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 March 31, 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)
March 31, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 2,071 $ 2,190
Deferred leasing commissions, net 139 134
Receivables and other assets 356 206
Investments in unconsolidated joint ventures 7,485 7,383
Investment properties:
Real estate 17,737 17,737
Accumulated depreciation (3,344) (3,226)
14,393 14,511
$ 24,444 $ 24,424
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 124 $ 106
Partners' Capital
General partner -- --
Limited partners (73,341 units issued and
outstanding at March 31, 1996, and
December 31, 1995) 24,320 24,318
Total partners' capital 24,320 24,318
$ 24,444 $ 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
March 31,
1996 1995
Revenues:
Rental income $ 579 $ 490
Other income 28 18
Equity in income of unconsolidated
joint ventures 64 96
Total revenues 671 604
Expenses:
Operating 109 109
General and administrative 164 123
Depreciation 118 110
Total expenses 391 342
Net income $ 280 $ 262
Net income allocated to general partner $ 3 $ 3
Net income allocated to limited partners 277 259
$ 280 $ 262
Net income per limited partnership unit $ 3.78 $ 3.53
Cash distributions per limited
partnership unit $ 3.75 $ 3.75
<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 Partners' 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 three
months ended March 31, 1996 -- 3 277 280
Distributions to partners -- (3) (275) (278)
Partners' capital
at March 31, 1996 73,341 $ -- $ 24,320 $ 24,320
<FN>
See Accompanying Notes to Financial Statements
d) CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1996 1995
Cash flows from operating activities:
Net income $ 280 $ 262
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 118 110
Amortization of lease commissions 9 9
Equity in income of unconsolidated joint
ventures' operations (64) (96)
Change in accounts:
Deferred leasing commissions paid (14) (20)
Receivables and other assets (150) (72)
Accrued expenses and other liabilities 18 (56)
Net cash provided by operating activities 197 137
Cash flows from investing activities:
Property improvements and replacements -- (95)
Contributions to unconsolidated joint venture (38) --
Net cash used in investing activities (38) (95)
Cash flows from financing activities:
Distributions to partners (278) (278)
Net cash used in financing activities (278) (278)
Decrease in cash and cash equivalents (119) (236)
Cash and cash equivalents at beginning of period 2,190 2,038
Cash and cash equivalents at end of period $ 2,071 $ 1,802
<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 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 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
The Partnership has no employees and is dependent on NPI Equity Investments II,
Inc. ("NPI Equity" or 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 Three Months Ended
March 31,
1996 1995
(in thousands)
Partnership management fee (included in general
and administrative expenses) $ 31 $ 31
Reimbursement for services of affiliates (included
in general and administrative expenses) 54 26
Services relating to successful real estate tax
appeals (included in operating expenses) -- 5
General partner share in Partnership's
cash distributions 3 3
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.
The general partner of the Partnership is Fox Partners VI, a California general
partnership, whose general partners are Fox Capital Management Corporation
("FCMC"), a California corporation and Fox Realty Investors ("FRI"), a
California general partnership.
On December 6, 1993, the shareholders of FCMC entered into a Voting Trust
Agreement with NPI Equity pursuant to which NPI Equity was granted the right to
vote 100 percent of the outstanding stock of FCMC and NPI Equity became the
managing general partner of FRI. As a result, NPI Equity became responsible for
the operation and management of the business and affairs of the Partnership and
the other investment partnerships originally sponsored by FCMC and/or FRI. NPI
Equity is a wholly-owned subsidiary of NPI. The shareholders of FCMC and the
partners in FRI retain indirect economic interests in the Partnership and such
other investment limited partnerships, but have ceased to be responsible for the
operation and management of the partnership and such other partnerships.
On August 17, 1995, the stockholders of NPI entered into an agreement to sell to
IFGP Corporation, a Delaware corporation, an affiliate of Insignia, a Delaware
corporation, all of the issued and outstanding common stock of NPI for an
aggregate purchase price of $1,000,000. 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 and the Managing General
Partner resigned and IFGP Corporation caused new officers and directors of each
of those entities to be elected.
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 March 31, 1996, and December 31,
1995, and condensed statements of operations for the three months ended March
31, 1996 and 1995, of Coral Palm Plaza Joint Venture.
CORAL PALM PLAZA JOINT VENTURE
BALANCE SHEETS
(in thousands)
March 31, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 393 $ 263
Deferred leasing commissions, net 153 154
Receivables and other assets, net of
allowance of $116 and $0, respectively 18 270
Investment properties:
Real estate 9,352 9,049
Less accumulated depreciation (3,105) (3,046)
6,247 6,003
$ 6,811 $ 6,690
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 409 $ 345
Partners' Capital:
Century Pension Income Fund XXIII 4,268 4,231
Century Pension Income Fund XXIV 2,134 2,114
Total partners' capital 6,402 6,345
$ 6,811 $ 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.
