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 0-8658
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 (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 XII - 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 $ 1,713,000 $ 1,101,000
Other assets 242,000 111,000
Real Estate:
Real estate 12,144,000 12,040,000
Accumulated depreciation (4,541,000) (4,264,000)
------------- -------------
Real estate, net 7,603,000 7,776,000
Deferred costs, net 210,000 246,000
------------- -------------
Total assets $ 9,768,000 $ 9,234,000
============= =============
Liabilities and Partners' Equity
Notes payable $ 3,020,000 $ 3,075,000
Accrued expenses 278,000 243,000
Other liability 250,000 250,000
------------- -------------
Total liabilities 3,548,000 3,568,000
------------- -------------
Commitments and Contingencies
Partners' Equity:
General partners 13,000 7,000
Limited partners (35,000 units outstanding at
September 30, 1995 and December 31, 1994) 6,207,000 5,659,000
------------- -------------
Total partners' equity 6,220,000 5,666,000
------------- -------------
Total liabilities and partners' equity $ 9,768,000 $ 9,234,000
============= =============
See notes to financial statements.
2 of 14
CENTURY PROPERTIES FUND XII - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Nine Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 1,784,000 $ 1,497,000
Interest and other income 53,000 175,000
------------- -------------
Total revenues 1,837,000 1,672,000
------------- -------------
Expenses:
Operating 663,000 649,000
Interest 177,000 260,000
Depreciation 277,000 276,000
General and administrative 166,000 236,000
------------- -------------
Total expenses 1,283,000 1,421,000
------------- -------------
Net income $ 554,000 $ 251,000
============= =============
Net income per limited partnership unit $ 15.66 $ 7.09
============= =============
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Three Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 596,000 $ 505,000
Interest and other income 21,000 8,000
------------- -------------
Total revenues 617,000 513,000
------------- -------------
Expenses:
Operating 244,000 234,000
Interest 60,000 55,000
Depreciation 93,000 92,000
General and administrative 54,000 37,000
------------- -------------
Total expenses 451,000 418,000
------------- -------------
Net income $ 166,000 $ 95,000
============= =============
Net income per limited partnership unit $ 4.69 $ 2.69
============= =============
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - 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 $ 554,000 $ 251,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 319,000 308,000
Deferred costs paid (6,000) (36,000)
Changes in operating assets and liabilities:
Other assets (131,000) (4,000)
Accrued expenses 35,000 (20,000)
------------- -----------
Net cash provided by operating activities 771,000 499,000
------------- -----------
Investing Activities:
Additions to real estate (104,000) (186,000)
Proceeds from cash investments - 1,486,000
------------- -----------
Net cash (used in) provided by investing
activities (104,000) 1,300,000
------------- -----------
Financing Activities:
Repayment of notes payable - (1,323,000)
Notes payable principal payments (55,000) (67,000)
------------- -----------
Cash (used in) financing activities (55,000) (1,390,000)
------------- -----------
Increase in Cash and Cash Equivalents 612,000 409,000
Cash and Cash Equivalents at Beginning of Period 1,101,000 575,000
------------- -----------
Cash and Cash Equivalents at End of Period $ 1,713,000 $ 984,000
============= ===========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 173,000 $ 268,000
============= ===========
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - 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 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.
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
Realty Investors and Fox Capital Management Corporation, the
general partners 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
(a) An affiliate of NPI, Inc. received reimbursement of
administrative expenses amounting to $108,000 and $112,000
during the nine months ended September 30, 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 nine months ended September
30, 1995 and 1994, affiliates of NPI, Inc. received $19,000
and $14,000, respectively. These fees are included in
operating expenses.
(c) During each of the nine month periods ended September 30,
1995 and 1994, an affiliate of NPI, Inc. was paid $4,000
relating to successful real estate tax appeals on certain of
the Partnership's properties. These fees are included in
operating expenses.
