FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
[No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
[No Fee Required]
For the transition period from _________to _________
Commission file number 0-13408
CENTURY PROPERTIES FUND XX
(Name of small business issuer in its charter)
California 94-2930770
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interests
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $8,954,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
Item 1. Description of Business
General
Century Properties Fund XX (the "Partnership" or "Registrant") was organized as
a limited partnership under the Uniform Limited Partnership laws of California
as of December 1983. The Partnership's general partner is Fox Partners III, a
California general partnership. The general partners of Fox Partners III are Fox
Capital Management Corporation ("FCMC" or the "Managing General Partner"), a
California corporation, Fox Realty Investors ("FRI"), a California general
partnership, and Fox Partners 84, a California general partnership. The Managing
General Partner and NPI Equity Investments II Corporation, the managing general
partner of FRI, are subsidiaries of Apartment Investment and Management Company
("AIMCO") (see "Transfer of Control"). The Partnership Agreement provides that
the Partnership is to terminate on December 31, 2008, unless terminated prior to
such date.
The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-88615), was declared effective by the Securities and Exchange
Commission on February 22, 1984. The Partnership marketed its securities
pursuant to its Prospectus dated February 22, 1984, and November 8, 1984, which
were thereafter supplemented (hereinafter the "Prospectus"). The Prospectus was
filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the
Securities Act of 1933.
Beginning in February 1984 through April 1985, the Partnership offered
$35,000,000 in Individual Investor Units and $65,000,000 in Pension Investors
Notes ("Non-Recourse Promissory Notes" or "Promissory Notes"), and sold
$30,907,000 and $49,348,500, respectively. Since its initial offering, the
Partnership has not received, nor are the limited partners required to make,
additional capital contributions. The net proceeds of this offering were used to
purchase four income-producing real estate properties including one property
which was acquired in two phases, and to fund seven mortgage loans totaling
$31,568,000. The Partnership's original property portfolio was geographically
diversified with properties acquired and properties on which mortgage loans were
funded in seven states. The Partnership's acquisition and mortgage loan funding
activities were completed in February 1986 and since then the principal activity
of the Partnership has been managing its portfolio. Two mortgage loans were
prepaid in 1989, one was prepaid in 1991, and another was satisfied in 1994. In
April 1991, the Partnership finalized foreclosure proceedings on Metcalf 103
Office Park which secured a mortgage loan and during 1992 finalized foreclosure
proceedings against the borrowers on two additional mortgage loans (Harbor Club
Downs and The Corners Apartments). The remaining mortgage loan was prepaid in
1992. Two of the commercial properties were sold in 1999. See "Item 2.
Description of Properties" below for a description of the Partnership's
properties (see "Item 6. Management's Discussion and Analysis or Plan of
Organization" for a description of the sale of Crabtree Office Center and
Commonwealth Center).
At December 31, 1999, the Partnership adopted the liquidation basis of
accounting. The Nonrecourse Promissory Notes (the "Notes") were in default due
to nonpayment upon maturity on November 30, 1998. The Managing General Partner
contacted the indenture trustee for the Notes and certain holders of the Notes
regarding this default. On October 28, 1999 the Partnership entered into a
forbearance agreement with the indenture trustee for a period of 390 days. In
turn, the Partnership agreed to (a) deliver to the indenture trustee for the
benefit of the note holders all of the accumulated cash of the Partnership, less
certain reserves and anticipated operating expenses, (b) market all of its
properties for sale, (c) deliver all cash proceeds from any sales to the
indenture trustee until the notes are fully satisfied and (d) comply with the
reporting requirements under the indenture. Based on current market conditions,
it is unlikely that the sale of the Partnership's assets will generate
sufficient proceeds to pay off the Nonrecourse Promissory Notes in full. If the
Partnership cannot sell its properties for sufficient value, in accordance with
the terms of the forbearance agreement, it is likely that the Partnership will
lose its properties through delivery to an auctioneer who would sell the assets
for the benefit of the Note holders.
The Registrant has no employees. Management and administrative services are
provided by the Managing General Partner and by agents retained by the Managing
General Partner for the Partnership's residential properties. With respect to
the Partnership's commercial properties, management is performed by an
unaffiliated third party management company.
The real estate business in which the Partnership is engaged is highly
competitive. There are other properties within the market area of the
Partnership's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the Managing General
Partner, in such market area could have a material effect on the rental market
for the apartments and commercial space at the Partnership's properties and the
rents that may be charged for such apartments and space. While the Managing
General Partner and its affiliates are a significant factor in the United States
in the apartment industry, they own an insignificant percentage of total
apartment units in the United States and competition for the apartments is
local. The Managing General Partner is not a significant factor in commercial
real estate in the United States.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed which resulted in no material adverse
conditions or liabilities. In no case has the Partnership received notice that
it is a potentially responsible party with respect to an environmental clean up
site.
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential and commercial properties because
such properties are susceptible to the impact of economic and other conditions
outside of the control of the Partnership.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.
Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. ("Insignia") and Insignia
Properties Trust ("IPT") merged into AIMCO, a publicly traded real estate
investment trust, with AIMCO being the surviving corporation (the "Insignia
Merger"). As a result, AIMCO ultimately acquired 100% ownership interest in the
Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Item 2. Description of Properties
The following table sets forth the Partnership's investment in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership (2) Use
<S> <C>
Linpro Park I 03/85 Fee ownership Office Building
Reston, Virginia 75,000 sq. ft.
Metcalf 103 Office Park 04/91 Fee ownership Office Building
Overland Park, Kansas 62,000 sq. ft.
Highland Park Commerce Center (1) Fee ownership Business Park
Charlotte, North Carolina 106,000 sq. ft.
Harbor Club Downs 05/92 Fee ownership Apartment
Palm Harbor, Florida 272 units
The Corners Apartment 11/92 Fee ownership Apartment
Spartanburg, South Carolina 176 units
</TABLE>
(1) Highland Park Commerce Center was acquired in separate transactions on
November 5, 1985 and February 12, 1986, respectively.
(2) The Non-Recourse Promissory Notes are secured by a deed of trust on all
properties owned by the Partnership.
Schedule of Properties:
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Linpro $ 8,930 (1) 5-39 yrs S/L $ 4,078
Metcalf 3,149 (1) 5-39 yrs S/L 2,770
Highland Park 5,680 (1) 5-39 yrs S/L 4,630
Harbor Club 10,622 (1) 5-39 yrs S/L 7,224
The Corners 3,760 (1) 5-30 yrs S/L 2,956
Total $32,141 $21,658
</TABLE>
(1) As a result of adopting the liquidation basis of accounting, the gross
carrying values of the properties were adjusted to their net realizable
value and will not be depreciated any further.