CORAL PALM PLAZA JOINT VENTURE
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1996 1995
Revenues $ 279 $ 273
Expenses:
Bad debt expense 116 --
Other expenses 217 182
Total expenses 333 182
Net (loss) income $ (54) $ 91
Allocation of net (loss) income:
Century Pension Income Fund XXIII $ (36) $ 61
Century Pension Income Fund XXIV (18) 30
$ (54) $ 91
The following are the balance sheets as of March 31, 1996, and December 31,
1995, and condensed statements of operations for the three months ended March
31, 1996 and 1995, of Minneapolis Business Parks Joint Venture.
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
BALANCE SHEETS
(in thousands)
March 31, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 559 $ 159
Deferred leasing commissions, net 233 243
Receivables and other assets 398 193
Investment properties:
Real estate 20,475 20,467
Less accumulated depreciation (4,750) (4,603)
15,725 15,864
$ 16,915 $ 16,459
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 356 $ 157
Partners' Capital:
Century Pension Income Fund XXIII 11,208 11,033
Century Pension Income Fund XXIV 5,351 5,269
Total partners' capital 16,559 16,302
$ 16,915 $ 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.
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1996 1995
Rental and other revenues $ 766 $ 715
Expenses 509 510
Net income $ 257 $ 205
Allocation of net income:
Century Pension Income Fund XXIII $ 175 $ 139
Century Pension Income Fund XXIV 82 66
$ 257 $ 205
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 three months ended March 31, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Butler Square Center
Mauldin, South Carolina 97% 89%
Kenilworth Commons Shopping Center
Charlotte, North Carolina 100% 100%
Plantation Pointe Shopping Center
Smyrna, Georgia 98% 97%
Coral Palm Plaza (1)
Coral Springs, Florida 76% 68%
Alpha Business Center (2)
Bloomington, Minnesota 93% 95%
Plymouth Service Center (2)
Plymouth, Minnesota 100% 100%
Westpoint Business Center (2)
Plymouth, Minnesota 96% 91%
(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 to the growing local economy, which has been strongly influenced
by the introduction of two major employers into the market. In May 1995, a
grocery store renewed its lease at Butler Square, expanding its existing space
by 6,500 square feet. In addition, Coral Palm Plaza's occupancy increased due
to the leasing in 1995 of all of the space that became available when one tenant
representing 23% of the building's space negotiated a lease buy-out in November
1994. Partially offsetting this increase in occupancy at Coral Palm Plaza was
the October 1995 lease buy-out and termination agreement with another former
tenant. The $300,000 termination payment has been deferred and is being
amortized into income on a straight-line basis over the remainder of the former
tenant's lease until the related unoccupied space is leased again. Finally,
Westpoint Business Center's occupancy increased due to a strong local market and
the successful execution of new leases representing approximately 12% of the
business park's space since March 31, 1995.
The Partnership's net income for the three months ended March 31, 1996, was
approximately $280,000 versus $262,000 for the same period of 1995. The
increase in income is primarily attributable to an increase in rental income due
to an increase in occupancy at Butler Square, where a significant tenant's lease
terms were renegotiated to expand the tenant's existing space by 6,500 square
feet as discussed above. In addition, other income increased as a result of an
increase in interest income. This increase was primarily due to the
Partnership's cash reserves being invested in accounts which produced a higher
rate of return. Partially offsetting these increases to income was an increase
in general and administrative expenses due to an increase in expense
reimbursements related to the operation of two partnership administration
offices during the first quarter of 1996 and the relocation of the partnership
administration offices during the same period.
Partially offsetting the increase in net income was the decrease in equity in
income of the unconsolidated joint ventures of approximately $32,000. This
decrease is primarily due to the Partnership's share of bad debt expense of
$116,000 at Coral Palm Plaza. An allowance for uncollectible rents was
established in the first quarter of 1996 relating to two tenants with long-term
delinquencies which management believes will not be collected. Partially
offsetting this decrease was an increase in net income for Minneapolis Business
Parks Joint Venture which is due partially to increased occupancy at Westpoint
Business Center. Also contributing was an increase in interest earnings as a
result of higher cash reserves during the three months ended March 31, 1996.
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 March 31, 1996, the Partnership had unrestricted cash of approximately
$2,071,000 as compared to $1,802,000 at March 31, 1995. Net cash provided by
operating activities increased primarily due to the increase in rental income as
discussed above. The increases (decreases) in certain assets and liabilities
are the result of the timing and receipt and payment of various operating
activities. The increase in receivables and other assets is primarily
attributable to the increase in common area maintenance receivables due to the
timing of billings. Net cash used in investing activities decreased due to 1995
tenant improvements at Butler Square Center. Partially offsetting this decrease
was 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. Net cash used in financing activities remained the same, representing
distributions of $278,000 to the partners for both three month periods ending
March 31, 1996, and March 31, 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 $1,111,000 to the partners (including $11,000 to the general
partner) during 1995 and $278,000 to the partners (including $3,000 to the
general partner) in the first quarter of 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 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) Exhibits:
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 Registrant.
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: May 15, 1996