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, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-8658
Century Properties Fund XII
(Exact name of Registrant as specified in its charter)
California 94-2414893
(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 (404) 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
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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 __________________.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
March 31, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 1,290,000 $ 1,101,000
Other assets 182,000 111,000
Real Estate:
Real estate 12,057,000 12,040,000
Accumulated depreciation (4,356,000) (4,264,000)
-------------- --------------
Real estate, net 7,701,000 7,776,000
Deferred costs, net 234,000 246,000
-------------- --------------
Total assets $ 9,407,000 $ 9,234,000
============== ==============
Liabilities and Partners' Equity
Notes payable $ 3,057,000 $ 3,075,000
Accrued expenses 269,000 243,000
Other liability 250,000 250,000
-------------- --------------
Total liabilities 3,576,000 3,568,000
-------------- --------------
Commitments and Contingencies
Partners' Equity:
General partners 9,000 7,000
Limited partners (35,000 units outstanding at
March 31, 1995 and December 31, 1994) 5,822,000 5,659,000
-------------- --------------
Total partners' equity 5,831,000 5,666,000
-------------- --------------
Total liabilities and partners' equity $ 9,407,000 $ 9,234,000
============== ==============
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 1995
Statements of Operations (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Revenues:
Rental $ 554,000 $ 459,000
Interest and other income 14,000 155,000
-------------- --------------
Total revenues 568,000 614,000
-------------- --------------
Expenses:
Operating 200,000 214,000
Interest 58,000 93,000
Depreciation 92,000 92,000
General and administrative 53,000 84,000
-------------- --------------
Total expenses 403,000 483,000
-------------- --------------
Net income $ 165,000 $ 131,000
============== ==============
Net income per limited partnership unit $ 5 $ 4
============== ==============
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 1995
Statements of Cash Flows (Unaudited)
For the Three Months Ended
March 31, March 31,
1995 1994
Operating Activities:
Net income $ 165,000 $ 131,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 106,000 101,000
Deferred costs paid (2,000) (3,000)
Changes in operating assets and liabilities:
Other assets (71,000) 57,000
Accrued expenses 26,000 28,000
----------- -----------
Net cash provided by operating activities 224,000 314,000
----------- -----------
Investing Activities:
Additions to real estate (17,000) (15,000)
Proceeds from cash investments - 1,486,000
----------- -----------
Net cash (used in) provided by investing activities (17,000) 1,471,000
----------- -----------
Financing Activities:
Notes payable principal payments (18,000) (26,000)
----------- -----------
Cash (used in) financing activities (18,000) (26,000)
----------- -----------
Increase in Cash and Cash Equivalents 189,000 1,759,000
Cash and Cash Equivalents at Beginning of Period 1,101,000 575,000
----------- -----------
Cash and Cash Equivalents at End of Period $1,290,000 $2,334,000
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 57,000 $ 92,000
=========== ===========
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 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 in order 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.
At March 31, 1995, the Partnership had approximately $978,000 invested in
overnight repurchase agreements earning approximately 6% per annum.
The results of operations for the three months ended March 31, 1995 and
1994 are not necessarily indicative of the results to be expected for the full
year.
2. Transactions with Related Parties
(a) An affiliate of NPI, Inc. received reimbursement of administrative
expenses amounting to $36,000 and $34,000 during the three months ended March
31, 1995 and 1994, respectively. These reimbursements are included in general
and administrative expenses.
(b) An affiliate of NPI, Inc. is entitled to receive a management fee
equal to 5% of the annual gross receipts from certain properties it manages.
For the three months ended March 31, 1995 and 1994, affiliates of NPI, Inc.
received $6,000 and $2,000, respectively. These fees are included in
operating expenses.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 1995
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 properties consist of two commercial
properties and one residential apartment complex. The properties are located
in Arizona and Texas. The properties are leased to tenants subject to leases
with original lease terms ranging from six months to one year for the
residential property and with remaining lease terms of up to twelve years for
the commercial properties. Registrant receives rental income from its
properties and is responsible for operating expenses, administrative expenses,
capital improvements and debt service payments. Registrant's commercial
properties and its residential property generated positive cash flow for the
three months ended March 31, 1995. As of May 1, 1995, twelve of the fifteen
properties originally purchased by Registrant were sold or otherwise disposed.
Registrant uses working capital reserves from any undistributed cash flow from
operations and proceeds from cash investments as its primary source of
liquidity. It is anticipated that cash distributions from operations will
continue to be suspended until additional properties are sold.
The level of liquidity based upon cash and cash equivalents experienced a
$189,000 increase at March 31, 1995, as compared to December 31, 1994.
Registrant's $224,000 of net cash provided by operating activities was
partially offset by $17,000 of cash used for additions to real estate
(investing activities) and $18,000 of cash used in mortgage principal payments
(financing activities). One of the major tenants at Registrant's Country Club
Plaza Shopping Center has requested that Registrant restructure its lease in
connection with a pre-packaged bankruptcy filing. At present, the tenant has
not made this filing. It is anticipated that the lease payments under the
restructured lease will be approximately 25 percent less than the current
payments. If, however, the tenant were to vacate this space, there is a
potential for Registrant to incur capital expenditures for tenant improvements
and/or leasing commissions in the process. Registrant has no plans for any
other material capital expenditures during the next 12 months. 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 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 current working capital
reserves, will be sufficient to fund required capital improvements and regular
debt service payments in 1995 and the foreseeable future.
The Promissory Note Holders have received full payment of principal and
interest and will not receive any residual interest. For the Limited
Partners, it appears that the investment objective of capital growth will not
be attained and that a significant portion of invested capital will not be
returned to investors. The remaining properties have been held longer than
originally expected.
