-----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, STnPL8U+lCgix3rH+eP1LEjpj3IqZkMB2L5dfo6tE1wjc7mBYTSovVL0D5hhgt2Z I3UT4gntevriKKv6Q2606g== 0000769129-98-000002.txt : 19980401 0000769129-98-000002.hdr.sgml : 19980401 ACCESSION NUMBER: 0000769129-98-000002 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980331 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-K SEC ACT: SEC FILE NUMBER: 000-15710 FILM NUMBER: 98582646 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-K 1 FORM 10-K - ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (As last amended in Rel No. 34-31905, eff. 10/26/93.) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from___________to____________ Commission file number 0-15710 CENTURY PENSION INCOME FUND XXIV California 94-2984976 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 Issuer's telephone number Securities registered under Section 12(b) of the Act: None Securities registered under Section 12(g) of the Exchange Act: Individual Investor Units and Pension Investor Notes (Title of each class) 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 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [X] State the aggregate market value of the voting stock held by non-affiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. Market value information for Registrant's Partnership Interests is not available. DOCUMENTS INCORPORATED BY REFERENCE NONE PART I ITEM 1. BUSINESS Century Pension Income Fund XXIV (the "Partnership" or "Registrant") was organized in June 1984 as a California limited partnership under the Uniform Limited Partnership Act of the California Corporations Code. Fox Partners VI, a California general partnership, is the General Partner of the Registrant. Fox Capital Management Corporation (the "Managing General Partner") and Fox Realty Investors ("FRI") are the General Partners of Fox Partners VI. The managing general partner of FRI is NPI Equity Investments II, Inc. ("NPI Equity II"). The Registrant's Registration Statement, filed pursuant to the Securities Act of 1933 (No. 33-1261), was declared effective by the Securities and Exchange Commission on June 9, 1986. The Registrant marketed its securities pursuant to its Prospectus dated June 9, 1986, which was thereafter supplemented (hereinafter the "Prospectus"). This Prospectus was filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933. The principal business of the Registrant is to acquire, manage and ultimately sell income-producing real properties. The Registrant is a "closed" limited partnership real estate syndicate of the unspecified asset type. Beginning in July 1986, the Registrant offered $50,000,000 in Limited Partnership Assignee Units. The offering was completed on March 31, 1988, with Limited Partnership Assignee Units having an initial price of $36,670,500 being sold. The net proceeds of this offering were used to acquire three properties and interests in four other properties through two joint ventures with an affiliated partnership. The Registrant's property portfolio is geographically diversified with properties acquired in five states. See "Item 2, Properties" below for a description of the Registrant's properties. The Registrant is involved in only one industry segment as described above. The Registrant does not engage in any foreign operations or derive revenues from foreign services. Both the income and expenses of operating the properties which are owned by the Registrant are subject to factors beyond the Registrant's control, such as oversupply of similar rental facilities as a result of overbuilding, increases in unemployment or population shifts, changes in zoning laws or changes in patterns of needs of the users. Expenses, such as local real estate taxes and management expenses, are subject to change and cannot always be reflected in rental increases due to market conditions or existing leases. The profitability and marketability of developed real property may be adversely affected by changes in general and local economic conditions and in prevailing interest rates, and favorable changes in such factors will not necessarily enhance the profitability or marketability of such property. Even under the most favorable market conditions there is no guarantee that any property owned by the Registrant can be sold by it or, if sold, that such sale can be made upon favorable terms. It is possible that legislation on the state or local level may be enacted in states where the Registrant's properties are located which may include some form of rent control. There have been, and it is possible there may be other, Federal, state and local legislation and regulations enacted relating to the protection of the environment. The Managing General Partner is unable to predict the extent, if any, to which such existing or new legislation or regulations might adversely affect the properties owned by the Registrant. The Registrant monitors its properties for evidence of pollutants, toxins and other dangerous substances, including the presence of asbestos. In certain cases environmental testing has been performed, which resulted in no material adverse conditions or liabilities. In no case has the Registrant received notice that it is a potentially responsible party with respect to an environmental clean up site. A further description of the Partnership's business is included in "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" included in this Form 10-K. The Registrant has no employees. Management and administrative services are performed by the Managing General Partner, Insignia Commercial Group, L.P., an affiliate of Insignia Financial Group, Inc. ("Insignia"), the ultimate parent company of the Managing General Partner, and a third party management company. Pursuant to a management agreement between them, Insignia Commercial Group, L.P., and a third party management company provide property management services to the Registrant. See "Item 8. Financial Statements and Supplementary Data - Note B" for additional information. The real estate business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in this industry. The Registrant's properties are subject to competition from similar properties in the vicinity in which the properties are located. In addition, various limited partnerships have been formed by the General Partners and/or their affiliates to engage in business which may be competitive with the Registrant. In January 1995, the Registrant's Coral Palm Plaza Joint Venture in which the Registrant has a one-third interest received an $800,000 payment from a former significant tenant that had occupied 27,000 square feet at Coral Palm Plaza. During June 1995, management re-leased 20,000 square feet of the unoccupied space, on similar terms, and recognized a portion of the lease buy-out in the amount of $517,000. During September 1995, management re-leased the remaining 7,000 square feet of the unoccupied space, on similar terms, and recognized the remaining portion of the lease buy-out fee as rental income in 1995, which represents the amortization of the fee prior to the new tenants' lease commencement dates. In addition, in October 1995, the Coral Palm Plaza Joint Venture accepted a lease buy-out from a tenant that occupied 11,300 square feet of space for $300,000. Management is currently attempting to re-lease the vacated space. From March 1988 through December 1993, the Registrant's affairs were managed by Metric Management, Inc. ("MMI") or a predecessor. On December 16, 1993, the service agreement with MMI was modified and, as a result thereof, the Managing General Partner began directly providing real estate advisory and asset management services to the Registrant. As advisor, such affiliate provides all partnership accounting and administrative services, investment management, and supervisory services over property management and leasing. On December 6, 1993, the shareholders of the Managing General Partner 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 the Managing General Partner. In addition, NPI Equity II became the managing partner of FRI. As a result, NPI Equity II indirectly became responsible for the operation and management of the business and affairs of the Registrant and the other investment partnerships originally sponsored by the Managing General Partner and/or FRI. The individuals who had served previously as partners of FRI and as officers and directors of the Managing General Partner contributed their general partnership interests in FRI to a newly formed limited partnership, Portfolio Realty Associates, L.P. ("PRA"), in exchange for