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 0-8440
Century Properties Fund XI
(Exact name of Registrant as specified in its charter)
California 94-6401363
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
September 30, December 31,
1995 1994
Assets
Cash and cash equivalents $ 4,801,000 $ 3,268,000
Receivables and other assets 54,000 45,000
Real Estate:
Real estate 2,276,000 7,161,000
Accumulated depreciation (136,000) (2,073,000)
------------- -------------
Real estate, net 2,140,000 5,088,000
Deferred costs, net 19,000 111,000
------------- -------------
Total assets $ 7,014,000 $ 8,512,000
============= =============
Liabilities and Partners' Equity
Notes payable $ - $ 2,077,000
Accrued expenses and other liabilities 53,000 301,000
------------- -------------
Total liabilities 53,000 2,378,000
------------- -------------
Commitments and Contingencies
Partners' Equity:
General partner 60,000 57,000
Limited partners (29,982 units outstanding at
September 30, 1995 and December 31, 1994) 6,901,000 6,077,000
------------- -------------
Total partners' equity 6,961,000 6,134,000
------------- -------------
Total liabilities and partners' equity $ 7,014,000 $ 8,512,000
============= =============
See notes to financial statements.
2 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Nine Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $1,539,000 $2,046,000
Interest income 132,000 102,000
Gain on sale of properties 502,000 -
---------- ----------
Total revenues 2,173,000 2,148,000
---------- ----------
Expenses:
Operating 810,000 975,000
Interest 120,000 753,000
General and administrative 264,000 361,000
Depreciation 152,000 314,000
---------- ----------
Total expenses 1,346,000 2,403,000
---------- ----------
Income (loss) before extraordinary item 827,000 (255,000)
Extraordinary item:
Gain on extinguishment of debt - 798,000
---------- ----------
Net income $ 827,000 $ 543,000
========== ==========
Net income per limited partnership unit:
Net income (loss) before extraordinary item $ 27.48 $ (8.41)
Extraordinary item - 26.35
---------- ----------
Net income $ 27.48 $ 17.94
========== ==========
Distributions per limited partnership unit $ - $ 74.28
========== ==========
See notes to financial statements.
3 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Three Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $412,000 $573,000
Interest income 59,000 48,000
Gain on sale of properties 502,000 -
-------- --------
Total revenues 973,000 621,000
-------- --------
Expenses:
Operating 269,000 350,000
Interest 24,000 188,000
General and administrative 90,000 115,000
Depreciation 31,000 98,000
-------- --------
Total expenses 414,000 751,000
-------- --------
Income (loss) before extraordinary items 559,000 (130,000)
Extraordinary item:
Gain on extinguishment of debt - 798,000
-------- --------
Net income $559,000 $668,000
======== ========
Net income per limited partnership unit:
Net income (loss) before extraordinary items $ 18.61 $ (4.30)
Extraordinary item - 26.35
-------- --------
Net income $ 18.61 $ 22.05
======== ========
See notes to financial statements.
4 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Cash Flows
For the Nine Months Ended
September 30, September 30,
1995 1994
Operating Activities:
Net income $ 827,000 $ 543,000
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Gain on extinguishment of debt - (798,000)
Gain on sale of properties (502,000) -
Depreciation and amortization 181,000 357,000
Deferred costs paid (42,000) (50,000)
Provision for doubtful receivables - 5,000
Changes in operating assets and liabilities:
Receivables and other assets (9,000) 52,000
Accrued expenses and other liabilities (248,000) (513,000)
---------- ----------
Net cash provided by (used in) operating
activities 207,000 (404,000)
---------- ----------
Investing Activities:
Net proceeds from sale of properties 3,486,000 -
Restricted cash decrease - 23,000
Additions to real estate (83,000) (90,000)
---------- ----------
Net cash provided by (used in) investing
activities 3,403,000 (67,000)
---------- ----------
Financing Activities:
Satisfaction of mortgages payable (2,032,000) (2,758,000)
Cash distributions to partners - (2,549,000)
Notes payable principal payments (45,000) (124,000)
---------- ----------
Cash (used in) financing activities: (2,077,000) (5,431,000)
---------- ----------
Increase (Decrease) in Cash and Cash
Equivalents 1,533,000 (5,902,000)
Cash and Cash Equivalents at Beginning
of Period 3,268,000 7,710,000
---------- ----------
Cash and Cash Equivalents at End of Period $4,801,000 $1,808,000
========== ==========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 137,000 1,265,000
========== ==========
Supplemental Disclosure of Non-cash Investing
and Financing Activities:
Foreclosure of property and extinguishment
of debt in 1994 - See Note 5.
See notes to financial statements.