Pursuant to the terms of a Settlement Agreement entered into in connection
with the Ruben and Andrews actions, DeForest Ventures I L.P. will make a
tender offer for an aggregate number of units of Registrant (including the
units purchased in the initial tender) constituting up to 49% of the total
number of units of Registrant at a price equal to the initial tender price
plus 15% less attorney's fees
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
and expenses. In addition, pursuant to the terms of the proposed settlement,
the Managing General Partner will agree to provide Registrant a credit line of
$150,000 per property, borrowings under which would bear interest at the
lesser of prime plus 1% or the rate permitted by the Partnership Agreement of
Registrant. A hearing for final approval of the settlement is scheduled for
May 19, 1995. See Part II - Other Information, "Item 1 - Legal Proceedings".
If the settlement receives final Court approval, it is expected that the
tender offer will commence on or about June 19, 1995. The Managing General
Partner believes that the settlement will not have an adverse effect on
Registrant.
Real Estate Market
The Southwest 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 refinance or sell its remaining properties 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,
however, 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 properties in the future.
Results of Operations
Three Months Ended March 31, 1995 vs. March 31, 1994
Operating results improved by $34,000 for the three months ended March 31,
1995, as compared to 1994, due to decreases in revenues of $46,000 and
expenses of $80,000.
Revenues decreased due to decreases in interest and other income of $141,000,
which was partially offset by an increase in rental revenue of $95,000.
Interest and other income increased due to the receipt of a lease termination
payment from a former tenant in 1994. Rental revenue increased primarily due
to increases in occupancy at all of Registrant's properties for the three
months ended March 31, 1995.
Expenses decreased by $80,000 for the three months ended March 31, 1995, as
compared to 1994, due to decreases in interest expense of $35,000, operating
expenses of $14,000 and general and administrative expenses of $31,000.
Interest expense decreased primarily due to the satisfaction of the Parkside
Apartments mortgage along with the amortization of principal balance. General
and administrative expenses decreased primarily due to the decrease in asset
management costs effective July 1, 1994. Operating expenses remained
relatively constant.
7 of 10
CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 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 XII
OCCUPANCY SUMMARY
For the Quarters Ended March 31, 1995 and 1994
Average
Date of Occupancy Rate (%)
Name and Location Size Purchase 1995 1994
- ----------------- -------- -------- ------ ------
Country Club Plaza
Shopping Center 111,000 12/77 95 87
Mesa, Arizona sq. ft.
Indian River Shopping
Center 87,000 12/77 98 93
Scottsdale, Arizona sq. ft.
Parkside Apartments (1) 94 11/78 96 93
Irving, Texas units
(1) Property re-acquired through foreclosure in August 1989; originally sold
in November 1982.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 1995
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Lawrence M. Whiteside, on behalf of himself and all other similarly
situated, v. Fox Capital Management Corporation, et al., Superior Court of the
State of California, San Mateo County, Case No. 390018 ("Whiteside").
Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all
others similarly situated, v. DeForest Ventures I L.P., et al., United States
District Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-2983-JEC ("Ruben").
Roger L. Vernon, individually and on behalf of all similarly situated
persons v. DeForest Ventures I L.P., et al., Circuit Court of Cook County,
County Departments, Chancery Division, State of Illinois, Case No. 94CH0100592
("Vernon").
James Andrews, et al., on behalf of themselves and all other similarly
situated v. Fox Capital Management Corporation, et al., United States District
Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-3351-JEC ("Andrews").
On March 16, 1995 the United States District Court for the Northern
District of Georgia, Atlanta Division, entered an order which granted
preliminary approval to a settlement agreement in the Ruben and Andrews
actions, conditionally certified two classes for purpose of settlement, and
authorized the parties to give notice to the classes of the terms of the
proposed settlement. Plaintiffs counsel in the Vernon and Whiteside action
have joined in the Settlement Agreement as well. The two certified classes
constitute all limited partners of Registrant and the eighteen other
affiliated partnerships who either tendered their units in connection with the
October tender offers or continue to hold their units in Registrant and the
other affiliated partnerships. Pursuant to the terms of the proposed
settlement, which are described in the notice sent to the class members in
March 1995, (and more fully described in the Amended Stipulation of Settlement
submitted to the court on March 14, 1995) all claims which either were made or
could have been asserted in any of the class actions would be dismissed with
prejudice and/or released. In consideration for the dismissal and/or release
of such claims, among other things, DeForest I would pay to each unit holder
who tendered their units in Registrant an amount equal to 15% of the original
tender offer price less attorney's fees and expenses. In addition, DeForest I
will commence a second tender offer for an aggregate number of units of
Registrant (including the units purchased in the initial tender) constituting
up to 49% of the total number of units of Registrant at a price equal to the
initial tender price plus 15% less attorney's fees and expenses. Furthermore,
under the terms of the proposed settlement, the Managing General Partner would
agree, among other things, to provide Registrant a credit line of $150,000 per
property which would bear interest at the lesser of prime rate plus 1% and the
rate permitted under the partnership agreement of Registrant. A hearing on
the final approval of the settlement is scheduled for May 19, 1995.
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
9 of 10
CENTURY PROPERTIES FUND XII - FORM 10-Q - MARCH 31, 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 XII
By: FOX CAPITAL MANAGEMENT CORPORATION,
A General Partner
/S/ARTHUR N. QUELER
---------------------------------------------
ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
10 of 10
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The schedule contains summary financial information extracted from Century
Properties Fund XII and is qualified in its entirety by reference to such
financial statements.
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
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<PP&E> 12,057,001
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<OTHER-SE> 5,831,000
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<TOTAL-REVENUES> 554,000
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