limited partnership interests in PRA. The shareholders of the Managing General Partner and the prior partners of FRI, in their capacity as limited partners of PRA, continue to hold, indirectly, certain economic interests in the Registrant and such other investment limited partnerships, but have ceased to be responsible for the operation and management of the Registrant and such other partnerships. On January 19, 1996, IFGP Corporation, an affiliate of Insignia, acquired all of the issued and outstanding shares of capital stock of National Property Investors, Inc. ("NPI"). At the time, NPI was the sole shareholder of NPI Equity II. In addition, on June 1996, an affiliate of Insignia purchased all of the issued and outstanding shares of capital stock of the Managing General Partner. As a result of the foregoing transactions, IFGP Corporation caused new officers and directors of NPI Equity II and the Managing General Partner to be elected. See "Item 10, Directors and Executive Officers of the Registrant." On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter 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 General Partner of the Partnership. ITEM 2. PROPERTIES The following table sets forth the Partnership's investments in properties: Date of Property Purchase Type Size Butler Square Center 01/88 Shopping 80,000 Mauldin, South Carolina Center sq.ft. Kenilworth Commons Shopping Center 08/88 Shopping 38,000 Charlotte, North Carolina Center sq.ft. Plantation Pointe Shopping Center 04/89 Shopping 63,000 Smyrna, Georgia Center sq.ft. The Partnership owns 33 1/3% of a joint venture, Coral Palm Plaza Joint Venture, with Century Pension Income Fund XXIII ("CPF XXIII"), an affiliated partnership. The joint venture owns one property, Coral Palm Plaza, located in Coral Springs, Florida. For additional information relating to Coral Palm Plaza Joint Venture and its property see "Exhibit 99.1" attached hereto. The Partnership owns 32% of a joint venture, Minneapolis Business Parks Joint Venture, with CPF XXIII. The joint venture owns three properties, Alpha Business Center, Plymouth Service Center and Westpoint Business Center, all of which are located in Minnesota. For additional information relating to Minneapolis Business Park's Joint Venture and its properties see "Exhibit 99.2" attached hereto. SCHEDULE OF PROPERTIES: (dollar amounts in thousands) Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Butler Square $ 6,709 $ 1,916 3-39 yrs S/L $ 5,370 Kenilworth Commons 4,569 901 5-39 yrs S/L 3,925 Plantation Pointe 6,505 1,369 4-39 yrs S/L 5,521 $17,783 $ 4,186 $14,816 See "Note A" of the financial statements included in "Item 8" for a further description of the Partnership's depreciation policy. SCHEDULE OF RENTAL RATES AND OCCUPANCY: Average Annual Rental Rates Average Annual Occupancy Property 1997 1996 1997 1996 Butler Square $ 8.31 sq.ft. $ 8.28 sq.ft. 100% 99% Kenilworth Commons 12.70 sq.ft. 12.28 sq.ft. 100% 100% Plantation Pointe 9.09 sq.ft. 9.21 sq.ft. 97% 98% As noted under "Item 1. Business," the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other commercial buildings in the area. The Managing General Partner believes that all of the properties are adequately insured. The following is a schedule of the lease expirations at the Registrant's properties for the years beginning 1998 through the maturities of current leases: Number of % of Gross Expirations Square Feet Annual Rent Annual Rent Butler Square 1998 3 5,075 $ 55,000 8.30% 1999 8 27,656 232,000 34.77% 2000 2 7,400 53,000 8.02% 2002 1 1,500 23,000 3.49% 2007 1 38,654 303,000 45.42% Kenilworth Commons 1998 2 2,259 50,000 10.20% 1999 2 2,284 45,000 9.38% 2000 5 5,307 107,000 22.16% 2001 2 2,267 48,000 9.99% 2008 1 26,000 234,000 48.27% Plantation Pointe 1998 3 5,825 94,000 17.17% 2000 2 2,930 44,000 7.97% 2001 1 4,435 51,000 9.27% 2002 1 3,700 52,000 9.44% 2008 1 44,000 308,000 56.14% SCHEDULE OF REAL ESTATE TAXES AND RATES: (dollar amounts in thousands) 1997 1997 Billing Rate Butler Square $ 67 1.51% Kenilworth Commons 42 1.26% Plantation Pointe 52 4.08% SCHEDULE OF SIGNIFICANT TENANTS (1) AT DECEMBER 31, 1997: Square Nature of Expiration Base Rent Footage Business of Lease Per Year Butler Square Center Tenant 1 38,654 Grocer 2007 $302,660 Tenant 2 8,470 Retail 1999 $ 59,290 Kenilworth Commons Shopping Center Tenant 1 26,000 Grocer 2008 $234,000 Plantation Pointe Shopping Center Tenant 1 44,000 Grocer 2008 $308,000 (1) Tenant occupying 10% or more of total rentable square footage of the property. ITEM 3. LEGAL PROCEEDINGS The Registrant is unaware of any pending or outstanding litigation that is not of a routine nature. The Managing General Partner of the Registrant believes that all such pending or outstanding routine litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. ITEM 4. SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS During the year ended December 31, 1997, no matter was submitted to a vote of unit holders through the solicitation of proxies or otherwise. PART II ITEM 5. MARKET FOR THE REGISTRANT'S EQUITY AND RELATED SECURITY HOLDER MATTERS The Partnership, a publicly-held limited partnership, sold 73,341 Limited Partnership Assignee Units aggregating $36,670,500. The Partnership currently has 73,341 units outstanding held by 3,907 partners of record. There is no intention to sell additional Limited Partnership Assignee Units nor is there an established market for these units. During each of the years ended December 31, 1997, 1996 and 1995, the Partnership made quarterly distributions totaling approximately $1,111,000 to the partners in each year. The limited partners received approximately $1,100,000 ($15.00 per limited partnership unit) and the general partner received approximately $11,000. The amounts represent a distribution of cash from operations. The Partnership made a distribution totaling approximately $278,000 to the partners during February 1998. ITEM 6. SELECTED FINANCIAL DATA The following represents selected financial data for the Registrant, for the years ended December 31, 1997, 1996, 1995, 1994, and 1993. The data should be read in conjunction with the financial statements included elsewhere herein. This data is not covered by the independent auditors' report. For the Years Ended December 31, 1997 1996 1995 1994 1993 (in thousands, except per unit data) Total revenues $ 2,150 $ 2,250 $ 2,012 $ 1,767 $ 1,790 Net income (loss) $ 176 $ 986 $ 1,017 $ (871) $ 567 Net income (loss) per limited partnership assignee unit (1) $ 2.25 $ 13.30 $ 13.44 $(11.75) $ 7.54 Total Assets $23,404 $24,333 $24,424 $24,566 $26,551 Cash distribution per limited partnership assignee units $ 15.00 $ 15.00 $ 15.00 $ 15.00 $ 18.75 (1) $500 original contribution per unit, based on weighted average units outstanding during the period after giving effect to the allocation of net income (loss) to the General Partner. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This item should be read in conjunction with the consolidated financial statements and other items contained elsewhere in this report. Results of Operations 1997 Compared to 1996 The Partnership's net income for the year ended December 31, 1997 was approximately $176,000 versus approximately $986,000 for the year ended December 31, 1996. The decline in net income is attributable to decreases in equity in income of the unconsolidated 33.3% owned joint venture, Coral Palm Plaza, and in rental revenue. The decrease in equity in joint venture operations is the result of the write-down of the Coral Palm Plaza Joint Venture property during 1997. During the year ended December 31, 1997, the Joint Venture property lost two major tenants. Based on its evaluation of the condition of the property after the loss of the tenants, the General Partner concluded that a $2,067,000 write-down was needed to reduce the property to its estimated fair value. The decrease in rental revenue is primarily due to decreases in rental revenue at Butler Square and in tenant reimbursements at Plantation Pointe. Partially offsetting the above decreases was a decrease in total expenses due to a decrease in general and administrative expenses. The decrease in general and administrative expense is partially attributable to a decrease in reimbursements for services of affiliates related to the transition from the Atlanta, Georgia to the Greenville, South Carolina administrative office in 1996. Additionally, the transition of asset management responsibilities to the Greenville office contributed to increased reimbursements during 1996. Included in operating expense for the year ended December 31, 1997 is approximately $58,000 of major repairs and maintenance comprised primarily of exterior building repairs, major landscaping, parking lot repairs, and exterior painting. 