FORM 10-K - ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel No. 34-31905, eff. 10/26/93.)
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from___________to____________
Commission file number 0-15710
CENTURY PENSION INCOME FUND XXIV
California 94-2984976
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Individual Investor Units and Pension Investor Notes
(Title of each class)
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K contained herein, and will not be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K X
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of filing. Market
value information for Registrants's Partnership Interests is not available.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Business
Century Pension Income Fund XXIV (the "Partnership" or "Registrant") was
organized in June 1984 as a California limited partnership under the Uniform
Limited Partnership Act of the California Corporations Code. Fox Partners VI, a
California general partnership, is the general partner of the Registrant. Fox
Capital Management Corporation (the "Managing General Partner") and Fox Realty
Investors ("FRI") are the general partners of Fox Partners VI.
The Registrant's Registration Statement, filed pursuant to the Securities Act of
1933 (No. 33-1261), was declared effective by the Securities and Exchange
Commission on June 9, 1986. The Registrant marketed its securities pursuant to
its Prospectus dated June 9, 1986, which was thereafter supplemented
(hereinafter the "Prospectus"). This Prospectus was filed with the Securities
and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933.
The principal business of the Registrant is to acquire, manage and ultimately
sell income-producing real properties. The Registrant is a "closed" limited
partnership real estate syndicate of the unspecified asset type.
Beginning in July 1986, the Registrant offered $50,000,000 in Limited
Partnership Assignee Units. The offering was completed on March 31, 1988, with
Limited Partnership Assignee Units having an initial price of $36,670,500 being
sold. The net proceeds of this offering were used to acquire three properties
and interests in four other properties through two joint ventures with an
affiliated partnership. The Registrant's property portfolio is geographically
diversified with properties acquired in five states. See "Item 2, Properties"
below for a description of the Registrant's properties.
The Registrant is involved in only one industry segment as described above. The
Registrant does not engage in any foreign operations or derive revenues from
foreign services.
Both the income and expenses of operating the properties which are owned by the
Registrant are subject to factors beyond the Registrant's control, such as
oversupply of similar rental facilities as a result of overbuilding, increases
in unemployment or population shifts, changes in zoning laws or changes in
patterns of needs of the users. Expenses, such as local real estate taxes and
management expenses, are subject to change and cannot always be reflected in
rental increases due to market conditions or existing leases. The profitability
and marketability of developed real property may be adversely affected by
changes in general and local economic conditions and in prevailing interest
rates, and favorable changes in such factors will not necessarily enhance the
profitability or marketability of such property. Even under the most favorable
market conditions there is no guarantee that any property owned by the
Registrant can be sold by it or, if sold, that such sale can be made upon
favorable terms.
It is possible that legislation on the state or local level may be enacted in
states where the Registrant's properties are located which may include some form
of rent control. There have been, and it is possible there may be other,
Federal, state and local legislation and regulations enacted relating to the
protection of the environment. The Managing General Partner is unable to
predict the extent, if any, to which such existing or new legislation or
regulations might adversely affect the properties owned by the Registrant.
The Registrant monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain
cases environmental testing has been performed, which resulted in no material
adverse conditions or liabilities. In no case has the Registrant received
notice that it is a potentially responsible party with respect to an
environmental clean up site.
A further description of the Partnership's business is included in "Item 7.
Management's Discussion and Analysis of Financial Condition and Results of
Operations" included in this Form 10-K.
The Registrant has no employees. Management and administrative services are
performed by the Managing General Partner, Insignia Commercial Group, L.P., an
affiliate of Insignia Financial Group, Inc. ("Insignia"), the ultimate parent
company of the Managing General Partner, and a third party management company.
Pursuant to a management agreement between them, Insignia Commercial Group,
L.P., and a third party management company provide property management services
to the Registrant.
The real estate business in which the Partnership is engaged is highly
competitive, and the Partnership is not a significant factor in this industry.
The Registrant's properties are subject to competition from similar properties
in the vicinity in which the properties are located. In addition, various
limited partnerships have been formed by the General Partners and/or their
affiliates to engage in business which may be competitive with the Registrant.
