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 0-13408
Century Properties Fund XX
(Exact name of Registrant as specified in its charter)
California 94-2930770
(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 XX - 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 $ 5,650,000 $ 4,226,000
Other assets 632,000 340,000
Real Estate:
Real estate 54,335,000 53,835,000
Accumulated depreciation (14,207,000) (12,835,000)
Allowance for impairment of value (6,296,000) (6,296,000)
------------- -------------
Real estate, net 33,832,000 34,704,000
Deferred sales commissions, net 610,000 755,000
Deferred organization expenses, net 419,000 519,000
Deferred costs, net 395,000 427,000
------------- -------------
Total assets $ 41,538,000 $ 40,971,000
============= =============
Liabilities and Partners' (Deficit)
Accrued expenses, deferred income and
other liabilities $ 1,661,000 $ 868,000
Non-recourse Promissory Notes:
Principal 31,386,000 31,386,000
Deferred interest payable 13,543,000 12,601,000
------------- -------------
Total liabilities 46,590,000 44,855,000
------------- -------------
Commitments and Contingencies
Partners' (deficit):
General partner (1,349,000) (1,313,000)
Limited partners (61,814 units outstanding at
September 30, 1995 and December 31, 1994) (3,703,000) (2,571,000)
------------- -------------
Total partners' (deficit) (5,052,000) (3,884,000)
------------- -------------
Total liabilities and partners' (deficit) $ 41,538,000 $ 40,971,000
============= =============
See notes to financial statements.
2 of 14
CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Nine Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 5,251,000 $ 4,767,000
Interest income 182,000 110,000
------------- -------------
Total revenues 5,433,000 4,877,000
------------- -------------
Expenses:
Interest to Promissory Note Holders 1,883,000 1,883,000
Amortization 244,000 244,000
Interest - 50,000
Operating 2,546,000 2,580,000
Depreciation 1,372,000 1,371,000
General and administrative 543,000 570,000
------------- -------------
Total expenses 6,588,000 6,698,000
------------- -------------
Net loss $ (1,155,000) $ (1,821,000)
============= =============
Net loss per individual investor unit $ (18.31) $ (28.88)
============= =============
See notes to financial statements.
3 of 14
CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Three Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 1,699,000 $ 1,698,000
Interest income 64,000 27,000
------------- -------------
Total revenues 1,763,000 1,725,000
------------- -------------
Expenses:
Interest to Promissory Note Holders 628,000 628,000
Amortization 81,000 81,000
Interest - 5,000
Operating 854,000 831,000
Depreciation 457,000 457,000
General and administrative 157,000 158,000
------------- -------------
Total expenses 2,177,000 2,160,000
------------- -------------
Net loss $ (414,000) $ (435,000)
============= =============
Net loss per individual investor unit $ (6.57) $ (6.89)
============= =============
See notes to financial statements.
4 of 14
CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Cash Flows
For the Nine Months Ended
September 30, September 30,
1995 1994
Operating Activities:
Net loss $ (1,155,000) $ (1,821,000)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 1,760,000 1,741,000
Provision for doubtful receivable - 7,000
Deferred costs paid (111,000) (131,000)
Deferred interest on non-recourse
promissory notes 942,000 941,000
Changes in operating assets and liabilities:
Other assets (292,000) (389,000)
Accrued expenses, deferred income and
other liabilities 793,000 403,000
------------- -------------
Net cash provided by operating activities 1,937,000 751,000
------------- -------------
Investing Activities:
Additions to real estate (500,000) (308,000)
Proceeds from cash investments - 3,652,000
------------- -------------
Net cash (used in) provided by investing
activities (500,000) 3,344,000
------------- -------------
Financing Activities:
Repayment of notes payable - (986,000)
Notes payable principal payments - (43,000)
Cash distributions to the general partner (13,000) (13,000)
------------- -------------
Cash (used in) financing activities (13,000) (1,042,000)
------------- -------------
Increase in Cash and Cash Equivalents 1,424,000 3,053,000
Cash and Cash Equivalents at Beginning of Period 4,226,000 1,379,000
------------- -------------
Cash and Cash Equivalents at End of Period $ 5,650,000 $ 4,432,000
============= =============
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period -
notes payable $ - $ 40,000
============= =============
Interest paid in cash during the period -
non-recourse promissory notes $ 942,000 $ 942,000
============= =============
See notes to financial statements.
5 of 14
CENTURY PROPERTIES FUND XX - 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 balance
sheet accounts have been reclassified in order to conform to the
current period.
The financial information contained herein is unaudited. In the
opinion of management, 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
Capital Management Corporation, the managing general partner of the
Partnership's general partner, 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 reimbursements of
administrative expenses amounting to $117,000 and $102,000
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 gross receipts from certain properties it
manages. For the nine months ended September 30, 1995 and
1994, affiliates of NPI, Inc. received $102,000 and $75,000,
respectively. These fees are included in operating expenses.
