FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 312905, eff. 4/26/93.)
UNITED STATES
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, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from.........to.........
(Amended by Exchange Act Rel. No. 312905, eff. 4/26/93.)
Commission file number 0-15710
CENTURY PENSION INCOME FUND XXIV
(Exact name of registrant as specified in its charter)
California 94-2984976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
(864) 239-1000
(Registrant's telephone number)
Indicate by check mark whether the 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CENTURY PENSION INCOME FUND XXIV
BALANCE SHEETS
(in thousands, except unit data)
June 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 1,959 $ 2,190
Deferred leasing commissions, net 147 134
Receivables and other assets 388 206
Investments in unconsolidated joint 7,577 7,383
Investment properties:
Real estate 17,771 17,737
Accumulated depreciation (3,464) (3,226)
14,307 14,511
$ 24,378 $ 24,424
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 139 $ 106
Partners' Capital
General partner's -- --
Limited partners' (73,341 units issued and
outstanding at June 30, 1996, and
December 31, 1995) 24,239 24,318
Total partners' capital 24,239 24,318
$ 24,378 $ 24,424
Note: The balance sheet at December 31, 1995, has been derived
from the audited financial statements at that date but does
not include all of the information and footnotes required
by generally accepted accounting principles for complete
financial statements.
See Accompanying Notes to Financial Statements
b) CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 493 $ 479 $ 1,072 $ 969
Other income 25 31 53 49
Equity in income of
unconsolidated joint
ventures 92 237 156 333
Total revenues 610 747 1,281 1,351
Expenses:
Operating 138 132 247 241
General and administrative 155 133 319 256
Depreciation 120 109 238 219
Total expenses 413 374 804 716
Net income $ 197 $ 373 $ 477 $ 635
Net income allocated to
general partner $ 3 $ 3 $ 6 $ 6
Net income allocated to
limited partners 194 370 471 629
$ 197 $ 373 $ 477 $ 635
Net income per limited
partnership unit $ 2.64 $ 5.04 $ 6.42 $ 8.58
Cash distributions per
limited partnership unit $ 3.75 $ 3.75 $ 7.50 $ 7.50
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
c) CENTURY PENSION INCOME FUND XXIV
STATEMENT OF PARTNERS' CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner's Partners' Total
<S> <C> <C> <C> <C>
Original capital contributions 73,341 $ -- $ 36,671 $ 36,671
Partners' capital
at December 31, 1995 73,341 $ -- $ 24,318 $ 24,318
Net income for the six
months ended June 30, 1996 -- 6 471 477
Distributions to partners -- (6) (550) (556)
Partners' capital
at June 30, 1996 73,341 $ -- $ 24,239 $ 24,239
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 477 $ 635
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 238 219
Amortization of lease commissions 21 18
Equity in income of unconsolidated joint
ventures' operations (156) (333)
Change in accounts:
Deferred leasing commissions paid (34) (66)
Receivables and other assets (182) (25)
Accrued expenses and other liabilities 33 (21)
Net cash provided by operating activities 397 427
Cash flows from investing activities:
Property improvements and replacements (34) (385)
(Contributions to) distributions received from
unconsolidated joint venture (38) 574
Net cash (used in) provided by investing
activities (72) 189
Cash flows from financing activities:
Distributions to partners (556) (556)
Net cash used in financing activities (556) (556)
(Decrease) increase in cash and cash equivalents (231) 60
Cash and cash equivalents at beginning of period 2,190 2,038
Cash and cash equivalents at end of period $ 1,959 $ 2,098
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
e) CENTURY PENSION INCOME FUND XXIV
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Fox Capital Management Corporation ("FCMC" or the "Managing
General Partner"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 1996, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1996. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's annual report on
Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Note B - 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 payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with affiliates of Insignia Financial Group, Inc.
("Insignia"), National Property Investors, Inc. ("NPI"), and affiliates of NPI
were charged to expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Partnership management fee (included in general
and administrative expenses) $ 62,000 $ 62,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 101,000 48,000
</TABLE>
For the period from January 19, 1996, to June 30, 1996, the Partnership insured
its properties under a master policy through an agency and insurer unaffiliated
with the Managing General Partner. An affiliate of the Managing General Partner
acquired, in the acquisition of a business, certain financial obligations from
an insurance agency which was later acquired by the agent who placed the current
year's master policy. The current agent assumed the financial obligations to
the affiliate of the Managing General Partner who received payments on these
obligations from the agent. The amount of the Partnership's insurance premiums
accruing to the benefit of the affiliate of the Managing General Partner by
virtue of the agent's obligations is not significant.
For the period ended June 30, 1995, an affiliate of NPI was paid a fee of
$16,000 ($5,000 allocated to the Partnership) relating to the successful real
estate tax appeal on the Partnership's Coral Palm Plaza and Minneapolis Business
Park joint venture properties. This fee is included in operating expenses.
The general partner received cash distributions of $6,000 during the six months
ended June 30, 1996 and 1995.
