SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 - JUNE 30, 1994
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
Consolidated Balance Sheets
June 30, December 31,
1994 1993
(Unaudited) (Audited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 404,000 $ 341,000
Restricted cash 777,000 775,000
Cash investments - 1,187,000
Receivables and other assets 1,351,000 520,000
Real Estate:
Real estate 127,667,000 127,614,000
Furnishings 11,779,000 11,626,000
Accumulated depreciation (41,912,000) (39,860,000)
_____________ _____________
Net real estate 97,534,000 99,380,000
Deferred financing costs, net 665,000 792,000
_____________ _____________
Total assets $ 100,731,000 $ 102,995,000
============= =============
Liabilities and Partners' Equity
Accrued expenses and other liabilities 2,078,000 1,908,000
Notes payable 80,666,000 81,848,000
_____________ _____________
Total liabilities 82,744,000 83,756,000
_____________ _____________
Partners' equity (deficit):
General partner (6,962,000) (6,814,000)
Limited partners (82,848 units outstanding at
June 30, 1994 and December 31, 1993) 24,949,000 26,053,000
_____________ _____________
Total partners' equity 17,987,000 19,239,000
_____________ _____________
Total liabilities and partners' equity $ 100,731,000 $ 102,995,000
============= =============
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited)
For the Six Months Ended
June 30, 1994 June 30, 1993
Revenues:
<S> <C> <C>
Rental $ 9,631,000 $ 9,089,000
Interest and other income 37,000 51,000
_____________ _____________
Total revenues 9,668,000 9,140,000
_____________ _____________
Expenses:
Operating 4,782,000 4,430,000
Interest 3,712,000 3,846,000
Depreciation 2,052,000 2,134,000
General and administrative 374,000 385,000
_____________ _____________
Total expenses 10,920,000 10,795,000
_____________ _____________
Net loss $ (1,252,000) $ (1,655,000)
============= =============
Net loss per limited partnership unit $ (13) $ (18)
============= =============
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
Consolidated Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended
June 30, 1994 June 30, 1993
Revenues:
<S> <C> <C>
Rental $ 4,822,000 $ 4,562,000
Interest and other income 15,000 27,000
_____________ _____________
Total revenues 4,837,000 4,589,000
_____________ _____________
Expenses:
Operating 2,405,000 2,148,000
Interest 1,838,000 1,889,000
Depreciation 1,030,000 1,029,000
General and administrative 227,000 252,000
_____________ _____________
Total expenses 5,500,000 5,318,000
_____________ _____________
Net loss $ (663,000) $ (729,000)
============= =============
Net loss per limited partnership unit $ (7) $ (8)
============= =============
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30, 1994 June 30, 1993
Operating Activities:
<S> <C> <C>
Net loss $ (1,252,000) $ (1,655,000)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 2,232,000 2,316,000
Changes in operating assets and liabilities:
Receivables and other assets (831,000) (49,000)
Accounts payable and other liabilities 170,000 (91,000)
_____________ _____________
Net cash provided by operating activities 319,000 521,000
_____________ _____________
Investing Activities:
Additions to rental properties (206,000) (532,000)
Purchase of cash investments - (595,000)
Proceeds from cash investments 1,187,000 595,000
Restricted cash (increase) decrease (2,000) 4,000
_____________ _____________
Net cash provided by (used in)
investing activities 979,000 (528,000)
_____________ _____________
Financing Activities:
Repayment of note on debt modification (805,000) -
Notes payable principal payments (377,000) (308,000)
Financing costs (paid) refunded (53,000) 5,000
_____________ _____________
Net cash (used in) financing activities (1,235,000) (303,000)
_____________ _____________
Increase (Decrease) in Cash and Cash
Equivalents 63,000 (310,000)
Cash and Cash Equivalents at Beginning
of Period 341,000 2,236,000
_____________ _____________
Cash and Cash Equivalents at End of Period $ 404,000 $ 1,926,000
============= =============
Supplemental Disclosure of Cash Flow
Information:
Interest paid in cash during the period $ 3,465,000 $ 3,655,000
============= =============
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 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. 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 six and three months ended June 30,
1994 and 1993 are not necessarily indicative of the results to be
expected for the full year.