See "Note B" of the financial statements in "Item 7. Financial Statements" for a
description of the Partnership's former depreciation policy.
The Partnership has Non-Recourse Promissory Notes secured by a deed of trust on
all properties owned by the Partnership. The Promissory Notes bear interest at
eight percent per annum. On October 28, 1999 the Partnership entered into a
forbearance agreement with the indenture trustee for a period of 390 days. In
turn, the Partnership agreed to (a) deliver to the indenture trustee for the
benefit of the note holders all of the accumulated cash of the Partnership, less
certain reserves and anticipated operating expenses, (b) market all of its
properties for sale, (c) deliver all cash proceeds from any sales to the
indenture trustee until the notes are fully satisfied and (d) comply with the
reporting requirements under the indenture. It is uncertain whether the sale of
the Partnership's assets will generate sufficient proceeds to pay off the
Nonrecourse Promissory Notes in full. If the Partnership cannot sell its
properties for sufficient value, in accordance with the terms of the forbearance
agreement, it is likely that the Partnership will lose its properties through
delivery to an auctioneer who would sell the assets for the benefit of the Note
holders.
Schedule of Rental Rate and Occupancy:
Average annual rental rates and occupancy for 1999 and 1998 for each property
were:
Average Annual Average
Rental Rates Occupancy
Property 1999 1998 1999 1998
Linpro $20.36/sq.ft. $19.68/sq.ft. 100% 96%
Metcalf 12.02/sq.ft. 11.61/sq.ft. 92% 97%
Highland Park 9.61/sq.ft. 9.53/sq.ft. 87% 97%
Harbor Club 8,310/unit 7,900/unit 96% 94%
The Corners 5,982/unit 5,714/unit 94% 91%
The increase in occupancy at Linpro is due to the addition of one tenant
occupying the remaining available space. The decrease in occupancy at Metcalf is
due to the loss of three tenants during the year of 1999. The decrease in
occupancy at Highland Park Commerce Center is due to the loss of five tenants
occupying 12,464 square feet, which represents approximately 12% of the total
space. The increase at The Corners Apartments is due to increased marketing
efforts and a strong economy in the Spartanburg, South Carolina area.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
similar properties in the area. The Managing General Partner believes that all
of the properties are adequately insured. The multi-family residential
properties' lease terms are for one year or less. The commercial lease terms
vary as set forth below. No residential tenant leases 10% or more of the
available rental space. All of the properties are in good physical condition,
subject to normal depreciation and deterioration as is typical for assets of
this type and age.
<PAGE>
The following is a schedule of the lease expirations for the years 2000-2009:
<TABLE>
<CAPTION>
Number of Square Annual % of Gross
Expirations Feet Rent Annual Rent
(in thousands)
<S> <C> <C> <C> <C>
Linpro
2000 - 2001 -- -- -- --
2002 6 65,879 $1,392 88.61%
2003 1 3,402 77 4.91%
2004 -- -- -- --
2005 1 4,523 102 6.48%
2006 - 2009 -- -- -- --
Metcalf
2000 5 22,362 $ 243 35.63%
2001 8 15,262 174 25.59%
2002 1 5,834 79 11.56%
2003 3 6,793 94 13.76%
2004 2 3,320 55 8.06%
2005 - 2009 -- -- -- --
Highland Park
2000 9 46,015 $ 442 50.41%
2001 4 15,099 163 18.65%
2002 3 10,221 74 8.49%
2003 -- -- -- --
2004 1 15,010 131 14.99%
2005 1 600 8 0.96%
2006 -- -- -- --
2007 1 4,212 57 6.49%
2008-2009 -- -- -- --
</TABLE>
The following schedule reflects information on tenants occupying 10% or more of
leasable square footage at December 31, 1999:
Nature of Square Footage Annual Rent Per Lease
Business Leases Square Foot Expiration
Linpro
Government Agency 57,122 $21.48 12/31/2002
Real Estate 8,757 18.85 12/15/2002
Metcalf
Business Offices 18,677 10.63 10/31/2000
Highland Park
Software Designer 20,426 9.50 10/31/2000
Bank 15,010 8.75 03/31/2004
<PAGE>
Schedule of Real Estate Taxes and Rates:
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing Rate
(in thousands)
Linpro $104 1.29%
Metcalf 109 2.98%
Highland Park 81 1.20%
Harbor Club 185 2.17%
The Corners 96 2.53%
Capital Improvements:
Linpro Park I
The Partnership completed approximately $24,000 in capital expenditures at
Linpro Park I as of December 31, 1999, consisting primarily of tenant
improvements and major landscaping. These improvements were funded from
operating cash flow. This property was sold subsequent to year end.
Metcalf 103 Office Park
The Partnership completed approximately $51,000 in capital expenditures at
Metcalf 103 Office Park as of December 31, 1999, consisting primarily of
building improvements and tenant improvements. These improvements were funded
from operating cash flow. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. As the property is
currently being held for sale, improvements are anticipated to be made only on
an as needed basis to maintain the property is good condition for sale.
Highland Park Commerce Center
The Partnership completed approximately $45,000 in capital expenditures at
Highland Park Commerce Center as of December 31, 1999, consisting primarily of
tenant improvements. These improvements were funded from operating cash flow.
The Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. As the property is currently being held for
sale, improvements are anticipated to be made only on an as needed basis to
maintain the property is good condition for sale.
Harbor Club Downs
The Partnership completed approximately $410,000 in capital expenditures at
Harbor Club Downs as of December 31, 1999, consisting primarily of roof
replacements, floor covering replacements, parking lot improvements, and
electrical upgrades. These improvements were funded from operating cash flow.
The Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $81,600. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
<PAGE>
The Corners Apartments
The Partnership completed approximately $92,000 in capital expenditures at The
Corners Apartments as of December 31, 1999, consisting primarily of structural
improvements, floor covering replacements, and HVAC upgrades. These improvements
were funded from operating cash flow. The Partnership is currently evaluating
the capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $300 per unit or $52,800. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
Commonwealth Center
The Partnership completed approximately $70,000 in capital improvements at
Commonwealth Center in 1999 consisting primarily of building improvements. The
property was sold December 30, 1999.
Crabtree Office Center
The Partnership completed approximately $119,000 in capital improvements at
Crabtree Office Center in 1999 consisting primarily of tenant improvements. The
property was sold November 10, 1999.