3. Notes Payable
On June 1, 1994, the Partnership satisfied the first mortgage
encumbering its Parkside Apartment Complex in the amount of
$1,323,000. The Partnership incurred a prepayment premium of
$33,000.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
4. Contingency
A Phase I Environmental Assessment performed at the Partnership's
Indian River propertydisclosed the existence of dry cleaning chemicals in the
soil. The Partnership is currently performing a Phase II Environmental
Assessment to determine the type and level of the chemical. Upon completion of
the Phase II, the Partnership's will be able to determine the effect such
potential contamination may have on its financial statements.
5. Subsequent Event
In October 1995, the Partnership distributed $1,200,000 ($34.29 per
unit) to the limited partners and $12,000 to the general partner.
7 of 14
CENTURY PROPERTIES FUND XII - 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 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.
All of Registrant's properties generated positive cash flow for the nine
months ended September 30, 1995. As of November 1, 1995, twelve of the
fifteen properties originally purchased by Registrant were sold or
otherwise disposed. Registrant is currently marketing its remaining
properties for sale.
Registrant uses working capital reserves from any undistributed cash flow
from operations and proceeds from cash investments as its primary source of
liquidity. On October 1, 1995, Registrant made a cash distribution of
$1,200,000 ($34.29 per unit) to the limited partners. The general partner
received $12,000. To the extent Registrant is successful in selling its
remaining properties, Registrant anticipates distributing the net proceeds
of such sales, after payment of all of Registrant's expenses and the
establishment of sufficient reserves, to the partners and winding up the
affairs of Registrant.
The level of liquidity based upon cash and cash equivalents experienced a
$612,000 increase at September 30, 1995, as compared to December 31, 1994.
Registrant's $771,000 of net cash provided by operating activities was
partially offset by $104,000 of cash used for improvements to real estate
(investing activities) and $55,000 of cash used in mortgage principal
payments (financing activities). One of the major tenants at Registrant's
Country Club Plaza Shopping Center restructured its lease in connection
with a pre-packaged bankruptcy filing, which became effective on October 4,
1995. The lease payments under the restructured lease will be
approximately 25 percent less than the current payments. Although cash
flow will be reduced, sufficient cash flow remains to fulfill property
obligations. Registrant has no plans for any 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 the next twelve months
and the foreseeable future.
A Phase I Environmental Assessment performed at Registrant's Indian River
property disclosed the existence of dry cleaning chemicals in the soil.
Registrant is currently performing a Phase II Environmental Assessment to
determine the type and level of the chemical. Upon completion of the Phase
II, Registrant will be able to determine the effect such potential
contamination may have on Registrants's liquidity and results of
operations.
8 of 14
CENTURY PROPERTIES FUND XII - 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)
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.
As required by the terms of the settlement of the actions brought against,
among others, DeForest Ventures I L.P. ("DeForest") relating to the tender
offer made by DeForest in October 1994 (the "First Tender Offer") for units
of limited partnership interest in Registrant and certain affiliated
partnerships, DeForest commenced a second tender offer (the "Second Tender
Offer") on June 2, 1995 for units of limited partnership interest in
Registrant. Pursuant to the Second Tender Offer, DeForest acquired an
additional 1,957 units of Registrant which, when added to the units
acquired during the First Tender Offer, represents approximately 40.1% of
the total number of outstanding units of Registrant. The Managing General
Partner believes that the tender will not have a significant impact on
future operations or liquidity of Registrant. Also in connection with the
settlement, an affiliate of the Managing General Partner has made available
to Registrant a credit line of up to $150,000 per property owned by
Registrant. Registrant has no outstanding amounts due under this line of
credit. Based on present plans, management does not anticipate the need to
borrow in the near future. Other than cash and cash equivalents the line
of credit is Registrant's only unused source of liquidity.
On August 17, 1995, Insignia Financial Group, Inc. and certain of its
affiliates (collectively, "Insignia") entered into agreements pursuant to
which (i) 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., and (ii) Insignia would acquire all of the interests in NPI-
AP Management, L.P., the property manager at Registrant's residential
properties. The consummation of these transactions 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.