In January 1995, the Registrant's Coral Palm Plaza joint venture in which the
Registrant has a one-third interest received an $800,000 payment from a former
significant tenant that had occupied 27,000 square feet at Coral Palm Plaza.
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 fee as rental income in 1995, which
represents the amortization of the fee prior to the new tenants' lease
commencement dates.
In addition, in October 1995, the Coral Palm Plaza Joint Venture accepted a
lease buy-out from a tenant that occupied 11,300 square feet of space for
$300,000. Management is currently attempting to release the vacated space.
From March 1988 through December 1993, the Registrant's affairs were managed by
Metric Management, Inc. ("MMI") or a predecessor. On December 16, 1993, the
services agreement with MMI was modified and, as a result thereof, the Managing
General Partner began directly providing real estate advisory and asset
management services to the Registrant. As advisor, such affiliate provides all
partnership accounting and administrative services, investment management, and
supervisory services over property management and leasing.
On December 6, 1993, the shareholders of the Managing General Partner entered
into a Voting Trust Agreement with NPI Equity Investments II, Inc. ("NPI Equity
II") pursuant to which NPI Equity II was granted the right to vote 100% of the
outstanding stock of the Managing General Partner. In addition, NPI Equity II
became the managing partner of FRI. As a result, NPI Equity II indirectly
became responsible for the operation and management of the business and affairs
of the Registrant and the other investment partnerships originally sponsored by
the Managing General Partner and/or FRI. The individuals who had served
previously as partners of FRI and as officers and directors of the Managing
General Partner contributed their general partnership interests in FRI to a
newly formed limited partnership, Portfolio Realty Associates, L.P. ("PRA"), in
exchange for limited partnership interests in PRA. The shareholders of the
Managing General Partner and the prior partners of FRI, in their capacity as
limited partners of PRA, continue to hold, indirectly, certain economic
interests in the Registrant and such other investment limited partnerships, but
have ceased to be responsible for the operation and management of the Registrant
and such other partnerships.
On January 19, 1996, IFGP Corporation, an affiliate of Insignia, acquired for
$1,000,000 all of the issued and outstanding shares of capital stock of National
Property Investors, Inc. ("NPI"). NPI is the sole shareholder of NPI Equity II,
the Managing General Partner of FRI, and the entity which controlled the
Managing General Partner. In addition, on June 1996, an affiliate of Insignia
purchased all of issued and outstanding shares of capital stock of the Managing
General Partner. As a result of the foregoing transactions, IFGP Corporation
caused new officers and directors of NPI Equity II and the Managing General
Partner to be elected. See "Item 10, Directors and Executive Officers of the
Registrant."
Item 2. Properties
The following table sets forth the Partnership's investments in properties:
Date of
Property Purchase Type Size
Butler Square Center 01/88 Shopping 80,000
Mauldin, South Carolina Center sq.ft.
Kenilworth Commons Shopping Center 08/88 Shopping 38,000
Charlotte, North Carolina Center sq.ft.
Plantation Pointe Shopping Center 04/89 Shopping 63,000
Smyrna, Georgia Center sq.ft.
The Partnership owns 33 1/3% of a joint venture, Coral Palm Plaza Joint Venture,
with Century Pension Income Fund XXIII, an affiliated partnership. The joint
venture owns one property, Coral Palm Plaza, located in Coral Springs, Florida.
The Partnership owns 32% of a joint venture, Minneapolis Business Parks Joint
Venture, with Century Pension Income Fund XXIII, an affiliated partnership. The
joint venture owns three properties, Alpha Business Center, Plymouth Service
Center and Westpoint Business Center, all of which are located in Minnesota.
Schedule of Properties (in thousands):
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
Butler Square $ 6,709 $ 1,689 3-39 yrs S/L $ 5,549
Kenilworth Commons 4,564 804 5-39 yrs S/L 3,992
Plantation Pointe 6,503 1,211 4-39 yrs S/L 5,605
$17,776 $ 3,704 $15,146
See "Note A" of the financial statements included in "Item 8" for a description
of the Partnership's depreciation policy.