Item 3. Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Item 7. Financial Statements, Note D - Transfer of Control"). The plaintiffs
seek monetary damages and equitable relief, including judicial dissolution of
the Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999. Pending the
ruling on such demurrers, settlement negotiations commenced. On November 2,
1999, the parties executed and filed a Stipulation of Settlement, settling
claims, subject to final court approval, on behalf of the Partnership and all
limited partners who own units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Superior Court of the
State of California, County of San Mateo, at which time the Court set a final
approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing
the Court received various objections to the settlement, including a challenge
to the Court's preliminary approval based upon the alleged lack of authority of
class plaintiffs' counsel to enter the settlement. On December 14, 1999, the
Managing General Partner and its affiliates terminated the proposed settlement.
Certain plaintiffs have filed a motion to disqualify some of the plaintiffs'
counsel in the action. The Managing General Partner does not anticipate that
costs associated with this case will be material to the Partnership's overall
operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
During the quarter ended December 31, 1999, no matter was submitted to a vote of
unit holders through the solicitation of proxies or otherwise.
PART II
Item 5. Market for the Partnership Equity and Related Partner Matters
The Partnership, a publicly-held limited partnership, offered and sold 61,814
Individual Investor Units during its offering period through April 1985. The
Partnership currently has 1,772 holders of record owning an aggregate of 61,814
Units. An affiliate of the Managing General Partner owns 3,601 Units or 5.826%.
No public trading market has developed for the Units, and it is not anticipated
that such a market will develop in the future.
In light of the maturity of the Notes, no distributions were made to the limited
partners for the years ended December 31, 1999 or 1998. On October 28, 1999 the
Partnership entered into a forbearance agreement with the indenture trustee for
a period of 390 days. In turn, the Partnership agreed to (a) deliver to the
indenture trustee for the benefit of the note holders all of the accumulated
cash of the Partnership, less certain reserves and anticipated operating
expenses, (b) market all of its properties for sale, (c) deliver all cash
proceeds from any sales to the indenture trustee until the notes are fully
satisfied and (d) comply with the reporting requirements under the indenture. It
is uncertain whether the sale of the Partnership's assets will generate
sufficient proceeds to pay off the Nonrecourse Promissory Notes in full. If the
Partnership cannot sell its properties for sufficient value, in accordance with
the terms of the forbearance agreement, it is likely that the Partnership will
lose its properties through delivery to an auctioneer who would sell the assets
for the benefit of the Note holders.
Item 6. Management's Discussion and Analysis or Plan of Organization
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the disclosure
contained in this Form 10-KSB and the other filings with the Securities and
Exchange Commission made by the Registrant from time to time. The discussion of
the Registrant's business and results of operations, including forward-looking
statements pertaining to such matters, does not take into account the effects of
any changes to the Registrant's business and results of operation. Accordingly,
actual results could differ materially from those projected in the
forward-looking statements as a result of a number of factors, including those
identified herein.
This item should be read in conjunction with the financial statements and other
items contained elsewhere in this report.
Results of Operations
At December 31, 1999, the Partnership adopted the liquidation basis of
accounting due to the imminent loss of its investment properties. In order to
finance the purchase of its properties, the Partnership sold Nonrecourse Pension
Investor Notes with an aggregate original principal amount of $49,348,500 (the
"Notes"). Pursuant to the terms of the Notes, the Partnership was required to
pay interest at a rate of 4% per annum on the Notes, and accrue the additional
4% per annum due on the Notes. The Notes are secured by all of the Partnership's
properties. The Notes, which had a balance of principal and accrued interest of
approximately $36,555,000 at December 31, 1999, matured on November 30, 1998.
See discussion in "Liquidity and Capital Resources" regarding the adoption of
liquidation basis.
Prior to adopting the liquidation basis of accounting, the Partnership realized
a net loss for the year ended December 31, 1999 of approximately $931,000 as
compared to a net loss of $184,000 for the year ended December 31, 1998. The
increase in net loss for the year ended December 31, 1999, is attributable to an
increase in total expenses which more than offset an increase in total revenues.
Total revenues for the comparable periods increased due to a net gain on the
sale of Commonwealth Center and Crabtree Office Center. Excluding the net gain
and results of operations for Commonwealth Center and Crabtree Office Center for
1999 and 1998, the Partnership realized an increase in net loss for the year
ended December 31, 1999. The increase in net loss is due to an increase in total
revenues which was offset by an increase in total expenses. The increase in
total revenues is due to an increase in income from a deficiency certificate
settlement (see "Item 7. Financial Statements, Note J - Contingency" for further
discussion). Total expenses increased primarily due to an increase in general
and administrative expenses, which was partially offset by a decrease in
interest on the promissory notes and amortization of sales commissions and
organizational costs. General and administrative expenses increased due to
professional fees and expenses associated with the Partnership's attempt to
secure alternative financing for the non recourse promissory notes which matured
November 30, 1998. The decrease in interest on the promissory notes is due to
the reduction of the principal amount of the notes.
Included in general and administrative expenses for the year ended December 31,
1999 and 1998, are reimbursements to the Managing General Partner allowed under
the Partnership Agreement associated with its management of the Partnership. In
addition, costs associated with the quarterly and annual communications with
investors and regulatory agencies and the annual audit required by the
Partnership Agreement are also included.
On November 10, 1999, the Partnership sold Crabtree Office Center to an
unaffiliated third party for approximately $6,700,000. The Partnership
recognized a gain of approximately $1,505,000 on the sale during the year ended
December 31, 1999. The net sales proceeds of approximately $6,494,000 were paid
directly to the indenture trustee, as required by the forbearance agreement.
On December 30, 1999, the Partnership sold Commonwealth Center to an
unaffiliated party for approximately $1,950,000. The Partnership recognized a
loss of approximately $650,000 during the year ended December 31, 1999. The net
sales proceeds of approximately $1,862,000 were paid directly to the indenture
trustee as required by the forbearance agreement.
The following unaudited pro-forma information reflects the operations of the
Partnership for the years ended December 31, 1999 and 1998, as if Crabtree
Office Center and Commonwealth Center had been sold January 1, 1998.
1999 1998
(in thousands, except per unit data)
Revenues $ 6,897 $ 6,944
Net loss (1,883) (511)
Net loss per limited partnership unit (29.85) (8.10)
In March 2000 the Partnership sold Linpro Park I to an unaffiliated third party
for approximately $8,900,000, net of closing costs.
<PAGE>
Liquidity and Capital Resources
The financial statements have been prepared assuming the Partnership will
liquidate during 2000 (see "Item 7. Financial Statements, Note A"). The
nonrecourse promissory notes matured on November 30, 1998 and all of the
remaining properties are being marketed for sale. In addition, the Partnership
suffers from inadequate liquidity. In addition, there are no other capital
resources available to the Partnership.