1996 Compared to 1995 The Partnership's net income for the year ended December 31, 1996, was approximately $986,000 versus approximately $1,017,000 for the year ended December 31, 1995. The decline in net income is attributable to a decrease in equity in income of the unconsolidated 33.3% owned joint venture, Coral Palm Plaza, and to an increase in general and administrative expense. The decrease in equity in joint venture operations is the result of the recognition of income in 1995 relating to a lease buy-out at the Partnership's unconsolidated joint venture property, Coral Palm Plaza. In December 1994, Coral Palm Plaza accepted a lease buy-out of $800,000 from a significant tenant that had occupied 27,000 square feet. The payment was received in 1995. During 1995, Coral Palm Plaza re-leased all of the unoccupied space, on similar terms, and recognized the remaining portion of the lease buy-out in the amount of $699,000 as other income. The decline in net income was partially offset by increased rental revenue at Butler Square due to increased occupancy. Operating expense in 1996 increased due to parking lot repairs and increased management fees at Butler Square. Included in operating expense is approximately $46,000 of major repairs and maintenance comprised of major landscaping and parking lot repairs for the year ended December 31, 1996. The increase in general and administrative expenses is partially due to an increase in reimbursements to affiliates which was directly attributable to the combined transition efforts of the Greenville, South Carolina and Atlanta, Georgia administrative offices during the 1995 year-end close, preparation of the 10-K and tax returns (including the limited partner K-1's), filing for the first two quarterly reports and transition of asset management responsibilities to the new administration. During 1997, 1996, and 1995, the Registrant was allocated its equity income (loss) in the operations of the unconsolidated joint ventures. In 1995, the Registrant received cash distributions from the unconsolidated joint ventures. The financial statements for the unconsolidated joint ventures are presented in Exhibits 99.1 and 99.2 attached hereto. Liquidity and Capital Resources The Registrant's real estate properties consist of three shopping center properties and investments in two unconsolidated joint ventures. The three shopping centers are located in South Carolina, North Carolina and Georgia. The unconsolidated joint venture properties include one shopping center in Florida and three business parks in Minnesota. The properties are leased to tenants subject to leases with remaining lease terms of up to twelve years. The Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses and capital improvements. At December 31, 1997, the Partnership had cash and cash equivalents of approximately $1,889,000 as compared to $1,929,000 at December 31, 1996. The net decrease in cash and cash equivalents for the years ended December 31, 1997 and 1996 is $40,000 and $261,000, respectively. Net cash provided by operating activities increased primarily due to the decrease in receivables and deposits and in other assets. The decrease in receivables and deposits and other assets is attributable to the timing of receipts. Net cash used in investing activities decreased due to a Partnership contribution to Coral Palm during 1996 which was not necessary during 1997. The decrease in cash used in investing activities is also attributable to decreases in purchases of property improvements and replacements. Net cash used in financing activities remained constant representing distributions to the partners for the years ended December 31, 1997 and 1996. The Registrant uses working capital reserves provided from any undistributed cash flow from operations and distributions from unconsolidated joint ventures as its primary source of liquidity. For the long term, cash from operations and distributions from unconsolidated joint ventures will remain the Registrant's primary source of liquidity. The Partnership has no material capital programs scheduled to be performed in 1998, although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations. 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 Partnership distributed a total of $1,111,000 to the partners during each of the years ended December 31, 1997, 1996, and 1995. These distributions included $11,000 to the general partner and $1,100,000 ($15.00 per unit) to the limited partners. 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 business in which the Registrant is engaged is highly competitive, and the Registrant is not a significant factor in its industry. Each investment property is located in or near a major urban area and, accordingly, competes for rentals not only with similar properties in its immediate area but with hundreds of similar properties throughout the urban area. Such competition is primarily on the basis of location, rents, services and amenities. In addition, the Registrant competes with significant numbers of individuals and organizations (including similar partnerships, real estate investment trusts and financial institutions) with respect to the sale of improved real properties, primarily on the basis of the prices and terms of such transactions. 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. 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 not 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 annual 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 annual report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates of 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. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA CENTURY PENSION INCOME FUND XXIV, List of Financial Statements Independent Auditors' Report Balance Sheets - December 31, 1997 and 1996 Statements of Operations-Years Ended December 31, 1997, 1996 and 1995 Statements of Changes in Partners' Capital-Years Ended December 31, 1997, 1996 and 1995 Statements of Cash Flows-Years Ended December 31, 1997, 1996 and 1995 Notes to Financial Statements To the Partners Century Pension Income Fund XXIV, A California Limited Partnership Greenville, South Carolina Independent Auditors' Report We have audited the accompanying balance sheets of Century Pension Income Fund XXIV, A California Limited Partnership (the "Partnership") as of December 31, 1997 and 1996, and the related statements of operations, changes in partners' capital and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Century Pension Income Fund XXIV, A California Limited Partnership, as of December 31, 1997 and 1996, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. /s/ Imowitz Koenig & Co., LLP Certified Public Accountants New York, N.Y. February 12, 1998 CENTURY PENSION INCOME FUND XXIV BALANCE SHEETS (in thousands, except unit data)
December 31, 1997 1996 Assets Cash and cash equivalents $ 1,889 $ 1,929 Receivables and deposits 308 298 Other assets 181 190 Investments in unconsolidated joint ventures 7,429 7,844 Investment properties: Land 4,397 4,397 Buildings and related personal property 13,386 13,379 17,783 17,776 Less accumulated depreciation (4,186) (3,704) 13,597 14,072 $ 23,404 $ 24,333 Liabilities and Partners' Capital Liabilities Accounts payable $ 4 $ 13 Tenant security deposit liabilities 34 43 Accrued property taxes 81 66 Other liabilities 27 18 Partners' Capital General partner's -- -- Limited partners' (73,341 units issued and outstanding at December 31, 1997 and 1996) 23,258 24,193 Total partners' capital 23,258 24,193 $ 23,404 $ 24,333 See Accompanying Notes to Financial Statements
