SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to ____________
Commission file number 0-14528
Century Pension Income Fund XXIII,
A California Limited Partnership
(Exact name of Registrant as specified in its charter)
California 94-2963120
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (770) 916-9090
N/A
Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No_____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12, 13, or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes ______ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the
latest practicable date __________________.
1 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
September 30, December 31,
1995 1994
Assets
Cash and cash equivalents $ 6,112,000 $ 5,202,000
Restricted cash 168,000 148,000
Other assets 1,420,000 1,419,000
Mortgage loans receivable, net 1,137,000 1,749,000
Real Estate:
Real estate 96,274,000 93,913,000
In-substance foreclosure property - 1,985,000
Accumulated depreciation (18,450,000) (16,529,000)
Allowance for impairment of value (7,091,000) (7,091,000)
------------- -------------
Real estate, net 70,733,000 72,278,000
Deferred sales commissions, net 889,000 1,087,000
Deferred organization expenses, net 528,000 644,000
Deferred costs, net 790,000 773,000
------------- -------------
Total assets $ 81,777,000 $ 83,300,000
============= =============
Liabilities and Partners' Deficit
Deferred income, accrued expenses and
other liabilities $ 1,529,000 $ 1,236,000
Accrued interest - notes payable 695,000 638,000
Accrued interest - non-recourse promissory
notes 524,000 1,048,000
Notes payable 16,956,000 16,947,000
Non-recourse Promissory Notes:
Principal 41,939,000 41,939,000
Deferred interest payable 28,353,000 26,278,000
------------- -------------
Total liabilities 89,996,000 88,086,000
------------- -------------
Minority interest in consolidated joint
ventures 7,588,000 7,681,000
------------- -------------
Committment and Contingencies
Partners' deficit:
General partner (2,011,000) (1,903,000)
Limited partners (95,789 units outstanding at
September 30, 1995 and December 31, 1994) (13,796,000) (10,564,000)
------------- -------------
Total partners' deficit (15,807,000) (12,467,000)
------------- -------------
Total liabilities and partners' deficit $ 81,777,000 $ 83,300,000
============= =============
See notes to consolidated financial statements.
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CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Consolidated Statements of Operations
For the Nine Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 8,571,000 $ 8,233,000
Interest income on mortgage loans 61,000 243,000
Interest and other income 923,000 311,000
------------- -------------
Total revenues 9,555,000 8,787,000
------------- -------------
Expenses:
Interest to Promissory Note Holders 3,647,000 3,647,000
Amortization 314,000 314,000
Operating 3,589,000 3,506,000
Depreciation 1,921,000 1,987,000
Interest 1,288,000 1,322,000
General and administrative 635,000 654,000
Provision for impairment of value - 400,000
Loss on satisfaction of mortgage loan
receivable 978,000 -
------------- -------------
Total expenses 12,372,000 11,830,000
------------- -------------
Loss before minority interest in joint
ventures' operations (2,817,000) (3,043,000)
Minority interest in joint ventures'
operations (481,000) (220,000)
------------- -------------
Net loss $ (3,298,000) $ (3,263,000)
============= =============
Net loss per individual investor unit $ (33.74) $ (33.39)
============= =============
See notes to consolidated financial statements.
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CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Consolidated Statements of Operations
For the Three Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 2,887,000 $ 2,938,000
Interest income on mortgage loans 20,000 81,000
Interest and other income 266,000 212,000
------------- -------------
Total revenues 3,173,000 3,231,000
------------- -------------
Expenses:
Interest to Promissory Note Holders 1,216,000 1,216,000
Amortization 105,000 105,000
Operating 1,322,000 1,023,000
Depreciation 640,000 662,000
Interest 461,000 507,000
General and administrative 222,000 235,000
Provision for impairment of value - 400,000
------------- -------------
Total expenses 3,966,000 4,148,000
------------- -------------
Loss before minority interest in joint
ventures' operations (793,000) (917,000)
Minority interest in joint ventures' operations (148,000) (122,000)
------------- -------------
Net loss $ (941,000) $ (1,039,000)
============= =============
Net loss per individual investor unit $ (9.63) $ (10.63)
============= =============
See notes to consolidated financial statements.
