-----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, T9fpXmecmrr8SPo1P+oXgu1f3mT3vFT0aY/GixQuS/6Se2bqBt954bKsNt+YY+jq 2YIkkmZ8B1KqlVvXmiL4tg== 0000889812-96-000298.txt : 19960401 0000889812-96-000298.hdr.sgml : 19960401 ACCESSION NUMBER: 0000889812-96-000298 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960329 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-K405 SEC ACT: 1934 Act SEC FILE NUMBER: 000-15710 FILM NUMBER: 96541308 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 C/O INSIGNIA FINANCIAL GROUP CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 10-K405 1 ANNUAL REPORT 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 For the fiscal year ended December 31, 1995, or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-15710 CENTURY PENSION INCOME FUND XXIV A California Limited Partnership (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 Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (864) 239-1000 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Individual Investor Units and Pension Investor Notes 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 is not contained herein, and will not be contained, to the best of the 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] No market for the Individual Investor Units and Pension Investor Notes exists and therefore a market value for such Units or Notes cannot be determined. DOCUMENTS INCORPORATED HEREIN BY REFERENCE: Prospectus of the Registrant dated June 9, 1986 and thereafter supplemented incorporated in Parts I and IV. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership PART I Item 1. Business. Century Pension Income Fund XXIV (the "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 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. For a further description of the business of the Registrant, see the sections entitled "Risk Factors" and "Investment Objectives and Policies" of the Prospectus. 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 sources. 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. There have been, and 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 new legislation or regulations might occur and the degree to which such existing or new legislation or regulations might adversely affect the properties owned. 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. The Registrant maintains property and liability insurance on its properties and believes such coverage to be adequate. Property Matters Coral Palm Plaza - 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 joint venture accepted a lease buy-out from a tenant that occupied 11,300 square feet of space for $300,000. The joint venture is currently attempting to re-lease the vacated space. Employment The Registrant's properties are managed by unaffiliated third party management companies pursuant to management agreements with such third parties. Change in Control 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 services 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 Investments II, Inc. ("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 October 12, 1994, an affiliate of Apollo Real Estate Advisors, L.P. ("Apollo") acquired one-third of the stock of National Property Investors, Inc. ("NPI"), the parent corporation of NPI Equity II. Pursuant to the terms of the stock acquisition, Apollo was entitled to designate three of the seven directors of the Managing General Partner and NPI Equity II. In addition, the approval of certain major actions on behalf of the Registrant required the affirmative vote of at least five directors of the Managing General Partner. On August 17, 1995, the stockholders of NPI entered into an agreement to sell to IFGP Corporation, a Delaware corporation, an affiliate of Insignia Financial Group, Inc. ("Insignia"), a Delaware corporation, all of the issued and outstanding common stock of NPI, for an aggregate purchase price of $1,000,000. NPI is the sole shareholder of NPI Equity II, the general partner of FRI, and the entity which controls the Managing General Partner. The closing of the transactions contemplated by the above mentioned agreement (the "Closing") occurred on January 19, 1996. Upon the Closing, the officers and directors of NPI, NPI Equity II and the Managing General Partner resigned and IFGP Corpoation caused new officers and directors of each of those entities to be elected. See "Item 10, Directors and Executive Officers of the Registrant." Competition The Registrant is affected by and subject to the general competitive conditions of the residential, commercial, retail and office real estate industries. In addition, each of the Registrant's properties competes in an area which normally contains numerous other real properties which may be considered competitive. Item 2. Properties. A description of the income-producing properties in which the Registrant has an ownership interest is as follows. All of the Registrant's properties are owned in fee except as indicated.
Date of Name and Location Purchase Type Size Butler Square Center 01/88 Shopping 80,000 West Butler Road at Center sq.ft. Whatley Circle Mauldin, South Carolina Kenilworth Commons Shopping 08/88 Shopping 38,000 Center Center sq.ft. 1227 East Boulevard Charlotte, North Carolina Plantation Pointe Shopping Center 04/89 Shopping 63,000 Spring Rd. and Campbell Rd. Center sq.ft. Smyrna, Georgia CORAL PALM PLAZA JOINT VENTURE: Coral Palm Plaza (1) 01/87 Shopping 135,000 University Drive at N.W. 20th Center sq.ft. Coral Springs, Florida MINNEAPOLIS BUSINESS PARKS JOINT VENTURE: Alpha Business Center (2) 05/87 Business 172,000 8100 26th Avenue Park sq.ft. Bloomington, Minnesota Plymouth Service Center (2) 05/87 Business 74,000 Water Tower Circle and Park sq.ft. Xenium Lane Plymouth, Minnesota Westpoint Business Center (2) 05/87 Business 161,000 13800 Industrial Park Blvd. Park sq.ft. Plymouth, Minnesota
_________ (1) Property is owned by a joint venture between the Registrant, which has a 33 1/3% interest, and an affiliated partnership. (2) Property is owned by a joint venture between the Registrant, which has a 32% interest, and an affiliated partnership. The following chart sets forth the average occupancy at the Registrant's remaining properties for the years ended December 31, 1995, 1994, 1993, 1992 and 1991: OCCUPANCY SUMMARY Average Occupancy Rate(%) for the Year Ended December 31, -------------------------------- 1995 1994 1993 1992 1991 ---- ---- ---- ---- ---- Butler Square Center 94 79 71 79 80 Kenilworth Commons Shopping Center 100 100 100 100 100 Plantation Pointe Shopping Center 98 98 99 99 98 CORAL PALM PLAZA JOINT VENTURE: Coral Palm Plaza 78 83 76 71 78 MINNEAPOLIS BUSINESS PARKS JOINT VENTURE: Alpha Business Center 92 89 79 82 73 Plymouth Service Center 93 98 75 91 90 Westpoint Business Center 93 80 83 87 85 SIGNIFICANT TENANTS (1) December 31, 1995
Annualized Square Nature of Expiration Base Rent Renewal Footage Business of Lease Per Year(2) Options (3) ------- -------- -------- ----------- ----------- Butler Square Center BI-Lo Inc. 38,654 Grocer 2015 $302,660 3-5 Yr Revco D.S. 8,470 Discount 1999 $59,290 5-5 Yr Retail Kenilworth Commons Shopping Center Harris-Teeter 26,000 Grocer 2008 $234,000 4-5 Yr Plantation Pointe Shopping Center Winn Dixie 44,000 Grocer 2008 $308,000 4-5 Yr CORAL PALM PLAZA JOINT VENTURE: Coral Palm Plaza Luria & Sons 21,891 Catalog 2006 (4) 3-5 Yr Retailer Linen Supermarket 14,071 Household 1998 $168,852 1-5 Yr Item Store 2005 Michaels Stores 20,000 Craft Store 2005 $150,000 3-5 Yr MINNEAPOLIS BUSINESS PARKS JOINT VENTURE: Plymouth Service Center Paul Robey & Assoc. 14,332 Sales 1999 $67,790 - Tool Parts Sola Optical 13,966 Optometrist 1996 $78,768 - Guyer's Builder Supplies 35,768 Building 2003 $201,495 - Supplies Westpoint Business Center ETS Energy Tech Systems 18,637 Parts 1999 $65,820 - Manufacturer Kloster Corporation 21,850 Parts 1999 $138,737 1-2 Yr Manufacturer Tile by Design 21,815 Tile 1999 $161,018 -
(1) Tenant occupying 10% or more of total rentable square footage of the property. (2) Represents annualized base rent excluding additional rent due as operating expense reimbursements, percentage rents and future contractual escalations. (3) The first amount represents the number of renewal options. The second amount represents the length of each option. (4) Tenant pays percentage rent based on retail stores occupied. Item 3. Legal Proceedings. There are no material pending legal proceedings to which the Registrant is a party or to which any of its assets are subject. Item 4. Submission of Matter to a Vote of Security Holders No matter was submitted to a vote of security holders during the period covered by this Report. PART II Item 5. Market for the Registrant's Equity and Related Security Holder Matters. The Limited Partnership Assignee Unit holders are entitled to certain distributions as provided in the Partnership Agreement. As of March 1, 1996, Assignee Units holders have received distributions from operations of $3,200 to $3,866 for each $10,000 of original investment. No market for Limited Partnership Assignee Units exists nor is any expected to develop. As of March 1, 1996, the approximate number of holders of Limited Partnership Assignee Units was 4,021. During the years ended December 31, 1995 and 1994, the Registrant has made the following cash distributions with respect to each $10,000 initial investment to holders of Units as of the dates set forth below in the amounts set forth opposite such dates: Distribution with Amount of Distribution Respect to Quarter End Per $10,000 Investment(*) 1995 1994 March 31 $75 $75 June 30 $75 $75 September 30 $75 $75 December 31 $75 $75 * The amounts represent distributions of cash from operations. (See "Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations", for information relating to the Registrant's future distributions.) Item 6. Selected Financial Data. The following represents selected financial data for the Registrant, for the years ended December 31, 1995, 1994, 1993, 1992 and 1991. The data should be read in conjunction with the consolidated financial statements included elsewhere herein. This data is not covered by the independent auditors' report.