(c) In accordance with the Partnership Agreement, the general
partner is entitled to receive a partnership management fee
based on cash available for distribution. For the nine month
periods ended September 30, 1995 and 1994, these fees totaled
$36,000. These fees are included in general and administrative
expenses. In addition, a $13,000 distribution was made to the
general partner during the nine month periods ended September
30, 1995 and 1994.
3. Contingency
On January 24, 1990, a settlement agreement was executed by and
between the Partnership and certain defendants in connection with
legal proceedings at Commonwealth Centre. Lincoln Property Company
("Lincoln"), one of the defendants, provided the Partnership with a
deficiency certificate totaling $1,250,000 pursuant to Lincoln's
company wide debt restructuring plan. Effective December 31, 1994,
the obligors under this collateral pool agreement exercised their
right to extend the maturity date of the deficiency certificates to
December 31, 1997. It is anticipated that any payments made to the
Partnership on account of its $1,250,000 face amount
6 of 14
CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995
NOTES TO FINANCIAL STATEMENTS
3. Contingency (Continued)
deficiency certificate will not be made, if at all, until such
time. The amount the Partnership will ultimately receive under the
certificate, which is subject to contingencies, is uncertain.
Accordingly, the certificate will be recorded in the financial
statements when payment is received.
4. Legal Proceedings
Adrian Charles Pastori, on his own behalf and for all others
similarly situated vs. Century Properties Fund XX et al.,
California Superior Court for County of San Diego, Case No. 673150.
On January 20, 1995, the Court sustained the Partnership's motion
that the plaintiff's case did not set forth the cause of action
upon which relief could be granted and again granted the plaintiff
leave to file an amended complaint. On June 21, 1995, the demurrer
previously granted by the Court was overruled. Registrant has
filed its answer in the case and intends to vigorously defend this
action. The ultimate outcome of the litigation cannot presently be
determined, however, MGP does not believe that the litigation will
have a material adverse effect to the Partnership.
7 of 14
CENTURY PROPERTIES FUND XX - 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 real estate properties consist of three office buildings
located in North Carolina, Virginia, and Kansas, two business parks located
in Texas and North Carolina and two apartment complexes located in Florida
and South Carolina. The properties are leased to tenants subject to leases
with original lease terms ranging from six months to one year for the
residential properties and with remaining lease terms of up to six 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 seven of
Registrant's properties generated positive cash flow from operations during
the nine months ended September 30, 1995.
Registrant uses working capital reserves from any undistributed cash flow
from operations and proceeds from cash investments as its primary source of
liquidity. For the long term, cash from operations will remain
Registrant's primary source of liquidity. Excess cash from operations was
not distributed for the nine months ended September 30, 1995. Cash
generated from operations will continue to be used to make the required
payments to the Promissory Note Holders and for working capital reserves.
It is not currently anticipated that Registrant will make any distributions
from operations in the near future.
Liquidity based on cash and cash equivalents improved by $1,424,000 at
September 30, 1995, as compared to December 31, 1994. Registrant's
$1,937,000 of net cash provided by operating activities was only partially
offset by $500,000 of cash used for improvements to real estate (investing
activities) and $13,000 of cash distributions to the general partner
(financing activities). Net cash provided by operating activities
increased, as compared to the prior year comparative period, partially due
to the receipt of $470,000 of prepaid rent (through October 1996) from a
significant tenant occupying 25,000 square feet at Registrant's Linpo Park
property. Registrant has no plans for major capital improvements. All
other increases (decreases) in certain assets and liabilities are the
result of the timing of the receipt and payment of various operating
activities.
Working capital reserves are being invested in a money market account or
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 capital improvements and
required interest payments to the Promissory Note Holders until November
30, 1998, the maturity date of the notes. At that time Registrant will
have to extend the due dates of these notes, find replacement financing, or
sell properties.
With respect to 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 and any portions that
are returned will come from cash flow. The extent to which invested
capital is returned to investors is dependent upon the success of the
performance of Registrant's properties and the markets in which such
properties are located. It is anticipated that many of the properties will
continue to be held longer than originally expected. The ability to hold
and operate theses properties is dependent on Registrant's ability to
obtain additional financing, refinancing, or debt restructuring as
required.
8 of 14
CENTURY PROPERTIES FUND XX - 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, 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 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 refinance or sell its
existing properties may be restricted. These factors caused a decline in
market property values and serve to reduce market rental rates and/or sales
prices. Compounding these difficulties for residential properties are
relatively low interest rates, which encourage existing and potential
residential tenants to purchase homes. In addition, there has been a
significant decline nationally in new household formation. 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
Nine Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $666,000 for the nine months ended September
30, 1995, as compared to September 30, 1994, as revenues increased by
$556,000 and expenses decreased by $110,000.