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CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Consolidated Statements of Cash Flows
For the Nine Months Ended
September 30, September 30,
1995 1995
Operating Activities:
Net loss $ (3,298,000) $ (3,263,000)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 2,423,000 2,486,000
Minority interest in joint ventures'
operations 481,000 220,000
Loss on satisfaction of notes receivable 978,000 -
Deferred interest added to note payable
principal 6,000 106,000
Provision for doubtful receivables - 42,000
Provision for impairment of value - 400,000
Deferred interest on non-recourse promissory
notes 2,075,000 2,075,000
Deferred costs paid (205,000) (200,000)
Changes in operating assets and liabilities:
Other assets (1,000) (574,000)
Deferred income, accrued expenses and other
liabilities (171,000) 229,000
------------- -------------
Net cash provided by operating activities 2,288,000 1,521,000
------------- -------------
Investing Activities:
Cost of real estate acquired through foreclosure (1,114,000) -
Additions to real estate (635,000) (773,000)
(Increase) decrease in restricted cash (20,000) 38,000
Proceeds from cash investments - 3,357,000
Proceeds from satisfaction of mortgage loan
receivable 1,007,000 -
------------- -------------
Net cash (used in) provided by investing
activities (762,000) 2,622,000
------------- -------------
Financing Activities:
Joint venture partner distributions (574,000) (150,000)
Cash distributions to general partner (42,000) (42,000)
------------- -------------
Cash (used in) financing activities (616,000) (192,000)
Increase in Cash and Cash Equivalents 910,000 3,951,000
Cash and Cash Equivalents at Beginning of
Period 5,202,000 923,000
------------- -------------
Cash and Cash Equivalents at End of Period $ 6,112,000 $ 4,874,000
============= =============
Supplemental Disclosure of Cash Flow
Information:
Interest paid in cash during the
period - notes payable $ 1,231,000 $ 1,195,000
============= =============
Interest paid in cash during the
period - non-recourse promissory notes $ 2,096,000 $ 2,096,000
============= =============
Supplemental Disclosure of Non-Cash Investing
and Financing Activities:
Deferred interest added to note payable
principal $ 3,000 $ -
============= =============
Mortgage loan receivable reclassified to
real estate (Note 4) $ 612,000 $ -
============= =============
See notes to consolidated financial statements.
5 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
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,
1994. Certain accounts have been reclassified in order to conform
to the current period.
The financial information contained herein is unaudited. In the
opinion of management, all adjustments necessary for a fair
presentation of such financial information have been included. All
adjustments are of a normal recurring nature, except as discussed
in Notes 5 and 6.
The results of operations for the nine and three months ended
September 30, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
On August 17, 1995, the stockholders of National Property
Investors, Inc. ("NPI, Inc."), the sole shareholder of NPI Equity
Investments II, Inc. ("MGP" or "NPI Equity"), the entity which
controls Fox Capital Management Corporation, the managing general
partner of the Partnership's general partner, entered into an
agreement to sell to IFGP Corporation, an affiliate of Insignia
Financial Group, Inc. ("Insignia"), all of the issued and
outstanding stock of NPI, Inc. The sale of the stock is subject to
the satisfaction of certain conditions and is scheduled to close in
January 1996.
2. Transactions with Related Parties
(a) An affiliate of the NPI, Inc. received reimbursement of
administrative expenses amounting to $72,000 and $74,000 during
the nine months ended September 30, 1995 and 1994,
respectively. These reimbursements are primarily included in
general and administrative expenses.
(b) An affiliate of NPI, Inc. is entitled to receive 5% of annual
gross receipts from certain Partnership properties it manages.
For the nine months ended September 30, 1995 and 1994,
affiliates of NPI, Inc. received $77,000 and $57,000,
respectively, which are included in operating expenses.
(c) During each of the nine month periods ended September 30, 1995
and 1994, an affiliate of NPI, Inc. was paid a $16,000 and
$10,000 fee ($11,000 and $7,000 allocated to the Partnership,
respectively) relating to successful real estate tax appeals on
the Partnership's Coral Palm Plaza, Alpha Business Center and
Westpoint Business Center joint venture properties. These fees
are included in operating expenses.
(d) The general partner received cash distributions totaling
$42,000, which is equal to 2 percent of interest paid to
Promissory Note holders, during each of the nine month periods
ended September 30, 1995 and 1994.
(e) An affiliate of the general partner is entitled to receive a
partnership management fee in an amount equal to 10 percent of
cash available for distribution before interest payments to the
Promissory Note Holders. For each of the nine month periods
ended September 30, 1995 and 1994, MGP received $111,000.