Fox Partners VI, a California general partnership, is the general partner. The
general partners of Fox Partners VI are FCMC, a California corporation, and Fox
Realty Investors ("FRI"), a California general partnership.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia acquired (i) control of NPI Equity Investments II, Inc.,
the managing general partner of FRI, and (ii) all of the issued and outstanding
shares of stock of FCMC. In connection with these transactions, affiliates of
Insignia appointed new officers and directors of NPI Equity Investments II, Inc.
and FCMC.
Note C - Investments In Unconsolidated Joint Ventures
The Partnership has investments in two unconsolidated joint ventures as follows:
Coral Palm Plaza Joint Venture
On January 21, 1987, the Partnership acquired a 33.33% ownership interest in
Coral Palm Plaza Joint Venture ("Coral Palm"), a joint venture with Century
Pension Income Fund XXIII, a California Limited Partnership ("CPIF XXIII") and
an affiliate of FCMC and FRI. Also, on January 23, 1987, Coral Palm Plaza Joint
Venture acquired the Coral Palm Plaza, a shopping center located in Coral
Springs, Florida. The Partnership's interest in the Coral Palm Plaza Joint
Venture is reported using the equity method of accounting.
Minneapolis Business Parks Joint Venture
On April 30, 1987, the Partnership acquired a 32% ownership interest in
Minneapolis Business Parks Joint Venture, a joint venture with CPIF XXIII. On
May 5, 1987, Minneapolis Business Parks Joint Venture acquired Alpha Business
Center located in Bloomington, Minnesota, Plymouth Service Center located in
Plymouth, Minnesota, and Westpoint Business Center located in Plymouth,
Minnesota. The Partnership's interest in the Minneapolis Business Parks Joint
Venture is reported using the equity method of accounting.
The following are the balance sheets as of June 30, 1996, and December 31, 1995,
and condensed statements of operations for the three and six months ended June
30, 1996 and 1995, of Coral Palm Plaza Joint Venture.
CORAL PALM PLAZA JOINT VENTURE
BALANCE SHEETS
(in thousands)
June 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 335 $ 263
Deferred leasing commissions, net 150 154
Receivables and other assets, net of
allowance of $116 and $0, respectively 110 270
Investment properties:
Real estate 9,471 9,049
Less accumulated depreciation (3,130) (3,046)
6,341 6,003
$ 6,936 $ 6,690
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 450 $ 345
Partners' Capital:
Century Pension Income Fund XXIII 4,324 4,231
Century Pension Income Fund XXIV 2,162 2,114
Total partners' capital 6,486 6,345
$ 6,936 $ 6,690
Note: The balance sheet at December 31, 1995, has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
Note C - Investments In Unconsolidated Joint Ventures - continued
CORAL PALM PLAZA JOINT VENTURE
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues $ 255 $ 673 $ 534 $ 946
Expenses:
Bad debt expense -- -- 116 --
Other expenses 171 176 388 358
Total expenses 171 176 504 $ 358
Net income $ 84 $ 497 $ 30 $ 588
Allocation of net income:
Century Pension
Income Fund XXIII $ 56 $ 331 $ 20 $ 392
Century Pension
Income Fund XXIV 28 166 10 196
$ 84 $ 497 $ 30 $ 588
</TABLE>
The following are the balance sheets as of June 30, 1996, and December 31, 1995,
and condensed statements of operations for the three and six months ended June
30, 1996 and 1995, of Minneapolis Business Parks Joint Venture.
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
BALANCE SHEETS
(in thousands)
June 30, December 31,
1996 1995
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 941 $ 159
Deferred leasing commissions, net 228 243
Receivables and other assets 181 193
Investment properties:
Real estate 20,474 20,467
Less accumulated depreciation (4,897) (4,603)
15,577 15,864
$ 16,927 $ 16,459
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 168 $ 157
Partners' Capital:
Century Pension Income Fund XXIII 11,344 11,033
Century Pension Income Fund XXIV 5,415 5,269
Total partners' capital 16,759 16,302
$ 16,927 $ 16,459
Note: The balance sheet at December 31, 1995, has been derived from the
audited financial statements at that date but does not include all
of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
Note C - Investments In Unconsolidated Joint Ventures - continued
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Rental and other revenues $ 751 $ 720 $ 1,517 $ 1,435
Expenses 551 497 1,060 1,007
Net income $ 200 $ 223 $ 457 $ 428
Allocation of net income:
Century Pension
Income Fund XXIII $ 136 $ 152 $ 311 $ 291
Century Pension
Income Fund XXIV 64 71 146 137
$ 200 $ 223 $ 457 $ 428
</TABLE>
Note D - Distributions to Partners
The Partnership distributed $556,000 in cash during the six month periods ended
June 30, 1996 and 1995 ($550,000 to limited partners and $6,000 to the general
partner).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of three wholly-owned shopping
centers, as well as three business parks and one shopping center owned by two
unconsolidated joint ventures between the Partnership and an affiliated
partnership. The following table sets forth the average occupancy of the
properties for the six months ended June 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Butler Square Center
Mauldin, South Carolina 98% 93%
Kenilworth Commons Shopping Center
Charlotte, North Carolina 100% 100%
Plantation Pointe Shopping Center
Smyrna, Georgia 98% 98%
Coral Palm Plaza (1)
Coral Springs, Florida 74% 67%
Alpha Business Center (2)
Bloomington, Minnesota 92% 95%
Plymouth Service Center (2)
Plymouth, Minnesota 100% 100%
Westpoint Business Center (2)
Plymouth, Minnesota 96% 91%
(1) Property is owned by Coral Palm Plaza Joint Venture, which is a joint
venture between the Partnership, which has a 33 1/3% interest, and an
affiliated partnership.