Schedule of Average Rental Rates and Occupancy
Average Annual Rental Rates Average Annual Occupancy
Property 1996 1995 1996 1995
Butler Square $ 8.28 sq.ft. $ 7.46 sq.ft. 99% 94%
Kenilworth Commons 12.28 sq.ft. 12.19 sq.ft. 100% 100%
Plantation Pointe 9.21 sq.ft. 9.03 sq.ft. 98% 98%
The Managing General Partner attributes the increased occupancy at Butler Square
Shopping Center primarily to the growing local economy which has been strongly
influenced by the introduction of two major employers into the market.
As noted under "Item 1. Business," the real estate industry is highly
competitive. All of the properties of the Partnership are subject to
competition from other commercial buildings in the area. The Managing General
Partner believes that all of the properties are adequately insured.
The following is a schedule of the lease expirations at the Registrant's
properties for the years beginning 1997 through the maturities of current
leases:
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
Butler Square
1997 2 2,900 $ 37,000 5.67%
1998 3 5,075 54,000 8.17%
1999 8 27,656 225,000 34.20%
2000 1 6,000 39,000 5.93%
2007 1 38,654 303,000 46.03%
Kenilworth Commons
1997 3 3,211 63,000 13.10%
1998 2 2,259 46,000 9.67%
1999 2 2,284 45,000 9.32%
2000 1 1,125 21,000 4.35%
2001 2 2,267 49,000 10.28%
2008 1 26,000 234,000 48.92%
Plantation Pointe
1997 3 5,650 82,000 14.21%
1998 2 4,880 78,000 13.44%
2000 1 2,030 29,000 5.07%
2001 1 4,435 50,000 8.64%
2008 1 44,000 308,000 53.31%
Real estate taxes (in thousands) and rates in 1996 for each property were:
1996 1996
Billing Rate
Butler Square $ 66 24.92%
Kenilworth Commons 42 1.26%
Plantation Pointe 53 4.11%
SIGNIFICANT TENANTS (1)
December 31, 1996
Annualized
Square Nature of Expiration Base Rent
Footage Business of Lease Per Year
Butler Square Center
Bi-Lo Inc. 38,654 Grocer 2007 $302,660
Revco D.S. 8,470 Retail 1999 $ 59,290
Kenilworth Commons Shopping Center
Harris-Teeter 26,000 Grocer 2008 $234,000
Plantation Pointe Shopping Center
Winn Dixie 44,000 Grocer 2008 $308,000
(1) Tenant occupying 10% or more of total rentable square footage of the
property.
Item 3. Legal Proceedings
The Registrant is unaware of any pending or outstanding litigation that is not
of a routine nature. The Managing General Partner of the Registrant believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.
Item 4. Submission of Matter to a Vote of Security Holders
During the year ended December 31, 1996, no matter was submitted to a vote of
unit holders through the solicitation of proxies or otherwise.
PART II
Item 5. Market for the Registrant's Equity and Related Security
Holder Matters
The Partnership, a publicly-held limited partnership, sold 73,341 Limited
Partnership Assignee Units aggregating $36,670,500. The Partnership currently
has 73,341 units outstanding and 3,982 partners of record. There is no
intention to sell additional Limited Partnership Assignee Units nor is there an
established market for these units.
During the years ended December 31, 1996 and 1995, the Partnership distributed
quarterly distributions totaling approximately $1,111,000 to the partners. The
limited partners received approximately $1,100,000 ($15.00 per limited
partnership units) and the general partner received approximately $11,000. The
amounts represent a distribution of cash from operations.
Item 6. Selected Financial Data
The following represents selected financial data for the Registrant, for the
years ended December 31, 1996, 1995, 1994, 1993, and 1992. The data should be
read in conjunction with the consolidated financial statements included
elsewhere herein. This data is not covered by the independent auditors' report.
For the Year Ended December 31,
1996 1995 1994 1993 1992
(in thousands except per unit data)
Total revenues $ 2,673 $ 2,519 $ 522 $ 1,897 $ 1,221
Net income (loss) $ 986 $ 1,017 $ (871)$ 567 $ 873
Net income (loss) per
limited partnership
assignee unit (1) $ 13.30 $ 13.44 $(11.75)$ 7.54 $ 11.43
Total Assets $24,333 $24,424 $24,566 $26,551 $27,386
Cash distribution per limited
partnership assignee units $ 15.00 $ 15.00 $ 15.00 $ 18.75 $ 21.24
(1) $500 original contribution per unit, based on weighted average units
outstanding during the period after giving effect to the allocation of net
income (loss) to the general partner.