These fees are included in general and administrative expenses.
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CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. Restricted Cash
Restricted cash at September 30, 1995 and 1994 represents cash
maintained at Sunnymead Towne Center, which is restricted as to its
use pursuant to a court approved reorganization plan and the
modified note agreements.
4. Mortgage Loans Receivable
The Partnership entered into various agreements with the borrowers
on two of the Partnership's second mortgage loans receivable, which
were cross collateralized and in default. The properties are
located in Irvine ("Irvine") and Costa Mesa, California ("Costa
Mesa"). The borrower on the Irvine property had terminated
payments on the mortgage loan receivable in October 1994 and, in
January 1995, a court appointed receiver was placed on the Irvine
property. As a result, on April 20, 1995, the Partnership
acquired the Irvine property through deed in lieu of foreclosure
and satisfied the existing first mortgage encumbering the property
in the principal amount (including expenses) of approximately
$1,114,000. On May 31, 1995, the receiver on the Irvine property
was dismissed. The Partnership commenced operating the property on
June 1, 1995. The mortgage loan receivable, net of the previously
recorded provision for impairment of value of $1,250,000, has been
reclassified as real estate at September 30, 1995. The mortgagor
of the Costa Mesa property assumed $400,000 of the principal amount
of the debt encumbering the Irvine property resulting in an
aggregate outstanding principal balance of $1,137,000. The
Partnership extended the maturity date of the loan on the Costa
Mesa property to March 31, 2000. Monthly payments to the
Partnership remain the same. Upon the sale of the Costa Mesa
property, the Partnership will be entitled to contingent interest
of 50% of the amount received in excess of the current debt.
During the third quarter of 1994, based upon the information then
available, the Partnership recorded a provision for impairment of
value of $400,000 to reflect a write down of the two second
mortgage loan receivables to their net realizable value.
On June 20, 1995, the Partnership received a notice from the first
mortgagee on 1726 M Street, indicating that they expect to
foreclose on this property. On July 31, 1995, the Partnership lost
its second mortgage interest in this property. In 1992, the
Partnership fully reserved for this contingency.
5. Loss on Satisfaction of Mortgage Loan Receivable on In-Substance
Foreclosure Property
On April 28, 1995, the Partnership received $1,007,000 in full
satisfaction of its mortgage loan receivable on the Warren,
Michigan property. The property had been classified as an in-
substance foreclosure property. The Partnership accepted the
discounted settlement because it determined that, based upon
projected future operational cash flow of the property, and the
cost of litigation, it appeared likely that a substantial portion
of contractual obligations would not be collected. The Partnership
recorded a $978,000 loss on satisfaction of a mortgage loan
receivable. A $1,850,000 provision for doubtful mortgage loan and
interest receivable had previously been recorded in 1992.
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CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. Other Income
The Partnership accepted a lease buy-out of $800,000 in December
1994 from a significant tenant that had occupied 27,000 square feet
at Coral Palm Plaza (and was received in 1995). During June 1995,
management re-leased 20,000 square feet of the unoccupied space, on
similar terms, and recognized a portion of the lease buy-out in the
amount of $517,000. During September 1995, management re-leased
the remaining 7,000 square feet of the unoccupied space, on similar
terms, and recognized the remaining portion of the lease buy-out in
the amount of $266,000. Registrant recognized $84,000 of the buy-
out fee as rental income in 1995, which represents the amortization
of the fee prior to the new tenants' lease commencement dates.
8 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
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
As of November 1, 1995, Registrant's real estate properties consist of one
apartment complex located in Georgia, four business parks located in
Florida, North Carolina, California and Texas and three shopping centers
located in Kentucky, Georgia and California. Registrant also holds joint
venture interests in three business parks located in Minnesota and a
shopping center located in Florida. The properties are leased to tenants
subject to leases with original lease terms ranging from six months to one
year for the residential property and remaining lease terms of up to
seventeen years for commercial properties. Registrant receives rental
income from its properties and is responsible for operating expenses,
administrative expenses, capital improvements and debt service payments.
