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 June 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 (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 ____
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 FUND XII - FORM 10-Q - JUNE 30, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
June 30, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 1,584,000 $ 1,101,000
Other assets 139,000 111,000
Real Estate:
Real estate 12,067,000 12,040,000
Accumulated depreciation (4,448,000) (4,264,000)
------------ ------------
Real estate, net 7,619,000 7,776,000
Deferred costs, net 223,000 246,000
------------ ------------
Total assets $ 9,565,000 $ 9,234,000
============ ============
Liabilities and Partners' Equity
Notes payable $ 3,038,000 $ 3,075,000
Accrued expenses 223,000 243,000
Other liability 250,000 250,000
------------ ------------
Total liabilities 3,511,000 3,568,000
------------ ------------
Commitments and Contingencies
Partners' Equity:
General partners 11,000 7,000
Limited partners (35,000 units outstanding at
June 30, 1995 and December 31, 1994) 6,043,000 5,659,000
------------ ------------
Total partners' equity 6,054,000 5,666,000
------------ ------------
Total liabilities and partners' equity $ 9,565,000 $ 9,234,000
============ ============
See notes to financial statements.
2 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
Statements of Operations (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $1,188,000 $ 992,000
Interest and other income 32,000 167,000
---------- ----------
Total revenues 1,220,000 1,159,000
---------- ----------
Expenses:
Operating 419,000 415,000
Interest 117,000 205,000
Depreciation 184,000 184,000
General and administrative 112,000 199,000
---------- ----------
Total expenses 832,000 1,003,000
---------- ----------
Net income $ 388,000 $ 156,000
========== ==========
Net income per limited partnership unit $ 11 $ 4
========== ==========
See notes to financial statements.
3 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
Statements of Operations (Unaudited)
For the Three Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $634,000 $533,000
Interest and other income 18,000 12,000
--------- --------
Total revenues 652,000 545,000
--------- --------
Expenses:
Operating 219,000 201,000
Interest 59,000 112,000
Depreciation 92,000 92,000
General and administrative 59,000 115,000
--------- --------
Total expenses 429,000 520,000
--------- --------
Net income $223,000 $ 25,000
--------- --------
Net income per limited partnership unit $ 6 $ 1
========= ========
See notes to financial statements.
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CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
Statements of Cash Flows (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Operating Activities:
Net income $ 388,000 $ 156,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 211,000 203,000
Deferred costs paid (4,000) (32,000)
Changes in operating assets and liabilities:
Other assets (28,000) 8,000
Accrued expenses and other liabilities (20,000) 1,000
--------- --------
Net cash provided by operating activities 547,000 336,000
--------- --------
Investing Activities:
Additions to real estate (27,000) (98,000)
Proceeds from cash investments -- 1,486,000
--------- ---------
Net cash (used in) investing activities (27,000) 1,388,000
--------- ---------
Financing Activities:
Repayment of notes payable -- (1,323,000)
Notes payable principal payments (37,000) (47,000)
--------- ---------
Cash (used in) financing activities (37,000) (1,370,000)
--------- ---------
Increase in Cash and Cash Equivalents 483,000 354,000
Cash and Cash Equivalents at Beginning of Period 1,101,000 575,000
--------- ---------
Cash and Cash Equivalents at End of Period $1,584,000 $ 929,000
========= =========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 115,000 $ 215,000
========= ========
See notes to financial statements.
5 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 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 six and three months ended June 30, 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 $72,000 and $88,000 during the six months ended
June 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 six months ended June 30, 1995 and 1994, affiliates
of NPI, Inc. received $12,000 and $8,000, respectively. These fees are
included in operating expenses.
3. Legal Proceedings
On May 19, 1995 final approval was given by the Court to a settlement
agreement relating to the tender offer litigation. As required by the terms
of the settlement agreement, DeForest Ventures I L.P. ("DeForest") commenced
a second tender offer (the "Second Tender Offer") on June 2, 1995 for units
of limited partnership in the Partnership. Pursuant to the Second Tender
Offer, DeForest acquired an additional 1,957 limited partnership units of
the Partnership.
6 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 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 six months ended June 30, 1995. As of
August 1, 1995, twelve of the fifteen properties originally purchased by
Registrant were sold or otherwise disposed. Registrant anticipates marketing
its remaining properties for sale during 1995.
Registrant uses working capital reserves from any undistributed cash flow from
operations and proceeds from cash investments as its primary source of
liquidity. Registrant anticipates that a cash distribution from operations will
be made during the third quarter of 1995. Upon the sale of a property, it is
anticipated that all or a portion of the sale proceeds will be distributed.