Item 7. 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 Registrant's real estate properties consist of three shopping center
properties and investments in two unconsolidated joint ventures. The three
shopping centers are located in South Carolina, North Carolina and Georgia. The
unconsolidated joint venture properties include one shopping center in Florida
and three business parks in Minnesota. The properties are leased to tenants
subject to leases with remaining lease terms of up to twelve years. The
Registrant receives rental income from its properties and is responsible for
operating expenses, administrative expenses and capital improvements. All of
the Registrant's properties generated positive cash flow for the year ended
December 31, 1996.
At December 31, 1996, the Partnership had unrestricted cash of approximately
$1,929,000 as compared to $2,190,000 at December 31, 1995. Net cash provided by
operating activities increased primarily due to the increase in accrued expenses
and other liabilities due to timing of payments to vendors. 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 Coral Palm 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
to the partners for both years ending December 31, 1996 and 1995.
The Registrant uses working capital reserves provided from any undistributed
cash flow from operations and distributions from unconsolidated joint ventures
as its primary source of liquidity. For the long term, cash from operations and
distributions from unconsolidated joint ventures will remain the Registrant's
primary source of liquidity.
The Partnership has no material capital programs scheduled to be performed in
1997, although certain routine capital expenditures and maintenance expenses
have been budgeted. These capital expenditures and maintenance expenses will be
incurred only if cash is available from operations or is received from the
capital reserve account.
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 a total of $1,111,000 to the partners during each of the years ended
December 31, 1996, 1995, and 1994. These distributions included $11,000 to the
general partner, and $1,100,000 ($15.00 per unit) to the limited partners.
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 1997. The level of
such distributions will be contingent upon successful future operations.
The business in which the Registrant is engaged is highly competitive, and the
Registrant is not a significant factor in its industry. Each investment
property is located in or near a major urban area and, accordingly, competes for
rentals not only with similar properties in its immediate area but with hundreds
of similar properties throughout the urban area. Such competition is primarily
on the basis of location, rents, services and amenities. In addition, the
Registrant competes with significant numbers of individuals and organizations
(including similar partnerships, real estate investment trusts and financial
institutions) with respect to the sale of improved real properties, primarily on
the basis of the prices and terms of such transactions.
Results of Operations
1996 Compared to 1995
The Partnership's net income for the year ended December 31, 1996, was
approximately $986,000 versus approximately $1,017,000 for the year ended
December 31, 1995. The decline in net income is attributable to a decrease in
equity in income of the unconsolidated 33.3% owned joint venture, and increases
in operating and general and administrative expenses. The decrease in equity in
joint venture operations is the result of the recognition of income in 1995
relating to a lease buy-out at the Partnership's unconsolidated joint venture
property, Coral Palm Plaza. In December 1994, Coral Palm Plaza accepted a lease
buy-out of $800,000 from a significant tenant that had occupied 27,000 square
feet. The payment was received in 1995. During 1995, Coral Palm Plaza re-
leased all of the unoccupied space, on similar terms, and recognized the
remaining portion of the lease buy-out in the amount of $699,000 as other
income.
Operating expense increased due to parking lot repairs and increased management
fees at Butler Square. Included in operating expense is approximately $21,000
of major repairs and maintenance comprised of exterior building, exterior
painting and parking lot for the year ended December 31, 1996. The increase in
general and administrative expenses is partially due to an increase in expense
reimbursements. The increase in expense reimbursements during the year ended
December 31, 1996, is directly attributable to the combined transition efforts
of the Greenville, South Carolina and Atlanta, Georgia administrative offices
during the year-end close, preparation of the 10-K and tax returns (including
the limited partner K-1's), filing for the first two quarterly reports and
transition of asset management responsibilities to the new administration. These
increases were partially offset by increased rental revenue at Butler Square due
to increased occupancy.