Registrant also holds a mortgage loan. As described in Item 1, Note 4, in
April 1995, Registrant acquired the Irvine property by deed in lieu of
foreclosure and satisfied the first mortgage encumbering this property, in
the amount of approximately $1,114,000, including expenses. The mortgagor
of the Costa Mesa property assumed $400,000 of the debt encumbering the
Irvine property. In addition, Registrant extended the loan on the Costa
Mesa property to March 31, 2000. As described in Item 1, Note 5, on April
28, 1995, the loan encumbering Registrant's in-substance foreclosure
property was satisfied at a discount. On June 20, 1995, the Partnership
received a notice from the first mortgagee on 1726 M Street, indicating
that they expect to foreclose on this property. On July 31, 1995, the
Partnership lost its second mortgage interest in this property. In 1992,
the Partnership fully reserved for this contingency. All of Registrant's
properties, except Registrant's The Enclaves Apartments (formerly Valley
Apartments), generated positive cash flow during the nine months ended
September 30, 1995. Registrant's The Enclaves Apartments generated
negative cash flow for the nine months ended September 30, 1995, due to
capital improvements (discussed below).
Registrant uses working capital reserves from any undistributed cash flow
from operations and proceeds from cash investments as its primary source of
liquidity. For the long term, cash from operations will remain
Registrant's primary source of liquidity. Cash distributions to limited
partners will remain suspended as cash flow and existing working capital
reserves are utilized for the repayment of Promissory Notes. Promissory
Note Holders continue to receive the required minimum interest payments.
Registrant accepted a lease buy-out of $800,000 in December 1994 from a
significant tenant that had occupied 27,000 square feet at Coral Palm Plaza
(and was received in 1995). During June 1995, management re-leased 20,000
square feet of the unoccupied space, on similar terms, and recognized a
portion of the lease buy-out in the amount of $517,000. During September
1995, management re-leased the remaining 7,000 square feet of the
unoccupied space, on similar terms, and recognized the remaining portion of
the lease buy-out in the amount of $266,000. Registrant allocated $84,000
of the buy-out fee to rental income in 1995, which represents the
amortization of the fee prior to the new tenants' lease commencement dates.
During 1994, $17,000 of the lease buy-out was recognized as rental income.
Management is currently negotiating a lease buy-out agreement with a tenant
that currently occupies 11,300 square feet of space at Coral Palm Plaza for
approximately $300,000. Management is attempting to re-lease the space.
In May 1995, a significant tenant at Registrant's Interrich Plaza vacated.
Management is currently attempting to re-lease the unoccupied
9 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
space. A significant tenant at Registrant's Sunnymead Towne Center, that
occupied 98,000 square feet, vacated during the three months ended
September 30, 1995 as part of the retail chain's national downsizing.
Registrant continues to receive monthly rent payments from the tenant. If
payments under this lease obligation cease, and the space is not re-leased,
Registrant would not be able to continue debt service payments. In this
case, Registrant would lose the property through foreclosure. If the
property is lost through foreclosure, Registrant would not recognize a loss
for financial reporting purposes. If unoccupied space is re-leased,
Registrant may be required to expend significant capital resources for
tenant installations and leasing commissions. During the nine months ended
September 30, 1995, a construction project to replace the breezeways at
Registrant's The Enclaves Apartments was started and completed at a cost of
approximately $260,000. Except for the potential tenant improvements,
Registrant has no other plans for material capital expenditures.
The level of liquidity based on cash and cash equivalents experienced a
$910,000 increase at September 30, 1995, as compared to December 31, 1994.
Registrant's $2,288,000 of net cash provided by operating activities was
partially offset by $762,000 of net cash used in investing
activities, $574,000 of cash distributed to the joint venture partner
(financing activities) and $42,000 of cash distributed to the general
partner (financing activities). Cash used in investing activities
consisted of $1,114,000 of cash paid to satisfy the first mortgage
encumbering the Medtronics property, which Registrant acquired through deed
in lieu of foreclosure, $635,000 of cash used for improvements to real
estate, primarily at Registrant's The Enclaves Apartments and a $20,000
increase in restricted cash. The cash used in investing activities was
partially offset by $1,007,000 of cash received by Registrant in
satisfaction, at a discount, of the mortgage loan encumbering Registrant's
in-substance foreclosure property (investing activities). 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. 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, regular debt service payments and minimum interest
payments on the Promissory Notes for the next twelve months and the
foreseeable future. In the event that additional resources are required,
the Managing General Partner will attempt to arrange further financing or
refinancing.