For the Year Ended December 31, ----------------------------------------- 1995 1994 1993 1992 1991 (Amounts in thousands except per unit data) Total revenues $ 2,519 $ 522 $ 1,897 $ 1,221 $ 2,476 Net income (loss) $ 1,017 $ (871) $ 567 $ 873 $ (33) Net income (loss) per limited partnership assignee unit (1) $ 13.44 $(11.75) $ 7.54 $ 11.43 $ (.45) Total assets $24,424 $24,566 $26,551 $27,386 $28,070 Cash distribution per limited partnership assignee units $ 15.00 $ 15.00 $ 18.75 $ 21.24 $ 24.99
(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. 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 nineteen years. The Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses and capital improvements. All of the Registrant's properties generated positive cash flow for the year ended December 31, 1995. 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 Registrant distributed $1,111,000 to partners (including $11,000 to the general partner) during each of the years ended December 31, 1995 and 1994. Distributions are expected to continue in the near future. The level of such distributions will be contingent upon successful future operations. The level of liquidity based on cash and cash equivalents experienced a $152,000 increase at December 31, 1995, as compared to 1994. The Registrant's $805,000 of distributions received from unconsolidated joint ventures (investing activities) and the $871,000 of net cash provided by operating activities were only partially offset by the $413,000 of improvements to real estate (investing activities) and $1,111,000 of cash distributions to partners (financing activities). The improvements to real estate were primarily at the Registrant's Butler Square Center property relating to a significant tenant's expansion of its existing space. The Registrant renegotiated the tenant's lease terms to expand the tenant's existing space by 6,500 square feet. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are invested in a money market account or in repurchase agreements secured by United States Treasury obligations. At the Registrant's joint venture property, Coral Palm Plaza, management accepted a lease buy-out of $800,000 in December 1994 from a significant tenant that had occupied 27,000 square feet, (and 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 ($233,000 allocated to the Partnership). In October 1995, the Registrant accepted a lease buy-out and termination agreement with a former tenant at the Coral Palm Plaza 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. The Managing General Partner believes that if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements and the current level of distributions for the foreseeable future. On January 19, 1996, the stockholders of NPI, the sole shareholder of NPI Equity II, sold to IFGP Corporation all of the issued and outstanding stock of NPI. In addition, an affiliate of Insignia purchased the limited partnership units held by DeForest I and certain of its affiliates. IFGP Corporation caused new officers and directors of NPI Equity II and the Managing General Partner to be elected. The Managing General Partner does not believe these transactions will have a significant effect on the Registrant's liquidity or results of operations. See "Item 1 Business-Change in Control". Real Estate Market 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. Results of Operations 1995 Compared to 1994 Operating results improved by $1,888,000 for the year ended December 31, 1995, as compared to 1994, due to an increase in revenues of $1,997,000, which was only slightly offset by an increase in expenses of $109,000. Revenues increased by $1,997,000 for the year ended December 31, 1995, as compared to 1994, due to increases in equity in unconsolidated joint venture operations of $1,752,000, rental income of $226,000 and interest income of $19,000. Equity in unconsolidated joint ventures' operations increased due to the Registrant's $1,500,000 allocated portion of the provision for impairment of value recorded in 1994 on the Coral Palm Plaza joint venture property and the recognition of the termination payment accepted from a major tenant at Coral Palm Plaza in 1995. Rental income increased primarily due to increased rental rates and occupancy at the Registrant's Butler Square Center property. Interest income increased primarily due to an increase in average working capital reserves available for investment. Expenses increased by $109,000 for the year ended December 31, 1995, as compared to 1994, due to increases in operating expenses of $76,000, general and administrative expenses of $10,000 and depreciation expense of $23,000. Operating expense increased primarily due to increased repairs and maintenance and an increase in amortization of leasing commissions at the Registrant's Butler Square Center property. Depreciation expense increased due to significant tenant improvements at the Registrant's Butler Square Center property. General and administrative expenses remained relatively constant. 1994 Compared to 1993 Operating results declined by $1,438,000 for the year ended December 31, 1994, as compared to 1993, primarily due to the Registrant's $1,500,000 allocated portion of the provision for impairment of value recorded on their Coral Palm Plaza unconsolidated joint venture. Revenues decreased by $1,375,000 due to an increase in equity loss from unconsolidated joint ventures' operations of $1,352,000, and decreases in rental income of $19,000 and interest income of $4,000. Loss in unconsolidated joint venture operations increased due to the Registrant's $1,500,000 allocated portion of the provision for impairment of value recorded on their Coral Palm Plaza joint venture property. The loss was slightly offset by improved operations due to higher occupancy at the Registrant's Minneapolis Business Parks Alpha Business Center and Plymouth Service Center joint venture properties. Rental income declined due to a decrease in rental rates at the Registrant's Kenilworth Commons and Plantation Pointe Shopping Centers which was offset by an increase in occupancy at the Registrant's Butler Square Center property. Interest income declined due to a decrease in average working capital reserves available for investment. Expenses increased by $63,000 for the year ended December 31, 1994, as compared to 1993, due to increases in general and administrative expenses of $54,000, operating expenses of $3,000 and depreciation expense of $6,000. General and administrative expenses increased due to additional costs associated with the management transition. Operating expenses increased due to an increase in repairs and maintenance at the Registrant's Butler Square property, which was only partially offset by a decrease in repairs and maintenance at the Registrant's Plantation Pointe property. Depreciation expense increased slightly due to the effect of fixed asset additions. Unconsolidated Joint Ventures During 1995, 1994 and 1993, the Registrant was allocated its equity income (loss) in the operations of, and received cash distributions from, the unconsolidated joint ventures. The financial statements for the unconsolidated joint ventures are presented in "Item 8, Financial Statements and Supplementary Data". A discussion of their Results of Operations follows: Equity income from unconsolidated joint ventures' operations increased $1,752,000 in 1995, as compared to 1994, primarily due to the recognition of the termination payment accepted from a major tenant at the Registrant's Coral Palm Plaza property and the provision for impairment recognized in 1994. Revenues at Minneapolis Business Parks Joint Venture properties increased due to an increase in occupancy at the joint venture's Alpha Business Center and Westpoint Business Center properties and an increase in rental rates at all of the Registrant's Minneapolis Business Park Joint Venture properties, which was only slightly offset by a decrease in occupancy at the Registrant's Plymouth Service Center property. Expenses increased at all of the Registrant's Minneapolis Business Park Joint Venture properties due to an increase in repairs and maintenance. Equity income from unconsolidated joint ventures' operations declined $1,352,000 in 1994, as compared to 1993, due to the Registrant's $1,500,000 allocated portion of the provision for impairment of value recorded in 1994 on the Registrant's Coral Palm Plaza property. The provision for impairment was recognized due to the loss of a tenant who occupied approximately 20% of the space. Revenues at Coral Palm Plaza increased due to an increase in average occupancy prior to the tenant vacating. Expenses decreased due to a decline in real estate taxes. Revenues at Minneapolis Business Parks joint venture properties increased due to an increase in occupancy at the joint venture's Alpha Business Center and Plymouth Service Center properties and an increase in rental rates at all of the Registrant's Minneapolis Business Park Joint Venture properties. Expenses declined at all of the Registrant's Minneapolis Business Park Joint Venture properties due to a decrease in real estate taxes. Item 8. Financial Statements and Supplementary Data. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 1995 INDEX
