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 March 31, 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)
(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
BALANCE SHEET
Unaudited
(in thousands, except unit data)
March 31, 1996
Assets
Cash and cash equivalents $ 817
Receivable and other assets 220
Deferred charges 187
Investment properties:
Land $ 2,553
Buildings and related personal property 9,653
12,206
Less accumulated depreciation (4,729) 7,477
$ 8,701
Liabilities and Partners' Capital
Liabilities
Accounts payable and accrued expense $ 271
Mortgage notes payable 2,983
Partners' Capital:
General partners' $ 5
Limited partners' (35,000 units outstanding) 5,442 5,447
$ 8,701
<FN>
See Accompanying Notes to Financial Statements
b) CENTURY PROPERTIES FUND XII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1996 1995
Revenues:
Rental income $ 572 $ 554
Interest and other income 11 17
Total revenues 583 571
Expenses:
Operating 267 202
Interest 62 58
Depreciation 92 92
General and administrative 62 54
Total expenses 483 406
Net income $ 100 $ 165
Net income allocated to general partners (1%) $ 1 $ 2
Net income allocated to limited partners (99%) 99 163
Net income $ 100 $ 165
Net income per limited partnership unit $ 2.83 $ 4.66
See Accompanying Notes to Financial Statements
c) CENTURY PROPERTIES FUND XII
STATEMENT OF PARTNERS' CAPITAL
(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 three
months ended March 31, 1996 -- 1 99 100
Partners' capital at
March 31, 1996 35,000 $ 5 $ 5,442 $ 5,447
<FN>
See Accompanying Notes to Financial Statements
d) CENTURY PROPERTIES FUND XII
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1996 1995
Cash flows from operating activities:
Net income $ 100 $ 165
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation 92 92
Amortization 14 14
Change in accounts:
Deferred charges -- (2)
Receivable and other assets (3) (71)
Accounts payable and accrued expenses 28 26
Net cash provided by operating activities 231 224
Cash flows from investing activities:
Property improvements and replacements (26) (17)
Net cash used in investing activities (26) (17)
Cash flows from financing activities:
Payments of mortgage notes payable (19) (18)
Net cash used in financing activities (19) (18)
Net increase in cash and cash equivalents 186 189
Cash and cash equivalents at beginning of period 631 1,101
Cash and cash equivalents at end of period $ 817 $ 1,290
Supplemental information:
Cash paid for interest $ 58 $ 57
<FN>
See Accompanying Notes to Financial Statements
e)
CENTURY PROPERTIES FUND XII
NOTES TO FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the 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 (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three month period ended March 31,
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
Century Properties Fund XII (the "Partnership") has no employees and is
dependent on its general partners and their 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 Three Months Ended
March 31,
1996 1995
Property management fees (included in operating
expenses) $ 7,000 $ 6,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 39,000 36,000
For the period from January 19, 1996, to March 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.
Note B - Transactions with Affiliated Parties (continued)
Fox Capital Management Corporation (the "Managing General Partner"), a
California corporation, and Fox Realty Investors ("FRI"), a California general
partnership, are the general partners of the Partnership.
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") pursuant to which NPI Equity was granted the right to vote 100% of the
outstanding stock of the Managing General Partner. In addition, NPI Equity
became the managing partner of FRI. As a result, NPI Equity indirectly became
responsible for the operation and management of the business and affairs of the
Registrant and the other investment partnership originally sponsored by the
Managing General Partner and/or FRI.
On August 17, 1995, the stockholders of NPI entered into an agreement to sell to
IFGP Corporation, an affiliate of Insignia, all of the issued and outstanding
common stock of NPI for an aggregate purchase price of $1,000,000. NPI Equity
is a wholly-owned subsidiary of NPI. 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, the Managing General
Partner and NPI equity resigned and IFGP Corporation caused new officers and
directors of each of those entities' to be elected.
Note C - Subsequent Events
On April 1, 1996, the Partnership sold Indian River Shopping Center to an
unaffiliated third party for $3,420,000. After closing expenses of $119,000,
the net proceeds received by the Partnership were approximately $3,301,000.
Note D - Proforma Financial Information
The following pro forma consolidated balance sheet as of March 31, 1996, and the
pro forma consolidated statement of operations for the three months ended March
31, 1996, and the year ended December 31, 1995, give effect to the sale of the
Partnership's Indian River Shopping Center. The adjustments related to the pro
forma consolidated balance sheet assume the transactions were consummated at
March 31, 1996, while the adjustments to the pro forma consolidated income
statement assume the transaction was consummated at the beginning of the year
presented. The sale occurred on April 1, 1996.
The pro forma adjustments required are to eliminate the assets, liabilities and
operating activity of Indian River Shopping Center to reflect consideration
received for the property.
These proforma 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.