On August 17, 1995, Insignia Financial Group, Inc. and certain of its
affiliates (collectively, "Insignia") entered into agreements pursuant to
which (i) the stockholders of NPI, Inc., the sole shareholder of NPI
Equity, agreed to sell to Insignia all of the issued and outstanding stock
of NPI, Inc., and (ii) Insignia would acquire all of the interests in NPI-
AP Management, L.P., the property manager at Registrant's residential
properties. The consummation of these transactions is subject to the
satisfaction of certain conditions (including, third party consents and
other conditions not within the control of the parties to the agreement)
and is scheduled to close in January 1996. Upon closing, it is expected
that Insignia will elect new officers and directors of NPI Equity.
10 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
Insignia is a fully integrated real estate service company specializing in
the ownership and operation of securitized real estate assets. According
to Commercial Property News and the National Multi-Housing Council, since
1992 Insignia has been the largest property manager in the United States.
The Managing General Partner does not believe these transactions will have
a significant effect on Registrant's liquidity or results of operation.
With respect to limited partners, 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 their invested capital and any
portions that are returned will come from cash flow. The extent to which
invested capital is returned to investors is dependent upon the performance
of Registrant's properties and the markets in which such properties are
located and on the sales price of the properties. In this regard, it is
anticipated at this time that some of the properties will continue to be
held longer than originally expected. The ability to hold and operate
these properties is dependent on Registrant's ability to obtain additional
financing, refinancing or debt restructuring, as required. As to the
Promissory Note Holders and assuming the notes are held to maturity, at
this time it appears that all remaining principal and a portion of deferred
interest will be returned. The ability of Registrant to make such payments
of principal and interest is dependent upon the ultimate sales prices,
timing of sales of the remaining properties, net proceeds received by
Registrant from sales and refinancing and overall Partnership operations.
Based on current projections, the Promissory Note Holders will not receive
any payment of residual interest.
Real Estate Market
The national real estate market has suffered from the effects of the real
estate recession including, but not limited to, a downward trend in market
values of existing properties. In addition, the bailout of the savings and
loan associations and sales of foreclosed properties by auction reduced
market values and caused a further restriction on the ability to obtain
credit. As a result, Registrant's ability to refinance or sell its
existing properties may be restricted. These factors caused a decline in
market property values and serve to reduce market rental rates and/or sales
prices. Management believes, however, that the emergence of new
institutional purchasers, including real estate investment trusts and
insurance companies should create a more favorable market value for
Registrant's properties in the future.
Results of Operations
Nine Months Ended September 30, 1995 vs. September 30, 1994
Operating results, before minority interest in joint ventures' operations
of $481,000, improved by $226,000 for the nine months ended September 30,
1995 as compared to 1994, due to an increase in revenues of $768,000 which
was partially offset by an increase in expenses of $542,000. The increase
in expenses is due to the $978,000 loss on satisfaction of a mortgage loan
receivable on Registrant's in substance foreclosure property, Century
Center.
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CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Nine Months Ended September 30, 1995 vs. September 30, 1993 (Continued)
Operating results, before minority interest in joint ventures' operations
and excluding the Medtronics property (which was acquired through deed in
lieu of foreclosure on April 20, 1995), declined by $335,000 due to an
increase in expenses of $882,000 which was offset by an increase in
revenues of $547,000.
Rental revenues, before minority interest in joint ventures' operations and
excluding the Medtronics property, increased by $117,000 primarily due to
increased rental rates at Registrant's The Enclaves Apartments, Sunnymead
Towne Center and Regency Centre and increased occupancy at Registrant's
Alpha Business Center and Westpoint Business Center joint venture
properties. These increases were partially offset by increased vacancies
at Registrant's Interrich Plaza, Commerce Plaza and Registrant's Coral Palm
Plaza joint venture property. Occupancy and rental rates remained
relatively constant at Registrant's remaining properties. Interest and
other income increased by $612,000 primarily due to the recognition of
$699,000 of lease termination income at Registrant's Coral Palm Plaza joint
venture property and an increase in interest income due to an increase in
average working capital reserves available for investment and increased
interest rates. The increases in interest and other income were
partially offset by $185,000 of proceeds from a legal settlement at
Registrant's Regency Centre received during the nine months ended September
30, 1994. Interest income on mortgage loans declined by $182,000 due to
the termination of payment by the borrower on the Medtronics mortgage loan
in October 1994. Registrant acquired the Medtronics property through deed
in lieu of foreclosure in April 1995.
