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 0-13408
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 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 13
CENTURY PROPERTIES FUND XX - 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 $ 4,684,000 $ 4,226,000
Other assets 525,000 340,000
Real Estate:
Real estate 54,184,000 53,835,000
Accumulated depreciation (13,750,000) (12,835,000)
Allowance for impairment of value (6,296,000) (6,296,000)
------------ ------------
Real estate, net 34,138,000 34,704,000
Deferred sales commissions, net 659,000 755,000
Deferred organization expenses, net 452,000 519,000
Deferred costs, net 386,000 427,000
------------ ------------
Total assets $ 40,844,000 $ 40,971,000
============ ============
Liabilities and Partners' (Deficit)
Accrued expenses and other liabilities $ 867,000 $ 868,000
Non-Recourse Promissory Notes:
Principal 31,386,000 31,386,000
Deferred interest payable 13,229,000 12,601,000
------------ ------------
Total liabilities 45,482,000 44,855,000
------------ ------------
Commitments and Contingencies
Partners' (Deficit):
General partner (1,341,000) (1,313,000)
Limited partners (61,814 units outstanding at
June 30, 1995 and December 31, 1994) (3,297,000) (2,571,000)
------------ ------------
Total partners' (deficit) (4,638,000) (3,884,000)
------------ ------------
Total liabilities and partners' (deficit) $ 40,844,000 $ 40,971,000
============ ============
See notes to financial statements.
2 of 13
CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 30, 1995
Statements of Operations (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $ 3,552,000 $ 3,069,000
Interest income 118,000 83,000
----------- -----------
Total revenues 3,670,000 3,152,000
----------- -----------
Expenses:
Interest to Promissory Note Holders 1,255,000 1,255,000
Interest -- 45,000
Operating 1,692,000 1,750,000
Depreciation 915,000 914,000
Amortization 163,000 163,000
General and administrative 386,000 411,000
----------- -----------
Total expenses 4,411,000 4,538,000
----------- -----------
Net loss $ (741,000) $(1,386,000)
=========== ===========
Net loss per individual investor unit $ (12) $ (22)
=========== ===========
See notes to financial statements.
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CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 30, 1995
Statements of Operations (Unaudited)
For the Three Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $ 1,816,000 $ 1,552,000
Interest income 64,000 50,000
----------- -----------
Total revenues 1,880,000 1,602,000
----------- -----------
Expenses:
Interest to Promissory Note Holders 627,000 627,000
Interest -- 22,000
Operating 894,000 951,000
Depreciation 458,000 457,000
Amortization 82,000 82,000
General and administrative 222,000 237,000
----------- -----------
Total expenses 2,283,000 2,376,000
----------- -----------
Net loss $ (403,000) $ (774,000)
=========== ===========
Net loss per individual investor unit $ (6) $ (12)
=========== ===========
See notes to financial statements.
4 of 13
CENTURY PROPERTIES FUND XX - 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 loss $ (741,000) $(1,386,000)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 1,171,000 1,154,000
Deferred interest on non-recourse
promissory notes 628,000 628,000
Provision for doubtful receivables 2,000 --
Deferred costs paid (52,000) (97,000)
Changes in operating assets and liabilities:
Other assets (187,000) (110,000)
Accrued expenses and other liabilities (1,000) 25,000
----------- -----------
Net cash provided by operating activities 820,000 214,000
----------- -----------
Investing Activities:
Additions to real estate (349,000) (151,000)
Proceeds from cash investments -- 3,652,000
----------- -----------
Net cash (used in) provided by investing
activities (349,000) 3,501,000
----------- -----------
Financing Activities:
Repayment of notes payable -- (986,000)
Cash distributions to general partner (13,000) (13,000)
Notes payable principal payments -- (43,000)
----------- -----------
Cash (used in) financing activities (13,000) (1,042,000)
----------- -----------
Increase in Cash and Cash Equivalents 458,000 2,673,000
Cash and Cash Equivalents at Beginning
of Period 4,226,000 1,379,000
----------- -----------
Cash and Cash Equivalents at End of Period $ 4,684,000 $ 4,052,000
=========== ===========
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 $ 627,000 $ 627,000
=========== ===========
See notes to financial statements.
5 of 13
CENTURY PROPERTIES FUND XX - 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 reimbursements of administrative
expenses amounting to $78,000 and $66,000 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 gross receipts from certain properties it manages.
For the six months ended June 30, 1995 and 1994, affiliates of NPI,
Inc. received $68,000 and $43,000, 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 six month periods ended June 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 six month
periods ended June 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 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.