(2) Property is owned by Minneapolis Business Parks Joint Venture, which
is a joint venture between the Partnership, which has a 32% interest,
and an affiliated partnership.
The Managing General Partner attributes the increased occupancy at Butler Square
Shopping Center to the growing local economy which has been strongly influenced
by the introduction of two major employers into the market. In addition, Coral
Palm Plaza's occupancy increased due to the leasing in 1995 of all of the space
that became available when one tenant representing 23% of the building's space
negotiated a lease buy-out in 1994. Partially offsetting this increase in
occupancy at Coral Palm Plaza was the October 1995 lease buy-out and termination
agreement with another former tenant. The $300,000 termination payment has been
deferred and is being amortized into income on a straight-line basis over the
remainder of the former tenant's lease until the related unoccupied space is
leased again. Occupancy declined at Alpha Business Center as a result of one
tenant reducing its leasable space from 8% to 2% of the building at the end of
the second quarter of 1995. Finally, Westpoint Business Center's occupancy
increased due to a strong local market and the successful execution of new
leases representing approximately 9% of the business park's space since June 30,
1995.
The Partnership's net income for the six months ended June 30, 1996, was
approximately $477,000 versus $635,000 for the same period of 1995. The net
income for the three months ended June 30, 1996, was approximately $197,000
compared to net income of approximately $373,000 for the three months ended June
30, 1995. The decrease in net income is primarily attributable to a decrease in
equity in joint venture operations and an increase in general and administrative
expenses. The decrease in equity in joint venture operations is the result of
the recognition of income in June of 1995 relating to a lease buy-out at the
Partnership's unconsolidated joint venture property, Coral Palm Plaza. The
Managing General Partner accepted a lease buy-out of $800,000 in December 1994
from a significant tenant which occupied 27,000 square feet. During June 1995,
the Managing General Partner 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 ($172,000 allocated to the Partnership). As a result, other
income at Coral Palm Plaza decreased from the prior year, causing the decrease
in equity in joint venture operations. The increase in general and
administrative expenses is due to an increase in expense reimbursements related
to the transition of the partnership administration offices.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership had unrestricted cash of approximately
$1,959,000 as compared to $2,098,000 at June 30, 1995. Net cash provided by
operating activities decreased primarily due to the decrease in net income as
discussed above. The increase in receivables and other assets is primarily
attributable to the increase in common area maintenance receivables due to the
timing of billings. Net cash used in investing activities increased primarily
due to a distribution from unconsolidated joint ventures in 1995, as opposed to
a Partnership contribution to the Coral Palm Joint Venture in 1996. Partially
offsetting this increase in cash used in investing activities was a decrease in
property improvements and replacements due to 1995 tenant improvements at the
Partnership's Butler Square Center. Net cash used in financing activities
remained constant, representing distributions of $556,000 to the partners for
both six month periods ending June 30, 1996 and 1995.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical assets
and other operating needs of the Partnership. Such assets are currently thought
to be sufficient for any near-term needs of the partnership. The Partnership
distributed $1,111,000 to the partners (including $11,000 to the general
partner) during 1995 and $556,000 to the partners (including $6,000 to the
general partner) in the six months ended June 30, 1996. Future cash
distributions will depend on the levels of cash generated from operations,
property sales, and the availability of cash reserves, however, quarterly
distributions are expected to continue throughout 1996. The level of such
distributions will be contingent upon successful future operations.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K: None filed during the quarter ended June
30, 1996.
SIGNATURES
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 XXIV
By: FOX PARTNERS VI
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Its Managing General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: August 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Pension Income Fund XXIV 1996 Second Quarter 10-Q and is qualified in its
entirety by reference to such 10-Q filing.
</LEGEND>
<CIK> 0000780590
<NAME> CENTURY PENSION INCOME FUND XXIV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,959
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 17,771
<DEPRECIATION> 3,464
<TOTAL-ASSETS> 24,378
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 24,239
<TOTAL-LIABILITY-AND-EQUITY> 24,378
<SALES> 0
<TOTAL-REVENUES> 1,281
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 804
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 477
<EPS-PRIMARY> 6.42<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