1995 Compared to 1994
Operating results improved by $1,888,000 for the year ended December 31, 1995,
as compared to 1994, due to an increase in revenues of $1,997,000, which was
only slightly offset by an increase in expenses of $109,000.
Revenues increased by $1,997,000 for the year ended December 31, 1995, as
compared to 1994, due to increases in equity in unconsolidated joint venture
operations of $1,752,000, rental income of $206,000 and interest income of
$19,000. Equity in unconsolidated joint ventures' operations increased due to
the Registrant's $1,500,000 allocated portion of the provision for impairment of
value recorded in 1994 on the Coral Palm Plaza joint venture property and the
recognition of the termination payment accepted from a major tenant at Coral
Palm Plaza in 1995. Rental income increased primarily due to increased rental
rates and occupancy at the Registrant's Butler Square Center property. Interest
income increased primarily due to an increase in average working capital
reserves available for investment.
Expenses increased by $109,000 for the year ended December 31, 1995, as compared
to 1994, due to increases in operating expenses of $76,000, general and
administrative expenses of $10,000 and depreciation expense of $23,000.
Operating expense increased primarily due to increased repairs and maintenance
and an increase in amortization of leasing commissions at the Registrant's
Butler Square Center property. Depreciation expense increased due to
significant tenant improvements at the Registrant's Butler Square Center
property. General and administrative expenses remained relatively constant.
During 1996, 1995, and 1994, the Registrant was allocated its equity income
(loss) in the operations of, and in 1995 and 1994, received cash distributions
from, the unconsolidated joint ventures. The financial statements for the
unconsolidated joint ventures are presented in Exhibit 99.1. The 1996 Results of
Operations compared to the 1995 Results of Operations was discussed above. A
discussion of their 1995 Results of Operations compared to their 1994 Results of
Operations follows:
Equity income from unconsolidated joint ventures' operations increased
$1,752,000 in 1995, as compared to 1994, primarily due to the recognition of the
termination payment accepted from a major tenant at the Registrant's Coral Palm
Plaza property and the provision for impairment recognized in 1994. Revenues at
Minneapolis Business Parks Joint Venture properties increased due to an increase
in occupancy at the joint venture's Alpha Business Center and Westpoint Business
Center properties and an increase in rental rates at all of the Registrant's
Minneapolis Business Park Joint Venture properties, which was only slightly
offset by a decrease in occupancy at the Registrant's Plymouth Service Center
property. Expenses increased at all of the Registrant's Minneapolis Business
Park Joint Venture properties due to an increase in repairs and maintenance.
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 expenses. 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.
Item 8. Financial Statements and Supplementary Data
CENTURY PENSION INCOME FUND XXIV,
List of Financial Statements
Independent Auditors' Reports
Balance Sheets - December 31, 1996 and 1995
Statements of Operations-Years Ended December 31, 1996, 1995 and 1994
Statements of Changes in Partners' Capital-Years Ended December 31,
1996, 1995 and 1994
Statements of Cash Flows-Years Ended December 31, 1996, 1995 and 1994
Notes to Financial Statements
To the Partners
Century Pension Income Fund XXIV,
A California Limited Partnership
Greenville, South Carolina
Independent Auditors' Report
We have audited the accompanying balance sheets of Century Pension Income Fund
XXIV, A California Limited Partnership (the "Partnership") as of December 31,
1996 and 1995, and the related statements of operations, partners' capital and
cash flows for each of the three years in the period ended December 31, 1996.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Century Pension Income Fund
XXIV, A California Limited Partnership, as of December 31, 1996 and 1995, and
the results of its operations and its cash flows for each of the three years in
the period ended December 31, 1996 in conformity with generally accepted
accounting principles.
/s/ Imowitz Koenig & Co., LLP
New York, N.Y.