Page Independent Auditors' Reports.............................................................................................F - 2 Financial Statements: Balance Sheets at December 31, 1995 and 1994.........................................................................F - 4 Statements of Operations for the Years Ended December 31, 1995, 1994 and 1993........................................F - 5 Statements of Partners' Equity for the Years Ended December 31, 1995, 1994 and 1993..................................................................................F - 6 Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................F - 7 Notes to Financial Statements........................................................................................F - 8 Financial Statement Schedule: Schedule III - Real Estate and Accumulated Depreciation at December 31, 1995..................................F - 15 CORAL PALM PLAZA JOINT VENTURE Independent Auditors' Reports.............................................................................................F - 17 Financial Statements: Balance Sheets at December 31, 1995 and 1994.........................................................................F - 19 Statements of Operations for the Years Ended December 31, 1995, 1994 and 1993........................................F - 20 Statements of Partners' Equity for the Years Ended December 31, 1995, 1994 and 1993..................................................................................F - 21 Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................F - 22 Notes to Financial Statements........................................................................................F - 23 Financial Statement Schedule: Schedule III - Real Estate and Accumulated Depreciation at December 31, 1995..................................F - 27 MINNEAPOLIS BUSINESS PARKS JOINT VENTURE Independent Auditors' Reports.............................................................................................F - 29 Financial Statements: Balance Sheets at December 31, 1995 and 1994.........................................................................F - 31 Statements of Operations for the Years Ended December 31, 1995, 1994 and 1993........................................F - 32 Statements of Partners' Equity for the Years Ended December 31, 1995, 1994 and 1993..................................................................................F - 33 Statements of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................F - 34 Notes to Financial Statements........................................................................................F - 35 Financial Statement Schedule: Schedule III - Real Estate and Accumulated Depreciation at December 31, 1995..................................F - 38
Financial statement schedules not included have been omitted because of the absence of conditions under which they are required or because the information is included elsewhere in 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, 1995 and 1994, and the related statements of operations, partners' equity and cash flows for the years then ended. Our audits also included the additional information supplied pursuant to Item 14(a)(2). 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, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Imowitz Koenig & Co., LLP Certified Public Accountants New York, N.Y. February 20, 1996 INDEPENDENT AUDITORS' REPORT Century Pension Income Fund XXIV, a California Limited Partnership: We have audited the accompanying statements of operations, partners' equity and cash flows of Century Pension Income Fund XXIV, a California limited partnership (the "Partnership") for the year ended December 31, 1993. 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 audit. We conducted our audit 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 audit provides a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the results of operations and cash flows of the Partnership for the year ended December 31, 1993 in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP San Francisco, California March 18, 1994 CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership BALANCE SHEETS DECEMBER 31, ------------------------- 1995 1994 ---------- ---------- ASSETS Cash and cash equivalents $2,190,000 $2,038,000 Receivables and other assets 206,000 185,000 Investments in unconsolidated joint ventures 7,383,000 7,681,000 Real Estate: Real estate 17,737,000 17,324,000 Accumulated depreciation (3,226,000) (2,764,000) ----------- ----------- Real estate, net 14,511,000 14,560,000 Deferred leasing commissions, net 134,000 102,000 ----------- ----------- Total assets $24,424,000 $24,566,000 =========== =========== LIABILITIES AND PARTNERS' EQUITY Accrued expenses and other liabilities $ 106,000 $ 154,000 ----------- ----------- Total liabilities 106,000 154,000 ----------- ----------- Contingencies Partners' equity (deficit): General partner -- (20,000) Limited partners (73,341 units outstanding at December 31, 1995 and 1994) 24,318,000 24,432,000 Total partners' equity 24,318,000 24,412,000 ----------- ----------- Total liabilities and partners' equity $24,424,000 $24,566,000 =========== =========== See notes to financial statements. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, --------------------------------------- 1995 1994 1993 ---------- ---------- ---------- Revenues: Rental $1,915,000 $1,689,000 $1,708,000 Interest income 97,000 78,000 82,000 Equity (loss) in unconsolidated joint ventures' operations 507,000 (1,245,000) 107,000 ---------- ---------- ---------- Total revenues 2,519,000 522,000 1,897,000 Expenses (including $236,000, $221,000 and $154,000 paid to the general partner and affiliates in 1995, 1994 and 1993): General and administrative 507,000 497,000 443,000 Operating 533,000 457,000 454,000 Depreciation 462,000 439,000 433,000 ---------- ---------- ---------- Total expenses 1,502,000 1,393,000 1,330,000 ---------- ---------- ---------- Net income (loss) $1,017,000 $ (871,000) $ 567,000 ========== ========== ========== Net income (loss) per limited partnership assignee unit $ 13.44 $ (11.75) $ 7.54 ========== ========== ========== Cash distributions per limited partnership assignee unit $ 15.00 $ 15.00 $ 18.75 ========== ========== ========== See notes to financial statements. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership STATEMENTS OF PARTNERS' EQUITY YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 General Limited Total partner's partners' partners' (deficit) equity equity --------- ----------- ----------- Balance - January 1, 1993 $ -- $27,216,000 $27,216,000 Net income 14,000 553,000 567,000 Cash distributions (14,000) (1,375,000) (1,389,000) --------- ----------- ----------- Balance - December 31, 1993 -- 26,394,000 26,394,000 Net (loss) (9,000) (862,000) (871,000) Cash distributions (11,000) (1,100,000) (1,111,000) --------- ----------- ----------- Balance - December 31, 1994 (20,000) 24,432,000 24,412,000 Net income 31,000 986,000 1,017,000 Cash distributions (11,000) (1,100,000) (1,111,000) --------- ----------- ----------- Balance - December 31, 1995 $ -- $24,318,000 $24,318,000 ========= =========== =========== See notes to financial statements. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, ------------------------------------ 1995 1994 1993 ---------- ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $1,017,000 $ (871,000) $ 567,000 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 500,000 459,000 447,000 Equity (income) loss in unconsolidated joint ventures' operations (507,000) 1,245,000 (107,000) Deferred leasing commissions paid (70,000) (93,000) (19,000) Provision for doubtful receivables -- 1,000 -- Changes in operating assets and liabilities: Receivables and other assets (21,000) 2,000 (18,000) Accrued expenses and other liabilities (48,000) (3,000) (13,000) ---------- ---------- ---------- Net cash provided by operating activities 871,000 740,000 857,000 ---------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to real estate (413,000) (60,000) (9,000) Unconsolidated joint ventures distributions received 805,000 150,000 201,000 Purchase of cash investments -- -- (2,073,000) Proceeds from cash investments -- 1,283,000 2,757,000 ---------- ---------- ---------- Net cash provided by investing activities 392,000 1,373,000 876,000 ---------- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Cash distributions to partners (1,111,000) (1,111,000) (1,389,000) ---------- ---------- ---------- Cash used in financing activities (1,111,000) (1,111,000) (1,389,000) ---------- ---------- ---------- Increase in Cash and Cash Equivalents 152,000 1,002,000 344,000 Cash and Cash Equivalents at Beginning of Year 2,038,000 1,036,000 692,000 ---------- ---------- ---------- Cash and Cash Equivalents at End of Year $2,190,000 $2,038,000 $1,036,000 ========== ========== ========== See notes to financial statements. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization 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"), a California corporation and Fox Realty Investors ("FRI"), a California general partnership. 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 Investments II, Inc. ("NPI Equity" or the "Managing General Partner") pursuant to which NPI Equity was granted the right to vote 100 percent of the outstanding stock of FCMC and NPI Equity became the managing general partner of FRI. As a result, NPI Equity became responsible for the operation and management of the business and affairs of the Partnership and the other investment partnerships originally sponsored by FCMC and/or FRI. NPI Equity is a wholly-owned subsidiary of 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"). 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, 3.0 percent and 3.8 percent for 1995, 1994 and 1993, respectively. 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. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Cash and Cash Equivalents The Partnership considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Concentration of Credit Risk The Partnership maintains cash balances at institutions insured up to $100,000 by the Federal Deposit Insurance Corporation. Balances in excess of $100,000 are usually invested in money market accounts and repurchase agreements, which are collateralized by United States Treasury obligations. Cash balances exceeded these insured levels during the year. At December 31, 1995, the Partnership had $671,000 invested in overnight repurchase agreements, secured by United States Treasury obligations, which are included in cash and cash equivalents. Real Estate Real estate is stated at cost. Acquisition fees are capitalized as a cost of real estate. In 1995, the Partnership adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of ", which requires impairment losses to be recognized for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows are not sufficient to recover the asset's carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The adoption of the SFAS had no effect on the Partnership's financial statements. Depreciation Depreciation is computed by the straight-line method over estimated useful lives ranging from 30 to 39 years for buildings and improvements and six years for furnishings. Deferred Leasing Commissions Leasing commissions are deferred and amortized over the lives of the related leases. At December 31, 1995 and 1994, accumulated amortization of deferred leasing commissions totaled $72,000 and $41,000, respectively. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 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. Reclassification Certain amounts have been reclassified to conform to the 1995 presentation. 2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES In accordance with the Partnership Agreement, the Partnership may be charged by the general partner and affiliates for services provided to the Partnership. From March 1988 to December 1992, such amounts were assigned pursuant to a services agreement by the general partner and affiliates to Metric Realty Services, L.P. ("MRS"), which performed partnership management and other services for the Partnership. On January 1, 1993, Metric Management, Inc. ("MMI") successor to MRS, a company which is not affiliated with the general partner, commenced providing certain property and portfolio management services to the Partnership under a new services agreement. As provided in the new services agreement effective January 1, 1993, no reimbursements were made to the general partner and affiliates after December 31, 1992. Subsequent to December 31, 1992, reimbursements were made to MMI. On December 16, 1993, the services agreement with MMI was modified and, as a result thereof, NPI Equity began directly providing cash management and other Partnership services on various dates commencing December 23, 1993 (see Notes 1 and 7). In accordance with the partnership agreement, the general partner is entitled to receive a partnership management fee in an amount equal to 10 percent of cash available for distribution. Related party expenses for the years ended December 31, 1995, 1994 and 1993 were as follows: CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES (Continued)
1995 1994 1993 --------- --------- --------- Partnership management fees $ 123,000 $ 123,000 $ 154,000 Real estate tax reduction fees 16,000 10,000 - Reimbursement of expenses: Partnership accounting and investor services 97,000 88,000 - --------- --------- --------- Total $ 236,000 $ 221,000 $ 154,000 ========= ========= =========
Property management fees and real estate tax reduction fees are included in operating expenses. Partnership management fees and reimbursed expenses are primarily included in general and administrative expenses. In accordance with the partnership agreement, the general partner was allocated its one percent continuing interest in the Partnership's net loss and taxable loss 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. 3. 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 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. 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. CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 3. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES (Continued) Separate audited financial statements for the above joint ventures are included in this Item 8. 4. REAL ESTATE Real estate, at December 31, 1995 and 1994, is summarized as follows:
1995 1994 ----------- ----------- Land $ 4,410,000 $ 4,410,000 Buildings, improvements and furnishings 13,327,000 12,914,000 ----------- ----------- Total 17,737,000 17,324,000 Accumulated depreciation (3,226,000) (2,764,000) ----------- ----------- Real estate, net $14,511,000 $14,560,000 =========== ===========
5. MINIMUM FUTURE RENTAL REVENUES Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1995, are as follows: 1996 $ 1,581,000 1997 1,415,000 1998 1,239,000 1999 1,054,000 2000 862,000 Thereafter 6,098,000 ----------- Total $12,249,000 =========== 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, 1995, 1994 and 1993, the percentages were as follows: CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 5. MINIMUM FUTURE RENTAL REVENUES (Continued)
Percentage of Total Rental Revenue ---------------------------------- 1995 1994 1993 -------- -------- --------- Butler Square Center 18% 15 % 13 % Kenilworth Commons Shopping Center 15% 18 % 14 % Plantation Pointe Shopping Center 18% 20 % 18 %
Amortization of leasing commissions totaled $38,000, $20,000 and $14,000 in 1995, 1994 and 1993, respectively. 6. 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:
1995 1994 1993 ---------- ----------- ------------ Net income (loss) - financial statements $1,017,000 $ (871,000) $ 567,000 Differences resulted from: Depreciation 130,000 114,000 110,000 Equity in unconsolidated joint ventures' operations (178,000) 1,819,000 104,000 Other (2,000) 3,000 - ---------- ----------- ----------- Net income - income tax method $ 967,000 $ 1,065,000 $ 781,000 ========== =========== ============ Taxable income per limited partnership assignee unit after giving effect to the allocation to the general partner $ 13 $ 14 $ 11 ============ ============ ============ Partners' equity - financial statements $ 24,318,000 $ 24,412,000 $ 26,394,000 Differences resulted from: Sales commissions 3,050,000 3,050,000 3,050,000 Organization expenses 2,452,000 2,452,000 2,452,000 Depreciation 829,000 699,000 585,000 Payments credited to rental properties 112,000 112,000 112,000 Equity in unconsolidated joint ventures' operations 3,550,000 3,728,000 1,909,000 Other (6,000) (4,000) (7,000) ----------- ------------ ----------- Partners' equity - income tax method $34,305,000 $ 34,449,000 $34,495,000 =========== ============ ===========
CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 7. SUBSEQUENT EVENTS 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. As a result of the transaction, the Managing General Partner of the Partnership is controlled by Insignia. Insignia affiliates now provide property and asset management services to the Partnership, maintain its books and records and oversee its operations. SCHEDULE III CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995
COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN A B C D E F G H I Cost Capitalized Gross Amount at Initial Cost Subsequent Which Carried at to Partnership to Acquisition Close of Period(1) -------------- -------------- -------------------- Life on which Deprecia- Accumu- Year tion is Buildings Buildings lated of Date computed and and Deprecia- Con- of in latest Encum- Improve- Improve- Carrying Improve- tion struc- Acqui- statement of Description brances Land ments ments Costs Land ments Total (2) (3) tion sition operations - ----------- ------- ------ -------- -------- -------- ------ --------- --------- --------- ------- -------- ------------- (Amounts in thousands) Butler Square Center Mauldin, South Carolina $ - $ 873 $ 5,396 $466 $ (55) $ 866 $ 5,814 $ 6,680 $1,466 1987 1/88 30 to 39 yrs. Kenilworth Commons Shopping Center Charlotte, North Carolina - 1,701 2,895 13 (57) 1,679 2,873 4,552 707 1988 8/88 30 to 39 yrs. Plantation Pointe Shopping Center Smyrna, Georgia - 1,865 4,563 77 - 1,865 4,640 6,505 1,053 1988 4/89 6 to 39 yrs. - ----------- -------- ------- --------- -------- ------ ------ -- ---- ------ ------- ------ ------- ------------ TOTAL $ - $4,439 $12,854 $556 $(112) $4,410 $13,327 $17,737 $3,226 =========== ======== ======= ========= ======== ====== ====== ======= ======= =====
See accompanying notes. SCHEDULE III CENTURY PENSION INCOME FUND XXIV, A California Limited Partnership REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995 NOTES: (1) The aggregate cost for Federal income tax purposes is $17,849,000. (2) Balance, January 1, 1993 $17,255,000 Improvements capitalized subsequent to acquisition 9,000 ----------- Balance, December 31, 1993 17,264,000 Improvements capitalized subsequent to acquisition 60,000 ----------- Balance, December 31, 1994 17,324,000 Improvements capitalized subsequent to acquisition 413,000 ----------- Balance, December 31, 1995 $17,737,000 =========== (3) Balance, January 1, 1993 $1,892,000 Additions charged to expense 433,000 ---------- Balance, December 31, 1993 2,325,000 Additions charged to expense 439,000 ---------- Balance, December 31, 1994 2,764,000 Additions charged to expense 462,000 ---------- Balance, December 31, 1995 $3,226,000 ========== 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, 1995 and 1994, and the related statements of operations, partners' equity and cash flows for the years then ended. Our audits also included the additional information supplied pursuant to Item 14(a)(2). 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, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Imowitz Koenig & Co., LLP Certified Public Accountants New York, N.Y. February 20, 1996 INDEPENDENT AUDITORS' REPORT Coral Palm Plaza Joint Venture: We have audited the accompanying statements of operations, partners' equity and cash flows of Coral Palm Plaza Joint Venture (the "Partnership") for the year ended December 31, 1993. 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 audit. We conducted our audit 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 audit provides a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the results of operations and cash flows of the Partnership for the year ended December 31, 1993 in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP San Francisco, California March 18, 1994 CORAL PALM PLAZA JOINT VENTURE BALANCE SHEETS
DECEMBER 31, --------------------- 1995 1994 ----------- ----------- ASSETS Cash and cash equivalents $ 263,000 $ 239,000 Receivables and other assets 270,000 881,000 Real Estate: Real estate 16,140,000 16,065,000 Accumulated depreciation (3,046,000) (2,829,000) Allowance for impairment of value (7,091,000) (7,091,000) ----------- ----------- Real estate, net 6,003,000 6,145,000 Deferred leasing commissions, net 154,000 87,000 ----------- ----------- Total assets $ 6,690,000 $ 7,352,000 =========== =========== LIABILITIES AND PARTNERS' EQUITY Unearned revenue and other liabilities $ 345,000 $ 844,000 ----------- ----------- Total liabilities 345,000 844,000 ----------- ----------- Contingencies Partners' equity: Century Pension Income Fund XXIII 4,231,000 4,339,000 Century Pension Income Fund XXIV 2,114,000 2,169,000 ----------- ----------- Total partners' equity 6,345,000 6,508,000 ----------- ----------- Total liabilities and partners' equity $ 6,690,000 $ 7,352,000 =========== ===========
See notes to financial statements. CORAL PALM PLAZA JOINT VENTURE STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, ----------------------------- 1995 1994 1993 --------- ----------- ---------- Revenues: Rental $ 939,000 $ 1,084,000 $1,003,000 Interest and other income 717,000 6,000 5,000 ---------- ----------- ---------- Total revenues 1,656,000 1,090,000 1,008,000 ---------- ----------- ---------- Expenses: Provision for impairment of value - 4,500,000 - Operating 625,000 573,000 619,000 Depreciation 217,000 351,000 333,000 General and administrative 11,000 15,000 10,000 ---------- ----------- ---------- Total expenses 853,000 5,439,000 962,000 ---------- ----------- ---------- Net income (loss) $ 803,000 $(4,349,000) $ 46,000 ========== =========== ==========
See notes to financial statements. CORAL PALM PLAZA JOINT VENTURE STATEMENTS OF PARTNERS' EQUITY YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Century Century Pension Pension Income Income Fund XXIII Fund XXIV Total ---------- --------- ----- Balance - January 1, 1993 $ 7,623,000 $ 3,812,000 $11,435,000 Net income 31,000 15,000 46,000 Cash distributions (116,000) (58,000) (174,000) ----------- ----------- ----------- Balance - December 31, 1993 7,538,000 3,769,000 11,307,000 Net loss (2,899,000) (1,450,000) (4,349,000) Cash distributions (300,000) (150,000) (450,000) ----------- ----------- ----------- Balance - December 31, 1994 4,339,000 2,169,000 6,508,000 Net income 535,000 268,000 803,000 Cash distributions (643,000) (323,000) (966,000) ----------- ----------- ----------- Balance - December 31, 1995 $ 4,231,000 $ 2,114,000 $ 6,345,000 ============ =========== ===========
See notes to financial statements. CORAL PALM PLAZA JOINT VENTURE STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, ------------------------------- 1995 1994 1993 ---- ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 803,000 $(4,349,000) $ 46,000 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 249,000 380,000 358,000 Deferred leasing commissions paid (99,000) (42,000) (41,000) Provision for impairment of value - 4,500,000 - Changes in operating assets and liabilities: Receivables and other assets 611,000 (621,000) (129,000) Unearned revenue and other liabilities (499,000) 749,000 15,000 --------- ----------- --------- Net cash provided by operating activities 1,065,000 617,000 249,000 --------- ----------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to real estate (75,000) (26,000) (72,000) --------- ----------- --------- Cash used in investing activities (75,000) (26,000) (72,000) --------- ----------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Joint venture partners' distributions paid (966,000) (450,000) (174,000) --------- ----------- --------- Cash used in financing activities (966,000) (450,000) (174,000) --------- ----------- --------- Increase in Cash and Cash Equivalents 24,000 141,000 3,000 Cash and Cash Equivalents at Beginning of Year 239,000 98,000 95,000 --------- ----------- --------- Cash and Cash Equivalents at End of Year $ 263,000 $ 239,000 $ 98,000 ========= ========== =========