6 of 13
CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 30, 1995
NOTES TO FINANCIAL STATEMENTS
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 13
CENTURY PROPERTIES FUND XX - 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 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 six months ended June
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. Excess cash from operations was not distributed for the six months
ended June 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 $458,000 at June 30,
1995, as compared to December 31, 1994. Registrant's $820,000 of net cash
provided by operating activities was only partially offset by $349,000 of cash
used for improvements to real estate (investing activities) and $13,000 of
cash distributions to the general partner (financing activities). Registrant
has no plans for major capital improvements during the next twelve months.
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 13
CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
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 have been 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
Six Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $645,000 for the six months ended June 30, 1995,
as compared to June 30, 1994, as revenues increased by $518,000 and expenses
decreased by $127,000.
Revenues increased by $518,000 due to increases in rental income of $483,000
and interest income of $35,000. 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. Interest income increased primarily due to an increase
in average working capital reserves available for investment, coupled with an
increase in interest rates.
Expenses decreased by $127,000 due to decreases in operating expenses of
$58,000, interest expense of $45,000 and general and administrative expenses
of $25,000, 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 primarily due to a decrease in asset management fees. All other
expenses remained relatively constant.
Three Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $371,000 for the three months ended June 30,
1995, as compared to June 30, 1994, as revenues increased by $278,000 and
expenses decreased by $93,000.
Revenues increased by $278,000 due to increases in rental income of $264,000
and interest income of $14,000. 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 the Corners Apartments,
9 of 13
CENTURY PROPERTIES FUND XX - 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 (Continued)
which was partially offset by decreased occupancy at Registrant's Commonwealth
property. Interest income increased primarily due to an increase in average
working capital reserves available for investment, coupled with an increase in
interest rates.
Expenses decreased by $93,000 due to decreases in operating expenses of
$57,000, general and administrative expenses of $15,000, and interest expense
of $22,000, 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 primarily due to a decrease in asset management fees. All other
expenses remained relatively constant.
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 XX
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
Six Months Three Months
Ended Ended
Date of June 30, June 30,
Name and Location Purchase Type Size 1995 1994 1995 1994
- ----------------- -------- ---- ---- ---- ---- ---- ----
Commonwealth Centre 10/84 Business 109,000 88 93 88 93
Dallas, Texas Park sq. ft.
Crabtree Office Center 12/84 Office 57,000 99 89 99 92
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 92 89 92 91
Overland Park, Kansas Building sq. ft.
Highland Park Commerce
Center - Phase I and
The Goodyear and
Digital Buildings (1) Business 107,000 80 77 82 77
Charlotte, North Carolina Park sq. ft.
10 of 13
CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties (Continued)
Average
Occupancy Rate (%)
Six Months Three Months
Ended Ended
Date of June 30, June 30,
Name and Location Purchase Type Size 1995 1994 1995 1994
- ----------------- -------- ---- ---- ---- ---- ---- ----
Harbor Club Downs (3) 05/92 Apartment 272 97 96 97 96
Palm Harbor, Florida Building units
The Corners Apartments (4) 11/92 Apartment 176 96 94 96 92
Spartanburg, South Building units
Carolina
(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 mortgage loan
receivable in April 1991.
(3) Registrant acquired the property through foreclosure of mortgage loan
receivable in May 1992.
(4) Registrant acquired the property through foreclosure of mortgage loan
receivable in November 1992.
11 of 13
CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 30, 1995
PART II - OTHER INFORMATION
Item 1. Litigation
Adrian Charles Pastori on his own behalf and for all others similarly
situated v. Century Properties Fund XX, et. al, California Superior Court
for the County of San Francisco, Case No. 960684.
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.
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
12 of 13
CENTURY PROPERTIES FUND XX - FORM 10-Q - JUNE 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 13
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 4,684,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 54,184,000
<DEPRECIATION> (20,046,000)<F1>
<TOTAL-ASSETS> 40,844,000
<CURRENT-LIABILITIES> 0
<BONDS> 44,615,000<F2>
<COMMON> 0
0
0
<OTHER-SE> (4,638,000)
<TOTAL-LIABILITY-AND-EQUITY> 40,844,000
<SALES> 0
<TOTAL-REVENUES> 3,552,000
<CGS> 0
<TOTAL-COSTS> 2,607,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,255,000
<INCOME-PRETAX> (741,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (741,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (741,000)
<EPS-PRIMARY> (12)
<EPS-DILUTED> (12)
<FN>
<F1> Depreciation includes a $6,296,000 allowance for impairment of value.
<F2> Bonds include $13,229,000 of deferred interest payable.
</FN>
</TABLE>