At December 31, 1999, the Partnership had cash and cash equivalents of
approximately $1,718,000, as compared to approximately $9,197,000 at December
31, 1998. Cash and cash equivalents decreased by approximately $7,479,000 from
the Partnership's previous year ended December 31, 1998. The decrease is due to
approximately $8,971,000 of cash used in financing activities and approximately
$5,957,000 of cash used in operating activities offset by approximately
$7,449,000 of cash provided by investing activities. Cash used in financing
activities consists of principal payments on the promissory notes. Cash provided
by investing activities consists of proceeds from the sale of Commonwealth
Center and Crabtree Office Center partially offset by property improvements and
replacements and lease commissions paid. The Partnership invests its working
capital reserves in money market accounts.
Pursuant to the terms of the Notes, the Partnership was required to pay interest
at a rate of 4% per annum on the Notes, and accrue the additional 4% per annum
due on the Notes. The Notes are secured by all of the Partnership's properties.
The Notes, which had a balance of principal and accrued interest of
approximately $36,555,000 at December 31, 1999, matured on November 30, 1998. As
a result, the Partnership is currently in default under the Nonrecourse
Promissory Notes. The Managing General Partner has contacted the indenture
trustee and entered a forbearance agreement on October 29, 1999. In turn, the
Partnership agreed to (a) deliver to the indenture trustee for the benefit of
the note holders all of the accumulated cash of the Partnership, less certain
reserves and anticipated operating expenses, (b) market all of its properties
for sale, (c) deliver all cash proceeds from any sales to the indenture trustee
until the notes are fully satisfied and (d) comply with the reporting
requirements under the indenture. It is uncertain whether the sale of the
Partnership's assets will generate sufficient proceeds to pay off the
Nonrecourse Promissory Notes in full. If the Partnership cannot sell its
properties for sufficient value, in accordance with the terms of the forbearance
agreement, it is likely that the Partnership will lose its properties through
delivery to an auctioneer who would sell the assets for the benefit of the Note
holders.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements at December 31,
1999 to the liquidation basis of accounting. Consequently, assets have been
valued at estimated net realizable value and liabilities are presented at their
estimated settlement amounts. The valuation of assets and liabilities
necessarily requires many estimates and assumptions and there are substantial
uncertainties in carrying out the liquidation. The actual realization of assets
and settlement of liabilities could be higher or lower than amounts indicated
and is based upon the Managing General Partner's estimates as of the date of the
financial statements.
The Managing General Partner estimates the liquidation process will be completed
by June 30, 2000. Because the success in realization of assets and the
settlement of liabilities is based on the Managing General Partner's best
estimates, the liquidation period may be shorter than projected or it may be
extended beyond the projected period.
<PAGE>
The net adjustment required to convert to the liquidation basis of accounting
was a decrease in net liabilities of approximately $8,921,000 which is included
in the Statement of Changes in Partners' Deficit/Net Liabilities in Liquidation.
The adjustments are summarized as follows:
(Increase) Decrease
in Net Liabilities
(in thousands)
Adjustment from book value of properties and
improvements to estimated net realizable value $ 9,530
Adjustment of other assets (609)
Net decrease in net liabilities $ 8,921
In light of the maturity of the Notes, no distributions were made to the limited
partners for the years ended December 31, 1999 or 1998.
Subsequent Event
In March 2000, the Partnership sold Linpro Park I to an unaffiliated third party
for approximately $8,900,000, net of closing costs.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership have not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
Item 7. Financial Statements
CENTURY PROPERTIES FUND XX
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young, LLP, Independent Auditors
Report of Imowitz, Koenig & Co., LLP, Independent Auditors
Statement of Net Liabilities in Liquidation - December 31, 1999
Statements of Operations - Years ended December 31, 1999 and 1998
Statements of Changes in Partners' Deficit/Net Liabilities in Liquidation for
the years ended December 31, 1999 and 1998
Statements of Cash Flows - Years ended December 31, 1999 and 1998
Notes to Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Century Properties Fund XX
We have audited the accompanying statement of net liabilities in liquidation of
Century Properties Fund XX as of December 31, 1999 and the related statements of
operations, changes in partners' deficit/net liabilities in liquidation and cash
flows for the year then ended. These financial statements are the responsibility
of the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
As more fully described in Note A, due to the imminent disposal of its
investment properties, the Managing General Partner has decided, effective
December 31, 1999, to liquidate the Partnership. As a result, the Partnership
changed its basis of accounting as of December 31, 1999 from a going concern
basis to a liquidation basis.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net liabilities in liquidation of Century Properties
Fund XX at December 31, 1999 and the results of its operations and its cash
flows for the year then ended, in conformity with accounting principles
generally accepted in the United States applied on the bases described in the
preceding paragraph.
/s/Ernst & Young LLP
Greenville, South Carolina
March 24, 2000
<PAGE>
Independent Auditors' Report
To the Partners
Century Properties Fund XX
Greenville, South Carolina
We have audited the accompanying statements of operations, partners' deficit and
cash flows of Century Properties Fund XX (a limited partnership) (the
"Partnership") for the year ended December 31, 1998. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying financial statements have been prepared assuming that the
Partnership will continue as a going concern. As discussed in Note A to the
financial statements, the Partnership's Non-Recourse Promissory Notes, totaling
approximately $49,323,000 in principal and interest, matured on November 30,
1998 and are in default. This matter raises substantial doubt about the
Partnership's ability to continue as a going concern. Management's plans in
regard to this matter are also described in Note A. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Century
Properties Fund XX for the year ended December 31, 1998, in conformity with
generally accepted accounting principles.