See notes to financial statements. CORAL PALM PLAZA JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. 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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Partnership considers all highly liquid investments with an original maturity date of three months or less at the time of purchase to be cash equivalents. Concentration of Credit Risk The Partnership maintains cash balances at institutions insured up to $100,000 by the Federal Deposit Insurance Corporation. Balances in excess of $100,000 are usually invested in repurchase agreements, which are collateralized by United States Treasury obligations. Cash balances exceeded these insured levels during the year. Real Estate Real estate is stated at cost. Acquisition fees are capitalized as a cost of real estate. In 1995, the Partnership adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of ", which requires impairment losses to be recognized for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows are not sufficient to recover the asset's carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The adoption of the SFAS had no effect on the Partnership's financial statements. Depreciation Depreciation is computed by the straight-line method over estimated useful lives ranging from 30 to 39 years for buildings and improvements. CORAL PALM PLAZA JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Leasing Commissions Leasing commissions are deferred and amortized over the lives of the related leases, which range from one to eleven years. At December 31, 1995 and 1994, accumulated amortization of deferred leasing commissions totaled $90,000 and $68,000, 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. 2. RELATED PARTY TRANSACTIONS During 1995 and 1994, the Partnership paid an affiliate of the general partner a $16,000 and $10,000 fee, respectively, relating to a successful real estate tax appeal for the joint venture. These fees were allocated 66.67% to XXIII and 33.33% to XXIV, in accordance with the partnership agreement. 3. REAL ESTATE Real estate, at December 31, 1995 and 1994, is summarized as follows:
1995 1994 ------------ ----------- Land $ 4,876,000 $ 4,876,000 Buildings and improvements 11,264,000 11,189,000 ------------ ----------- Total 16,140,000 16,065,000 Accumulated depreciation (3,046,000) (2,829,000) Allowance for impairment of value (7,091,000) (7,091,000) ----------- ----------- Real estate, net $ 6,003,000 $ 6,145,000 =========== ===========
CORAL PALM PLAZA JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 4. ALLOWANCE FOR IMPAIRMENT OF VALUE During 1994, based upon current economic conditions and projected future operational cash flows, the Partnership determined that the decline in value of the Coral Palm Plaza Shopping Center was other than temporary and that recovery of its carrying value was not likely. Accordingly, the property's carrying value was reduced by $4,500,000 to an amount equal to its estimated fair value. Due to the current real estate market, it is reasonably possible that the Partnership's estimate of fair value will change within the next year. 5. 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. 6. MINIMUM FUTURE RENTAL REVENUES Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1995, are as follows: 1996 $ 744,000 1997 782,000 1998 697,000 1999 576,000 2000 482,000 Thereafter 1,018,000 ---------- Total $4,299,000 ========== Rental revenue from one tenant was 20 percent, 22 percent and 20 percent of total rental revenues in 1995, 1994 and 1993, respectively. Rental revenue from another tenant was 19 percent, 13 percent and 10 percent of total rental revenues in 1995, 1994 and 1993, respectively. CORAL PALM PLAZA JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 6. MINIMUM FUTURE RENTAL REVENUES (Continued) Rental revenues included percentage and other contingent rentals of $59,000, $40,000 and $52,000 in 1995, 1994 and 1993, respectively. Amortization of deferred leasing commissions totaled $32,000, $29,000 and $25,000 for the years ended December 31, 1995, 1994 and 1993, respectively. SCHEDULE III CORAL PALM PLAZA JOINT VENTURE REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995
COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN A B C D E F G H I Cost Capitalized Gross Amount at Initial Cost Subsequent Which Carried at to Partnership to Acquisition Close of Period(1) -------------- ---------------- -------------------- Accumu- Life lated on which Deprecia- Deprecia- tion Year tion is Buildings Buildings and Provision of Date computed and and for Impair- Con- of in latest Encum- Improve- Improve- Carrying Improve- Total ment struc- Acqui- statement of Description brances Land ments ments Costs Land ments (2) (3) tion sition operations - ----------- -------- ------ --------- -------- -------- ------ --------- ------- ------------- ------ ------- ------------ (Amounts in thousands) Coral Palm Plaza Coral Springs, Florida $ - $5,009 $11,046 $512 $(427) $4,876 $11,264 $16,140 $10,137 1985 1/87 30-39 Yrs. =========== ======== ====== ========= ======== ======== ====== ========= ======= =============
See accompanying notes. SCHEDULE III CORAL PALM PLAZA JOINT VENTURE REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995 NOTES: (1) The aggregate cost for Federal income tax purposes is $16,568,000. (2) Balance, January 1, 1993 $15,967,000 Improvements capitalized subsequent to acquisition 72,000 ----------- Balance, December 31, 1993 16,039,000 Improvements capitalized subsequent to acquisition 26,000 ----------- Balance, December 31, 1994 16,065,000 Improvements capitalized subsequent to acquisition 75,000 ----------- Balance, December 31, 1995 $16,140,000 =========== (3) Balance, January 1, 1993 $ 4,736,000 Additions charged to expense 333,000 ---------- Balance, December 31, 1993 5,069,000 Additions charged to expense 351,000 Provision for impairment of value 4,500,000 --------- Balance, December 31, 1994 9,920,000 Additions charged to expense 217,000 ---------- Balance, December 31, 1995 $10,137,000 =========== 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, 1995 and 1994, and the related statements of operations, partners' equity and cash flows for the years then ended. Our audits also included the additional information supplied pursuant to Item 14(a)(2). 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, 1995 and 1994, and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Imowitz Koenig & Co., LLP Certified Public Accountants New York, N.Y. February 20, 1996 INDEPENDENT AUDITORS' REPORT Minneapolis Business Parks Joint Venture: We have audited the accompanying statements of operations, partners' equity and cash flows of Minneapolis Business Parks Joint Venture (the "Partnership") for the year ended December 31, 1993. 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 audit. We conducted our audit 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 audit provides a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the results of operations and cash flows of the Partnership for the year ended December 31, 1993 in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP San Francisco, California March 18, 1994 MINNEAPOLIS BUSINESS PARKS JOINT VENTURE BALANCE SHEETS DECEMBER 31, --------------------------- 1995 1994 ------------ ------------ ASSETS Cash and cash equivalents $ 159,000 $ 648,000 Other assets 193,000 134,000 Real Estate: Real estate 20,467,000 20,214,000 Accumulated depreciation (4,603,000) (3,999,000) ------------ ------------ Real estate, net 15,864,000 16,215,000 Deferred leasing commissions, net 243,000 214,000 ------------ ------------ Total assets $ 16,459,000 $ 17,211,000 ============ ============ LIABILITIES AND PARTNERS' EQUITY Accrued expenses and other liabilities $ 157,000 $ 151,000 ------------ ------------ Total liabilities 157,000 151,000 ------------ ------------ Contingencies Partners' equity: Century Pension Income Fund XXIII 11,033,000 11,548,000 Century Pension Income Fund XXIV 5,269,000 5,512,000 ------------ ------------ Total partners' equity 16,302,000 17,060,000 ------------ ------------ Total liabilities and partners' equity $ 16,459,000 $ 17,211,000 ============ ============ See notes