Revenues increased by $556,000 due to increases in rental income of
$484,000 and interest income of $72,000. Rental revenues increased due to
an increase in occupancy and rental rates during the period at Registrant's
Crabtree Office Center, Highland Park Commerce Center, and Metcalf 103
Office Park properties, which was partially offset by decreased occupancy
at Registrant's Commonwealth Centre. Occupancy remained relatively
constant at Registrant's remaining properties. Interest income increased
due to an increase in average working capital reserves available for
investment, coupled with an increase in interest rates.
9 of 14
CENTURY PROPERTIES FUND XX - FORM 10-Q - SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Nine Months Ended September 30, 1995 vs. September 30, 1994 (Continued)
Expenses decreased by $110,000 due to decreases in operating expenses of
$34,000, interest expense of $50,000 and general and administrative
expenses of $27,000, which were slightly offset by an increase in
depreciation expense of $1,000. Operating expenses declined primarily due
to a decrease in legal expenses incurred at Commonwealth Centre in
connection with a settlement with a tenant in the prior year comparative
period. Interest expense declined due to the satisfaction of the note
payable encumbering Registrant's Corners Apartments property in June 1994.
General and administrative expenses declined due to a decrease in asset
management fees effective July 1, 1994. All other expenses remained
relatively constant.
Three Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $21,000 for the three months ended September
30, 1995, as compared to September 30, 1994, as the increase in revenues of
$38,000 was partially offset by an increase in expenses of $17,000.
Revenues increased by $38,000 due to increases in rental income of $1,000
and interest income of $37,000. Rental revenues increased due to an
increase in occupancy and rental rates during the period at Registrant's
Highland Park Commerce Center, Metcalf 103 Office Park and the Corners
Apartments, which was offset by an over accrual of escalation billbacks at
September 30, 1994 and reduced occupancy at Registrant's Commonwealth
property. Occupancy remained relatively constant at Registrant's remaining
properties. Interest income increased due to an increase in average
working capital reserves available for investment, coupled with an increase
in interest rates.
Expenses increased by $17,000 due to an increase in operating expenses of
$23,000, which was slightly offset by decreases in interest expense of
$5,000 and in general and administrative expenses of $1,000. Operating
expenses increased primarily due to increased repairs and maintenance
expenses at Registrant's Metcalf 103 Office Park, Highland Park Commerce
Center and Crabtree Office Center properties. Interest expense, general
and administrative expenses, depreciation and amortization remained
relatively constant. All other expenses remained relatively constant.
10 of 14
CENTURY PROPERTIES FUND XX - 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 XX
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
Nine Months Three Months
Ended Ended
Date of September 30, September 30,
Name and Location Purchase Type Size 1995 1994 1995 1994
Commonwealth Centre 10/84 Business 109,000 84 91 76 88
Dallas, Texas Park sq. ft.
Crabtree Office Center 12/84 Office 57,000 99 92 99 99
Raleigh, North Carolina Building sq. ft.
Linpro Park I 03/85 Office 79,000 100 100 100 100
Reston, Virginia Building sq. ft.
Metcalf 103 Office
Park(2) 04/91 Office 60,000 93 90 96 92
Overland Park, Kansas Building sq. ft.
Highland Park Commerce
Center - Phase I and
The Goodyear and
Digital Buildings (1) Business 107,000 82 77 85 79
Charlotte, North Carolina Park sq. ft.
Harbor Club Downs (3) 05/92 Apartment 272 97 96 98 97
Palm Harbor, Florida Building units
The Corners
Apartments (4) 11/92 Apartment 176 96 95 97 95
Spartanburg, South Carolina Building units
(1) Phase I and the two buildings were acquired in separate transactions
on November 5, 1985 and February 12, 1986, respectively.
(2) Registrant acquired the property through foreclosure of a mortgage
loan receivable in April 1991.
(3) Registrant acquired the property through foreclosure of a mortgage
loan receivable in May 1992.
(4) Registrant acquired the property through foreclosure of a mortgage
loan receivable in November 1992.
11 of 14
CENTURY PROPERTIES FUND XX - 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 XX - 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 XX
By: FOX PARTNERS III,
Its General Partner
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 XX - 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 XX 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> 5,650,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 54,335,000
<DEPRECIATION> (20,503,000)<F1>
<TOTAL-ASSETS> 41,538,000
<CURRENT-LIABILITIES> 0
<BONDS> 44,929,000<F2>
<COMMON> 0
0
0
<OTHER-SE> (5,052,000)
<TOTAL-LIABILITY-AND-EQUITY> 41,538,000
<SALES> 0
<TOTAL-REVENUES> 5,251,000
<CGS> 0
<TOTAL-COSTS> 3,918,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,883,000
<INCOME-PRETAX> (1,155,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,155,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,155,000)
<EPS-PRIMARY> (18.31)
<EPS-DILUTED> (18.31)
<FN>
<F1> Depreciation includes a $6,296,000 allowance for impairment of value.
<F2> Bonds include $13,543,000 of deferred interest payable.
</FN>
</TABLE>