CENTURY PENSION INCOME FUND XXIV STATEMENTS OF OPERATIONS (in thousands, except unit data) Years Ended December 31, 1997 1996 1995 Revenues: Rental income $2,044 $2,133 $1,895 Other income 106 117 117 Total revenues 2,150 2,250 2,012 Expenses: Operating 400 392 387 General and administrative 516 656 512 Depreciation 482 478 462 Property taxes 161 161 141 Total expenses 1,559 1,687 1,502 Income before equity in (loss) income of unconsolidated joint ventures 591 563 510 Equity in (loss) income of unconsolidated joint ventures (415) 423 507 Net income $ 176 $ 986 $1,017 Net income allocated to general partner $ 11 $ 11 $ 31 Net income allocated to limited partners 165 975 986 $ 176 $ 986 $1,017 Net income per limited partnership unit $ 2.25 $13.30 $13.44 Distribution per limited partnership unit $15.00 $15.00 $15.00 See Accompanying Notes to Financial Statements CENTURY PENSION INCOME FUND XXIV STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (in thousands, except unit data) Limited Partnership General Limited Units Partner's Partners' Total Original capital contributions 73,341 $ -- $ 36,671 $ 36,671 Partners' capital at December 31, 1994 73,341 $ (20) $ 24,432 $ 24,412 Net income for the year ended December 31, 1995 -- 31 986 1,017 Distributions to partners -- (11) (1,100) (1,111) Partners' capital at December 31, 1995 73,341 -- 24,318 24,318 Net income for the year ended December 31, 1996 -- 11 975 986 Distributions to partners -- (11) (1,100) (1,111) Partners' capital at December 31, 1996 73,341 -- 24,193 24,193 Net income for the year ended December 31, 1997 -- 11 165 176 Distributions to partners -- (11) (1,100) (1,111) Partners' capital at December 31, 1997 73,341 $ -- $ 23,258 $ 23,258 See Accompanying Notes to Financial Statements CENTURY PENSION INCOME FUND XXIV STATEMENTS OF CASH FLOWS (in thousands) Years Ended December 31, 1997 1996 1995 Cash flows from operating activities: Net income $ 176 $ 986 $ 1,017 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 482 478 462 Amortization of lease commissions 39 44 38 Equity in loss (income) of unconsolidated joint ventures' operations 415 (423) (507) Change in accounts: Receivables and deposits (10) (104) (21) Other assets (30) (88) (70) Accounts payable (9) 10 (37) Tenant security deposit liabilities (9) (3) 2 Accrued property taxes 15 25 (13) Other liabilities 9 2 -- Net cash provided by operating activities 1,078 927 871 Cash flows from investing activities: Property improvements and replacements (7) (39) (413) Distributions received from unconsolidated joint ventures -- -- 805 Contributions to unconsolidated joint ventures -- (38) -- Net cash (used in) provided by investing activities (7) (77) 392 Cash flows from financing activities: Distributions to partners (1,111) (1,111) (1,111) Net cash used in financing activities (1,111) (1,111) (1,111) Net (decrease) increase in cash and cash equivalents (40) (261) 152 Cash and cash equivalents at beginning of period 1,929 2,190 2,038 Cash and cash equivalents at end of period $ 1,889 $ 1,929 $ 2,190 See Accompanying Notes to Financial Statements Century Pension Income Fund XXIV Notes to Financial Statements December 31, 1997 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Century Pension Income Fund XXIV (the "Partnership") is a limited partnership organized in 1984 under the laws of the State of California to acquire, manage and ultimately sell income-producing real estate. The Partnership currently owns three shopping centers located in South Carolina, North Carolina and Georgia. The Partnership also holds joint venture interests in a shopping center in Florida and in three business parks in Minnesota. The General Partner is Fox Partners VI, a California general partnership, whose General Partners are Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a California corporation and Fox Realty Investors ("FRI"), a California general partnership. The managing general partner of FRI is NPI Equity Investments II, Inc. ("NPI Equity II"). The capital contributions of $36,670,500 ($500 per assignee unit) were made by Limited Partnership Assignee Unit Holders. On December 6, 1993, the shareholders of FCMC entered into a Voting Trust Agreement with NPI Equity II pursuant to which NPI Equity II was granted the right to vote 100 percent of the outstanding stock of FCMC and NPI Equity II became the managing general partner of FRI. As a result, NPI Equity II effectively 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 II was, at the time, a wholly-owned subsidiary of National Property Investors, Inc. ("NPI, Inc."). The shareholders of FCMC and the partners in FRI retain 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 January 19, 1996, the stockholders of NPI, Inc. sold all of the issued and outstanding stock of NPI, Inc. to an affiliate of Insignia Financial Group, Inc. ("Insignia"). In addition, on June 1996, an affiliate of Insignia purchased all of the issued and outstanding shares of capital stock of the Managing General Partner. As a result of the foregoing transactions, IFGP Corporation caused new officers and directors of NPI Equity II and the Managing General Partner to be elected. Basis of Presentation: The Partnership's investments in unconsolidated joint ventures are accounted for under the equity method of accounting. Distributions: Cash distributions from operations were made at annualized rates of 3.0 percent of original capital contributions for each of the years 1997, 1996 and 1995. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in banks, money market funds and certificates of deposit with original maturities less than 90 days. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Leases: The Partnership leases certain commercial space to tenants under various lease terms. The leases are accounted for as operating leases in accordance with Statement of Financial Accounting Standards ("SFAS") No. 13, "Accounting for Leases". Some of the leases contain stated rental increases during their term. For leases with fixed rental increases, rents are recognized on a straight-line basis over the terms of the lease. This straight-line basis recognized $25,000 and $39,000 more in rental income than was collected in 1997 and 1996, respectively. This amount will be collected in future years, as cash collections under the terms of the leases exceed the straight-line basis of revenue recognition. For all other leases, minimum rents are recognized over the terms of the leases. Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined in the SFAS as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments approximates their fair value due to the short term maturity of these instruments. Investment Properties: Investment properties are stated at cost. Acquisition fees are capitalized as a cost of real estate. In accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", the Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. Depreciation: Depreciation is computed by the straight-line method over estimated useful lives ranging from thirty to thirty nine years for buildings and improvements and three to five years for furnishings. Deferred Leasing Commissions: Leasing commissions, which are included in other assets, are deferred and amortized over the lives of the related leases. At December 31, 1997 and 1996, deferred leasing commissions totaled $244,000 and $221,000 and accumulated amortization totaled $92,000 and $71,000, respectively. Escrows for Taxes: All escrow funds are designated for the payment of real estate taxes and are held by the Partnership. These funds totaled approximately $114,000 and $92,000 at December 31, 1997 and 1996 respectively and are included in receivables and deposits. Net Income (Loss) Per Limited Partnership Assignee Unit: Net income (loss) per limited partnership assignee unit is computed by dividing the net income (loss) allocated to the unit holders by 73,341 units outstanding. Income Taxes: Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Net Income Allocation: In accordance with the Partnership Agreement, net income and taxable income have been allocated to the General Partner in an amount equal to the amount of cash distributions received by the General Partner. Reclassification: Certain reclassifications have been made to the 1996 and 1995 balances 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 following transactions with affiliates of the Managing General Partner were charged to expense in 1997, 1996 and 1995 (in thousands):
For the Years Ended December 31, 1997 1996 1995 Partnership management fee (included in general and administrative expense) (1) $123 $123 $123 Real estate tax reduction fees -- -- 16 Reimbursement for services of affiliates (included in general and administrative and operating 97 126 97 expenses) (2) (1) The Partnership Agreement provides for the payment of a partnership management fee to the General Partner equal to ten percent of cash available for distribution. This management fee is intended to defray some of the expenses related to services provided by the General Partner, or an affiliate, but not reimbursed by the Partnership. (2) Included in "Reimbursements for services of affiliates" for the year ended December 31, 1997, is approximately $1,000 in reimbursements for construction oversight costs. There were no reimbursements of this nature for either of the years ended December 31, 1996 or 1995.