to financial statements. MINNEAPOLIS BUSINESS PARKS JOINT VENTURE STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31, -------------------------------------- 1995 1994 1993 ---------- ---------- ---------- Revenues: Rental $2,833,000 $2,648,000 $2,361,000 Interest and other income 48,000 18,000 8,000 ---------- ---------- ---------- Total revenues 2,881,000 2,666,000 2,369,000 ---------- ---------- ---------- Expenses Operating 1,521,000 1,402,000 1,470,000 Depreciation 604,000 613,000 592,000 General and administrative 8,000 11,000 21,000 ---------- ---------- ---------- Total expenses 2,133,000 2,026,000 2,083,000 ---------- ---------- ---------- Net income $ 748,000 $ 640,000 $ 286,000 ========== ========== ========== See notes to financial statements. MINNEAPOLIS BUSINESS PARKS JOINT VENTURE STATEMENTS OF PARTNERS' EQUITY YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 Century Century Pension Pension Income Income Fund XXIII Fund XXIV Total ------------ ----------- ------------ Balance - January 1, 1993 $ 11,223,000 $ 5,358,000 $ 16,581,000 Net income 194,000 92,000 286,000 Cash distributions (304,000) (143,000) (447,000) ------------ ----------- ------------ Balance - December 31, 1993 11,113,000 5,307,000 16,420,000 Net income 435,000 205,000 640,000 ------------ ----------- ------------ Balance - December 31, 1994 11,548,000 5,512,000 17,060,000 Net income 509,000 239,000 748,000 Cash distributions (1,024,000) (482,000) (1,506,000) ------------ ----------- ------------ Balance - December 31, 1995 $ 11,033,000 $ 5,269,000 $ 16,302,000 ============ =========== ============ See notes to financial statements. MINNEAPOLIS BUSINESS PARKS JOINT VENTURE STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, ---------------------------------- 1995 1994 1993 ---------- ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 748,000 $ 640,000 $ 286,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 683,000 685,000 681,000 Deferred leasing commissions paid (108,000) (118,000) (109,000) Changes in operating assets and liabilities: Other assets (59,000) (103,000) 23,000 Accrued expenses and other liabilities 6,000 8,000 (64,000) ---------- ---------- ---------- Net cash provided by operating activities 1,270,000 1,112,000 817,000 ---------- ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to real estate (253,000) (560,000) (309,000) ---------- ---------- ---------- Cash used in investing activities (253,000) (560,000) (309,000) ---------- ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Joint venture partners' distributions paid (1,506,000) - (447,000) ---------- ---------- ---------- Cash used in financing activities (1,506,000) - (447,000) ---------- ---------- ---------- (Decrease) Increase in Cash and Cash Equivalents (489,000) 552,000 61,000 Cash and Cash Equivalents at Beginning of Year 648,000 96,000 35,000 ---------- ---------- ---------- Cash and Cash Equivalents at End of Year $ 159,000 $ 648,000 $ 96,000 ========== ========= ========= See notes to financial statements. MINNEAPOLIS BUSINESS PARKS JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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"), both are 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 The Partnership considers all highly liquid investments with an original maturity date of three months or less at the time of purchase to be cash equivalents. Concentration of Credit Risk The Partnership maintains cash balances at institutions insured up to $100,000 by the Federal Deposit Insurance Corporation. Balances in excess of $100,000 are usually invested in repurchase agreements, which are collateralized by United States Treasury obligations. Cash balances exceeded these insured levels during the year. At December 31, 1995, the Partnership had $116,000 invested in overnight repurchase agreements, secured by United States Treasury obligations, which are included in cash and cash equivalents. Real Estate Real estate is stated at cost. Acquisition fees are capitalized as a cost of real estate. In 1995, the Partnership adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of", which requires impairment losses to be recognized for long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows are not sufficient to recover the asset's carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The adoption of the SFAS had no effect on the Partnership's financial statements. Depreciation Depreciation is computed by the straight-line method over estimated useful lives ranging from 30 to 39 years for buildings and improvements. MINNEAPOLIS BUSINESS PARKS JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Deferred Leasing Commissions Leasing commissions are deferred and amortized over the lives of the related leases, which range from one to eight years. At December 31, 1995 and 1994, accumulated amortization of deferred costs totaled $205,000 and $158,000, 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. 2. RELATED PARTY TRANSACTIONS During 1995, the Partnership paid an affiliate of the managing general partner of XXIII and XXIV, a $33,000 fee relating to successful real estate tax appeals on Alpha and Westpoint Business Center joint venture properties. These fees were allocated 68 percent to XXIII and 32 percent to XXIV, in accordance with the partnership agreement. 3. REAL ESTATE Real estate, at December 31, 1995 and 1994, is summarized as follows:
1995 1994 ------------- ------------ Land $ 4,523,000 $ 4,523,000 Buildings and improvements 15,944,000 15,691,000 ------------- ------------ Total 20,467,000 20,214,000 Accumulated depreciation (4,603,000) (3,999,000) ------------- ------------ Real estate, net $ 15,864,000 $ 16,215,000 ============= ============
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 4. MINIMUM FUTURE RENTAL REVENUES Minimum future rental revenues from operating leases having non-cancelable lease terms in excess of one year at December 31, 1995, are as follows: 1996 $ 2,350,000 1997 1,869,000 1998 1,565,000 1999 997,000 2000 659,000 Thereafter 1,037,000 ----------- Total $ 8,477,000 =========== Amortization of deferred leasing commissions totaled $79,000, $72,000 and $89,000 for the years ended December 31, 1995, 1994 and 1993, respectively. SCHEDULE III MINNEAPOLIS BUSINESS PARKS JOINT VENTURE REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995
COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN COLUMN A B C D E F G H I Cost Capitalized Gross Amount at Initial Cost Subsequent Which Carried at to Partnership to Acquisition Close of Period(1) -------------- ---------------- ---------------------- Life on which Deprecia- Accumu- Year tion is Buildings Buildings lated of Date computed and and Deprecia- Con- of in latest Encum- Improve- Improve- Carrying Improve- Total tion struc- Acqui- statement of Description brances Land ments ments Costs Land ments (2) (3) tion sition operations - ----------- ------- ------ --------- -------- -------- ------ --------- ------- --------- ------ ------- ------------ (Amounts in thousands) Alpha Business Center Bloomington, Minnesota $ - $3,199 $ 6,735 $1,034 $ (611) $3,002 $ 7,355 $10,357 $2,156 1979 5/87 30-39 Yrs. Plymouth Service Center Plymouth, Minnesota - 475 2,306 276 (326) 419 2,312 2,731 634 1979 5/87 30-39 Yrs. Westpoint Business Center Plymouth, Minnesota - 1,166 5,987 622 (396) 1,102 6,277 7,379 1,813 1979 5/87 30-39 Yrs. - ----------- ------- ------ --------- -------- ------- ------ ------- ------- ------ TOTAL $ - $4,840 $15,028 $1,932 $(1,333) $4,523 $15,944 $20,467 $4,603 ======= ====== ========= ======== ======= ====== ======= ======= ======
