FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 312905, eff. 4/26/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from.........to.........
(Amended by Exchange Act Rel. No. 312905, eff. 4/26/93.)
Commission file number 0-15710
CENTURY PENSION INCOME FUND XXIV
(Exact name of registrant as specified in its charter)
California 94-2984976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
(864) 239-1000
(Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports ), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CENTURY PENSION INCOME FUND XXIV
BALANCE SHEETS
(in thousands, except unit data)
September 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 1,875 $ 2,190
Receivables and other assets 483 340
Investments in unconsolidated joint ventures 7,703 7,383
Investment properties:
Land 4,410 4,410
Buildings & related personal property 13,376 13,327
17,786 17,737
Less accumulated depreciation (3,584) (3,226)
14,202 14,511
$ 24,263 $ 24,424
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 157 $ 106
Partners' Capital
General partner's -- --
Limited partners' (73,341 units issued and
outstanding at September 30, 1996
and December 31, 1995) 24,106 24,318
Total partners' capital 24,106 24,318
$ 24,263 $ 24,424
Note: The balance sheet at December 31, 1995, has been derived from
the audited financial statements at that date but does not
include all of the information and footnotes required by
generally accepted accounting principles for complete
financial statements.
See Accompanying Notes to Financial Statements
b) CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Rental income $ 509 $ 461 $ 1,581 $ 1,430
Other income 29 20 82 69
Equity in income of
unconsolidated joint
ventures 126 148 282 481
Total revenues 664 629 1,945 1,980
Expenses:
Operating 245 113 492 354
General and administrative 155 126 474 382
Depreciation 120 110 358 329
Total expenses 520 349 1,324 1,065
Net income $ 144 $ 280 $ 621 $ 915
Net income allocated to
general partner $ 2 $ 3 $ 8 $ 9
Net income allocated to
limited partners 142 277 613 906
$ 144 $ 280 $ 621 $ 915
Net income per limited
partnership unit $ 1.93 $ 3.78 $ 8.35 $ 12.36
Cash distributions per
limited partnership unit $ 3.75 $ 3.75 $ 11.25 $ 11.25
<FN>
See Accompanying Notes to Financial Statements
c) CENTURY PENSION INCOME FUND XXIV
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner's Partners' Total
Original capital contributions 73,341 $ -- $ 36,671 $ 36,671
Partners' capital
at December 31, 1995 73,341 $ -- $ 24,318 $ 24,318
Net income for the nine months
ended September 30, 1996 -- 8 613 621
Distributions to partners -- (8) (825) (833)
Partners' capital
at September 30, 1996 73,341 $ -- $ 24,106 $ 24,106
<FN>
See Accompanying Notes to Financial Statements
d) CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Net income $ 621 $ 915
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 358 329
Amortization of lease commissions 33 28
Equity in income of unconsolidated joint
ventures' operations (282) (481)
Change in accounts:
Receivables and other assets (176) (99)
Accrued expenses and other liabilities 51 11
Net cash provided by operating activities 605 703
Cash flows from investing activities:
Property improvements and replacements (49) (410)
(Contributions to) distributions received from
unconsolidated joint ventures (38) 574
Net cash (used in) provided by investing
activities (87) 164
Cash flows from financing activities:
Distributions to partners (833) (833)
Net cash used in financing activities (833) (833)
(Decrease) increase in cash and cash equivalents (315) 34
Cash and cash equivalents at beginning of period 2,190 2,038
Cash and cash equivalents at end of period $ 1,875 $ 2,072
<FN>
See Accompanying Notes to Financial Statements
e)
CENTURY PENSION INCOME FUND XXIV
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Century Pension Income Fund
XXIV (the "Partnership") have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of Fox Capital Management Corporation, a California corporation ("FCMC"
or the "Managing General Partner"), all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and nine month periods ended
September 30, 1996, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1996. For further information,
refer to the financial statements and footnotes thereto included in the
Partnership's annual report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
Fox Partners VI, a California general partnership, is the general partner. The
general partners of Fox Partners VI are FCMC, and Fox Realty Investors ("FRI"),
a California general partnership.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("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. NPI
Equity is a wholly-owned subsidiary of National Property Investors, Inc.
("NPI"). In connection with these transactions, affiliates of Insignia appointed
new officers and directors of NPI Equity and FCMC.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES - continued
The following transactions with affiliates of Insignia, NPI, and affiliates of
NPI were charged to expense in 1996 and 1995:
For the Nine Months Ended
September 30,
1996 1995
Partnership management fee (included in general
and administrative expenses) (i) $ 93,000 $ 93,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 128,000 72,000
(i) The Partnership Agreement provides for the payment of a partnership
management fee to the general partner equal to ten percent of cash available
for distribution. This management fee is intended to defray some of the
expenses related to services provided by the general partner, or an
affiliate, but not reimbursed by the Partnership.