/s/IMOWITZ KOENIG & CO., LLP
Certified Public Accountants
New York, NY
March 10, 1999
<PAGE>
CENTURY PROPERTIES FUND XX
STATEMENT OF NET LIABILITIES IN LIQUIDATION
(in thousands, except unit data)
December 31, 1999
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 1,718
Receivables and deposits 678
Debt trustee escrow 2,270
Investment properties 32,141
36,807
Liabilities
Accounts payable 82
Tenant security deposit payable 125
Accrued property taxes 242
Other liabilities 176
Non-recourse promissory notes (Note A) 36,555
37,180
Net liabilities in liquidation $ (373)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XX
STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
Revenues:
<S> <C> <C>
Rental income $ 7,378 $ 7,634
Other income 630 547
Income from deficiency certificate settlement
(Note J) 91 301
Gain on sale of investment properties 855 --
Total revenues 8,954 8,482
Expenses:
Interest to promissory note holders 2,394 2,511
Operating 2,676 2,777
Depreciation 1,658 1,661
Amortization of sales commissions and organizational
costs -- 298
General and administrative 2,404 833
Property taxes 753 586
Total expenses 9,885 8,666
Net loss $ (931) $ (184)
Net income (loss) allocated to general partner $ 252 $ (4)
Net loss allocated to limited partners (1,183) (180)
$ (931) $ (184)
Net loss per limited partnership unit $(19.14) $ (2.91)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XX
STATEMENT OF CHANGES IN PARTNERS' DEFICIT/NET LIABILITIES IN LIQUIDATION
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 61,814 $ -- $30,907 $30,907
Partners' deficit at
December 31, 1997 61,814 $(1,475) $(6,678) $(8,153)
Net loss for the year ended
December 31, 1998 -- (4) (180) (184)
Distributions paid to partners -- (26) -- (26)
Partners' deficit at
December 31, 1998 61,814 (1,505) (6,858) (8,363)
Net income (loss) for year ended
December 31, 1999 -- 252 (1,183) (931)
Partners' deficit at
December 31, 1999 61,814 $(1,253) $(8,041) (9,294)
Adjustment to liquidation
basis (Notes A & C) 8,921
Net liabilities in liquidation
at December 31, 1999 $ (373)
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XX
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net loss $ (931) $ (184)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 1,658 1,661
Amortization of deferred charges 216 504
Interest on non-recourse promissory notes -- 1,256
Rent abatement -- (392)
Loss on disposal of property -- 26
Gain on sale of investment properties (855) --
Change in accounts:
Receivables and deposits 133 (551)
Debt trustee escrow (2,270) --
Other assets (127) 2
Accounts payable 42 (8)
Tenant security deposit liabilities (67) 10
Accrued property taxes (39) 268
Other liabilities 80 12
Deferred interest (3,483) --
Accrued interest (314) --
Net cash (used in) provided by operating
activities (5,957) 2,604
Cash flows from investing activities:
Property improvements and replacements (811) (440)
Lease commissions paid (96) (255)
Proceeds from sale of investment properties 8,356 --
Net cash provided by (used in) investing
activities 7,449 (695)
Cash flows from financing activities:
Cash distributions to general partner -- (26)
Non-recourse promissory notes principal payments (8,971) --
Net cash used in financing activities (8,971) (26)
Net (decrease) increase in cash and cash equivalents (7,479) 1,883
Cash and cash equivalents at beginning of period 9,197 7,314
Cash and cash equivalents at end of period $ 1,718 $ 9,197
Supplemental disclosure of cash flow information:
Cash paid for interest $ 5,667 $ 1,255
Supplemental disclosure of non-cash investing information:
Tenant improvements funded through rent abatement $ -- $ 392
</TABLE>
See Accompanying Notes to Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XX
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
Note A - Basis of Presentation
As of December 31, 1999, Century Properties Fund XX (the "Partnership" or
"Registrant") adopted the liquidation basis of accounting due to the imminent
loss of its remaining investment properties.
The Partnership's Nonrecourse Promissory Notes (the "Notes") of approximately
$49,323,000 in principal and accrued interest were in default due to nonpayment
upon maturity on November 30, 1998. The Notes are secured by a deed of trust on
all properties owned by the Partnership. The Promissory Notes bear interest at
eight percent per annum except that interest of up to four percent may be
deferred, provided the Partnership makes interest payments on the unpaid
principal balance of at least four percent per annum. The deferred interest does
not bear interest. Fox Capital Management Corporation ("FCMC" or the "Managing
General Partner") previously contacted the indenture trustee for the Notes and
certain holders of the Notes regarding this default. On October 28, 1999 the
Partnership entered into a forbearance agreement with the indenture trustee for
a period of 390 days. In turn, the Partnership agreed to (a) deliver to the
indenture trustee for the benefit of the note holders all of the accumulated
cash of the Partnership, less certain reserves and anticipated operating
expenses, (b) market all of its properties for sale, (c) deliver all cash
proceeds from any sales to the indenture trustee until the notes are fully
satisfied and (d) comply with the reporting requirements under the indenture. It
is uncertain whether the sale of the Partnership's assets will generate
sufficient proceeds to pay off the Nonrecourse Promissory Notes in full. If the
Partnership cannot sell its properties for sufficient value, in accordance with
the terms of the forbearance agreement, it is likely that the Partnership will
lose its properties through delivery to an auctioneer who would sell the assets
for the benefit of the Note holders.
As a result of the decision to liquidate the Partnership, the Partnership
changed its basis of accounting for its financial statements at December 31,
1999, to the liquidation basis of accounting. Consequently, assets have been
valued at estimated net realizable value and liabilities are presented at their
estimated settlement amounts. The valuation of assets and liabilities
necessarily requires many estimates and assumptions and there are substantial
uncertainties in carrying out the liquidation. The actual realization of assets
and settlement of liabilities could be higher or lower than amounts indicated
and is based upon the Managing General Partner's estimates as of the date of the
financial statements.
The Managing General Partner estimates that the liquidation process will be
completed by June 30, 2000. Because the success in realization of assets and the
settlement of liabilities is based on the Managing General Partner's best
estimates, the liquidation period may be shorter than projected or it may be
extended beyond the projected period.
Note B - Organization and Significant Accounting Policies
Organization: The Partnership was organized under the Uniform Limited
Partnership Laws of California as of December 1983. The general partner
responsible for management of the Partnership's business is Fox Partner III (the
"General Partner"). The general partners of Fox Partners III are Fox Capital
Management Corporation ("FCMC"), a California corporation, Fox Realty Investors
("FRI"), a California general partnership, and Fox 84, a California general
partnership. The Managing General Partner and NPI Equity Investments II, Inc.,
the managing general partner of FRI, are subsidiaries of Apartment Investment
And Management Company ("AIMCO") (see "Note D - Transfer of Control"). The
directors and officers of the Managing General Partner also serve as executive
officers of AIMCO. The Partnership Agreement provides that the Partnership is to
terminate on December 31, 2008 unless terminated prior to such date. The
Partnership operates three commercial properties and two apartment properties.
Uses of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Allocation of Income, Loss and Distributions: Net income, net loss and
distributions of cash of the Partnership are allocated between the general and
limited partners in accordance with the provisions of the Partnership Agreement.
Fair Value of Financial Instruments: SFAS No. 107, "Disclosures about Fair Value
of Financial Instruments", as amended by SFAS No. 119, "Disclosures about
Derivative Financial Instruments and Fair Value of Financial Instruments",
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's Non-Recourse Promissory Notes
is not practicable to estimate due to their maturity in November 1998.