Expenses, before minority interest in joint ventures' operations and
excluding the Medtronics property, increased for the nine months ended
September 30, 1995, as compared to 1994, due to the loss on satisfaction of
the mortgage loan receivable of $978,000. Registrant experienced decreases
in depreciation expense of $99,000 and interest expense of $34,000, which
were only slightly offset by an increase in operating expense of $56,000.
Depreciation expense declined due to the provision for impairment of value
recorded on Registrant's Coral Palm Plaza joint venture property. Interest
expense decreased due to a decrease in the amortization of deferred loan
costs, which were fully amortized in 1994. In addition, general and
administrative expenses declined by $19,000 due to lower general and
administrative expenses for the nine months ended September 30, 1995, as
compared to 1994. All other expenses remained relatively constant.
Three Months Ended September 30, 1995 vs. September 30, 1994
Operating results, before minority interest in joint ventures' operations
of $148,000, improved by $124,000 for the three months ended September 30,
1995, as compared to 1994, due to a decrease in expenses of $182,000 which
was partially offset by a decrease in revenues of $58,000.
Operating results, before minority interest in joint ventures' operations
and excluding the Medtronics property, declined $334,000 due to a decrease
in revenues of $137,000 and an increase in expenses of $197,000.
12 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Three Months Ended September 30, 1995 vs. September 30, 1994 (Continued)
Rental revenues, before minority interest in joint ventures' operations and
excluding the Medtronics property, decreased by $130,000, for the three
months ended September 30, 1995, as compared to 1994, primarily due to a
decline in occupancy at Registrant's Commerce Plaza, Highland Park Commerce
Center and Interrich Plaza properties and Registrant's Plymouth Business
Center and Coral Palm Plaza joint venture properties, which were partially
offset by an increase in occupancy at Registrant's Westpoint Business
Center joint venture property. Occupancy at Registrant's other properties
remained relatively constant. In addition, rental rates increased at
Registrant's The Enclaves Apartments, Sunnymead Towne Center and Regency
Centre properties.
Interest and other income increased by $54,000 due to the recognition of
$244,000 of lease termination income at Registrant's Coral Palm joint
venture property, offset by $185,000 of proceeds from a legal settlement at
Registrant's Regency Centre received during the three months ended
September 30, 1994. Interest income remained relatively constant as the
increase in average working capital reserves available for investment and
increased interest rates, were offset by an over accrual of interest income
in the prior year comparative period. Interest income on mortgage loans
declined by $61,000 due the termination of payment by the borrower on the
Medtronics mortgage loan in October 1994. Registrant acquired the
Medtronics property through deed in lieu of foreclosure in April of 1995.
Expenses, before minority interest in joint ventures' operations and
excluding the Medtronics property, decreased for the three months ended
September 30, 1995, as compared to 1994, due to an increase in operating
expenses of $289,000, which was partially offset by decreases in
depreciation expense of $33,000 and interest expense of $46,000. Operating
expenses increased primarily due to extensive exterior painting and repairs
and maintenance at Registrant's The Enclaves Apartments property in
connection with Registrant's capital improvement project. Depreciation
expense declined due to the provision for impairment of value recorded on
Registrant's Coral Palm Plaza joint venture property. Interest expense
declined due to a decrease in the amortization of deferred loan fees, which
were fully amortized in 1994. In addition, general and administrative
expenses declined by $13,000 primarily due to lower general and
administrative expenses during the three months ended September 30, 1995,
as compared to 1994. All other expenses remained relatively constant.
13 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties
A description of the properties in which Registrant has an ownership
interest during the period covered by this report, along with occupancy
data, follows:
CENTURY PENSION INCOME FUND XXIII,
A California Limited Partnership
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
-------------------------
Nine Months Three Months
Ended Ended
Date of September 30, September 30,
Name and Location Purchase Type Size 1995 1994 1995 1994
- ----------------- -------- ---- ---- ---- ---- ---- ----
Commerce Plaza 03/86 Business 83,000 94 99 94 99
Tampa, Florida Park sq. ft.
Regency Centre 05/86 Shopping 124,000 99 99 99 99
Lexington, Kentucky Center sq. ft.