Insignia is a fully integrated real estate service company specializing in
the ownership and operation of securitized real estate assets. According
to Commercial Property News and the National Multi-Housing Council, since
1992 Insignia has been the largest property manager in the United States.
The Managing General Partner does not believe these transactions will have
a significant effect on Registrant's liquidity or results of operation.
Real Estate Market
The Southwest real estate market 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. These factors caused a decline in market property values and
served 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, relatively
low interest rates and the improved economy, have created a more favorable
market for Registrant's properties.
9 of 14
CENTURY PROPERTIES FUND XII - 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 $303,000 for the nine months ended September
30, 1995, as compared to 1994, due to an increase in revenues of $165,000
and a decrease in expenses of $138,000.
Revenues increased due to an increase in rental revenue of $287,000 which
was partially offset by a decrease in interest and other income of
$122,000. Rental revenue increased due to an increase in rental rates and
occupancy at all of Registrant's properties for the nine months ended
September 30, 1995. Interest and other income decreased due to the receipt
of a lease termination payment from a former tenant in 1994, which was
partially offset by an increase in interest income due to an increase in
average working capital reserves available for investment.
Expenses decreased by $138,000 for the nine months ended September 30,
1995, as compared to 1994, due to decreases in interest expense of $83,000
and general and administrative expenses of $70,000, which were only
slightly offset by increases in operating expenses of $14,000 and
depreciation expense of $1,000. Interest expense decreased due to the
satisfaction of the Parkside Apartments mortgage in April 1994 along with
the amortization of principal balance. General and administrative expenses
decreased primarily due to a decrease in asset management costs effective
July 1, 1994. Operating and depreciation expenses remained relatively
constant.
Three Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $71,000 for the three months ended September
30, 1995, as compared to 1994, due to an increase in revenues of $104,000,
which was partially offset by an increase in expenses of $33,000.
Revenues increased due to increases in rental revenue of $91,000 and
interest and other income of $13,000. Rental revenue increased due to an
increase in rental rates and occupancy at all of Registrant's properties.
Interest and other income increased primarily due to an increase in average
working capital reserves available for investment.
Expenses increased by $33,000 for the three months ended September 30,
1995, as compared to 1994, due to increases in interest expense of $5,000,
general and administrative expenses of $17,000, operating expenses of
$10,000 and depreciation expense of $1,000. Interest expense increased due
to an increase in the variable interest rate on the mortgage loan. General
and administrative expenses increased due to an increase in reimbursed
expenses during the three months ended September 30, 1995. Operating and
depreciation expenses remained relatively constant.
10 of 14
CENTURY PROPERTIES FUND XII - 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:
Average
Occupancy Rate (%)
--------------------------
Nine Months Three Months
Date Ended Ended
of September 30, September 30,
Name and Location Size Purchase 1995 1994 1995 1994
- ----------------- ---- -------- ---- ---- ---- ----
Country Club Plaza
Shopping Center 111,000 12/77 96 89 96 93
Mesa, Arizona sq. ft.
Indian River Shopping
Center 87,000 12/77 99 93 100 94
Scottsdale, Arizona sq. ft.
Parkside Apartments (1) 94 11/78 96 94 98 93
Irving, Texas units
(1) Property re-acquired through foreclosure in August 1989; originally
sold in November 1982.
11 of 14
CENTURY PROPERTIES FUND XII - FORM 10-Q - SEPTEMBER 30, 1995
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 XII - 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 XII
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 XII - 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
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<LEGEND>
The schedule contains summary financial information extracted from
Century Properties Fund XII and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,713,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 12,144,000
<DEPRECIATION> (4,541,000)
<TOTAL-ASSETS> 9,768,000
<CURRENT-LIABILITIES> 0
<BONDS> 3,020,000
<COMMON> 0
0
0
<OTHER-SE> 6,220,000
<TOTAL-LIABILITY-AND-EQUITY> 9,768,000
<SALES> 0
<TOTAL-REVENUES> 1,784,000
<CGS> 0
<TOTAL-COSTS> 940,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 177,000
<INCOME-PRETAX> 554,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 554,000
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<NET-INCOME> 554,000
<EPS-PRIMARY> 15.66
<EPS-DILUTED> 15.66
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