For the period of January 19, 1996 to August 31, 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 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 General Partner received cash distributions of $11,000 during each of the years ended December 31, 1997, 1996, and 1995. 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 ("CPF XXIII") and an affiliate of FCMC and FRI. 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): December 31, 1997 1996 Total assets $ 5,041 $ 7,301 Total liabilities (366) (468) Total ventures' equity $ 4,675 $ 6,833 Years Ended December 31, 1997 1996 Total revenues $ 739 $ 1,183 Total expenses (2,897) (807) Net income $(2,158) $ 376 In 1996, the Partnership made contributions of approximately $38,000 to the Joint Venture. 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. 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 CPF 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): December 31, 1997 1996 Total assets $18,331 $17,412 Total liabilities (167) (176) Total ventures' equity $18,164 $17,236 Years Ended December 31, 1997 1996 Total revenues $ 3,190 $ 3,136 Total expenses (2,262) (2,202) Net income $ 928 $ 934 NOTE D - MINIMUM FUTURE RENTAL REVENUES Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1997, are as follows (in thousands): 1998 $ 1,645 1999 1,396 2000 1,081 2001 967 2002 902 Thereafter 4,490 Total $10,481 The Partnership had one tenant at each of its properties whose rental revenue was in excess of 10% of total Partnership rental revenue. At December 31, 1997, 1996 and 1995, the percentages were as follows: Percentage of Total Rental Revenue 1997 1996 1995 Butler Square Center 15% 14% 18% Kenilworth Commons Shopping Center 11% 11% 15% Plantation Pointe Shopping Center 15% 14% 18% Amortization of leasing commissions totaled $39,000, $44,000 and $38,000 in 1997, 1996 and 1995, respectively. NOTE E - RECONCILIATION TO INCOME TAX METHOD OF ACCOUNTING The differences between the accrual method of accounting for income tax reporting and the accrual method of accounting used in the financial statements are as follows (in thousands):
1997 1996 1995 Net income - financial statements $ 176 $ 986 $ 1,017 Differences resulted from: Depreciation 145 132 130 Equity in unconsolidated joint ventures' operations 765 (16) (178) Other 14 (38) (2) Net income - income tax method $ 1,100 $ 1,064 $ 967 Taxable income per limited partnership assignee unit after giving effect to the allocation to the general partner $ 15 $ 14 $ 13 Partner's equity - financial statements $23,258 $24,193 $24,318 Differences resulted from: Sales commissions 3,050 3,050 3,050 Organization expenses 2,452 2,452 2,452 Depreciation 1,106 961 829 Payments credited to rental properties 112 112 112 Equity in unconsolidated joint ventures' operations 4,299 3,534 3,550 Other (31) (44) (6) Partners' equity - income tax method $34,246 $34,258 $34,305 NOTE F - REAL ESTATE AND ACCUMULATED DEPRECIATION (in thousands) Initial Cost to Partnership Net Cost Buildings Capitalized and Related (written down) Personal Subsequent to Description Encumbrances Land Property Acquisition Butler Square Center $ -- $ 873 $ 5,396 $ 440 Kenilworth Commons Shopping Center -- 1,701 2,895 (27) Plantation Pointe Shopping Center -- 1,865 4,563 77 TOTAL $ -- $4,439 $12,854 $ 490
Gross Amount at Which Carried at December 31, 1997 Buildings and Related Personal Accumulated Year of Date of Depreciable Land Property Total Depreciation Construction Acquisition Life-Years (in thousands) Butler Square Center $ 866 $ 5,843 $ 6,709 $ 1,916 1987 1/88 3 to 39 years Kenilworth Commons Shopping Center 1,679 2,890 4,569 901 1988 8/88 5 to 39 years Plantation Pointe Shopping Center 1,852 4,653 6,505 1,369 1988 4/89 4 to 39 years TOTAL $4,397 $13,386 $17,783 $ 4,186
Reconciliation of Real Estate and Accumulated Depreciation (in thousands): Real Estate: Years Ended December 31, 1997 1996 1995 Balance at beginning of year $17,776 $17,737 $17,324 Property improvements and replacements 7 39 413 Balance at end of year $17,783 $17,776 $17,737 Accumulated Depreciation: Balance at beginning of year $ 3,704 $ 3,226 $ 2,764 Additions charged to expense 482 478 462 Balance at end of year $ 4,186 $ 3,704 $ 3,226 The aggregate cost of the investment properties for Federal income tax purposes at December 31, 1997, 1996 and 1995, is approximately $17,896,000, $17,888,000 and $17,849,000, respectively. Accumulated depreciation for Federal income tax purposes at December 31, 1997, 1996 and 1995, is approximately $3,080,000, $2,743,000 and $2,397,000, respectively. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Neither the Registrant nor Fox Partners VI ("Fox"), the General Partner of the Registrant, has any officers or directors. Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), the managing general partner of Fox, manages and controls substantially all of the Registrant's affairs and has general responsibility and ultimate authority in all matters affecting its business. The Managing General Partner is a wholly-owned affiliate of Insignia Financial Group, Inc. ("Insignia"). The names and ages of, as well as the positions held by the executive officers and directors of FCMC are set forth below. No family relationships exist among any of the officers or directors of FCMC. Name Age Position William H. Jarrard, Jr. 51 President and Director Ronald Uretta 41 Vice President and Treasurer Martha L. Long 38 Controller Robert D. Long, Jr. 30 Vice President Daniel M. LeBey 32 Vice President and Secretary Kelley M. Buechler 40 Assistant Secretary William H. Jarrard, Jr. has been President and Director of FCMC since June 1996. He has acted as Senior Vice President of Insignia Properties Trust ("IPT"), parent of the Managing General Partner, since May 1997. Mr. Jarrard previously acted as Managing Director-Partnership Administration of Insignia from January 1991 through September 1997, and served as Managing Director-Partnership Administration and Asset Management of Insignia from July 1994 until January 1996. Ronald Uretta has been Vice President and Treasurer of FCMC since June 1996 and Insignia's Treasurer since January 1992. Since August 1996, he has also served as Insignia's Chief Operating Officer. He has also served as Insignia's Secretary from January 1992 to June 1996 and as Chief Financial Officer from January 1992 to August 1996. Martha L. Long has been Controller of FCMC since December 1996 and Senior Vice President - Finance and Controller of Insignia since January 1997. In June 1994, Ms. Long joined Insignia as its Controller, and was promoted to Senior Vice President - Finance in January 1997. Prior to that time, she was Senior Vice President and Controller of the First Savings Bank in Greenville, South Carolina. Robert D. Long, Jr. has been Vice President of FCMC since January 2, 1998. Mr. Long joined Metropolitan Asset Enhancement, L.P. ("MAE"), an affiliate of Insignia, in September 1993. Since 1994 he has acted as Vice President and Chief Accounting officer of the MAE subsidiaries. Mr. Long was an accountant for Insignia until joining MAE in 1993. Prior to joining Insignia, Mr. Long was an auditor for the State of Tennessee and was associated with the accounting firm of Harsman Lewis and Associates. Daniel M. LeBey has been Vice President and Secretary of FCMC since January 29, 1998 and Insignia's Assistant Secretary since April 30, 1997. Since July 1996 he has also served as Insignia's Associate General Counsel. From September 1992 until June 1996, Mr. LeBey was an attorney with the law firm of Alston & Bird LLP, Atlanta, Georgia. Kelley M. Buechler has been Assistant Secretary of FCMC since June 1996 and Assistant Secretary of Insignia since 1991. ITEM 11. EXECUTIVE COMPENSATION The Registrant is not required to and did not pay any compensation to the officers or directors of the Managing General Partner. The Managing General Partner does not presently pay any compensation to any of its officers or directors. (See "Item 13, Certain Relationships and Related Transactions.") ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT There is no person known to the Registrant who owns beneficially or of record more than five percent of the voting securities of the Registrant. The Registrant is a limited partnership and has no officers or directors. The Managing General Partner, as managing general partner of Fox, has discretionary control over most of the decisions made by or for the Registrant in accordance with the terms of the Partnership Agreement. The directors and officers of the Managing General Partner and its affiliates, as a group do not own any of the Registrant's voting securities. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter 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 General Partner of the Partnership. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 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 the Managing General Partner were charged to expense in 1997, 1996 and 1995 (in thousands): For the Years Ended December 31, 1997 1996 1995 Partnership management fee (1) $123 $123 $123 Real estate tax reduction fees -- -- 16 Reimbursement for services of affiliates (2) 97 126 97 (1) The Partnership Agreement provides for the payment of a partnership management fee to the General Partner equal to ten percent of cash available for distribution. This management fee is intended to defray some of the expenses related to services provided by the General Partner, or an affiliate, but not reimbursed by the Partnership. (2) Included in "Reimbursements for services of affiliates" for the year ended December 31, 1997, is approximately $1,000 in reimbursements for construction oversight costs. There were no reimbursements of this nature for either of the years ended December 31, 1996 or 1995. For the period of January 19, 1996 to August 31, 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 master policy. The 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. In accordance with the Partnership Agreement, the General Partner was allocated its one percent continuing interest in the Partnership's net income and taxable income and cash distributions. Net income and taxable income have been allocated to the General Partner in an amount equal to the amount of cash distributions received by the General Partner. The General Partner received cash distributions of $11,000 during each of the years ended December 31, 1997, 1996, and 1995. PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K (a)(1)(2) Financial Statements and Financial Statement Schedules: See "Item 8" of this Form 10-K for Financial Statements of the Registrant, Notes thereto, and Financial Statement Schedules. (A Table of Contents to Financial Statements and Financial Statement Schedules is included in "Item 8" and incorporated herein by reference.) (a)(3) Exhibits: 2. NPI, Inc. Stock Purchase Agreement, dated as of August 17, 1995, incorporated by reference to the Registrant's Current Report on Form 8-K dated August 17, 1995. 3 4. Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of the Registrant dated June 9, 1986 and thereafter supplemented included in the Registrant's Registration Statement on Form S-11 (Reg. No. 33-1261) 16. Letter dated April 27, 1994 from the Registrant's Former Independent Auditors incorporated by reference to the Registrant's Current Report on Form 8-K dated April 22, 1994. 27. Financial Data Schedule is filed as an Exhibit to this report. 99.1 Coral Palm Plaza Joint Venture and audited financial statements for the years ended December 31, 1997, 1996 and 1995. 99.2 Minneapolis Business Parks Joint Venture and audited financial statements for the years ended December 31, 1997, 1996 and 1995. (b) Reports on Form 8-K: None SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 this 31st day of March 1998. 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 Date: March 31, 1998 Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated. /s/ William H. Jarrard, Jr. President and William H. Jarrard, Jr. Director /s/ Ronald Uretta Vice President and Ronald Uretta Treasurer EX-27 2
5 This schedule contains summary financial information extracted from Century Pension Income Fund XXIV 1997 Year-End 10-K and is qualified in its entirety by reference to such 10-K filing. 0000780590 CENTURY PENSION INCOME FUND XXIV 1,000 12-MOS DEC-31-1997 DEC-31-1997 1,889 0 0 0 0 0 17,783 (4,186) 23,404 0 0 0 0 0 23,258 23,404 0 2,150 0 0 1,559 0 0 0 0 0 0 0 0 176 2.25 0 Registrant has an unclassified balance sheet. Multiplier is 1.
EX-99.1 3 EXHIBIT 99.1 CORAL PALM PLAZA JOINT VENTURE FINANCIAL STATEMENTS DECEMBER 31, 1997, 1996 and 1995 List of Financial Statements Independent Auditors' Report Balance Sheets - December 31, 1997 and 1996 Statements of Operations-Years Ended December 31, 1997, 1996 and 1995 Statements of Changes in Partners' Capital-Years Ended December 31, 1997, 1996 and 1995 Statements of Cash Flows-Years Ended December 31, 1997, 1996 and 1995 Notes to Financial Statements To the Partners Coral Palm Plaza Joint Venture Greenville, South Carolina Independent Auditors' Report We have audited the accompanying balance sheets of Coral Palm Plaza Joint Venture (the "Partnership") as of December 31, 1997 and 1996, and the related statements of operations, changes in partners capital and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Coral Palm Plaza Joint Venture as of December 31, 1997 and 1996, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. /s/ Imowitz Koenig & Co., LLP Certified Public Accountants New York, N.Y. February 12, 1998 CORAL PALM PLAZA JOINT VENTURE BALANCE SHEETS (in thousands)
December 31, 1997 1996 Assets Cash and cash equivalents $ 427 $ 458 Other assets 652 613 Investment properties: Land 1,980 2,393 Buildings and related personal property 5,532 7,133 7,512 9,526 Less accumulated depreciation (3,550) (3,296) 3,962 6,230 $ 5,041 $ 7,301 Liabilities and Partners' Capital Accrued expenses and other liabilities $ 366 $ 468 Partners' Capital: Century Pension Income Fund XXIII 3,111 4,557 Century Pension Income Fund XXIV 1,564 2,276 Total partners' capital 4,675 6,833 $ 5,041 $ 7,301 See Accompanying Notes to Financial Statements
CORAL PALM PLAZA JOINT VENTURE STATEMENTS OF OPERATIONS (in thousands)
Years Ended December 31, 1997 1996 1995 Revenues: Rental income $ 706 $ 1,157 $ 939 Other income 33 26 717 Total revenues 739 1,183 1,656 Expenses: Operating 572 541 625 General and administrative 4 16 11 Depreciation 254 250 217 Provision for impairment of value 2,067 -- -- Total expenses 2,897 807 853 Net (loss) income $(2,158) $ 376 $ 803 Allocation of net (loss) income: Century Pension Income Fund XXIII $(1,446) $ 252 $ 535 Century Pension Income Fund XXIV (712) 124 268 $(2,158) $ 376 $ 803 See Accompanying Notes to Financial Statements
CORAL PALM PLAZA JOINT VENTURE STATEMENTS OF CHANGES IN PARTNERS' CAPITAL Years Ended December 31, 1997, 1996, and 1995 (in thousands)
Century Pension Century Pension Income Fund XXIII Income Fund XXIV Total Partners' capital at December 31, 1994 $ 4,339 $ 2,169 $ 6,508 Net income for the year ended December 31, 1995 535 268 803 Distributions to partners (643) (323) (966) Partners' capital at December 31, 1995 4,231 2,114 6,345 Net income for the year ended December 31, 1996 252 124 376 Contributions from partners 74 38 112 Partners' capital at December 31, 1996 4,557 2,276 6,833 Net loss for the year ended December 31, 1997 (1,446) (712) (2,158) Partners' capital at December 31, 1997 $ 3,111 $ 1,564 $ 4,675 See Accompanying Notes to Financial Statements
CORAL PALM PLAZA JOINT VENTURE STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 1997 1996 1995 Cash flows from operating activities: Net (loss) income $(2,158) $ 376 $ 803 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 254 250 217 Amortization of lease commissions 39 37 32 Provision for impairment of value 2,067 -- -- Change in accounts: Other assets (78) (226) 512 Accrued expenses and other liabilities (102) 123 (499) Net cash provided by operating activities 22 560 1,065 Cash flows from investing activities: Property improvements and replacements (53) (477) (75) Net cash used in investing activities (53) (477) (75) Cash flows from financing activities: Joint venture partners' distributions paid -- -- (966) Contributions received from Partners -- 112 -- Net Cash provided by (used in) financing activities -- 112 (966) Net (decrease) increase in Cash and Cash Equivalents (31) 195 24 Cash and Cash Equivalents at Beginning of Year 458 263 239 Cash and Cash Equivalents at End of Year $ 427 $ 458 $ 263 See Accompanying Notes to Financial Statements