See accompanying notes. SCHEDULE III MINNEAPOLIS BUSINESS PARKS JOINT VENTURE REAL ESTATE AND ACCUMULATED DEPRECIATION DECEMBER 31, 1995 NOTES: (1) The aggregate cost for Federal income tax purposes is $21,800,000. (2) Balance, January 1, 1993 $19,345,000 Improvements capitalized subsequent to acquisition 309,000 ----------- Balance, December 31, 1993 19,654,000 Improvements capitalized subsequent to acquisition 560,000 ----------- Balance, December 31, 1994 20,214,000 Improvements capitalized subsequent to acquisition 253,000 ----------- Balance, December 31, 1995 $20,467,000 =========== (3) Balance, January 1, 1993 $2,794,000 Additions charged to expense 592,000 ---------- Balance, December 31, 1993 3,386,000 Additions charged to expense 613,000 ---------- Balance, December 31, 1994 3,999,000 Additions charged to expense 604,000 ---------- Balance, December 31, 1995 $4,602,000 ========== Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures. Effective April 22, 1994, the Registrant dismissed its prior Independent Auditors, Deloitte & Touche, LLP ("Deloitte") and retained as its new Independent Auditors, Imowitz Koenig & Company, LLP. Deloitte's Independent Auditors' Report on the Registrant's financial statements for the calendar year ended December 31, 1993 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. The decision to change Independent Auditors was approved by the Managing General Partner's Directors. During the calendar year ended 1993 and through April 22, 1994, there were no disagreements between the Registrant and Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope of procedure which disagreements if not resolved to the satisfaction of Deloitte, would have caused it to make reference to the subject matter of the disagreements in connection with its reports. Effective April 22, 1994, the Registrant engaged Imowitz Koenig & Company, LLP as its Independent Auditors. The Registrant did not consult Imowitz Koenig & Company, LLP regarding any of the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K prior to April 22, 1994. 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 (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. NPI Equity Investments II, Inc., which controls the Managing General Partner, is a wholly-owned affiliate of National Property Investors, Inc., which in turn is owned by an affiliate of Insignia (See "Item 1, Business - Change in Control"). Insignia is a full service real estate service organization performing property management, commercial and retail leasing, investor services, partnership administration, mortgage banking, and real estate investment banking services for various entities. Insignia commenced operations in December 1990 and is the largest manager of multifamily residential properties in the United States and is a significant manager of commercial property. It currently provides property and/or asset management services for over 2,000 properties. Insignia's properties consist of approximately 300,000 units of multifamily residential housing and approximately 64 million square feet of commercial space. As of March 1, 1996, the names and positions held by the officers and directors of the Managing General Partner are as follows:
Has served as a Director and/or Officer of the Managing Name Positions Held General Partner since - ---- -------------- ----------------------- William H. Jarrard, Jr. President and Director January 1996 Ronald Uretta Vice President and January 1996 Treasurer John K. Lines, Esquire Vice President, January 1996 Secretary and Director Thomas R. Shuler Director January 1996 Kelley M. Buechler Assistant Secretary January 1996
William H. Jarrard. Jr., age 49, has been President and a Director of the Managing General Partner since January 1996. Mr. Jarrard has been a Managing Director - Partnership Administration of Insignia since January 1991. Ronald Uretta, age 40, has been Insignia's Chief Financial Officer and Treasurer since January 1992. Since September 1990, Mr. Uretta has also served as the Chief Financial Officer and Controller of Metropolitan Asset Group. John K. Lines, Esquire, age 36, has been a Director and Vice President and Secretary of the Managing General Partner since January 1996, Insignia's General Counsel since June 1994, and General Counsel and Secretary since July 1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen Financial Corporation, West Palm Beach, Florida. From October 1991 until May 1993, Mr. Lines was a Senior Attorney with Banc One Corporation, Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was an attorney with Squire Sanders & Dempsey, Columbus, Ohio. Thomas R. Shuler, age 50, has been Managing Director - Residential Property Management of Insignia since March 1991 and Executive Managing Director of Insignia and President of Insignia Management Services since July 1994. Kelley M. Buechler, age 38, has been the Assistant Secretary of the Managing General Partner since January 1996 and Assistant Secretary of Insignia since 1991. No family relationships exist among any of the officers or directors of the Managing General Partner. Each director and officer of the Managing General Partner will hold office until the next annual meeting of stockholders of the Managing General Partner and until his successor is elected and qualified. 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. There are no arrangements known to the Registrant, the operation of which may, at a subsequent date, result in a change in control of the Registrant. Item 13. Certain Relationships and Related Transactions. In accordance with the Registrant's partnership agreement, the Registrant may be charged by the general partner and affiliates for services provided to the Registrant. On January 1, 1993, Metric Management, Inc. ("MMI"), a company which is not affiliated with the general partner, commenced providing certain property and portfolio management services to the Registrant under a new services agreement. As provided in the new services agreement effective January 1, 1993, no reimbursements were made to the general partner and affiliates after December 31, 1992. Subsequent to December 31, 1992, reimbursements were made to MMI. On December 16, 1993, the services agreement with MMI was modified and, as a result thereof, NPI Equity II began directly providing cash management and other partnership services on various dates commencing December 23, 1993. In accordance with the partnership agreement, the general partner is entitled to receive a partnership management fee in an amount equal to 10 percent of cash available for distribution. Related party expenses for the years ended December 31, 1995, 1994 and 1993 were as follows: 1995 1994 1993 --------- --------- --------- Partnership management fees $ 123,000 $ 123,000 $ 154,000 Real estate tax reduction fees 16,000 10,000 - Reimbursement of expenses: Partnership accounting and investor services 97,000 88,000 - --------- --------- --------- Total $ 236,000 $ 221,000 $ 154,000 ========= ========= ========= Property management fees and real estate tax reduction fees are included in operating expenses. Partnership management fees and reimbursed expenses are primarily included in general and administrative expenses. In accordance with the Registrant's partnership agreement, the general partner was allocated its one percent continuing interest in the Registrant's net loss and taxable loss and cash distributions. Net income and taxable income has been allocated to the general partner in an amount equal to the amount of cash distributions received by the general partner. 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. (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 28th day of March, 1996. CENTURY PENSION INCOME FUND XXIV By: Fox Partners VI Its General Partner By: Fox Capital Management Corporation Its Managing General Partner By: William H. Jarrard, Jr. ----------------------- William H. Jarrard, Jr. President 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 March 28, 1996 - --------------------------- William H. Jarrard, Jr. Director /s/ Ronald Uretta Principal Financial March 28, 1996 - ----------------- Ronald Uretta Officer and Principal Accounting Officer /s/ John K. Lines Director March 28, 1996 - ----------------- John K. Lines Exhibit Index Exhibit Page 2. NPI, Inc. Stock Purchase Agreement, dated as of (1) August 17, 1995, 3.4 Agreement of Limited Partnership (2) 16 Letter dated April 27, 1994 from the Registrant's Former (3) Independent Auditors ___________________ (1) Incorporated by reference to Exhibit 2 to the Registrant's Current Report on Form 8-K dated August 17, 1995. (2) 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 on Form S-11 (Reg No. 33-1261). (3) Incorporated by reference to the Registrant's Current Report on Form 8-K dated April 22, 1994. EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Pension Income Fund XXIV and is qualified in its entirety by reference to such financial statements. 1 YEAR DEC-31-1995 JAN-01-1995 DEC-31-1995 2,190,000 0 206,000 0 0 0 17,737,000 (3,226,000) 24,424,000 0 0 0 0 0 24,318,000 24,424,000 0 2,422,000 0 995,000 0 0 0 1,017,000 0 1,017,000 0 0 0 1,017,000 13.44 13.44 Receivables include other assets of $61,000.
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