5 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
1. General
The accompanying financial statements, footnotes and discussions
should be read in conjunction with the financial statements,
related footnotes and discussions contained in the Partnership's
Annual Report for the year ended December 31, 1994. Certain
accounts have been reclassified to conform to the current period.
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 Notes 4 and 5.
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. was entitled to receive reimbursements of
administrative expenses amounting to $108,000 and $104,000 during
the nine months ended September 30, 1995 and 1994, respectively.
These reimbursements are included in general and administrative
expenses.
During the nine months ended September 30, 1995, an affiliate of
the general partner was paid $129,000 in connection with the sale
of Executive Center East, Executive Center West and the attached
parcel of land (see Note 4). This fee is included in the gain on
sale of properties.
3. Cash Distributions to Partners
In February 1994, the Partnership distributed $322,000 to the
general partner and 74.28 per unit ($2,227,000 in total) to the
limited partners resulting from collection of the Foxwood Village
Apartments note receivable.
4. Sale of Properties
On July 26, 1995, the Partnership sold its Executive Center East,
Executive Center West and the attached parcel of land to an
unaffiliated third party for $3,770,000. After debt repayment in
the amount of $2,032,000 and expenses, the Partnership received net
proceeds of approximately $1,454,000. For financial statement
purposes, the Partnership recognized a gain on the sale of
properties of $502,000 for the period ended September 30, 1995.
6 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
5. Gain on Extinguishment of Debt
The extraordinary gain on extinguishment of debt for the periods
ended September 30, 1994 is comprised of $251,000 from Manana/Dunn
Business Park, which was lost through foreclosure in July 1994, and
the payoff of the mortgage encumbering Shadle Shopping Center.
6. Notes Payable
On September 16, 1994, the Partnership repaid the $2,758,000 first
mortgage encumbering Shadle Shopping Center.
7 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30,1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Financial Statements and
other Items contained elsewhere in this Report.
Liquidity and Capital Resources
Registrant's remaining real estate property is a shopping center located in
Spokane, Washington. The property is leased to tenants subject to leases
with remaining lease terms currently ranging from approximately one to
eleven years. Registrant's remaining property generated positive cash flow
from operations during the nine months ended September 30, 1995.
Registrant receives rental income from commercial spaces and is responsible
for operating expenses, administrative expenses and capital improvements.
Registrant is currently in its property sales phase. As of November 1,
1995, Registrant has sold eleven properties and lost Manana/Dunn Business
Park through foreclosure. As described in Item 1, Note 4, on July 26, 1995
Registrant sold its Executive Center East, Executive Center West and the
attached parcel of land. Registrant received net proceeds of $1,454,000.
Registrant's remaining property, Shadle Shopping Center, was re-acquired
through foreclosure during 1993.
Registrant uses working capital reserves provided from any undistributed
cash flow from operations as its primary source of liquidity. In order to
preserve working capital reserves required for necessary capital
improvements at Shadle Shopping Center (see below), cash distributions
remain suspended. It is anticipated that cash distributions will continue
to be suspended until the remaining property is sold. A tenant occupying
approximately 19% of current leasable space at Shadle Shopping Center, who
has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code,
continues to make its rent payments.
The level of liquidity based upon cash and cash equivalents experienced a
$1,533,000 increase at September 30, 1995, as compared to December 31,
1994. Registrant's $207,000 of net cash from operating activities and
$3,403,000 of net cash from investing activities were partially offset by
$2,077,000 of cash used in financing activities. Cash provided by
investing activities consisted of $3,486,000 of net proceeds from the sale
of Registrant's Executive Center East, Executive Center West and the
attached parcel of land, were only slightly offset by $83,000 of
improvements to real estate. Cash used in financing activities consisted
of $2,032,000 of cash used in satisfaction of the notes encumbering
Registrant's Executive Center East and Executive Center West properties and
$45,000 of note payable principal payments. Registrant has commenced a
major redevelopment project at Shadle Shopping Center to enhance the
property value. The cash required to complete the renovation will come
from working capital reserves, which include net proceeds from the sale of
Executive Center East, Executive Center West and the attached parcel of
land. Once the redevelopment project is completed, the property will be
marketed for sale. All other increases (decreases) in certain assets and
liabilities are the result of the timing of receipt and payment of various
operating activities.
Working capital reserves are being invested in a money market account or in
repurchase agreements secured by United States Treasury obligations. The
Managing General Partner believes that, if market conditions remain
relatively stable, cash flow from operations, when combined with working
capital reserves, will be sufficient to fund required capital improvements
for the remainder of 1995 and the foreseeable future.
8 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
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. The
Managing General Partner does not believe these transactions will have a
significant 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
operating results and sales proceeds from Registrant's remaining asset.