Cash and Cash Equivalents: Includes cash on hand, in banks and money market
accounts. At certain times, the amount of cash deposited at a bank may exceed
the limit on insured deposits.
Depreciation: Depreciation was provided by the straight-line method over the
estimated lives of the investment properties and related personal property. For
Federal income tax purposes, the accelerated cost recovery method is used (1)
for real property over 15 years for additions prior to March 16, 1984, 18 years
for additions after March 15, 1984 and before May 9, 1985, and 19 years for
additions after May 8, 1985, and before January 1, 1987, and (2) for personal
property over 5 years for additions prior to January 1, 1987. As a result of the
Tax Reform Act of 1986, for additions after December 31, 1986, the modified
accelerated cost recovery method is used for depreciation of (1) real property
over 27 1/2 years and (2) personal property additions over 5 years.
As a result of adopting the liquidation basis of accounting, the gross carrying
values of the properties were adjusted to their net realizable value and will
not be depreciated any further.
<PAGE>
Deferred Charges: Sales commissions and organization expenses related to the
Notes were deferred and amortized by the straight-line method over the life of
the Promissory Notes. These costs became fully amortized at the maturity date of
November 30, 1998. Leasing commissions were deferred and amortized over the
lives of the related leases. Such amortization was charged to operating expense.
At December 31, 1999, these leasing commissions were written off in the
adjustment to liquidation basis because the Partnership determined that these
intangible assets no longer have value.
Tenant Security Deposits: The Partnership requires security deposits from
lessees for the duration of the lease and such deposits are included in
receivables and deposits. Deposits are refunded when the tenant vacates,
provided the tenant has not damaged its space and is current on rental payments.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
the Managing General Partner's policy is to offer rental concessions during
particularly slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged against rental income as
incurred.
The Partnership leases commercial space to tenants under various lease terms.
For leases containing fixed rental increases during their term, rents are
recognized on a straight-line basis over the terms of the leases. For all other
commercial leases, rents are recognized over the terms of the leases as earned.
Investment Properties: Investment properties consist of three commercial
properties and two apartment complexes and are stated at cost. Acquisition fees
are capitalized as a cost of real estate. In accordance with Financial
Accounting Standards Board Statement No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", the Partnership
records impairment losses on long-lived assets used in operations when events
and circumstances indicate that the assets might be impaired and the
undiscounted cash flows estimated to be generated by those assets are less than
the carrying amounts of those assets. No adjustment for impairment of value was
recorded in the year ended December 31, 1998. As a result of the Partnership
adopting the liquidation basis of accounting, the investment properties were
adjusted to their estimated net realizable values at December 31, 1999. The
effect of adoption was to increase the carrying value of the investment
properties by approximately $9,530,000.
Segment Reporting: Statement of Financial Standards ("SFAS") No. 131, Disclosure
about Segments of an Enterprise and Related Information established standards
for the way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports. It also establishes standards for related disclosures about products
and services, geographic areas, and major customers. See "Note L" for required
disclosure.
Advertising Costs: The Partnership expenses the costs of advertising as
incurred. Advertising costs of approximately $61,000 and $59,000 for the years
ended December 31, 1999 and 1998, respectively, were charged to operating
expense as incurred.
Reclassifications: Certain reclassifications have been made to 1998 balances
to conform to the 1999 presentation.
<PAGE>
Note C - Adjustment to Liquidation Basis of Accounting
At December 31, 1999, in accordance with the liquidation basis of accounting,
assets were adjusted to their estimated net realizable value and liabilities
were adjusted to their settlement amount. The net adjustment required to convert
to the liquidation basis of accounting was a decrease in net liabilities of
approximately $8,921,000 which is included in the Statement of Changes in
Partners' Deficit/Net Liabilities In Liquidation. The adjustments are summarized
as follows:
(Increase) Decrease
in Net Liabilities
(in thousands)
Adjustment from book value of property and
improvements to estimated net realizable value $ 9,530
Adjustment of other assets (609)
Net decrease in net liabilities $ 8,921
Note D - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the Managing General Partner. The Managing
General Partner does not believe that this transaction has had or will have a
material effect on the affairs and operations of the Partnership.
Note E - Income Taxes
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners.
The following is a reconciliation of reported net loss and Federal taxable loss
(in thousands, except per unit data):
1999 1998
Net loss as reported $ (931) $ (184)
Add (deduct):
Depreciation differences (606) (501)
Original issue discount -- (763)
Change in prepaid rental 67 (28)
Capitalized expenses -- 40
Other 272 (91)
Sale of investment properties (829) --
Federal taxable loss $(2,027) $(1,527)
Federal taxable loss per limited
partnership unit $(32.65) $(24.00)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
1999
Net liabilities in liquidation $ (373)
Land and buildings 7,176
Accumulated depreciation (17,659)
Syndication costs 4,551
Other 661
Net liabilities - Federal tax basis $ (5,644)
Note F - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursement of certain expense incurred by
affiliates on behalf of the Partnership.
The following payments were made to the Managing General Partner and affiliates
during the years ended December 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees (included in
operating expense) $ 159 $ 154
Reimbursement for services of affiliates
(included in investment properties and
operating and general and administrative
expenses) 187 212
Partnership management fees (included in
general and administrative expenses) 390 72
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from both of the
Registrant's residential properties as compensation for providing property
management services. These services were performed by affiliates of the Managing
General Partner. The Registrant paid to such affiliates approximately $159,000
and $154,000 for the years ended December 31, 1999 and 1998, respectively. For
the Registrant's commercial properties, these services were provided by an
unrelated party for the years ended December 31, 1999 and 1998.
Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $187,000 and $212,000 for the
years ended December 31, 1999 and 1998, respectively.
In accordance with the Partnership Agreement, the general partner was allocated
its two percent continuing interest in the Partnership's net loss. The general
partner received two percent of total distributions including cash paid to the
Promissory Note holders. In addition, the general partner is entitled to a
partnership management incentive distribution, which together with the
partnership management fee cannot exceed ten percent of cash available for
distribution, as defined. No incentive distributions were made in 1999 or 1998;
however, the general partner received a partnership management fee of
approximately $390,000 and $72,000 in 1999 and 1998, respectively.
Note G - Significant Tenant and Minimum Future Rental Revenues
Rental revenue from one tenant at Linpro Park I represented approximately 16% of
total Partnership rental income in 1999 and 1998. The tenant's lease is
scheduled to expire in December 2002.
Minimum future rental revenues from operating leases having initial or remaining
non-cancelable lease terms in excess of one year at December 31, 1999, are as
follows (in thousands):
2000 $ 3,104
2001 2,320
2002 2,191
2003 521
2004 317
Thereafter 105
$ 8,558
Amortization of deferred leasing commissions totaled approximately $216,000 and
$206,000 for the years ended December 31, 1999 and 1998, respectively.
