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, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________to ___________
Commission file number 0-7735
Century Properties Equity Partnership 72
(Exact name of Registrant as specified in its charter)
California 94-6294482
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (770) 916-9090
N/A
Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether 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_____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12, 13, or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the
latest practicable date __________________.
1 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
September 30, December 31,
1995 1994
Assets
Cash and cash equivalents $ 32,000 $ 63,000
Restricted cash 1,595,000 -
Due from affiliate 12,000 12,000
Notes receivable 92,000 98,000
Other assets - 1,000
Real Estate:
Real estate - 1,892,000
Accumulated depreciation - (911,000)
----------- -----------
Real estate, net - 981,000
Deferred costs, net - 94,000
----------- -----------
Total assets $ 1,731,000 $ 1,249,000
=========== ===========
Liabilities and Partners' Equity
Due to affiliate $ 399,000 $ -
Notes payable 92,000 924,000
Accrued expenses and other liabilities 64,000 43,000
----------- -----------
Total liabilities 555,000 967,000
----------- -----------
Minority interest in joint venture - 32,000
----------- -----------
Commitments and Contingencies
Partners' Equity:
General partner 323,000 230,000
Limited partners (14,205 units
outstanding at
September 30, 1995 and December 31, 1994) 853,000 20,000
----------- -----------
Total partners' equity 1,176,000 250,000
----------- -----------
Total liabilities and partners' equity $ 1,731,000 $ 1,249,000
=========== ===========
See notes to consolidated financial statements.
2 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
Consolidated Statements of Operations
For the Nine Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 92,000 $ 142,000
Interest income 40,000 9,000
Gain on sale of property 1,682,000 -
----------- -----------
Total revenues 1,814,000 151,000
----------- -----------
Expenses:
Operating 56,000 207,000
Additional interest to affiliate 399,000 -
General and administrative 58,000 94,000
Depreciation 20,000 60,000
Interest 23,000 39,000
----------- -----------
Total expenses 556,000 400,000
----------- -----------
Income (loss) before minority interest in 1,258,000 (249,000)
joint venture's operations
Minority interest in joint venture's (332,000) 32,000
operations ----------- -----------
Net income (loss) $ 926,000 $ (217,000)
=========== ===========
Net income (loss) per limited $ 58.64 $ (13.73)
partnership unit =========== ===========
See notes to consolidated financial statements.
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CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
Consolidated Statements of Operations
For the Three Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ - $ 53,000
Interest income 25,000 1,000
----------- -----------
Total revenues 25,000 54,000
----------- -----------
Expenses:
Operating - 59,000
Additional interest to affiliate 6,000 -
General and administrative 31,000 23,000
Depreciation - 22,000
Interest - 15,000
----------- -----------
Total expenses 37,000 119,000
----------- -----------
Loss before minority interest in joint (12,000) (65,000)
venture's operations
Minority interest in joint venture's
operations - (5,000)
----------- -----------
Net loss $ (12,000) $ (70,000)
=========== ===========
Net loss per limited partnership unit $ (0.77) $ (4.44)
=========== ===========
See notes to consolidated financial statements.
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CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
Consolidated Statements of Cash Flows
For the Nine Months Ended
September 30, September 30,
1995 1994
Operating Activities:
Net income (loss) $ 926,000 $ (217,000)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 27,000 68,000
Minority interest in joint venture's
operations 332,000 (32,000)
Gain on sale of property (1,682,000) -
Deferred costs paid - (8,000)
Changes in operating assets and liabilities:
Due to/(from) affiliate 399,000 (10,000)
Other assets 1,000 -
Accrued expenses and other liabilities 21,000 7,000
----------- -----------
Net cash provided by (used in) operating
activities 24,000 (192,000)
----------- -----------
Investing Activities:
Proceeds from sale of property 2,717,000 -
Additions to real estate - (286,000)
Increase in restricted cash (1,595,000) -
----------- -----------
Net cash provided by (used in)
investing activities 1,122,000 (286,000)
----------- -----------
Financing Activities:
Distribution to the joint venture partner (351,000) -
Satisfaction of notes payable (811,000) -
Contribution by the joint venture partner - 38,000
Notes payable principal payments (15,000) (50,000)
Notes payable proceeds - 105,000
----------- -----------
Net cash (used in) provided by
financing activities (1,177,000) 93,000
----------- -----------
Decrease in Cash and Cash Equivalents (31,000) (385,000)
Cash and Cash Equivalents at Beginning
of Period 63,000 442,000
----------- -----------
Cash and Cash Equivalents at End of Period $ 32,000 $ 57,000
=========== ===========
Supplemental Disclosure of Cash
Flow Information:
Interest paid in cash during the period $ 29,000 $ 37,000
=========== ===========
Supplemental Disclosure of Non-Cash
Investing and Financing Activities:
Payments made by purchaser on underlying
note subsequent to sale:
Note receivable decrease $ 6,000 $ 6,000
=========== ===========
Note payable decrease $ 6,000 $ 6,000
=========== ===========
See notes to consolidated financial statements.
