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 March 31, 1994
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 0-13418
Century Properties Growth Fund XXII
(Exact name of Registrant as specified in its charter)
California 94-2939418
(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 __________________.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
March 31, December 31,
1994 1993
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 760,000 $ 341,000
Restricted cash 811,000 775,000
Cash investments - 1,187,000
Receivables and other assets 712,000 520,000
Real Estate:
Real estate 127,667,000 127,614,000
Furnishings 11,655,000 11,626,000
Accumulated depreciation (40,882,000) (39,860,000)
------------ ------------
Net real estate 98,440,000 99,380,000
Deferred financing costs - net 755,000 792,000
------------ ------------
Total assets $101,478,000 $102,995,000
------------ ------------
------------ ------------
Liabilities and Partners' Equity
Accrued expenses and other liabilities 1,923,000 1,908,000
Notes payable 80,905,000 81,848,000
------------ ------------
Total liabilities 82,828,000 83,756,000
------------ ------------
Partners' equity:
General partner (6,884,000) (6,814,000)
Limited partners (82,848 units outstanding at
March 31, 1994 and December 31, 1993) 25,534,000 26,053,000
------------ ------------
Total partners' equity 18,650,000 19,239,000
------------ ------------
Total liabilities and partners' equity $101,478,000 $102,995,000
------------ ------------
------------ ------------
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended
March 31, 1994 March 31, 1993
Revenues:
Rental $4,809,000 $4,527,000
Interest and other income 22,000 24,000
---------- ----------
Total revenues 4,831,000 4,551,000
---------- ----------
Expenses:
Operating 2,377,000 2,282,000
Interest 1,874,000 1,957,000
Depreciation 1,022,000 1,105,000
General and administrative 147,000 133,000
---------- ----------
Total expenses 5,420,000 5,477,000
---------- ----------
Net loss $ (589,000) $ (926,000)
---------- ----------
---------- ----------
Net loss per limited partnership unit $ (6) $ (10)
---------- ----------
---------- ----------
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended
March 31, 1994 March 31, 1993
Operating Activities:
Net loss $ (589,000) $ (926,000)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 1,113,000 1,195,000
Changes in operating assets and liabilities:
Receivables and other assets (192,000) 38,000
Accrued expenses and other liabilities 15,000 (139,000)
---------- ----------
Net cash provided by operating activities 347,000 168,000
---------- ----------
Investing Activities:
Additions to rental properties (82,000) (248,000)
Proceeds from sale of cash investments 1,187,000 -
Purchase of cash investments - (595,000)
Restricted cash (increase) decrease (36,000) 5,000
---------- ----------
Net cash provided by (used in) investing
activities 1,069,000 (838,000)
---------- ----------
Financing Activities:
Repayment of note on debt modification (805,000) -
Notes payable principal payments (138,000) (141,000)
Financing costs (paid) refunded (54,000) 10,000
---------- ----------
Net cash (used in) financing activities (997,000) (131,000)
---------- ----------
Increase (Decrease) in Cash and Cash Equivalents 419,000 (801,000)
Cash and Cash Equivalents at Beginning of Period 341,000 2,236,000
---------- ----------
Cash and Cash Equivalents at End of Period $ 760,000 $1,435,000
---------- ----------
---------- ----------
Supplemental Disclosure of Cash Flow
Information:
Interest paid in cash during the period $1,784,000 $1,913,000
---------- ----------
---------- ----------
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and
discussions should be read in conjunction with the consolidated
financial statements, related footnotes and discussions contained in the
Partnership's Annual Report for the year ended December 31, 1993.
Certain balance sheet accounts have been reclassified in order to
conform to the current period.
The financial information contained herein is unaudited. However, in
the opinion of management, all adjustments necessary for a fair
presentation of such financial information have been included. All
adjustments are of a normal recurring nature.
The results of operations for the three months ended March 31, 1994 and
1993 are not necessarily indicative of the results to be expected for
the full year.
2. Transactions with Related Parties
(a) An affiliate of the Managing General Partner ("MGP") received
reimbursements of administrative expenses amounting to $51,000 during
the period ended March 31, 1994. These reimbursements are primarily
included in general and administrative expenses.
(b) NPI Property Management Corporation ("NPI Management"), an
affiliate of MGP, is entitled to receive a management fee equal to 5% of
gross receipts from certain properties it manages. For the period ended
March 31, 1994, NPI Management received $69,000, which is included in
operating expenses.
3. Notes Payable
The Partnership finalized a debt modification agreement with the
Monterey Village Apartments mortgagee. The terms of the loan include a
seven year extension with a reduction in the interest rate from 10.50
percent to 8.25 percent and a 30 year amortization period in exchange
for a principal payment of $805,000. In connection with the
modification, the Partnership paid extension fees and costs totalling
$78,000. The amount of financing costs paid during the period ended
March 31, 1994 was $54,000.
The Partnership has balloon payments due as follows:
Property Maturity Date Payment
- - ------------------------- ------------- ----------
Copper Mill Apartments 12/94 $3,669,000
Hampton Greens Apartments 1/95 $5,750,000
Stoney Creek Apartments 1/95 $6,750,000
The ability to hold and operate these properties is dependent on the
Partnership's ability to obtain refinancing or debt modification as
required.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Consolidated Financial
Statements and other Items contained elsewhere in this Report.
Liquidity and Capital Resources
The Fund holds investments in and operates residential real estate
properties. The Fund receives rental income from its properties and is
responsible for operating expenses, capital improvements and debt
service payments under mortgage obligations. As of May 1, 1994, one of
the eleven properties originally purchased by the Fund was lost through
foreclosure.
