FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
Commission file number 0-8658
CENTURY PROPERTIES FUND XII
(Exact name of small business issuer as specified in its charter)
California 94-2414893
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices) (zip code)
(864) 239-1000
Issuer's phone number
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports ), and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CENTURY PROPERTIES FUND XII
STATEMENT OF NET ASSETS IN LIQUIDATION
(Unaudited)
(in thousands)
June 30, 1996
Assets
Cash and cash equivalents $ 8,602
Other assets 4
8,606
Liabilities
Accounts payable and accrued expenses 111
Estimated costs during the period of 85
196
Net assets in liquidation $ 8,410
<FN>
See Accompanying Notes to Financial Statements
b) CENTURY PROPERTIES FUND XII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
Revenues:
Rental income $ 220 $ 631 $ 792 $ 1,185
Other income 68 24 79 41
Gain on sale of properties 3,030 -- 3,030 --
Total revenues 3,318 655 3,901 1,226
Expenses:
Operating 124 223 391 425
Interest 41 59 103 117
Depreciation 37 92 129 184
General and administrative 55 58 117 112
Total expenses 257 432 740 838
Income before adjustment to
liquidation basis and
extraordinary loss 3,061 223 3,161 388
Adjustment to liquidation
basis (86) -- (86) --
Income before extraordinary
loss 2,975 223 3,075 388
Extraordinary loss on early
extinguishment of debt (12) -- (12) --
Net income $ 2,963 $ 223 $ 3,063 $ 388
Net income allocated to
general partners (1%) $ 30 $ 2 $ 31 $ 4
Net income allocated to
limited partners (99%) 2,933 221 3,032 384
$ 2,963 $ 223 $ 3,063 $ 388
Net income per limited
partnership unit:
Income before extraordinary
loss $ 84.15 $ 6.31 $ 86.98 $ 10.97
Extraordinary loss (.35) -- (.35) --
Net income per limited
partnership unit $ 83.80 $ 6.31 $ 86.63 $ 10.97
<FN>
See Accompanying Notes to Financial Statements
c) CENTURY PROPERTIES FUND XII
STATEMENT OF CHANGES IN PARTNERS' CAPITAL/NET ASSETS IN LIQUIDATION
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners' Partners' Total
Original capital contributions 35,000 $ -- $ 35,000 $ 35,000
Partners' capital at
December 31, 1995 35,000 $ 4 $ 5,343 $ 5,347
Net income for the six months
ended June 30, 1996 -- 31 3,032 3,063
Net assets in liquidation at
June 30, 1996 35,000 $ 35 $ 8,375 $ 8,410
<FN>
See Accompanying Notes to Financial Statements
d) CENTURY PROPERTIES FUND XII
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Net income $ 3,063 $ 388
Adjustment to liquidation basis 86 --
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 150 211
Gain on sale of properties (3,030) --
Extraordinary loss on early extinguishment of debt 12 --
Change in accounts:
Deferred charges (5) (4)
Other assets 213 (28)
Accounts payable and accrued expenses (133) (20)
Net cash provided by operating activities 356 547
Cash flows from investing activities:
Property improvements and replacements (77) (27)
Proceeds from sale of properties 10,694 --
Net cash provided by (used in) investing
activities 10,617 (27)
Cash flows from financing activities:
Payments of mortgage notes payable (3,002) (37)
Net cash used in financing activities (3,002) (37)
Net increase in cash and cash equivalents 7,971 483
Cash and cash equivalents at beginning of period 631 1,101
Cash and cash equivalents at end of period $ 8,602 $ 1,584
Supplemental information:
Cash paid for interest $ 116 $ 115
<FN>
See Accompanying Notes to Financial Statements
e)
CENTURY PROPERTIES FUND XII
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
During the second quarter of 1996, Century Properties Fund XII ("the
Partnership"), sold its three remaining properties. As a result, the
Partnership changed its basis of accounting as of June 30, 1996, to a
liquidation basis of accounting. Consequently, assets have been valued at
estimated net realizable value and liabilities are presented at their estimated
settlement amounts including estimated costs associated with carrying out the
liquidation. The valuation of assets and liabilities necessarily requires many
estimates and assumptions and there are substantial uncertainties in carrying
out the liquidation. The actual realization of assets and settlement of
liabilities could be higher or lower than amounts indicated and is based upon
Fox Capital Management Corporation's ("FCMC" or the "Managing General Partner")
estimate as of the date of the financial statements.