For the period from January 19, 1996, to September 30, 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.
For the period ended September 30, 1995, an affiliate of NPI was paid a fee of
$16,000 ($5,000 of which was allocated to the Partnership) relating to the
successful real estate tax appeal on the Partnership's Coral Palm Plaza and
Minneapolis Business Park joint venture properties. The allocable portion of
this fee is included in operating expenses.
The general partner received cash distributions of $8,000 during the nine months
ended September 30, 1996 and 1995.
NOTE C - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
The Partnership has investments in two unconsolidated joint ventures as follows:
Coral Palm Plaza Joint Venture
On January 21, 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.
The following are the balance sheets as of September 30, 1996, and December 31,
1995, and condensed statements of operations for the three and nine months ended
September 30, 1996 and 1995, of Coral Palm Plaza Joint Venture.
NOTE C - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES - (CONTINUED)
CORAL PALM PLAZA JOINT VENTURE
BALANCE SHEETS
(in thousands)
September 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 452 $ 263
Receivables and other assets, net of
allowance of $118 and $0, respectively 337 424
Investment properties:
Land 2,393 2,393
Building & related personal property 7,090 6,656
9,483 9,049
Less accumulated depreciation (3,174) (3,046)
6,309 6,003
$ 7,098 $ 6,690
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 417 $ 345
Partners' Capital:
Century Pension Income Fund XXIII 4,455 4,231
Century Pension Income Fund XXIV 2,226 2,114
Total partners' capital 6,681 6,345
$ 7,098 $ 6,690
Note: The balance sheet at December 31, 1995, has been derived from the
audited financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.
NOTE C - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES - (CONTINUED)
CORAL PALM PLAZA JOINT VENTURE
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues $ 340 $ 419 $ 874 $ 1,365
Expenses:
Bad debt expense 2 -- 118 --
Other expenses 143 210 531 568
Total expenses 145 210 649 $ 568
Net income $ 195 $ 209 $ 225 $ 797
Allocation of net income:
Century Pension
Income Fund XXIII $ 131 $ 139 $ 151 $ 531
Century Pension
Income Fund XXIV 64 70 74 266
$ 195 $ 209 $ 225 $ 797
NOTE C - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES - (CONTINUED)
The following are the balance sheets as of September 30, 1996, and December 31,
1995, and condensed statements of operations for the three and nine months ended
September 30, 1996 and 1995, of Minneapolis Business Parks Joint Venture.
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
BALANCE SHEETS
(in thousands)
September 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 1,322 $ 159
Receivables and other assets 546 436
Investment properties:
Land 4,523 4,523
Buildings & related personal property 15,966 15,944
20,489 20,467
Less accumulated depreciation (5,045) (4,603)
15,444 15,864
$ 17,312 $ 16,459
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 359 $ 157
Partners' Capital:
Century Pension Income Fund XXIII 11,476 11,033
Century Pension Income Fund XXIV 5,477 5,269
Total partners' capital 16,953 16,302
$ 17,312 $ 16,459
Note: The balance sheet at December 31, 1995, has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
NOTE C - INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES - CONTINUED
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Rental and other revenues $ 752 $ 743 $ 2,269 $ 2,178
Expenses 557 498 1,617 1,505
Net income $ 195 $ 245 $ 652 $ 673
Allocation of net income:
Century Pension
Income Fund XXIII $ 133 $ 167 $ 444 $ 458
Century Pension
Income Fund XXIV 62 78 208 215
$ 195 $ 245 $ 652 $ 673
NOTE D - DISTRIBUTIONS TO PARTNERS
The Partnership distributed $833,000 in cash during each of the nine month
periods ended September 30, 1996 and 1995 ($825,000 to limited partners and
$8,000 to the general partner).
NOTE E - EQUITY IN UNCONSOLIDATED JOINT VENTURES' OPERATIONS
At the Partnership's unconsolidated joint venture property, Coral Palm Plaza,
management accepted a lease buy-out of $800,000 in December 1994, from a
significant tenant which occupied 27,000 square feet (payment for the buyout was
received in 1995). 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 ($172,000 allocated to the Partnership).