Note D - PRO FORMA FINANCIAL INFORMATION (CONTINUED)
PRO FORMA CONSOLIDATED BALANCE SHEET
March 31, 1996
(in thousands)
Pro Forma
Historical Adjustments Pro Forma
ASSETS
Cash and cash equivalents $ 817 $ 3,301 $ 4,118
Receivables and other assets 220 (93) 127
Deferred costs, net 187 (34) 153
Real estate:
Real estate 12,206 (4,902) 7,304
Accumulated depreciation (4,729) 2,025 (2,704)
Real estate, net 7,477 (2,877) 4,600
Total assets $ 8,701 $ 297 $ 8,998
LIABILITIES AND PARTNERS' EQUITY
Mortgage notes payable $ 2,983 $ -- $ 2,983
Accounts payable and accrued expenses 271 (110) 161
Total liabilities 3,254 (110) 3,144
Partners' Equity 5,447 407 5,854
Total liabilities and partners' equity $ 8,701 $ 297 $ 8,998
Note D - PRO FORMA FINANCIAL INFORMATION (CONTINUED)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the three months ended March 31, 1996
(in thousands, except unit data)
Pro Forma
Historical Adjustments Pro Forma
Revenues
Rental $ 572 $ (161) $ 411
Interest and other income 11 -- 11
Total revenues 583 (161) 422
Expenses:
Operating 267 (103) 164
Interest 62 -- 62
Depreciation 92 (38) 54
General and administrative 62 -- 62
Total expenses 483 (141) 342
Net income $ 100 $ (20) $ 80
Net income per limited partnership unit $ 2.83 $ (.57) $ 2.26
Note D - PRO FORMA FINANCIAL INFORMATION (CONTINUED)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the year ended December 31, 1995
(in thousands, except unit data)
Pro Forma
Historical Adjustments Pro Forma
Revenues
Rental $ 2,389 $ (753) $ 1,636
Interest and other income 319 (1) 318
Total revenues 2,708 (754) 1,954
Expenses:
Operating 942 (290) 652
Interest 238 -- 238
Depreciation 373 (152) 221
General and administrative 262 -- 262
Total expenses 1,815 (442) 1,373
Net income $ 893 $ (312) $ 581
Net income per limited partnership unit $ 25.26 $ (8.83) $ 16.43
Distributions per limited partnership unit $ 34.29 $ -- $ 34.29
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of two shopping centers and one
residential apartment complex. The following table sets forth the average
occupancy of the properties for the three months ended March 31, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Country Club Plaza
Mesa, Arizona 98% 95%
Indian River Shopping Center
Scottsdale, Arizona 99% 98%
Parkside Apartments
Irving, TX 98% 96%
The Partnership's net income for the three months ended March 31, 1996, was
approximately $100,000 versus $165,000 for the comparable period in 1995. This
decrease in net income is primarily attributable to the increase in operating
expenses. This increase is a result of the actual 1995 property taxes at
Country Club Plaza being higher than estimated early in 1995. Therefore the
1996 taxes are estimated on this increased amount. Also contributing to this
change is an increase in various maintenance items to improve the appearances of
the properties. Finally, Indian River incurred costs in connection with
preparing the property for sale. General and administrative expenses increased
due to additional cost reimbursements associated with operating two
administrative offices during the three months ended March 31, 1996, and the
relocation costs of moving the administrative offices. Finally, interest income
decreased due to the Partnership maintaining lower cash balances as a result of
the 1995 fourth quarter distribution to the limited partners. Partially
offsetting the decrease in net income is an increase in rental revenue resulting
from increased occupancy at the Partnership's properties as well as increased
rental rates at Parkside Apartments.
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 rent, maintain or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of this
plan, the Managing General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expense 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 rate
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At March 31, 1996, the Partnership had unrestricted cash of approximately
$817,000 as compared to approximately $1,290,000 at March 31, 1995. Net cash
provided by operating activities increased primarily as a result of a decrease
in cash used for other assets. This change was offset by the decrease in net
income discussed above. The increase in cash used in investing activities was a
result of additional costs in connection with tenant improvements at Country
Club Plaza. The cash used in financing activities is comparable between the two
periods.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line up to $150,000 per property owned by the Partnership.
At the present time, the Partnership has no outstanding amounts due under this
line of credit. Based on present plans, the Managing General Partner does not
anticipate the need to borrow in the near future. Other than cash and cash
equivalents, the line of credit is the Partnership's only unused source of
liquidity.
On April 1, 1996, the Partnership sold Indian River Plaza to an unaffiliated
third party. The purchase price for the property was $3,420,000. Net proceeds
after payment of closing costs were approximately $3,301,000.
It is the Managing General Partners intent to sell the remaining two
properties. The Managing General Partner is currently negotiating the sale of
the properties with potential purchasers. Both sales are scheduled to close in
the second quarter of 1996. However, the Managing General Partner cannot
guarantee that these sales will be consummated. Upon the sale of the
Partnership's remaining proeprties it is expected that the Partnership will be
dissolved and its remaining cash, after establishing sufficient reserves, will
be ditributed in accordance with the Partnership Agreement.
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 various properties to adequately maintain the
physical assets and other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $2,983,000 relates to Country Club Plaza and has a
balloon payment due January 1999 at which time the property will either be
refinanced or sold. The Managing General Partner is evaluating the cash
position of the Partnership and expects to make a distribution in 1995. No cash
distributions were made in 1995 or during the first three months of 1996. The
promissory note holders have received full payment of principal and interest and
will not receive any residual interest. For the Limited Partners, it appears
that the original investment objective of capital growth from the inception of
the Partnership will not be attained and that investors will not receive a
return of all of 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 January 19, 1996, was filed
reporting the change in control of the Partnership.
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: May 15, 1996