FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 June 30, 1997
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)
June 30, December 31,
1997 1996
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 1,957 $ 1,929
Receivables and other assets 411 488
Investments in unconsolidated joint ventures 8,021 7,844
Investment properties:
Land 4,397 4,397
Buildings and related personal property 13,381 13,379
17,778 17,776
Accumulated depreciation (3,944) (3,704)
13,834 14,072
$ 24,223 $ 24,333
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 148 $ 140
Partners' Capital
General partner -- --
Limited partners' (73,341 units issued and
outstanding at June 30, 1997, and
December 31, 1996) 24,075 24,193
Total partners' capital 24,075 24,193
$ 24,223 $ 24,333
<FN>
Note: The balance sheet at December 31, 1996, 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 unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenues:
Rental income $ 513 $ 493 $ 1,020 $ 1,072
Other income 27 25 53 53
Equity in income of
unconsolidated joint
ventures 90 92 177 156
Total revenues 630 610 1,250 1,281
Expenses:
Operating 153 138 302 247
General and administrative 152 155 271 319
Depreciation 120 120 240 238
Total expenses 425 413 813 804
Net income $ 205 $ 197 $ 437 $ 477
Net income allocated to
general partner $ 2 $ 3 $ 5 $ 6
Net income allocated to
limited partners 203 194 432 471
$ 205 $ 197 $ 437 $ 477
Net income per limited
partnership unit $ 2.76 $ 2.64 $ 5.89 $ 6.42
Cash distributions per
limited partnership unit $ 3.75 $ 3.75 $ 7.50 $ 7.50
<FN>
See Accompanying Notes to Financial Statements
c) CENTURY PENSION INCOME FUND XXIV
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners' Total
Original capital contributions 73,341 $ -- $ 36,671 $36,671
Partners' capital at
December 31, 1995 73,341 $ -- $ 24,318 $24,318
Distributions to partners -- (6) (550) (556)
Net income for the six months
ended June 30, 1996 -- 6 471 477
Partners' capital at
June 30, 1996 73,341 $ -- $ 24,239 $24,239
Partners' capital at
December 31, 1996 73,341 $ -- $ 24,193 $24,193
Distributions to partners -- (5) (550) (555)
Net income for the six months
ended June 30, 1997 -- 5 432 437
Partners' capital at
June 30, 1997 73,341 $ -- $(24,075) $24,075
<FN>
See Accompanying Notes to Financial Statements
d) CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1997 1996
Cash flows from operating activities:
Net income $ 437 $ 477
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 240 238
Amortization of lease commissions 21 21
Equity in income of unconsolidated joint
ventures' operations (177) (156)
Change in accounts:
Receivables and other assets 56 (216)
Accrued expenses and other liabilities 8 33
Net cash provided by operating activities 585 397
Cash flows from investing activities:
Property improvements and replacements (2) (34)
Contributions to unconsolidated joint venture -- (38)
Net cash used in investing activities (2) (72)
Cash flows from financing activities:
Distributions to partners (555) (556)
Net cash used in financing activities (555) (556)
Increase (decrease) in cash and cash equivalents 28 (231)
Cash and cash equivalents at beginning of period 1,929 2,190
Cash and cash equivalents at end of period $ 1,957 $ 1,959
<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 (the
"Managing General Partner" or "FCMC"), all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and six month periods ended June 30,
1997, are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1997. 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, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 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 General Partner of the Partnership is Fox Partners VI, a California general
partnership, whose general partners 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 all of the
issued and outstanding shares of stock of FCMC, NPI Equity Investments II, Inc.
("NPI Equity"), the managing general partner of FRI, and National Property
Investors, Inc. ("NPI"). In connection with these transactions, affiliates of
Insignia appointed new officers and directors of NPI Equity and FCMC.
The following transactions with affiliates of the Managing General Partner were
charged to expense in 1997 and 1996 (in thousands):
For the Six Months Ended
June 30,
1997 1996
Partnership management fee (included in general
and administrative expenses) $ 62 $ 62
Reimbursement for services of affiliates (included
in general and administrative expenses) 47 101
Since January 19, 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.
The general partner received cash distributions of approximately $5,000 and
$6,000 during the six months ended June 30, 1997 and 1996, respectively.
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 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"), an
affiliate of the Managing General Partner. 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.