CORAL PALM PLAZA JOINT VENTURE Notes To Financial Statements December 31, 1997 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: Coral Palm Plaza Joint Venture (the "Partnership") is a general partnership organized in 1987 under the laws of the State of California to acquire Coral Palm Plaza, a shopping center located in Coral Springs, Florida. The General Partners are Century Pension Income Fund XXIII ("XXIII") and Century Pension Income Fund XXIV ("XXIV"), California limited partnerships affiliated through their General Partners. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amount reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in banks, money market funds and certificates of deposit with original maturities of less than 90 days. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Tenant Security Deposits: The Partnership requires security deposits from lessees for the duration of the lease and such deposits are included in receivables and other assets. Deposits are refunded when the tenant vacates, provided the tenant has not damaged its space and is current on its rental payments. Leases: The Partnership leases certain commercial space to tenants under various lease terms. The leases are accounted for as operating leases in accordance with Statement of Financial Accounting Standards ("SFAS") No. 13, "Accounting for Leases." Some of the leases contain stated rental increases during their term. For leases with fixed rental increases, rents are recognized on a straight-line basis over the terms of the lease. This straight-line basis recognized approximately $28,000 and $119,000 more in rental income than was collected in 1997 and 1996, respectively. This amount will be collected in future years as cash collections under the terms of the leases exceed the straight-line basis of revenue recognition. For all other leases, minimum rents are recognized over the terms of the leases. Investment Properties: Investment properties are stated at cost. Acquisition fees are capitalized as a cost of real estate. The Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. The Partnership has determined that Coral Palm Plaza with a carrying amount of $6,029,000 was impaired and wrote its value down by $2,067,000 to reflect its fair value at December 31, 1997 of $3,962,000. Depreciation: Depreciation is computed by the straight-line method over estimated useful lives ranging from four to thirty-nine years for buildings and improvements and related personal property. Deferred Leasing Commission: Leasing commissions, which are included in other assets, are deferred and amortized over the lives of the related leases, which range from one to eleven years. At December 31, 1997 and 1996 deferred leasing commissions totaled $324,000 and $221,000 and accumulated amortization totaled $104,000 and $85,000, respectively. Net Income (Loss) Allocation: Net income (loss) is allocated based on the ratio of each partner's capital contribution to the Joint Venture. Income Taxes: Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Reclassification: Certain reclassifications have been made to the 1996 and 1995 balances to conform to the 1997 presentation. NOTE B - RELATED PARTY TRANSACTIONS During 1997 and 1996, the Partnership paid property management fees totaling $31,000 and $23,000, respectively, to an affiliate of the General Partner. These fees were allocated 66.67% to XXIII and 33.33% to XXIV, in accordance with the partnership agreement. NOTE C - PROVISION FOR IMPAIRMENT OF VALUE In December 1997, two significant tenants that had occupied 36,000 square feet (27% of leasable space) at Coral Palm Plaza moved out. The Partnership determined that, based on economic conditions at the time as well as projected future operational cash flows, a decline in value had occurred which was other than temporary. Accordingly, the property's carrying value was reduced to an amount equal to its estimated fair value and an impairment write down of $2,067,000 was recorded at December 31, 1997. NOTE D - TERMINATION AGREEMENT WITH FORMER TENANT In December 1994, the Partnership accepted a lease buy-out of $800,000 from a significant tenant that had occupied 27,000 square feet. The payment was received in 1995. During 1995, management re-leased all of the unoccupied space, on similar terms, and recognized the remaining portion of the lease buy- out in the amount of $699,000 as other income. In October 1995, the Partnership accepted a lease buy-out and termination agreement with a former tenant at the Partnership's property. The $300,000 termination payment, has been deferred and is being amortized into income on a straight-line basis over the remaining three years of the former tenant's lease. Management is currently attempting to re-lease the space. NOTE E - MINIMUM FUTURE RENTAL REVENUES Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1997 are as follows: 1998 $1,043 1999 1,024 2000 943 2001 828 2002 759 Thereafter 2,042 Total $6,639 Rental revenue from one tenant was 22 percent, 12 percent and 20 percent of total rental revenues in 1997, 1996 and 1995, respectively. Rental revenue from another tenant was 13 percent, 12 percent and 19 percent of total rental revenues in 1997, 1996 and 1995, respectively. Rental revenues included percentage and other contingent rentals of $33,000 and $59,000 in 1996 and 1995, respectively. There was not any percentage or contingent rental revenue in 1997. Amortization of deferred leasing commissions totaled $39,000, $37,000 and $32,000 for the years ended December 31, 1997, 1996, and 1995, respectively. NOTE F - REAL ESTATE AND ACCUMULATED DEPRECIATION (dollar amounts in thousands)
Initial Cost to Partnership Buildings Net Cost Capitalized and Related (written down) Subsequent Description Encumbrances Land Personal Property to Acquisition Coral Palm Plaza Coral Springs, Florida $ -- $ 5,009 $11,046 $(8,543)
Gross Amount at Which Carried at December 31, 1997 Buildings and Related Accumulated Year of Date of Depreciable Description Land Personal Property Total Depreciation Construction Acquisition Life-Years Coral Palm Plaza $1,980 $5,532 $7,512 $3,550 1985 1/87 4 to 39 Years
Reconciliation of Real Estate and Accumulated Depreciation (in thousands)
Real Estate: Years Ended December 31, 1997 1996 1995 Balance at beginning of year $ 9,526 $ 9,049 $ 8,974 Property improvements 53 477 75 Allowance for impairment of value (2,067) -- -- Balance at end of year $ 7,512 $ 9,526 $ 9,049 Accumulated Depreciation: Balance at beginning of year $ 3,296 $ 3,046 $ 2,829 Additions charged to expense 254 250 217 Balance at end of year $ 3,550 $ 3,296 $ 3,046
The aggregate cost of the real estate for Federal income tax purposes at December 31, 1997 and 1996, is approximately $17,098,000 and $17,044,000, respectively. Accumulated depreciation for Federal income tax purposes at December 31, 1997 and 1996, is approximately $3,678,000 and $3,324,000, respectively. EX-99.2 4 EXHIBIT 99.2 MINNEAPOLIS BUSINESS PARKS JOINT VENTURE FINANCIAL STATEMENTS DECEMBER 31, 1997, 1996 and 1995 List of Financial Statements Independent Auditors' Report Balance Sheets - December 31, 1997 and 1996 Statements of Operations-Years Ended December 31, 1997, 1996 and 1995 Statements of Changes in Partners' Capital-Years Ended December 31, 1997, 1996 and 1995 Statements of Cash Flows-Years Ended December 31, 1997, 1996 and 1995 Notes to Financial Statements To the Partners Minneapolis Business Parks Joint Venture Greenville, South Carolina Independent Auditors' Report We have audited the accompanying balance sheets of Minneapolis Business Parks Joint Venture (the "Partnership") as of December 31, 1997 and 1996, and the related statements of operations, changes in partners' capital and cash flows for each of the three years in the period ended December 31, 1997. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Minneapolis Business Parks Joint Venture as of December 31, 1997 and 1996, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 1997 in conformity with generally accepted accounting principles. /s/ Imowitz Koenig & Co., LLP Certified Public Accountants New York, N.Y. February 12, 1998 MINNEAPOLIS BUSINESS PARKS JOINT VENTURE BALANCE SHEETS (in thousands)