5 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q -SEPTEMBER 30, 1995
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and
discussions should be read in conjunction with the consolidated
financial statements, related footnotes and discussions contained
in the Partnership's Annual Report for the year ended December 31,
1994.
The financial information contained herein is unaudited. In the
opinion of management, however, all adjustments necessary for a
fair presentation of such financial information have been included.
All adjustments are of a normal recurring nature, except as
described in Note 3.
The results of operations for the nine and three months ended
September 30, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
On August 17, 1995, the stockholders of National Property
Investors, Inc. ("NPI, Inc."), the sole shareholder of NPI Equity
Investments II, Inc. ("NPI Equity"), the entity which controls Fox
Capital Management Corporation, the general partner of the
Partnership, entered into an agreement to sell to IFGP Corporation,
an affiliate of Insignia Financial Group, Inc. ("Insignia"), all of
the issued and outstanding stock of NPI, Inc. The sale of the
stock is subject to the satisfaction of certain conditions and is
scheduled to close in January 1996.
2. Transactions with Related Parties
An affiliate of NPI, Inc. received reimbursements of administrative
expenses amounting to $5,000 and $37,000 during the nine months
ended September 30, 1995 and 1994, respectively. These
reimbursements are included in general and administrative expenses.
3. Gain on Sale of Property
On March 31, 1995, the joint venture in which the Partnership had
an 80% interest sold the Santa Clara Industrial Buildings #1 and #3
for $2,720,000. After satisfaction of existing loans totaling
$811,000, payment in the amount of $351,000 to the Partnership's
joint venture partner for its interest pursuant to the Joint
Venture Agreement, and legal fees, the Partnership received
$1,555,000. The sale resulted in a gain of $1,682,000. In
accordance with the terms of its loan agreement with the Preferred
Partnership, the Partnership is required to distribute 25% of net
sales proceeds (including interest earned thereon through date of
distribution), equal to $399,000 in additional interest to the
Preferred Partnership. This additional interest is accrued at
September 30, 1995. Pursuant to the terms of the sale, the
Partnership and its joint venture partner have agreed to indemnify
the purchaser against a breach of their representations and
warranties. Any claim for indemnification must be made prior to
December 15, 1995; if no claim is made, the indemnity obligation
expires. The net proceeds from the sale will be held by the
Partnership until December 15, 1995, at which time, if no claim is
made, the Partnership will be free to distribute the proceeds.
Since this property was the remaining asset of the Partnership,
after all debt of the Partnership is satisfied and sufficient
reserves are established, the affairs of the Partnership will be
wound up, the partnership dissolved and any remaining proceeds
(including the net proceeds from the sale and interest earned
thereon) will be distributed to the partners.
6 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Consolidated Financial
Statements and other Items contained elsewhere in this Report.
Liquidity and Capital Resources
On March 31, 1995, the joint venture in which Registrant had an 80%
interest sold the Santa Clara Industrial Buildings #1 and #3 to an
unaffiliated third party for $2,720,000. Registrant's net proceeds from
the sale of property after satisfaction of outstanding loans of $811,000,
distribution to its joint venture partner pursuant to the Joint Venture
Agreement of $351,000 and legal fees was $1,555,000. Registrant's required
payment to the Preferred Partnership equal to 25 percent of its net
proceeds (including interest earned thereon through date of distribution)
was accrued in the amount of $399,000. The sale resulted in a gain of
$1,682,000, of which $334,000 was allocated to Registrant's joint venture
partner. As described in Item 1, Note 3, the net proceeds from the sale
will be held by Registrant until December 15, 1995, at which time, if no
claim is made by the purchaser, Registrant will be free to distribute the
proceeds. Since this property was the remaining asset of Registrant, after
all debt of Registrant is satisfied and sufficient reserves are
established, the affairs of Registrant will be wound up, the partnership
dissolved and any remaining proceeds (including the net proceeds from the
sale and interest earned thereon) will be distributed to the partners.
The level of liquidity based upon cash and cash equivalents experienced a
$31,000 decrease at September 30, 1995, as compared to December 31, 1994.
