 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PENSION INCOME FUND XXIV CENTRAL INDEX KEY: 0000780590 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942984976 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-15710 FILM NUMBER: 98683892 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: ONE INSIGNIA FINANCIAL PLZA CITY: GREENVILLE STATE: SC ZIP: 29602 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, 1998 or [ ] Transition Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 For the transition period from.........to......... (Amended by Exchange Act Rel. No. 312905, eff. 4/26/93.) Commission File Number 0-15710 CENTURY PENSION INCOME FUND XXIV (Exact name of registrant as specified in its charter) California 94-2984976 (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 (Registrant's telephone number) 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 XXIV BALANCE SHEETS (in thousands, except unit data) June 30, December 31, 1998 1997 (Unaudited) (Note) Assets Cash and cash equivalents $ 1,963 $ 1,889 Receivables and deposits 247 308 Other assets 156 181 Investments in unconsolidated joint ventures 7,675 7,429 Investment properties: Land 4,397 4,397 Buildings and related personal property 13,386 13,386 17,783 17,783 Accumulated depreciation (4,427) (4,186) 13,356 13,597 $23,397 $23,404 Liabilities and Partners' Capital Liabilities Accounts payable $ 3 $ 4 Tenant security deposit liabilities 36 34 Accrued property taxes 84 81 Other liabilities 17 27 Partners' Capital General partner -- -- Limited partner (73,341 units issued and outstanding at June 30, 1998 and December 31, 1997) 23,257 23,258 Total partners' capital 23,257 23,258 $23,397 $23,404 Note: The balance sheet at December 31, 1997, 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 Financial Statements b) CENTURY PENSION INCOME FUND XXIV STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 Revenues: Rental income $ 498 $ 513 $1,033 $1,020 Other income 23 27 47 53 Total revenues 521 540 1,080 1,073 Expenses: Operating 84 111 162 218 General and administrative 136 152 282 271 Depreciation 120 120 241 240 Property taxes 43 42 86 84 Total expenses 383 425 771 813 Income before equity in income of unconsolidated joint ventures 138 115 309 260 Equity in income of unconsolidated joint ventures 99 90 246 177 Net income $ 237 $ 205 $ 555 $ 437 Net income allocated to general partner $ 3 $ 2 $ 6 $ 5 Net income allocated to limited partners 234 203 549 432 $ 237 $ 205 $ 555 $ 437 Net income per limited partnership unit $ 3.20 $ 2.76 $ 7.49 $ 5.89 Distributions per limited partnership unit $ 3.75 $ 3.75 $ 7.50 $ 7.50 See Accompanying Notes to Financial Statements c) CENTURY PENSION INCOME FUND XXIV STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Unaudited) (in thousands, except unit data) Limited Partnership General Limited Units Partners' Partners' Total Original capital contributions 73,341 $ -- $36,671 $36,671 contributions Partners' capital at December 31, 1996 73,341 -- $24,193 $24,193 Net income for the six months ended June 30, 1997 -- 5 432 437 Distributions to partners -- (5) (550) (555) Partners' capital at June 30, 1997 73,341 $ -- $24,075 $24,075 Partners' capital at December 31, 1997 73,341 $ -- $23,258 $23,258 Net income for the six months ended June 30, 1998 -- 6 549 555 Distributions to partners -- (6) (550) (556) Partners' capital at June 30, 1998 73,341 $ -- $23,257 $23,257 See Accompanying Notes to Financial Statements d) CENTURY PENSION INCOME FUND XXIV STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 1998 1997 Cash flows from operating activities: Net income $ 555 $ 437 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 241 240 Amortization of lease commissions 25 21 Equity in income of unconsolidated joint ventures (246) (177) Change in accounts: Receivables and deposits 61 72 Other assets -- (16) Accounts payable (1) (10) Tenant security deposit liabilities 2 (5) Accrued property taxes 3 18 Other liabilities (10) 5 Net cash provided by operating activities 630 585 Cash flows from investing activities: Property improvements and replacements -- (2) Cash flows from financing activities: Distributions paid to partners (556) (555) Increase in cash and cash equivalents 74 28 Cash and cash equivalents at beginning of period 1,889 1,929 Cash and cash equivalents at end of period $1,963 $1,957 See Accompanying Notes to Financial Statements e) CENTURY PENSION INCOME FUND XXIV NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Century Pension Income Fund XXIV (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, a California corporation (the "Managing General Partner" or "FCMC"), the Managing General Partner of the general partner of the Partnership, 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, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1998. 