2. Transactions with Related Parties
(a) Affiliates of the Managing General Partner ("MGP") received
reimbursements of administrative expenses amounting to $112,000
during the six months ended June 30, 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 annual gross receipts from certain properties it
manages. For the six months ended June 30, 1994, NPI
Management received $320,000. These fees are included in
operating expenses.
(c) Included in operating expenses for the six months ended June
30, 1994 is $298,000 of insurance premiums, which were paid to
NPI Management under a master insurance policy arranged for by
MGP.
3. Notes Payable
The Partnership finalized a debt modification agreement with the
Monterey Village Apartments mortgagee in January 1994. 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 June 30, 1994 was $53,000.
The Partnership has balloon payments due as follows:
<TABLE>
<CAPTION>
Property Maturity Date Payment
<S> <C> <C>
Copper Mill Apartments 12/94 $3,669,000
Hampton Greens Apartments 1/95 $5,750,000
Stoney Creek Apartments 1/95 $6,750,000
</TABLE>
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Notes Payable (Continued)
The Hampton Green mortgage can be extended for two 1 year periods, as
defined. The Partnership has received terms from the existing lender
to modify and extend the terms of the Copper Mill Apartments and
Cooper's Pointe Apartments loans. It is anticipated that these loan
modifications will be executed in the third quarter of 1994. 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 - JUNE 30, 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, administrative expenses, capital
improvements and debt service payments. As of August 1, 1994, one of the
eleven properties originally purchased by the Fund was lost through
foreclosure. All of the Fund's properties, except for its Cooper's Pointe
property, generated positive cash flow from operations during the six
months ended June 30, 1994.
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. In order to
preserve working capital for potential refinancing of properties with
balloon payments (with maturity dates beginning in 1994), it is not
currently anticipated that the Fund will make any distributions from
operations in the near future.
Liquidity based upon cash and cash equivalents experienced a $63,000
increase at June 30, 1994, as compared to December 31, 1993. The Fund's
$319,000 of cash from operating activities and $979,000 of cash from
investing activities were substantially offset by $1,235,000 of cash used
in financing activities. The increase in cash from investing activities
included $1,187,000 of proceeds from cash investments which was partially
offset by $206,000 of additions to real estate and a $2,000 increase in
restricted cash. As described in Item 1, Note 3, cash used in financing
activities consisted of an $805,000 partial repayment of the mortgage
encumbering the Fund's Monterey Village Apartments property, as well as
$377,000 of notes payable principal payments and $53,000 of financing
costs.
Working capital reserves are currently in a money market account or
repurchase agreements secured by United States Treasury obligations. The
Managing General Partner believes that, if market conditions remain
relatively stable, cash flow from operations, when combined with working
capital reserves, will be sufficient to fund required capital improvements
and regular debt service payments in 1994 and the foreseeable future. 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 notes with 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 $3,100,000, $2,700,000 and $2,700,000,
respectively. The Fund is in various stages of negotiations with the
lenders on these properties, as well as with the lender on the Cooper's
Pointe property (due December 1995). The Partnership has received terms
from the existing lender to modify and extend the terms of the Copper Mill
Apartments and Cooper's Pointe Apartments loans. It is anticipated that
these loan modifications will be executed in the third quarter of 1994.
The mortgage encumbering Hampton Green has two 1 year extensions available,
as defined. The Managing General Partner expects to receive an extension
or refinance these mortgage obligations.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
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 the 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.
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
Six Months Ended June 30, 1994 vs. June 30, 1993
Operating results improved by $403,000 for the six months ended June 30,
1994, as compared to 1993, due to increases in revenues of $528,000 and in
expenses of $125,000.
Revenues increased by $528,000 for the six months ended June 30, 1994, as
compared to 1993, due to an increase of $542,000 in rental income, which
was slightly offset by a decrease of $14,000 in interest and other income.
Revenues increased primarily due to an increase in rental rates at
Plantation Creek Apartments and improved occupancy at all the Fund's
properties, except for Monterey Village Apartments and Four Winds
Apartments.