The statement of net assets in liquidation as of June 30, 1996, includes $85,000
of accrued costs that the Managing General Partner estimates will be incurred
during the period of liquidation, based on the assumption that the liquidation
process will be completed by December 31, 1996. Because the success in
realization of assets and the settlement of liabilities is based on the Managing
General Partner's best estimates, the liquidation period may be shorter than
projected or it may be extended beyond the projected period.
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
under the liquidation basis of accounting and with instructions to Form 10-QSB
and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of the Managing General
Partner, all adjustments considered necessary for a fair presentation on the
liquidation basis have been included. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with affiliates of Insignia Financial Group, Inc.
("Insignia"), National Property Investors, Inc. ("NPI"), and affiliates of NPI
were charged to expense in 1996 and 1995:
For the Six Months Ended
June 30,
1996 1995
Property management fees (included in operating
expenses) $ 12,000 $ 12,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 73,000 73,000
Note B - Transactions with Affiliated Parties (continued)
For the period from January 19, 1996, to May 31, 1996, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the current
year's master policy. The current agent assumed the financial obligations to
the affiliate of the Managing General Partner who received payments on these
obligations from the agent. The amount of the Partnership's insurance premiums
accruing to the benefit of the affiliate of the Managing General Partner by
virtue of the agent's obligations is not significant.
FCMC, a California corporation, and Fox Realty Investors ("FRI"), a California
general partnership, are the general partners of the Partnership.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia acquired (i) control of NPI Equity Investments II, Inc.
("NPI Equity"), the managing general partner of FRI, and (ii) all of the issued
and outstanding shares of stock of FCMC. In connection with these transactions,
affiliates of Insignia appointed new officers and directors of NPI Equity and
FCMC.
Note C - Disposition of Rental Properties
On April 1, 1996, the Partnership sold Indian River Shopping Center to an
unaffiliated third party for $3,420,000. After closing expenses the net
proceeds received by the Partnership were approximately $3,315,000. For
financial statement purposes, the sale resulted in a gain of $400,000.
On May 31, 1996, the Partnership sold Country Club Plaza to an unaffiliated
third party for $5,609,000. After repayment of first mortgage of approximately
$2,970,000 and closing expenses of $87,000, the net proceeds received by the
Partnership were approximately $2,552,000. As a result of the payoff of the
first mortgage, an extraordinary loss representing the remaining unamortized
loan costs of $12,000 was recorded. For financial statement purposes, the sale
resulted in a gain of $1,117,000.
On May 31, 1996, the Partnership sold Parkside Apartments to an unaffiliated
third party for $2,000,000. After closing expenses the net proceeds received by
the Partnership were approximately $1,858,000. For financial statement
purposes, the sale resulted in a gain of $1,513,000.
Note D - Pro Forma Financial Information
The following pro forma balance sheet as of March 31, 1996, and the pro forma
statements of operations for the twelve months ended December 31, 1995, and the
six months June 30, 1996, give effect to the sale of Country Club Plaza and
Parkside Apartments. The adjustments related to the pro forma balance sheet
assume the transactions were consummated at March 31, 1996, while the
adjustments to the pro forma income statements assume the transactions were
consummated at the beginning of the year presented. The sales both occurred on
May 31, 1996.
The pro forma adjustments required are to eliminate the assets, liabilities, and
operating activity of Country Club Plaza and Parkside Apartments to reflect
consideration received for the properties.
These pro forma adjustments are not necessarily reflective of the results that
actually would have occurred if the sale had been in effect as of and for the
periods presented or what may be achieved in the future.