February 18, 1997
CENTURY PENSION INCOME FUND XXIV
BALANCE SHEETS
(in thousands, except unit data)
December 31,
1996 1995
Assets
Cash and cash equivalents $ 1,929 $ 2,190
Receivables and other assets 488 340
Investments in unconsolidated joint ventures 7,844 7,383
Investment properties:
Land 4,397 4,410
Buildings & related personal property 13,379 13,327
17,776 17,737
Less accumulated depreciation (3,704) (3,226)
14,072 14,511
$ 24,333 $ 24,424
Liabilities and Partners' Capital
Liabilities
Accrued expenses and other liabilities $ 140 $ 106
Partners' Capital
General partners' -- --
Limited partners' (73,341 units issued and
outstanding at December 31, 1996 and 1995) 24,193 24,318
Total partners' capital 24,193 24,318
$ 24,333 $ 24,424
See Accompanying Notes to Financial Statements
CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1996 1995 1994
Revenues:
Rental income $2,133 $1,895 $ 1,689
Other income 117 117 78
Total revenues 2,250 2,012 1,767
Expenses (including $249, $236 and $221 paid
to the general partner and affiliates in
1996, 1995 and 1994):
Operating 553 528 457
General and administrative 656 512 497
Depreciation 478 462 439
Total expenses 1,687 1,502 1,393
Equity in income (loss) of unconsolidated
joint ventures 423 507 (1,245)
Net income (loss) $ 986 $1,017 $ (871)
Net income (loss) allocated to
general partner $ 11 $ 31 $ (9)
Net income (loss) allocated to
limited partners 975 986 (862)
$ 986 $1,017 $ (871)
Net income (loss) per limited
partnership unit $13.30 $13.44 $(11.75)
Distribution per limited partnership unit $15.00 $15.00 $ 15.00
See Accompanying Notes to Financial Statements
CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner's Partners' Total
Original capital contributions 73,341 $ -- $ 36,671 $ 36,671
Partners' capital
at January 1, 1994 73,341 $ -- $ 26,394 $ 26,394
Net loss for the year ended
December 31, 1994 (9) (862) (871)
Distributions to partners (11) (1,100) (1,111)
Partners' Capital at
December 31, 1994 73,341 (20) 24,432 24,412
Net income for the year ended
December 31, 1995 31 986 1,017
Distributions to partners (11) (1,100) (1,111)
Partners' capital
at December 31, 1995 73,341 -- 24,318 24,318
Net income for the year ended
December 31, 1996 11 975 986
Distributions to partners (11) (1,100) (1,111)
Partners' capital
at December 31, 1996 73,341 $ -- $ 24,193 $ 24,193
See Accompanying Notes to Financial Statements
CENTURY PENSION INCOME FUND XXIV
STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1996 1995 1994
Cash flows from operating activities:
Net income (loss) $ 986 $ 1,017 $ (871)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 522 500 459
Equity in income of unconsolidated joint
ventures' operations (423) (507) 1,245
Change in accounts:
Receivables and other assets (192) (91) (90)
Accrued expenses and other liabilities 34 (48) (3)
Net cash provided by operating activities 927 871 740
Cash flows from investing activities:
Property improvements and replacements (39) (413) (60)
Distributions received from
unconsolidated joint ventures -- 805 150
Contributions to unconsolidated joint ventures (38) -- --
Proceeds from cash investments -- -- 1,283
Net cash (used in) provided by
investing activities (77) 392 1,373
Cash flows from financing activities:
Distributions to partners (1,111) (1,111) (1,111)
Net cash used in financing activities (1,111) (1,111) (1,111)
(Decrease) increase in cash and cash equivalents (261) 152 1,002
Cash and cash equivalents at beginning of period 2,190 2,038 1,036
Cash and cash equivalents at end of period $ 1,929 $ 2,190 $ 2,038
See Accompanying Notes to Financial Statements
Century Pension Income Fund XXIV
Notes to Financial Statements
December 31, 1996
Note A - Organization And Summary Of Significant Accounting Policies
Century Pension Income Fund XXIV (the "Partnership") is a limited partnership
organized in 1984 under the laws of the State of California to acquire, manage
and ultimately sell income-producing real estate. The Partnership currently owns
three shopping centers located in South Carolina, North Carolina and Georgia.