December 31, 1997 1996 Assets Cash and cash equivalents $ 2,751 $ 1,543 Receivables and other assets 650 507 Investment Properties: Land 4,523 4,523 Building and related personal property 16,184 16,035 20,707 20,558 Less accumulated depreciation (5,777) (5,196) 14,930 15,362 $18,331 $17,412 Liabilities and Partners' Capital Accrued expenses and other liabilities $ 167 $ 176 Partners' Capital: Century Pension Income Fund XXIII 12,299 11,668 Century Pension Income Fund XXIV 5,865 5,568 Total partners' capital 18,164 17,236 $18,331 $17,412 See Accompanying Notes to Financial Statements
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE STATEMENTS OF OPERATIONS (in thousands)
Years Ended December 31, 1997 1996 1995 Revenues: Rental income $3,052 $3,000 $2,833 Other income 138 136 48 Total revenues 3,190 3,136 2,881 Expenses: Operating 1,676 1,593 1,521 General and administrative 5 16 8 Depreciation 581 593 604 Total expenses 2,262 2,202 2,133 Net income $ 928 $ 934 $ 748 Allocation of net income: Century Pension Income Fund XXIII $ 631 $ 635 $ 509 Century Pension Income Fund XXIV 297 299 239 $ 928 $ 934 $ 748 See Accompanying Notes to Financial Statements
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE STATEMENTS OF CHANGES IN PARTNERS' CAPITAL YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (in thousands)
Century Pension Century Pension Income Fund XXIII Income Fund XXIV Total Partners' capital at December 31, 1994 $11,548 $5,512 $17,060 Net income for the year ended December 31, 1995 509 239 748 Distributions to partners (1,024) (482) (1,506) Partners' capital at December 31, 1995 11,033 5,269 16,302 Net income for the year ended December 31, 1996 635 299 934 Partners' capital at December 31, 1996 11,668 5,568 17,236 Net income for the year ended December 31, 1997 631 297 928 Partners' capital at December 31, 1997 $12,299 $5,865 $18,164 See Accompanying Notes to Financial Statements
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 1997 1996 1995 Cash Flows From Operating Activities: Net income $ 928 $ 934 $ 748 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 581 593 604 Amortization 71 84 79 Change in accounts: Receivables and other assets (214) (155) (167) Accrued expenses and other liabilities (9) 19 6 Net cash provided by operating activities 1,357 1,475 1,270 Cash Flows From Investing Activities: Property improvements and replacements (149) (91) (253) Cash used in investing activities (149) (91) (253) Cash Flows From Financing Activities: Joint venture partners' distributions paid -- -- (1,506) Cash used in financing activities -- -- (1,506) Net increase (decrease) in Cash and Cash Equivalents 1,208 1,384 (489) Cash and Cash equivalents at Beginning of Year 1,543 159 648 Cash and Cash equivalents at End of Year $2,751 $1,543 $ 159 See Accompanying Notes to Financial Statements
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE Notes to Financial Statements December 31, 1997 NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization: Minneapolis Business Parks Joint Venture (the "Partnership") is a general partnership organized in 1987 under the laws of the State of California to acquire three business parks in Minnesota. The General Partners are Century Pension Income Fund XXIII ("XXIII") and Century Pension Income Fund XXIV ("XXIV"), California limited partnerships which are affiliated through their General Partners. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and in banks, money market funds and certificates of deposit with original maturities of less than 90 days. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Leases: The Partnership leases certain commercial space to tenants under various lease terms. The leases are accounted for as operating leases in accordance with Statement of Financial Accounting Standards ("SFAS") No. 13, "Accounting for Leases." Some of the leases contain stated rental increases during their term. For leases with fixed rental increases, rents are recognized on a straight-line basis over the terms of the lease. This straight-line basis recognized approximately $23,000 and $96,000 more in rental income than was collected in 1997 and 1996, respectively. This amount will be collected in future years as cash collections under the terms of the leases exceed the straight-line basis of revenue recognition. For all other leases, minimum rents are recognized over the terms of the leases. Investment Properties: Investment properties are stated at cost. Acquisition fees are capitalized as a cost of real estate. The Partnership records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. Depreciation: Depreciation is computed by the straight-line method over estimated useful lives ranging from five to thirty-nine years for buildings and improvements and related personal property. Deferred Leasing Commission: Leasing commissions are deferred and amortized over the lives of the related leases, which range from one to eleven years. At December 31, 1997 and 1996, deferred leasing commissions totaled $452,000 and $418,000 and accumulated amortization totaled $221,000 and $221,000, respectively. Net Income Allocation: Net income is allocated based on the ratio of each partner's capital contribution to the Joint Venture. Income Taxes: Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Reclassification: Certain reclassifications have been made to the 1996 and 1995 balances to conform to the 1997 presentation. NOTE B - RELATED PARTY TRANSACTIONS During 1995, the Partnership paid an affiliate of the general partner a $33,000 fee relating to a successful real estate tax appeal on Alpha and Westpoint Business Center joint venture properties. These fees were allocated 68% to XXIII and 32% to XXIV, in accordance with the Partnership Agreement. NOTE C - MINIMUM FUTURE RENTAL REVENUES Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1997, are as follows: 1998 $ 2,467 1999 1,906 2000 1,285 2001 799 2002 393 Thereafter 303 Total $ 7,153 Amortization of deferred leasing commissions totaled $62,000, $84,000 and $79,000 for the years ended December 31, 1997, 1996, and 1995, respectively. NOTE D - REAL ESTATE AND ACCUMULATED DEPRECIATION (dollar amounts in thousands)
Initial Cost to Partnership Buildings and Net Cost Capitalized Related Personal (removed) Subsequent Description Encumbrances Land Property to Acquisition Alpha Business Center $ -- $3,199 $ 6,735 $606 Plymouth Service -- 475 2,306 (40) Westpoint Business -- 1,166 5,987 273 Total $ -- $4,840 $15,028 $839
Gross Amount at Which Carried at December 31, 1997 Buildings and Related Accumulated Year of Date of Depreciable Description Land Personal Property Total Depreciation Construction Acquisition Life-Years Alpha Business Center $3,002 $ 7,538 $10,540 $2,730 1979 5/87 5-39 Years Plymouth Service 419 2,322 2,741 793 1979 5/87 5-39 Years Westpoint Business 1,102 6,324 7,426 2,254 1979 5/87 5-39 Years Total $4,523 $16,184 $20,707 $5,777
Reconciliation of Real Estate and Accumulated Depreciation (in thousands) Real Estate: Years Ended December 31, 1997 1996 1995 Balance at beginning of year $20,558 $20,467 $20,214 Property improvements 149 91 253 Balance at end of year $20,707 $20,558 $20,467 Accumulated Depreciation: Balance at beginning of year $ 5,196 $ 4,603 $ 3,999 Additions charged to expense 581 593 604 Balance at end of year $ 5,777 $ 5,196 $ 4,603 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1997 and 1996, is approximately $22,040,000 and $21,891,000, respectively. Accumulated depreciation for Federal income tax purposes at December 31, 1997 and 1996, is approximately $5,004,000 and $4,496,000, respectively. -----END PRIVACY-ENHANCED MESSAGE-----