Summary financial information for Coral Palm Plaza Joint Venture is as follows
(in thousands):
June 30, December 31
1997 1996
Total assets $ 7,164 $ 7,301
Total liabilities (311) (468)
Total ventures' equity $ 6,853 $ 6,833
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Total revenues $ 222 $ 255 $ 440 $ 534
Total expenses (179) (171) (420) (504)
Net income $ 43 $ 84 $ 20 $ 30
The Partnership did not receive a distribution from the Joint Venture during the
six month periods ended June 30, 1997 or 1996. The Partnership paid
contributions of approximately $38,000 to the Joint Venture during the six
months ended June 30, 1996.
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.
Summary financial information for Minneapolis Business Park Joint Venture is as
follows (in thousands):
June 30, December 31,
1997 1996
Total assets $17,938 $17,412
Total liabilities (169) (176)
Total ventures' equity $17,769 $17,236
For the Three Months Ended For the Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Total revenues $ 791 $ 751 $ 1,613 $ 1,517
Total expenses (552) (551) (1,080) (1,060)
Net income $ 239 $ 200 $ 533 $ 457
The Partnership did not receive a distribution from the Joint Venture during the
six month periods ended June 30, 1997 or 1996.
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 six months ended June 30, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Butler Square Center
Mauldin, South Carolina 100% 98%
Kenilworth Commons Shopping Center
Charlotte, North Carolina 100% 100%
Plantation Pointe Shopping Center
Smyrna, Georgia 98% 98%
The Partnership's net income for the six months ended June 30, 1997, was
approximately $437,000 versus approximately $477,000 for the same period of
1996. The net income for the three months ended June 30, 1997, was
approximately $205,000 compared to net income of approximately $197,000 for the
three months ended June 30, 1996. The decrease in net income for the six months
ended June 30, 1997 as compared to the six months ended June 30, 1996 is
primarily attributable to the increase in operating expenses. The increase in
operating expense is due to landscaping at Plantation Pointe, parking lot
repairs at Butler Square and exterior painting at Kenilworth Commons Shopping
Center. Additionally, operating expenses increased due to an increase in real
estate taxes at Butler Square which were due to a reassessment of the property
in 1996. Included in operating expense is approximately $35,000 of major
repairs and maintenance comprised primarily of major landscaping, parking lot
repairs and exterior painting for the six months ended June 30, 1997. Included
in operating expense for the six months ended June 30, 1996, is approximately
$9,000 comprised primarily of major landscaping.
Partially offsetting the increase in operating expense was an increase in income
from unconsolidated joint ventures and a decrease in general and administrative
expenses. The increase in income from unconsolidated joint ventures is primarily
attributable to an increase in the income at the Minneapolis Business Park Joint
Venture. The increase in income at the Minneapolis Business Park Joint Venture
is primarily the result of increased rental rates and interest income. The
decrease in general and administrative expenses is attributable to a decrease in
reimbursements for services of affiliates. The decrease in these reimbursements
is directly attributable to the combined transition efforts of the Greenville,
South Carolina and Atlanta, Georgia administrative offices during the 1995 year
end close, preparation of the 1995 10-K and the tax return (including the
limited partner K-1's) and transition of asset management responsibilities to
the new administration during the six months ended June 30, 1996.
The increase in net income for the three months ended June 30, 1997 is primarily
attributable to the increase in rental income which is a result of increased
occupancy at Butler Square Shopping Center. Partially offsetting the increase
in rental income was an increase in operating expenses for reasons discussed
above.
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 expense. 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 June 30, 1997, the Partnership had unrestricted cash of approximately
$1,957,000 as compared to approximately $1,959,000 at June 30, 1996. Net cash
provided by operating activities increased primarily due to the decrease in
receivables and other assets. The decrease in receivables and other assets is
primarily attributable to the decrease in common area maintenance receivables
due to the timing of receipts. Net cash used in investing activities decreased
due to a contribution by the Partnership to the Coral Palm Plaza Joint Venture
in 1996. The contribution was necessary to help fund tenant improvements at
Coral Palm. Also contributing to the decrease in cash used in investing
activities is a decrease in purchases of property improvements and replacements.
Net cash used in financing activities remained constant for the six month
periods ending June 30, 1997 and 1996.
The Partnership has no material capital programs scheduled to be performed in
1997, although certain routine capital expenditures and maintenance expenses
have been budgeted. These capital expenditures and maintenance expenses will be
incurred only if cash is available from operations or is received from the
capital reserve account.
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 approximately $555,000 and $556,000 to the partners (including
approximately $5,000 and $6,000 to the general partner) during the six months
ended June 30, 1997 and 1996. 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 1997. 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) Exhibits:
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 June 30, 1997.
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: August 7, 1997