Registrant's $1,122,000 of net cash provided by investing activities and
$24,000 of net cash provided by operating activities was substantially
offset by $1,177,000 of cash used in financing activities. The joint
venture received $2,717,000 in proceeds from the sale of its remaining
property, of which $811,000 was used to satisfy the notes payable
encumbering the property, $351,000 was distributed to Registrant's joint
venture partner, and $1,555,000 was distributed to Registrant, which is
being held as restricted cash, pursuant to the Purchase Agreement. In
addition, Registrant made $15,000 of notes payable principal payments
(financing activities).
On August 17, 1995, the stockholders of NPI, Inc., the sole shareholder of
NPI Equity, agreed to sell to Insignia all of the issued and outstanding
stock of NPI, Inc. The consummation of this transaction is subject to the
satisfaction of certain conditions (including, third party consents and
other conditions not within the control of the parties to the agreement)
and is scheduled to close in January 1996. Upon closing, it is expected
that Insignia will elect new officers and directors of NPI Equity. It is
anticipated that Registrant will be dissolved prior to the closing,
therefore these transactions will not have an effect on Registrant's
liquidity or results of operation.
To date, investors have received cash substantially in excess of their
original investment. Any additional return of cash is dependent upon the
resolution of claims, if any, for indemnification made by the purchaser of
the Santa Clara Industrial Buildings.
7 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q -SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Results of Operations
Nine Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $1,507,000, prior to minority interest in
joint venture's operations, for the nine months ended September 30, 1995,
as compared to 1994, due to an increase in revenues of $1,663,000, which
was only partially offset by an increase in expenses of $156,000.
Operating results improved due to the $1,682,000 gain on sale of
Registrant's joint venture property.
Three Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $53,000 prior to minority interest in joint
venture operations for the three months ended September 30, 1995, as
compared to 1994, due to a decrease in expenses of $82,000, which was
partially offset by a decrease in revenues of $29,000. The joint venture,
in which Registrant had an 80% interest, sold its remaining property on
March 31, 1995.
8 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q -SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties
A description of the properties in which the Fund has an 80% ownership
interest during the period covered by this Report, along with occupancy
data, follows:
CENTURY PROPERTIES EQUITY PARTNERSHIP 72
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
----------------------------
Nine Months Three Months
Ended Ended
Square Date of September 30, September 30,
Name and Location Footage Purchase 1995 1994 1995 1994
- ----------------- ------- -------- ---- ---- ---- ----
Santa Clara Industrial
Buildings #1 and #3 (1) 42,000 3/74 - 57 - 57
Santa Clara, California
(1) The buildings were sold on March 31, 1995.
9 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2. NPI, Inc. Stock Purchase Agreement dated as of August 17,
1995 incorporated by reference to Exhibit 2 to
Registrant's Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 24, 1995.
(b) Report on Form 8-K
On August 24, 1995, Registrant filed a Current Report on Form
8-K with the Securities and Exchange Commission with respect
to the sale of the stock of NPI, Inc. (Item 1, Change in
Control).
10 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
SIGNATURE
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 PROPERTIES EQUITY PARTNERSHIP 72
By: FOX CAPITAL MANAGEMENT CORPORATION,
A General Partner
/S/ ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
11 of 12
CENTURY PROPERTIES EQUITY PARTNERSHIP 72 - FORM 10-Q - SEPTEMBER 30, 1995
EXHIBIT INDEX
Exhibit Page No.
- ------- --------
2. NPI, Inc. Stock Purchase Agreement *
dated August 17, 1995
* Incorporated by reference to Exhibit 2 to Registrant's Current Report on
Form 8-K filed with the Securities and Exchange Commission on August 24,
1995.
12 of 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted
from Century Properties Equity Partnership 72 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,627,000 <F1>
<SECURITIES> 0
<RECEIVABLES> 104,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,731,000
<CURRENT-LIABILITIES> 0
<BONDS> 92,000
<COMMON> 0
0
0
<OTHER-SE> 1,176,000
<TOTAL-LIABILITY-AND-EQUITY> 1,731,000
<SALES> 0
<TOTAL-REVENUES> 1,774,000 <F2>
<CGS> 0
<TOTAL-COSTS> 76,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 422,000
<INCOME-PRETAX> 926,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 926,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 926,000
<EPS-PRIMARY> 58.64
<EPS-DILUTED> 58.64
<FN>
<F1> Cash includes restricted cash of $1,595,000.
<F2> Total revenues includes gain on sale of property of $1,682,000.
</FN>
</TABLE>