Expenses increased by $125,000 for the six months ended June 30, 1994, as
compared to 1993, due to an increase of $352,000 in operating expenses
which was only partially offset by decreases of $134,000 in interest
expense, $82,000 in depreciation expense and $11,000 in general and
administrative expenses. Operating expenses increased due to maintenance
and rent-up expenses performed at the Fund's Autumn Run, Cooper Mill,
Monterey Village, Promontory Point and Wood Creek Apartments,
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Six Months Ended June 30, 1994 vs. June 30, 1993 (Continued)
which were slightly offset by decreases in maintenance and rent-up expenses
at the Fund's Cooper's Pointe and Plantation Creek Apartments. Interest
expense decreased primarily due to the partial repayment and lower interest
rate resulting from the January 1994 debt modification on the mortgage
encumbering the Fund's Monterey Village Apartments. Depreciation expense
decreased due to the effect of assets becoming fully depreciated. General
and administrative expenses declined due to lower than normal expenses in
the second quarter of 1994.
Three Months Ended June 30, 1994 vs. June 30, 1993
Operating results improved by $66,000 for the three months ended June 30,
1994, as compared to 1993, due to increases in revenues of $248,000 and
expenses of $182,000.
Revenues increased by $248,000 for the three months ended June 30, 1994, as
compared to 1993, due to an increase of $260,000 in rental income, which
was slightly offset by a decrease of $12,000 in interest and other income.
Revenues increased primarily due to an increase in rental rates at
Plantation Creek Apartments and improved occupancy at all the Fund's
properties, except for Monterey Village Apartments, Four Winds Apartments
and Promontory Point Apartments. Occupancy at Stoney Creek Apartments
remained constant.
Expenses increased by $182,000 for the three months ended June 30, 1994, as
compared to 1993, due to an increase of $257,000 in operating expenses and
$1,000 in depreciation expense, which was only partially offset by
decreases of $51,000 in interest expense and $25,000 in general and
administrative expenses. Operating expenses increased due to maintenance
and rent-up expenses performed at the Fund's Autumn Run, Cooper Mill,
Monterey Village, Promontory Point and Wood Creek Apartments, which were
slightly offset by decreases in maintenance and rent-up expenses at the
Fund's Cooper's Pointe and Plantation Creek Apartments. Interest expense
decreased primarily due to a repayment and lower interest rate resulting
from the January 1994 debt modification on the mortgage encumbering the
Fund's Monterey Village Apartments property. General and administrative
expenses declined due to lower than normal expenses in the second quarter
of 1994. Depreciation expense remained constant as the effect of assets
becoming fully depreciated was offset by an under accrual during the three
months ended June 30, 1993.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
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:
<TABLE>
<CAPTION>
CENTURY PROPERTIES GROWTH FUND XXII
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
Six Months Three Months
Ended Ended
Number of Date of June 30, June 30,
Name and Location Units Purchase 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Wood Creek Apartments 432 05/84 97 93 95 89
Mesa, Arizona
Plantation Creek
Apartments 484 06/84 97 90 97 91
Atlanta, Georgia
Stoney Creek Apartments 364 06/85 92 90 91 91
Dallas, Texas
Four Winds Apartments 350 09/85 94 95 93 96
Overland Park, Kansas
Promontory Point
Apartments 252 10/85 95 94 93 94
Austin, Texas
Cooper's Pointe
Apartments 192 11/85 93 91 96 92
Charleston, South
Carolina
Hampton Greens Apartments 309 12/85 95 93 95 93
Dallas, Texas
Monterey Village
Apartments 224 04/86 90 94 92 93
Rancho Cucamonga,
California
Autumn Run Apartments 320 06/86 96 87 95 88
Naperville, Illinois
Copper Mill Apartments 192 09/86 96 95 98 96
Richmond, Virginia
</TABLE>
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 1994
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
On April 29, 1994, a Current Report on Form 8-K was filed with the
Securities and Exchange Commission to provide for the change in
the Fund's accountants from Deloitte & Touche to Imowitz Koenig &
Company. No other Reports on Form 8-K were filed during the
period covered by this Report.
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CENTURY PROPERTIES GROWTH FUND XXII - FORM 10-Q - JUNE 30, 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
/S/ARTHUR N. QUELER
ARTHUR N. QUELER
Executive Vice President (Principal
Financial and Accounting Officer)
and Director of Fox
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