Highland Park Commerce
Center - Phase II 09/86 Business 67,000 92 91 92 96
Charlotte, North Carolina Park sq. ft.
Interrich Plaza (1) 04/88 Business 53,000 78 95 60 97
Richardson, Texas Park sq. ft.
Centre Stage
Shopping Center (2) 01/90 Shopping 96,000 97 94 97 94
Norcross, Georgia Center sq. ft.
Sunnymead Towne Center (3) 03/91 Shopping 173,000 91 91 91 91
Moreno Valley, California Center sq. ft.
The Enclaves
Apartments (4)(5) 04/91 Apartments 268 96 96 96 94
Atlanta, Georgia units
Medtronics (6) 04/95 Business 35,000
Irvine, California Park sq. ft. 100 - 100 -
14 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties (Continued)
Average
Occupancy Rate (%)
-------------------------
Nine Months Three Months
Ended Ended
Date of September 30, September 30,
Name and Location Purchase Type Size 1995 1994 1995 1994
- ----------------- -------- ---- ---- ---- ---- ---- ----
Coral Palm Plaza Joint
Venture:
Coral Palm Plaza 01/87 Shopping 135,000 73 86 80 87
Coral Springs, Florida Center sq. ft.
Minneapolis Business Parks
Joint Venture:
Alpha Business Center 05/87 Business 172,000 92 88 88 91
Bloomington, Minnesota Park sq. ft.
Plymouth Service Center 05/87 Business 74,000 95 98 85 100
Plymouth, Minnesota Park sq. ft.
Westpoint Business Center 05/87 Business 161,000 92 76 95 83
Plymouth, Minnesota Park sq. ft.
(1) Property was acquired through foreclosure of a mortgage loan
receivable in April 1988.
(2) Property was acquired through deed in lieu of foreclosure of a
mortgage loan receivable in January 1990.
(3) Property was acquired through foreclosure of a mortgage loan
receivable in March 1991.
(4) Property was acquired through foreclosure of a mortgage loan
receivable in April 1991.
(5) Property was formerly known as Valley Apartments.
(6) Property was acquired through deed in lieu of foreclosure of a
mortgage loan receivable in April 1995.
15 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2. NPI, Inc. Stock Purchase Agreement dated as of August 17,
1995 incorporated by reference to Exhibit 2 to
Registrant's Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 24, 1995.
(b) Report on Form 8-K
On August 24, 1995, Registrant filed a Current Report on Form
8-K with the Securities and Exchange Commission with respect
to the sale of the stock of NPI, Inc. (Item 1, Change in
Control).
16 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
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 PENSION INCOME FUND XXIII,
A California Limited Partnership
By: FOX PARTNERS V
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION
A General Partner
/S/ ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
17 of 18
CENTURY PENSION INCOME FUND XXIII - FORM 10-Q - SEPTEMBER 30, 1995
A California Limited Partnership
EXHIBIT INDEX
Exhibit Page No.
2. NPI, Inc. Stock Purchase Agreement *
dated August 17, 1995
* Incorporated by reference to Exhibit 2 to Registrant's Current Report on
Form 8-K filed with the Securities and Exchange Commission on August 24,
1995.
18 of 18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century Pension Income
Fund XXIII and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 6,280,000 <F1>
<SECURITIES> 0
<RECEIVABLES> 1,137,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 96,274,000
<DEPRECIATION> (25,541,000) <F2>
<TOTAL-ASSETS> 81,777,000
<CURRENT-LIABILITIES> 0
<BONDS> 87,248,000 <F3>
<COMMON> 0
0
0
<OTHER-SE> (15,807,000)
<TOTAL-LIABILITY-AND-EQUITY> 81,777,000
<SALES> 0
<TOTAL-REVENUES> 8,571,000
<CGS> 0
<TOTAL-COSTS> 6,802,000 <F4>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,935,000
<INCOME-PRETAX> (3,298,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,298,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,298,000)
<EPS-PRIMARY> (33.74)
<EPS-DILUTED> (33.74)
<FN>
<F1> Cash includes restricted cash of $168,000.
<F2> Depreciation includes an allowance for impairment of value of $7,091,000.
<F3> Bonds include deferred interest payable of $28,353,000.
<F4> Total costs includes a loss on satisfaction of mortgage loan receivable
of $978,000.
</FN>
</TABLE>