Note H - Sale of Investment Properties
On November 10, 1999, the Partnership sold Crabtree Office Center to an
unaffiliated third party for approximately $6,700,000. The Partnership
recognized a gain of approximately $1,505,000 on the sale during the year ended
December 31, 1999. The net sales proceeds of approximately $6,494,000 were paid
directly to the indenture trustee, as required by the forbearance agreement. The
sale transaction is summarized as follows (amounts in thousands):
Sales price, net of selling costs $ 6,494
Net real estate (1) (4,877)
Net other assets (112)
Gain on sale of real estate $ 1,505
(1) Real estate at cost, net of accumulated depreciation of approximately
$3,965,000.
On December 30, 1999, the Partnership sold Commonwealth Center to an
unaffiliated third party for approximately $1,950,000. The Partnership
recognized a loss of approximately $650,000 during the year ended December 31,
1999. The net sales proceeds of approximately $1,862,000 were paid directly to
the indenture trustee as required by the forbearance agreement. The sale
transaction is summarized as follows (amounts in thousands):
Sales price, net of selling costs $ 1,862
Net real estate (2) (2,421)
Net other assets (91)
Loss on sale of real estate $ (650)
(2) Real estate at cost, net of accumulated depreciation of approximately
$4,104,000.
In March 2000 the Partnership sold Linpro Park I to an unaffiliated third party
for approximately $8,900,000, net of closing costs.
Note I - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
(in thousands)
Net Cost
Buildings (Removed) Adjustment
and Related Capitalized To
Personal Subsequent to Liquidation
Description Encumbrances (1) Land Property Acquisition Basis
(in thousands)
<S> <C> <C> <C> <C> <C>
Linpro Park I $ -- $ 1,089 $ 7,882 $ (488) $ 447
Metcalf 103
Office Park -- 810 1,565 880 (106)
Highland Park -- 1,256 7,884 1,450 (4,910)
Harbor Club Downs -- 1,416 6,864 1,198 1,144
The Corners -- 419 3,102 525 (286)
Totals $ -- $ 4,990 $27,297 $ 3,565 $(3,711)
</TABLE>
(1) The Non-Recourse Promissory Notes are secured by deed of trust on all
properties owned by the Partnership. See "Note A" for further discussion.
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1999
(in thousands)
Buildings
And Related Year of
Personal Accumulated Construc- Date Depreciable
Description Land Property Total Depreciation tion Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C> <C>
Linpro Park I $ 693 $ 8,237 $ 8,930 (1) 1982 03/85 5-39
Metcalf 103
Office Park 810 2,339 3,149 (1) 1973 04/91 5-39
Highland Park 1,231 4,449 5,680 (1) 1986 11/85-02/86 5-39
Harbor Club Downs 1,416 9,206 10,622 (1) 1986 05/92 5-39
The Corners 419 3,341 3,760 (1) 1974 11/92 5-30
Total $ 4,569 $27,572 $32,141
</TABLE>
(1) As a result of adopting the liquidation basis of accounting, the gross
carrying values of the properties were adjusted to their net realizable
value and will not be depreciated any further.
Reconciliation of Real Estate and Accumulated Depreciation:
Years Ended December 31,
1999 1998
(in thousands)
Investment Properties
Balance at beginning of year $ 50,408 $ 49,623
Property improvements 811 440
Rent abatement -- 392
Disposal of property -- (47)
Sale of investment properties (15,367) --
Adjustment to liquidation basis (3,711) --
Balance at end of year $ 32,141 $ 50,408
Accumulated Depreciation
Balance at beginning of year $ 19,652 $ 18,012
Additions charged to expense 1,658 1,661
Disposals of property -- (21)
Sale of investment properties (8,069) --
Adjustment to liquidation basis (13,241) --
Balance at end of year $ -- $ 19,652
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $39,317,000 and $58,008,000,
respectively. The accumulated depreciation for Federal income tax purposes at
December 31, 1999 and 1998 respectively, is approximately $17,659,000 and
$26,886,000.
Note J - 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 obligators under this collateral pool agreement exercised
their right to extend the maturity date of the deficiency certificates to
December 31, 1997. The senior obligators have accepted an offer to settle the
outstanding amounts due from Lincoln at a discounted rate. The Managing General
Partner was obligated to accept the initial settlement which equated to
approximately $256,000. Prior to this settlement, the Partnership had not
recorded a receivable on the financial statements due to the uncertainty of
receiving any funds. The initial settlement related to the cash collateral pool,
and the Partnership received further funds of approximately $45,000 during the
remaining months of 1998 as well as approximately $91,000 during the year ended
December 31, 1999. It is anticipated this will be the final payment received by
the Partnership.
With receipt of this settlement, the Partnership has recorded income from the
settlement in the financial statements. The current settlement relates to the
cash available to distribute in the collateral pool.
Note K - Rent Abatement
On January 1, 1998, a tenant of Linpro Park I entered into a five year lease
agreement. The lease provided for a renovation allowance equal to $7.00 per
square foot to reimburse the tenant for improvements made to accommodate the
tenant. This allowance is for the twelve month period beginning January 1, 1998
and ending December 31, 1998. As of December 31, 1998, $392,000 of improvements
have been completed. The allowance is reflected on the financial statements as
rent abatement and is included as rental income.
Note L - Disclosures about Segments of an Enterprise and Related Information
Description of the types of products and services from which the reportable
segment derives its revenues: The Partnership has two reportable segments:
commercial properties and residential properties. The Partnership's commercial
property segment consists of three office complexes in Virginia, Kansas, and
North Carolina. The Partnership leases office space for terms that typically
exceed one year. The residential property segment consists of two apartment
complexes in Florida and South Carolina. The Partnership rents apartment units
to tenants for terms that are typically twelve months or less.
Measurement of segment profit or loss: The Partnership evaluates performance
based on segment profit (loss) before depreciation. The accounting policies of
the reportable segments are the same as those described in the summary of
significant accounting policies.
Factors management used to identify the enterprise's reportable segment: The
Partnership's reportable segment consists of investment properties that offer
different products and services. The reportable segments are each managed
separately because they provide distinct services with different types of
products and services.
Segment information for the years 1999 and 1998 is shown in the tables below (in
thousands). The "Other" Column includes partnership administration related items
and income and expense not allocated to the reportable segment.