Real Estate Market
The national real estate market has suffered from the effects of the real
estate recession including, but not limited to, a downward trend in market
values of existing properties. In addition, the bailout of the savings and
loan associations and sales of foreclosed properties by auction reduced
market values and caused a further restriction on the ability to obtain
credit. As a result, Registrant's ability to sell its remaining property
may be restricted. These factors caused a decline in market property
values and serve to reduce market rental rates and/or sales prices.
Management believes that the emergence of new institutional purchasers,
including real estate investment trusts and insurance companies should
create a more favorable market value for Registrant's remaining property in
the future.
Results of Operations
Nine Months Ended September 30, 1995 vs. September 30, 1994
Operating results, before the extraordinary gain on extinguishment of debt,
improved by $1,082,000 for the nine months ended September 30, 1995, as
compared to 1994. Manana/Dunn Business Park was lost through foreclosure
in July 1994, Evergreen Plaza Shopping Center was sold in December 1994 and
Executive Center East, Executive Center West and the attached parcel of
land were sold July 1995.
With respect to the remaining property, rental revenues increased by
$192,000 primarily due to an increase in rental rates and underaccrual of
tenant billbacks in the prior comparative period, which was slightly offset
by a decrease in occupancy at Registrant's remaining property. Interest
income increased by $30,000 due to an increase in average working capital
reserves available for investment and the effect of higher interest rates.
With respect to the remaining property, interest expense was eliminated
during the 1995 period due to the repayment of the mortgage encumbering
Shadle Shopping Center in September 1994. Operating expense and
depreciation expense remained relatively constant. In addition, general
and administrative expenses decreased by $97,000 due to a reduction in
asset management fees effective July 1, 1994.
9 of 14
CENTURY PROPERTIES FUND XI - FORM 10-Q - SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Three Months Ended September 30, 1995 vs. September 30, 1994
Operating results, before the gain on extinguishment of debt, improved by
$689,000 for the three months ended September 30, 1995, as compared to
1994. Manana/Dunn Business Park was lost through foreclosure in July 1994
and Evergreen Plaza Shopping Center was sold in December 1994 and Executive
Center East, Executive Center West and the attached parcel of land were
sold July 1995.
With respect to the remaining property, rental revenues increased by
$152,000 primarily due to an increase in rental rates and underaccrual of
tenant billbacks in the three months ended September 30, 1994, which was
slightly offset by a decrease in occupancy at Registrant's remaining
property. Interest income increased by $11,000 primarily due to a increase
in average working capital reserves available for investment and the effect
of higher interest rates.
With respect to the remaining property, interest expense was eliminated
during the 1995 due to the repayment of the mortgage encumbering Shadle
Shopping Center in September 1994. Operating expenses decreased by $26,000
due to extensive legal fees relating to Shadle Shopping Center in the prior
year comparative period. Depreciation expense remained constant. In
addition, general and administrative expenses decreased by $25,000 due to
higher general and administrative expenses in the prior year comparative
period.
10 of 14
CENTURY PROPERTIES FUND XI - 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 Registrant has an ownership
interest during the period covered by this Report, along with occupancy
data, follows:
CENTURY PROPERTIES FUND XI
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
------------------------
Nine Months Three Months
Date Ended Ended
Square of September 30, September 30,
Name and Location Footage Purchase 1995 1994 1995 1994
- ----------------- ------- -------- ---- ---- ---- ----
Executive Center East (2) 48,000 12/76 - 93 - 91
Las Vegas, Nevada
Executive Center West (2) 34,000 04/78 - 92 - 91
Las Vegas, Nevada
Shadle Shopping Center 278,000 (1) 74 78 74 76
Spokane, Washington
(1) The property (originally sold in October 1985) securing one of
Registrant's notes receivable, was re-acquired through foreclosure
in September 1993.
(2) On July 26, 1995, Registrant's Executive Center East and West
properties were sold.
11 of 14
CENTURY PROPERTIES FUND XI - 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).
12 of 14
CENTURY PROPERTIES FUND XI - 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 FUND XI
By: FOX CAPITAL MANAGEMENT CORPORATION,
A General Partner
/S/ ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
13 of 14
CENTURY PROPERTIES FUND XI - 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.
14 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XI 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> 4,801,000
<SECURITIES> 0
<RECEIVABLES> 54,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,276,000
<DEPRECIATION> (136,000)
<TOTAL-ASSETS> 7,014,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 6,961,000
<TOTAL-LIABILITY-AND-EQUITY> 7,014,000
<SALES> 0
<TOTAL-REVENUES> 2,041,000 <F1>
<CGS> 0
<TOTAL-COSTS> 962,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 120,000
<INCOME-PRETAX> 827,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 827,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 827,000
<EPS-PRIMARY> 27.48
<EPS-DILUTED> 27.48
<FN>
<F1>Revenues include gain on sale of properties of $502,000.
</FN>
</TABLE>