PRO FORMA BALANCE SHEET
March 31, 1996
(Unaudited)
(in thousands)
Pro Forma
Historical Adjustments Pro Forma
Assets
Cash and cash equivalents $ 817 $ 4,279 $ 5,096
Other assets 220 (89) 131
Deferred charges, net 187 (153) 34
Investment properties:
Real estate 12,206 (7,304) 4,902
Accumulated depreciation (4,729) 2,698 (2,031)
Real estate, net 7,477 (4,606) 2,871
$ 8,701 $ (569) $ 8,132
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expenses $ 271 $ (108) $ 163
Mortgage note payable 2,983 (2,983) --
3,254 (3,091) 163
Partners' Capital 5,447 2,522 7,969
$ 8,701 $ (569) $ 8,132
Note D - Pro Forma Financial Information (continued)
PRO FORMA STATEMENT OF OPERATIONS
For the Year Ended December 31, 1995
(Unaudited)
(in thousands, except unit data)
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Rental income $ 2,389 $ (1,630) $ 759
Other income 319 (18) 301
Total revenues 2,708 (1,648) 1,060
Expenses:
Operating 942 (663) 279
Interest 238 (238) --
Depreciation 373 (221) 152
General and administrative 262 -- 262
Total expenses 1,815 (1,122) 693
Net income $ 893 $ (526) $ 367
Net income per limited partnership unit $ 25.26 $(14.88) $ 10.38
Note D - Pro Forma Financial Information (continued)
PRO FORMA STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
(in thousands, except unit data)
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Rental $ 792 $ (627) $ 165
Other income 79 (12) 67
Gain on sale of properties 3,030 (2,630) 400
Total revenues 3,901 (3,269) 632
Expenses:
Operating 391 (283) 108
Interest 103 (103) --
Depreciation 129 (91) 38
General and administrative 117 -- 117
Total expenses 740 (477) 263
Income before adjustment to liquidation basis
and extraordinary loss 3,161 (2,792) 369
Adjustment to liquidation basis (86) -- (86)
Income before extraordinary loss 3,075 (2,792) 283
Extraordinary loss on early extinguishment
of debt (12) 12 --
Net income $ 3,063 $ (2,780) $ 283
Net income per limited partnership unit:
Income before extraordinary loss $ 86.98 $ (78.98) $ 8.00
Extraordinary loss (.35) .35 --
Net income per limited partnership unit $ 86.63 $ (78.63) $ 8.00
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
For the six months ended June 30, 1996, the Partnership recorded net income of
approximately $3,063,000 compared to approximately $388,000 for the
corresponding period of 1995. The Partnership recorded net income of
approximately $2,963,000 for the three months ended June 30, 1996, compared to
approximately $223,000 for the corresponding period of 1995. As discussed in
Item 1 "Notes to Financial Statements, Notes A and C," the Partnership sold its
remaining properties during the second quarter of 1996. As a result of the
sales of the Partnership's properties, the Partnership recorded an aggregate
gain of $3,030,000 during the second quarter of 1996 and the Partnership changed
its basis of accounting to a liquidation basis of accounting. The conversion to
the liquidation basis includes adjusting assets to their estimated net
realizable value and presenting liabilities at their estimated settlement
amounts, including estimated costs associated with carrying out the liquidation.
The Partnership recorded an $86,000 loss when it converted to the liquidation
basis of accounting on June 30, 1996.
During the three and six month periods ending June 30, 1996, rental income
decreased. Partially offsetting the rental income decrease was a decrease in
operating, interest, and depreciation expenses. These decreases in income and
expense are the direct result of the Partnership's properties being sold in the
second quarter of 1996. Other income increased for the three and six month
periods as a result of an increase in interest income due to increased cash
reserves resulting from cash received from the property sales. During the three
and six month periods ending June 30, 1996, the Partnership incurred an
extraordinary loss on the extinguishment of the Country Club Plaza debt. The
extraordinary loss represents the remaining unamortized loan costs at the time
of the payoff.
At June 30, 1996, the Partnership had unrestricted cash of $8,602,000 compared
to $1,584,000 at June 30, 1995. Net cash provided by operating activities
decreased as a result of the Partnership's properties being sold in the second
quarter of 1996. Net cash provided by investing activities increased due to
proceeds from the property sales. Net cash used in financing activities
increased due to the payoff of the first mortgage of Country Club at the time of
the property's sale.
The Partnership distributed $8,028,000 to the limited partners ($229.37 per
limited partnership unit) and $81,000 to the general partners on July 3, 1996.
The distribution was from sales proceeds and working capital reserves. Since
all the Partnership's properties have been sold, the Managing General Partner
expects the Partnership to be terminated by December 31, 1996, after payment of
outstanding liabilities and a final distribution to the partners. For the
limited partners, the original investment objective of capital growth will not
be attained and investors will not receive a return of all their invested
capital.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K: A form 8-K dated May 31, 1996, was filed reporting
the sales of Country Club Plaza and Parkside Apartments.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto, duly
authorized.
CENTURY PROPERTIES FUND XII
By: FOX CAPITAL MANAGEMENT CORPORATION
Its Managing General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: August 13, 1996