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, 1997. Certain reclassifications have been made to the 1997 information to conform to the 1998 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 Managing General Partner is wholly-owned by Insignia Properties Trust ("IPT"), an affiliate of Insignia Financial Group, Inc. ("Insignia"). The Partnership Agreement provides for certain 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 the Managing General Partner were charged to expense in 1998 and 1997 (in thousands): For the Six Months Ended June 30, 1998 1997 Partnership management fee (included in general and administrative expenses) $62 $62 Reimbursement for services of affiliates (included in general and administrative expenses) 61 47 For the period of January 1, 1997 to August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the Managing General Partner with an 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 master policy. The agent assumed the financial obligations to the affiliate of the Managing General Partner, which 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 was not significant. The General Partner received cash distributions of approximately $6,000 and $5,000 during the six months ended June 30, 1998 and 1997, respectively. The limited partners received cash distributions of approximately $550,000 during each of the six month periods ended June 30, 1998 and 1997. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in IPT, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in September or October of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the Managing General Partner of the Partnership. NOTE C - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES The Partnership has investments in two unconsolidated joint ventures as follows: Coral Palm Plaza Joint Venture On January 23, 1987, the Partnership acquired a 33.33% ownership interest in Coral Palm Plaza Joint Venture ("Coral Palm"), a joint venture with Century Pension Income Fund XXIII, a California Limited Partnership ("CPIF XXIII") and an affiliate of the Managing General Partner. Also on January 23, 1987, Coral Palm Plaza Joint Venture acquired the Coral Palm Plaza, a shopping center located in Coral Springs, Florida. The Partnership's interest in the Coral Palm Plaza Joint Venture is reported using the equity method of accounting. Summary financial information for Coral Palm Plaza Joint Venture is as follows (in thousands): June 30, December 31, 1998 1997 Total assets $5,001 $5,041 Total liabilities (216) (366) Total ventures equity $4,785 $4,675 For the Three Months Ended For the Six Months Ended June 30, June 30, 1998 1997 1998 1997 Total revenues $ 258 $ 222 $ 582 $ 440 Total expenses (254) (179) (432) (420) Net income $ 4 $ 43 $ 150 $ 20 In 1997, the property owned by the Joint Venture, with a carrying value of $6,029,000, was determined to be impaired and its value was written down by $2,067,000 to reflect its fair value at December 31, 1997 of $3,962,000. The Partnership did not receive a distribution from the Joint Venture during either of the six month periods ended June 30, 1998 or 1997. Minneapolis Business Parks Joint Venture On April 30, 1987, the Partnership acquired a 32% ownership interest in Minneapolis Business Parks Joint Venture, a joint venture with CPIF XXIII. On May 5, 1987, Minneapolis Business Parks Joint Venture acquired Alpha Business Center located in Bloomington, Minnesota; Plymouth Service Center located in Plymouth, Minnesota, and Westpoint Business Center located in Plymouth, Minnesota. The Partnership's interest in the Minneapolis Business Parks Joint Venture is reported using the equity method of accounting. Summary financial information for Minneapolis Business Park Joint Venture is as follows (in thousands): June 30, December 31, 1998 1997 Total assets $18,939 $18,331 Total liabilities (160) (167) Total ventures equity $18,779 $18,164 For the Three Months Ended For the Six Months Ended June 30, June 30, 1998 1997 1998 1997 Total revenues $ 820 $ 791 $ 1,673 $ 1,613 Total expenses (515) (552) (1,058) (1,080) Net income $ 305 $ 239 $ 615 $ 533 The Partnership did not receive a distribution from the Joint Venture during either of the six month periods ended June 30, 1998 or 1997. ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of three wholly-owned shopping centers. The Partnership also has an interest in three business parks and one shopping center owned by two unconsolidated joint ventures between the Partnership and an affiliated partnership. The following table sets forth the average occupancy of the three wholly-owned properties for the six months ended June 30, 1998 and 1997: Average Occupancy Property 1998 1997 Butler Square Center Mauldin, South Carolina 100% 100% Kenilworth Commons Shopping Center Charlotte, North Carolina 100% 100% Plantation Pointe Shopping Center Smyrna, Georgia 96% 98% The Managing General Partner attributes the decreased occupancy at Plantation Pointe Shopping Center to the growing competition in the area and to the investment property's rental rate being higher than the area's average market rate per square foot. Results of Operations The Partnership realized net income of approximately $237,000 and $555,000 during the three and six months ended June 30, 1998, respectively, compared to net income of approximately $205,000 and $437,000 for the three and six months ended June 30, 1997, respectively. The increase in net income is primarily attributable to a decrease in operating expenses and to increases in equity