EXHIBIT 99.2
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
FINANCIAL STATEMENTS
DECEMBER 31, 1997, 1996 and 1995
List of Financial Statements
Independent Auditors' Report
Balance Sheets - December 31, 1997 and 1996
Statements of Operations-Years Ended December 31, 1997, 1996 and 1995
Statements of Changes in Partners' Capital-Years Ended December 31,
1997, 1996 and 1995
Statements of Cash Flows-Years Ended December 31, 1997, 1996 and 1995
Notes to Financial Statements
To the Partners
Minneapolis Business Parks Joint Venture
Greenville, South Carolina
Independent Auditors' Report
We have audited the accompanying balance sheets of Minneapolis Business Parks
Joint Venture (the "Partnership") as of December 31, 1997 and 1996, and the
related statements of operations, changes in partners' capital and cash flows
for each of the three years in the period ended December 31, 1997. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Minneapolis Business Parks
Joint Venture as of December 31, 1997 and 1996, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
/s/ Imowitz Koenig & Co., LLP
Certified Public Accountants
New York, N.Y.
February 12, 1998
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
BALANCE SHEETS
(in thousands)
December 31,
1997 1996
Assets
Cash and cash equivalents $ 2,751 $ 1,543
Receivables and other assets 650 507
Investment Properties:
Land 4,523 4,523
Building and related personal property 16,184 16,035
20,707 20,558
Less accumulated depreciation (5,777) (5,196)
14,930 15,362
$18,331 $17,412
Liabilities and Partners' Capital
Accrued expenses and other liabilities $ 167 $ 176
Partners' Capital:
Century Pension Income Fund XXIII 12,299 11,668
Century Pension Income Fund XXIV 5,865 5,568
Total partners' capital 18,164 17,236
$18,331 $17,412
<FN>
See Accompanying Notes to Financial Statements
</FN>
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
STATEMENTS OF OPERATIONS
(in thousands)
Years Ended December 31,
1997 1996 1995
Revenues:
Rental income $3,052 $3,000 $2,833
Other income 138 136 48
Total revenues 3,190 3,136 2,881
Expenses:
Operating 1,676 1,593 1,521
General and administrative 5 16 8
Depreciation 581 593 604
Total expenses 2,262 2,202 2,133
Net income $ 928 $ 934 $ 748
Allocation of net income:
Century Pension Income Fund XXIII $ 631 $ 635 $ 509
Century Pension Income Fund XXIV 297 299 239
$ 928 $ 934 $ 748
<FN>
See Accompanying Notes to Financial Statements
</FN>
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995
(in thousands)
Century Pension Century Pension
Income Fund XXIII Income Fund XXIV Total
Partners' capital at December 31, 1994 $11,548 $5,512 $17,060
Net income for the year ended
December 31, 1995 509 239 748
Distributions to partners (1,024) (482) (1,506)
Partners' capital at December 31, 1995 11,033 5,269 16,302
Net income for the year ended
December 31, 1996 635 299 934
Partners' capital at December 31, 1996 11,668 5,568 17,236
Net income for the year ended
December 31, 1997 631 297 928
Partners' capital at December 31, 1997 $12,299 $5,865 $18,164
<FN>
See Accompanying Notes to Financial Statements
</FN>
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1997 1996 1995
Cash Flows From Operating Activities:
Net income $ 928 $ 934 $ 748
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 581 593 604
Amortization 71 84 79
Change in accounts:
Receivables and other assets (214) (155) (167)
Accrued expenses and other liabilities (9) 19 6
Net cash provided by operating activities 1,357 1,475 1,270
Cash Flows From Investing Activities:
Property improvements and replacements (149) (91) (253)
Cash used in investing activities (149) (91) (253)
Cash Flows From Financing Activities:
Joint venture partners' distributions paid -- -- (1,506)
Cash used in financing activities -- -- (1,506)
Net increase (decrease) in Cash and Cash Equivalents 1,208 1,384 (489)
Cash and Cash equivalents at Beginning of Year 1,543 159 648
Cash and Cash equivalents at End of Year $2,751 $1,543 $ 159
<FN>
See Accompanying Notes to Financial Statements
</FN>
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
Notes to Financial Statements
December 31, 1997
NOTE A - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization: Minneapolis Business Parks Joint Venture (the "Partnership") is a
general partnership organized in 1987 under the laws of the State of California
to acquire three business parks in Minnesota. The General Partners are Century
Pension Income Fund XXIII ("XXIII") and Century Pension Income Fund XXIV
("XXIV"), California limited partnerships which are affiliated through their
General Partners.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Cash and Cash Equivalents: Cash and cash equivalents include cash on hand and
in banks, money market funds and certificates of deposit with original
maturities of less than 90 days. At certain times, the amount of cash deposited
at a bank may exceed the limit on insured deposits.