<TABLE>
<CAPTION>
1999 Residential Commercial Other Totals
<S> <C> <C> <C> <C>
Rental income $ 2,981 $ 4,397 $ -- $ 7,378
Other income 137 32 461 630
Income from settlement -- -- 91 91
Gain on sale of investment properties -- 855 -- 855
Interest expense -- -- 2,394 2,394
Depreciation 458 1,200 -- 1,658
General and administrative expense -- -- 2,404 2,404
Segment profit (loss) 1,204 2,111 (4,246) (931)
Net liabilities in liquidation -- -- (373) (373)
Capital expenditures for investment
properties 502 309 -- 811
</TABLE>
<TABLE>
<CAPTION>
1998 Residential Commercial Other Totals
<S> <C> <C> <C> <C>
Rental income $ 2,864 $ 4,770 $ -- $ 7,634
Other income 166 26 355 547
Income from settlement -- -- 301 301
Interest expense -- -- 2,511 2,511
Depreciation 471 1,190 -- 1,661
Amortization of deferred charges -- -- 298 298
General and administrative expense -- -- 833 833
Segment profit (loss) 1,087 1,715 (2,986) (184)
Total assets 10,745 21,890 8,914 41,549
Capital expenditures for investment
properties 133 699 -- 832
</TABLE>
Note M - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note D - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Managing General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
<PAGE>
Item 8. Changes in and Disagreements with Accountants and Financial
Disclosure
As of December 10, 1999 Imowitz Koenig & Co., LLP, the independent accountant
previously engaged as the principal accountant to audit the financial statements
of the Partnership, was terminated. As of the same date, the firm of Ernst &
Young LLP was engaged as the independent accountant for the Registrant.
The audit reports of Imowitz Koenig & Co., LLP on the financial statements of
the Partnership as of and for the years ended December 31, 1998 and 1997, did
not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to audit scope or accounting principles. The audit
reports were modified as to the uncertainty of the Registrant's ability to
continue as a going concern.
The decision to change accountants was approved by the board of directors of the
managing general partner of the Partnership on December 10, 1999.
During the Partnership's calendar year ended December 31, 1998 and the
subsequent interim periods preceding the change, there were no disagreements
with the former accountant on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of the former accountant,
would have caused it to make reference to the subject matter of the
disagreements in connection with its report.
During the calendar year ended December 31, 1998 and through December 10, 1999,
the Partnership did not consult Ernst & Young LLP regarding any matters or
events set forth in Item 304 (a)(2)(i) and (ii) of Regulation S-B.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons,
Compliance with Section 16(a) of the Exchange Act
Century Properties Fund XX (the "Partnership" or the "Registrant") has no
officers or directors. The names and ages of, as well as the positions and
offices held by, the present executive officers and director of Fox Capital
Management Corporation ("FCMC" or the "Managing General Partner") are set forth
below. The Managing General Partner manages and controls substantially all of
the partnership's affairs and has general responsibility and ultimate authority
in all matters affecting its business. There are no family relationships between
or among any officers or directors.
Name Age Position
Patrick J. Foye 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Martha L. Long has been Senior Vice President and Controller of the Managing
General Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia Financial Group, Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant under Rule 16a-3(e) during the Registrant's most recent fiscal
year and Form 5 and amendments thereto furnished to the Registrant with respect
to its most recent fiscal year, the Registrant is not aware of any director,
officer, beneficial owner of more than ten percent of the units of limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms, reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years.
Item 10. Executive Compensation
Neither the directors nor any of the officers of the Managing General Partner
received any remuneration from the Registrant.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1999.
Entity Number of Units Percentage
Insignia Properties LP 10 .016%
(an affiliate of AIMCO)
AIMCO Properties LP 3,591 5.810%
(an affiliate of AIMCO)
Independent Life & Accident 3,180 5.145%
(unrelated party)
Insignia Properties LP is indirectly ultimately owned by AIMCO. Its business
address is 55 Beattie Place, Greenville, South Carolina 29602.
AIMCO Properties LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado, 80222.
No director or officer of the Managing General Partner owns any Units.
Item 12. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursements of certain expenses incurred by
affiliates on behalf of the Partnership.
The following payments were made to the Managing General Partner and affiliates
during the years ended December 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees $ 159 $ 154
Reimbursement for services of affiliates 187 212
Partnership management fees 390 72
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from both of the
Registrant's residential properties as compensation for providing property
management services. These services were performed by affiliates of the Managing
General Partner. The Registrant paid to such affiliates approximately $159,000
and $154,000 for the years ended December 31, 1999 and 1998, respectively. For
the Registrant's commercial properties these services were provided by an
unrelated party for the years ended December 31, 1999 and 1998.
Affiliates of the Managing General Partner received reimbursement of accountable
administrative expenses amounting to approximately $187,000 and $212,000 for the
years ended December 31, 1999 and 1998, respectively.
In accordance with the Partnership Agreement, the general partner is allocated
its two percent continuing interest in the Partnership's net loss. The general
partner received two percent of total distributions including cash paid to the
Promissory Note holders. In addition, the general partner is entitled to a
partnership management incentive distribution, which together with the
partnership management fee cannot exceed ten percent of cash available for
distribution, as defined. No incentive distributions were made in 1999 or 1998;
however, the general partner received a partnership management fee of
approximately $390,000 and $72,000 in 1999 and 1998, respectively.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed in the fourth quarter of calendar year
1999:
None.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
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,
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities on the date
indicated.
/s/Patrick J. Foye Executive Vice President Date:
Patrick J. Foye and Director
/s/Martha L. Long Senior Vice President Date:
Martha L. Long and Controller
<PAGE>
EXHIBIT INDEX
Exhibit
2 NPI, Inc. Stock Purchase Agreement, dated as of August 17,
1995, incorporated by reference to the Partnership's Current
Report on Form 8-K dated August 17, 1995.
2.1 Agreement and Plan of Merger, dated as of October 1, 1998,
by and between AIMCO and IPT; incorporated by reference to
Current Report on Form 8-K dated October 1, 1998.
3.4 Agreement of Limited Partnership, incorporated by reference
to Exhibit A to the Prospectus of the Partnership dated
February 22, 1984, and November 8, 1984, and thereafter
supplemented contained in the Partnership Registration
Statement on Form S-11 (Reg. No. 2-88615).
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XX 1999 Fourth Quarter 10-KSB and is qualified in its entirety
by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000736909
<NAME> Century Properties Fund XX
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 1,718
<SECURITIES> 0
<RECEIVABLES> 678
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 32,141
<DEPRECIATION> 0
<TOTAL-ASSETS> 36,807
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 36,555
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 37,180
<SALES> 0
<TOTAL-REVENUES> 8,954
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,885
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,394
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (931)
<EPS-BASIC> (19.14)<F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