in income of both of the Partnership's unconsolidated joint ventures. Other items of expense and revenues remained relatively consistent for the comparable periods. The decrease in operating expenses is due primarily to decreases in major repairs and maintenance costs at the Partnership's investment properties in the first half of 1998 as compared to the same period of 1997 (as described below). Operating expenses also decreased due to repairs of a water leak at Plantation Pointe in the last half of 1997 and to the absence of worker's compensation audit adjustments during the six months ended June 30, 1998. The increases in equity in income of the unconsolidated joint ventures are primarily attributable to net increases in rental income due to increased rental rates at Coral Palm and to an increase in occupancy at Alpha Business Center, part of the 32% owned Minneapolis joint venture property. Partially offsetting these increases to rental income was a decrease in rental income at Westpoint Business Center and Plymouth Service Center (Minneapolis properties) due to a decline in average occupancy. For the six months ended June 30, 1998, approximately $5,000 of major repairs and maintenance, comprised primarily of landscaping costs was included in operating expense. For the six months ended June 30, 1997, approximately $35,000 of major repairs and maintenance, comprised primarily of landscaping, parking lot repairs, and exterior painting costs, was included in operating expense. 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. Liquidity and Capital Resources The Partnership held cash and cash equivalents of approximately $1,963,000 at June 30, 1998 compared to approximately $1,957,000 at June 30, 1997. The net increase in cash and cash equivalents was approximately $74,000 and 28,000 for the six months ended June 30, 1998 and 1997, respectively. Net cash provided by operating activities increased primarily due to the increase in net income, as discussed above. Net cash used in financing activities remained constant, representing distributions paid to partners during each of the six month periods ended June 30, 1998 and 1997. The Partnership has no material capital programs scheduled to be performed in 1998, although certain routine capital expenditures and maintenance expenses have been budgeted. 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 Partnership distributed approximately $556,000 and $555,000 to the partners (including approximately $6,000 and $5,000 to the general partner) during the six months ended June 30, 1998 and 1997, respectively. Future cash distributions will depend on the levels of cash generated from operations, property sales, and the availability of cash reserves, however, quarterly distributions are expected to continue throughout 1998. The level of such distributions will be contingent upon successful future operations. The Managing General Partner believes all of the Partnership's investment properties have reached their peak in market performance, and is currently evaluating the possibility of marketing the properties for sale. However, there can be no assurance that the Partnership will be successful in its attempt to sell the properties. Year 2000 The Partnership is dependent upon the Managing General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed no later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The Managing General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Partnership. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors 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 such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the Managing General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships which are named as nominal defendants, challenging the acquisition by Insignia and its affiliates of interests in certain general partner entities, past tender offers by Insignia affiliates to acquire limited partnership units, the management of partnerships by Insignia affiliates as well as a recently announced agreement between Insignia and AIMCO. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The Managing General Partner believes the action to be without merit, and intends to vigorously defend it. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Partnership believes that all such other pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition or operations of the Partnership. 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 were filed for the quarter ended June 30, 1998. 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 XXIV, By: Fox Partners VI 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 Principal Financial Officer and Principal Accounting Officer Date: August 12, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Century Pension Income Fund XXIV 1998 Second Quarter 10-Q and is qualified in its entirety by reference to such 10-Q filing. 0000780590 CENTURY PENSION INCOME FUND XXIV 1,000 6-MOS DEC-31-1998 JUN-30-1998 1,963 0 247 0 0 0 17,783 (4,427) 0 0 0 0 0 0 23,257 23,397 0 1,080 0 0 771 0 0 0 0 0 0 0 0 555 7.49 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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