Leases: The Partnership leases certain commercial space to tenants under
various lease terms. The leases are accounted for as operating leases in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 13,
"Accounting for Leases."
Some of the leases contain stated rental increases during their term. For
leases with fixed rental increases, rents are recognized on a straight-line
basis over the terms of the lease. This straight-line basis recognized
approximately $23,000 and $96,000 more in rental income than was collected in
1997 and 1996, respectively. This amount will be collected in future years as
cash collections under the terms of the leases exceed the straight-line basis of
revenue recognition.
For all other leases, minimum rents are recognized over the terms of the leases.
Investment Properties: Investment properties are stated at cost. Acquisition
fees are capitalized as a cost of real estate. The Partnership records
impairment losses on long-lived assets used in operations when events and
circumstances indicate that the assets might be impaired and the undiscounted
cash flows estimated to be generated by those assets are less than the carrying
amounts of those assets.
Depreciation: Depreciation is computed by the straight-line method over
estimated useful lives ranging from five to thirty-nine years for buildings and
improvements and related personal property.
Deferred Leasing Commission: Leasing commissions are deferred and amortized
over the lives of the related leases, which range from one to eleven years. At
December 31, 1997 and 1996, deferred leasing commissions totaled $452,000 and
$418,000 and accumulated amortization totaled $221,000 and $221,000,
respectively.
Net Income Allocation: Net income is allocated based on the ratio of each
partner's capital contribution to the Joint Venture.
Income Taxes: Taxable income or loss of the Partnership is reported in the
income tax returns of its partners. Accordingly, no provision for income taxes
is made in the financial statements of the Partnership.
Reclassification: Certain reclassifications have been made to the 1996 and 1995
balances to conform to the 1997 presentation.
NOTE B - RELATED PARTY TRANSACTIONS
During 1995, the Partnership paid an affiliate of the general partner a $33,000
fee relating to a successful real estate tax appeal on Alpha and Westpoint
Business Center joint venture properties. These fees were allocated 68% to
XXIII and 32% to XXIV, in accordance with the Partnership Agreement.
NOTE C - MINIMUM FUTURE RENTAL REVENUES
Minimum future rental revenues from operating leases having non-cancelable lease
terms in excess of one year at December 31, 1997, are as follows:
1998 $ 2,467
1999 1,906
2000 1,285
2001 799
2002 393
Thereafter 303
Total $ 7,153
Amortization of deferred leasing commissions totaled $62,000, $84,000 and
$79,000 for the years ended December 31, 1997, 1996, and 1995, respectively.
NOTE D - REAL ESTATE AND ACCUMULATED DEPRECIATION
(dollar amounts in thousands)
Initial Cost to Partnership
Buildings and Net Cost Capitalized
Related Personal (removed) Subsequent
Description Encumbrances Land Property to Acquisition
Alpha Business Center $ -- $3,199 $ 6,735 $606
Plymouth Service -- 475 2,306 (40)
Westpoint Business -- 1,166 5,987 273
Total $ -- $4,840 $15,028 $839
Gross Amount at Which Carried
at December 31, 1997
Buildings
and Related Accumulated Year of Date of Depreciable
Description Land Personal Property Total Depreciation Construction Acquisition Life-Years
Alpha Business Center $3,002 $ 7,538 $10,540 $2,730 1979 5/87 5-39 Years
Plymouth Service 419 2,322 2,741 793 1979 5/87 5-39 Years
Westpoint Business 1,102 6,324 7,426 2,254 1979 5/87 5-39 Years
Total $4,523 $16,184 $20,707 $5,777
Reconciliation of Real Estate and Accumulated Depreciation (in thousands)
Real Estate:
Years Ended December 31,
1997 1996 1995
Balance at beginning of year $20,558 $20,467 $20,214
Property improvements 149 91 253
Balance at end of year $20,707 $20,558 $20,467
Accumulated Depreciation:
Balance at beginning of year $ 5,196 $ 4,603 $ 3,999
Additions charged to expense 581 593 604
Balance at end of year $ 5,777 $ 5,196 $ 4,603
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1997 and 1996, is approximately $22,040,000 and $21,891,000,
respectively. Accumulated depreciation for Federal income tax purposes at
December 31, 1997 and 1996, is approximately $5,004,000 and $4,496,000,
respectively.