The level of liquidity based upon cash and cash equivalents experienced a
$483,000 increase at June 30, 1995, as compared to December 31, 1994.
Registrant's $547,000 of net cash provided by operating activities was partially
offset by $27,000 of cash used for improvements to real estate (investing
activities) and $37,000 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. 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.
7 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
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 (see Part II, Item 1,
Litigation). 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. Based on present plans, management
does not anticipate the need to borrow in the near future.
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.
Results of Operations
Six Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $232,000 for the six months ended June 30, 1995,
as compared to 1994, due to an increase in revenues of $61,000 and a decrease in
expenses of $171,000.
Revenues increased due to an increase in rental revenue of $196,000, which was
partially offset by a decrease in interest and other income of $135,000. Rental
revenue increased due to an increase in rental rates at all of Registrant's
properties and an increase in occupancy at Registrant's Country Club Plaza and
Indian River Shopping Centers for the six months ended June 30, 1995. Interest
and other income decreased due to the receipt of a lease termination payment
from a former tenant in 1994.
Expenses decreased by $171,000 for the six months ended June 30, 1995, as
compared to 1994, due to decreases in interest expense of $88,000 and general
and administrative expenses of $87,000, which were only slightly offset by an
increase in operating expenses of $4,000. Interest expense decreased 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. Operating and depreciation expenses
remained relatively constant.
8 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Three Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $198,000 for the three months ended June 30, 1995,
as compared to 1994, due to an increase in revenues of $107,000 and a decrease
in expenses of $91,000.
Revenues increased due to increases in rental revenue of $101,000 and interest
and other income of $6,000. Rental revenue increased due to an increase in
rental rates at all of Registrant's properties and increased occupancy at
Registrant's Country Club Plaza and Indian River properties, which was only
partially offset by decreased occupancy at Registrant's Parkside Apartments
property. Interest and other income increased primarily due to an increase in
average working capital reserves available for investment.
Expenses decreased by $91,000 for the three months ended June 30, 1995, as
compared to 1994, due to decreases in interest expense of $53,000 and general
and administrative expenses of $56,000, which were only slightly offset by an
increase in operating expenses of $18,000. Interest expense decreased 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. Operating and depreciation
expenses remained relatively constant.
9 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 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 had an ownership interest
during the period covered by this Report, along with occupancy data, follows:
CENTURY PROPERTIES FUND XII
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
Six Months Three Months
------------------------
Date Ended Ended
of June 30, June 30,
Name and Location Size Purchase 1995 1994 1995 1994
- ----------------- ---- -------- ---- ---- ---- ----
Country Club Plaza
Shopping Center 111,000 12/77 96 87 96 87
Mesa, Arizona sq. ft.
Indian River
Shopping Center 87,000 12/77 99 93 100 93
Scottsdale, Arizona sq. ft.
Parkside Apartments (1) 94 11/78 95 95 94 97
Irving, Texas units
(1) Property re-acquired through foreclosure in August 1989; originally sold
in November 1982.
10 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
PART II - OTHER INFORMATION
Item 1. Litigation
Lawrence M. Whiteside, on behalf of himself and all others similarly
situated, v. Fox Capital Management Corporation et al., Superior Court
of the State of California, San Mateo County, Case No. 390018.
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.
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.
James Andrews, et al., on behalf of themselves and all others 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.
On May 19, 1995, the Court gave final approval to the settlement
agreement entered into, in March 1995, by the plaintiffs and the
defendants in the above actions. Pursuant to the Court's order, all
claims made by the plaintiffs were dismissed with prejudice subject to
the defendants compliance with the settlement agreement. As required
by the settlement agreement, DeForest Ventures I L.P. ("DeForest") and
DeForest Ventures II L.P. commenced a tender offer for units of limited
partnership interest in Registrant as well as 18 other affiliated
partnerships on June 2, 1995 and implemented the other provisions of
the settlement agreement. See Part I, Item 2, "Management's Discussion
and Analysis of Financial Condition."
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
11 of 12
CENTURY PROPERTIES FUND XII - FORM 10-Q - JUNE 30, 1995
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, 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)
12 of 12
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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.
</LEGEND>
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<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 1,584,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
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<PP&E> 12,067,000
<DEPRECIATION> (4,448,000)
<TOTAL-ASSETS> 9,565,000
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<BONDS> 3,038,000
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<OTHER-SE> 6,054,000
<TOTAL-LIABILITY-AND-EQUITY> 9,565,000
<SALES> 0
<TOTAL-REVENUES> 1,188,000
<CGS> 0
<TOTAL-COSTS> 603,000
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<INCOME-PRETAX> 388,000
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