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 in the amount of $266,000 ($89,000 allocated to the
Partnership).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of three wholly-owned shopping
centers, as well as three business parks and one shopping center owned by two
unconsolidated joint ventures between the Partnership and an affiliated
partnership. The following table sets forth the average occupancy of the
properties for the nine months ended September 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Butler Square Center
Mauldin, South Carolina 98% 94%
Kenilworth Commons Shopping Center
Charlotte, North Carolina 100% 100%
Plantation Pointe Shopping Center
Smyrna, Georgia 98% 98%
Coral Palm Plaza (1)
Coral Springs, Florida 73% 73%
Alpha Business Center (2)
Bloomington, Minnesota 93% 92%
Plymouth Service Center (2)
Plymouth, Minnesota 99% 95%
Westpoint Business Center (2)
Plymouth, Minnesota 97% 92%
(1)Property is owned by Coral Palm Plaza Joint Venture, which is a joint
venture between the Partnership, which has a 33 1/3% interest, and an
affiliated partnership.
(2)Property is owned by Minneapolis Business Parks Joint Venture, which is a
joint venture between the Partnership, which has a 32% interest, and an
affiliated partnership.
The Managing General Partner attributes the increased occupancy at Butler Square
Shopping Center primarily to the growing local economy which has been strongly
influenced by the introduction of two major employers into the market.
Occupancy at Plymouth Service Center increased due to a new tenant leasing
approximately 5,000 square feet in December, 1995. Finally, Westpoint Business
Center's occupancy increased due to a strong local market and the successful
execution of new leases since September 30, 1995.
The Partnership's net income for the nine months ended September 30, 1996, was
approximately $621,000 versus $915,000 for the same period of 1995. The net
income for the three months ended September 30, 1996, was approximately $144,000
compared to net income of approximately $280,000 for the three months ended
September 30, 1995. The decrease in net income for the three and nine month
periods ended September 30, 1996, versus the corresponding periods in 1995 is
primarily attributable to a decrease in equity in joint venture operations, and
an increase in operating expenses, and general and administrative expenses. The
decrease in equity in joint venture operations is the result of the recognition
of income in June of 1995 relating to a lease buy-out at the Partnership's
unconsolidated joint venture property, Coral Palm Plaza. The Managing General
Partner accepted a lease buy-out of $800,000 in December 1994, from a
significant tenant which occupied 27,000 square feet. During June 1995, the
Managing General Partner 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 ($172,000 allocated to the Partnership). As a result, other income at
Coral Palm Plaza decreased from the prior year, causing the decrease in equity
in joint venture operations. The increase in operating expenses is attributable
to the Partnership paying worker's compensation premiums related to 1992 and
1993 claims in September 1996; the premiums had previously been disputed.
Operating expense also increased due to parking lot repairs and increased
management fees at Butler Square. The increase in general and administrative
expenses is due to an increase in expense reimbursements. As noted in "Item 1,
Note B - Transactions with Affiliated Parties", the Partnership reimburses the
Managing General Partner and its affiliates for its costs involved in the
management and administrations of all partnership activities. While overall
expense reimbursements have increased during the three and nine month periods
ended September 30, 1996, the recurring expenses subsequent to the transition
efforts to the new administration are expected to more closely approximate
historical levels. The increase in expense reimbursements during the three and
nine month periods ended September 30, 1996, is directly attributable to the
combined transition efforts of the Greenville, South Carolina, and Atlanta,
Georgia, administrative offices during the year-end close, preparation of the
1995 10-K and tax return (including the limited partner K-1's), filing of the
first two quarterly reports and transition of asset management responsibilities
to the new administration. These increases in expense were partially offset by
increased rental revenue at Butler Square due to increased occupancy.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At September 30, 1996, the Partnership had unrestricted cash of approximately
$1,875,000 as compared to $2,072,000 at September 30, 1995. Net cash provided
by operating activities decreased primarily due to the decrease in net income as
discussed above. The increase in receivables and other assets is primarily
attributable to the increase in tenant receivables due to the timing of common
area maintenance, insurance and real estate tax billings. Net cash used in
investing activities increased primarily due to a distribution from
unconsolidated joint ventures in 1995, as opposed to a Partnership contribution
to Coral Palm in 1996. Partially offsetting this increase in cash used in
investing activities was a decrease in property improvements and replacements
due to 1995 tenant improvements at the Partnership's Butler Square Center. Net
cash used in financing activities remained constant, representing distributions
to the partners for both nine month periods ending September 30, 1996 and 1995.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the Partnership. The Partnership
distributed a total of $833,000 to the partners during each of the nine month
periods ended September 30, 1996 and 1995. These distributions included $8,000
to the general partner, and $825,000 ($11.25 per unit) to the limited partners.
Future cash distributions will depend on the levels of cash generated from
operations, property sales, and the availability of cash reserves, however,
quarterly distributions are expected to continue throughout 1996. The level of
such distributions will be contingent upon successful future operations.
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: None filed during the quarter ended September 30,
1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY PENSION INCOME FUND XXIV
By: FOX PARTNERS VI,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Its Managing General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: November 12, 1996