The Fund uses working capital reserves from any undistributed cash flow
from operations and refinancing proceeds as its primary source of
liquidity. There have been no distributions since 1988. It is not
currently anticipated that the Fund will make any distributions from
operations in the near future.
Liquidity based on cash and cash equivalents experienced a $419,000
increase at March 31, 1994, as compared to December 31, 1993. The
Fund's $347,000 of cash from operating activities and $1,187,000 of
proceeds from sale of cash investments (investing activities) were
partially offset by $82,000 of additions to rental properties (investing
activities), a $36,000 increase in restricted cash (investing
activities), $943,000 of notes payable principal payments and $54,000 of
financing costs (financing activities). The increase in cash provided
by operating activities is primarily due to the decrease in net loss for
the three months ended March 31, 1994. All other increases (decreases)
in certain assets and liabilities are the result of the timing of
receipt and payment of various operating activities.
Working capital reserves are currently being invested in a money market
account or in repurchase agreements secured by United States Treasury
obligations. It is the opinion of the Managing General Partner that, if
market conditions remain relatively stable, cash flow from operations,
when combined with working capital reserves, will be sufficient to fund
required capital improvements and regular debt service payments in 1994
and the foreseeable future. However, in December 1994, and in 1995
through 1997, the Fund will have to arrange refinancings or debt
modifications. If necessary, the Fund could dispose of the properties
with significant balloon payments, in order to reduce future cash
requirements.
If the December 1994 and January 1995 balloon payments are not
refinanced or extended, or the properties are not sold, the properties
could be lost through foreclosure. If Copper Mill, Hampton Greens and
Stoney Creek Apartments are lost through foreclosure, the Fund would
incur a loss of approximately $3,200,000, $2,800,000 and $2,900,000,
respectively.
At this time, it appears that the investment objective of capital growth
will not be attained and that investors will not receive a return of all
of their invested capital. The extent to which invested capital is
returned to investors is dependent upon the performance of the Fund's
properties and the markets in which such properties are located and on
the sales price of the remaining properties. In this regard, it is
anticipated at this time that remaining properties will be held longer
than originally expected. The ability to hold and operate these
properties is dependent on the Fund's ability to obtain refinancing or
debt modification as required.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
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 residential properties. In addition, the bail
out 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, the Fund'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 are relatively low interest rates, which encourage existing
and potential tenants to purchase homes. In addition, there has been a
significant decline nationally in new household formation. Despite the
above, the rental market appears to be experiencing a gradual
strengthening and management anticipates that increases in revenue will
generally exceed increases in operating expenses during 1994.
Furthermore, management believes that the emergence of new institutional
purchasers, including real estate investment trusts and insurance
companies, should create a more favorable market value for the Fund's
properties in the future.
Results of Operations
Three Months Ended March 31, 1994 vs. March 31, 1993
Operating results improved by $337,000 for the three months ended March
31, 1994, as compared to 1993, due to increases in revenues of $280,000
and decreases in expenses of $57,000.
Revenues increased by $280,000 for the three months ended March 31,
1994, as compared to 1993, due to an increase of $282,000 in rental
income which was partially offset by a decrease of $2,000 in interest
and other income. Revenues increased primarily due to increases in
rental rates at Plantation Creek Apartments and improved occupancy at
all the Fund's properties, except for Monterey Village Apartments (which
declined) and Cooper's Pointe (which remained constant).
Expenses decreased by $57,000 due to decreases in interest expense of
$83,000 and depreciation of $83,000, which were only partially offset by
increases in operating expenses of $95,000 and general and
administrative expenses of $14,000. Interest expense decreased due to a
repayment of a portion of the loan principal and the lower interest rate
on the January 1994 debt modification on the Fund's Monterey Village
Apartments. Depreciation expense decreased due to the effect of assets
becoming fully depreciated in the prior year. Operating expenses
increased due to maintenance and rent-up expenses performed at the
Fund's Autumn Run, Copper Mill, Monterey Village, Promontory and Wood
Creek Apartments. General and administrative expenses increased
primarily due to costs associated with the management transition.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations (Continued).
Properties
A description of the properties in which the Fund has an ownership
interest during the period covered by this report, along with occupancy
data, follows:
CENTURY PROPERTIES GROWTH FUND XXII
OCCUPANCY SUMMARY
For the Quarters Ended March 31, 1994 and 1993
Average
Occupancy
Number Rate (%)
of Date of March 31,
Name and Location Units Purchase 1994 1993
- - ---------------------------- ------ -------- ---- ----
Wood Creek Apartments 432 05/84 98 96
Mesa, Arizona
Plantation Creek Apartments 484 06/84 97 90
Atlanta, Georgia
Stoney Creek Apartments 364 06/85 93 91
Dallas, Texas
Four Winds Apartments 350 09/85 96 95
Overland Park, Kansas
Promontory Point Apartments 252 10/85 97 95
Austin, Texas
Cooper's Pointe Apartments 192 11/85 90 90
Charleston, South Carolina
Hampton Greens Apartments 309 12/85 94 93
Dallas, Texas
Monterey Village Apartments 224 04/86 89 96
Rancho Cucamonga, California
Autumn Run Apartments 320 06/86 97 86
Naperville, Illinois
Copper Mill Apartments 192 09/86 94 93
Richmond, Virginia
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - MARCH 31, 1994
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 GROWTH FUND XXII
By: FOX PARTNERS IV,
A California General Partnership,
its general partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
A California Corporation,
its general partner
----------------------------------------------
ARTHUR N. QUELER
Executive Vice President (Principal
Financial and Accounting Officer)
and Director of Fox
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