The Partnership also holds joint venture interests in a shopping center in
Florida and in three business parks in Minnesota. The general partner is Fox
Partners VI, a California general partnership, whose general partners are Fox
Capital Management Corporation ("FCMC"), a California corporation and Fox Realty
Investors ("FRI"), a California general partnership. The capital contributions
of $36,670,500 ($500 per assignee unit) were made by Limited Partnership
Assignee Unit Holders.
On December 6, 1993, the shareholders of FCMC entered into a Voting Trust
Agreement with NPI Equity Investments II, Inc. ("NPI Equity" or the "Managing
General Partner") pursuant to which NPI Equity was granted the right to vote 100
percent of the outstanding stock of FCMC and NPI Equity became the managing
general partner of FRI. As a result, NPI Equity became responsible for the
operation and management of the business and affairs of the Partnership and the
other investment partnerships originally sponsored by FCMC and/or FRI. NPI
Equity is a wholly-owned subsidiary of National Property Investors, Inc. ("NPI,
Inc."). The shareholders of FCMC and the partners in FRI retain indirect
economic interests in the Partnership and such other investment limited
partnerships, but have ceased to be responsible for the operation and management
of the Partnership and such other partnerships.
On January 19, 1996, the stockholders of NPI, Inc. sold all of the issued and
outstanding stock of NPI, Inc. to an affiliate of Insignia Financial Group, Inc.
("Insignia"). In addition, on June 1996, an affiliate of Insignia purchased all
of issued and outstanding shares of capital stock of the Managing General
Partner. As a result of the foregoing transactions, IFGP Corporation caused new
officers and directors of NPI Equity II and the Managing General Partner to be
elected. See "Item 10, Directors and Executive Officers of the Registrant."
Basis of Presentation:
The Partnership's investments in unconsolidated joint ventures are accounted for
under the equity method of accounting.
Distributions:
Cash distributions from operations were made at annualized rates of 3.0 percent
of original capital contributions for each of the years 1996, 1995 and 1994.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with a maturity, when
purchased, of three months or less at the time of purchase to be cash
equivalents.
Leases:
The Partnership leases certain commercial space to tenants under various lease
terms. The leases are accounted for as operating leases in accordance with
"Financial Accounting Standards Board Statement No. 13."
Some of the leases contain stated rental increases during their term. For
leases with fixed rental increases, rents are recognized on a straight-line
basis over the terms of the lease. This straight-line basis recognized $39,000
more in rental income than was collected in 1996. This amount will be collected
in future years as cash collections under the terms of the leases exceed the
straight-line basis of revenue recognition.
For all other leases, minimum rents are recognized over the terms of the leases.
Concentration of Credit Risk:
The Partnership maintains cash balances at institutions insured up to $100,000
by the Federal Deposit Insurance Corporation. Balances in excess of $100,000
are usually invested in money market accounts and repurchase agreements, which
are collateralized by United States Treasury obligations. At certain times, the
cash balances may exceed these insured levels.
Fair Value
In 1995, the Partnership implemented "Statement of Financial Accounting
Standards ("SFAS") No. 107, Disclosures about Fair Value of Financial
Instruments," as amended by "SFAS No. 119, Disclosures about Derivative
Financial Instruments and Fair Value of Financial Instruments," which requires
disclosure of fair value information about financial instruments for which it is
practicable to estimate fair value. The carrying amount of the Partnership's
cash and cash equivalents approximates fair value due to their short-term
maturities.
Real Estate:
Real estate is stated at cost. Acquisition fees are capitalized as a cost of
real estate. In 1995, the Partnership adopted "SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
which requires impairment losses to be recognized for long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows are not sufficient to recover the asset's carrying amount. The impairment
loss is measured by comparing the fair value of the asset to its carrying
amount. The adoption of the SFAS had no effect on the Partnership's financial
statements.
Depreciation:
Depreciation is computed by the straight-line method over estimated useful lives
ranging from 30 to 39 years for buildings and improvements and three to six
years for furnishings.
Deferred Leasing Commissions:
Leasing commissions are deferred and amortized over the lives of the related
leases. At December 31, 1996 and 1995, accumulated amortization of deferred
leasing commissions totaled $71,000 and $72,000, respectively.
Net Income (Loss) Per Limited Partnership Assignee Unit:
Net income (loss) per limited partnership assignee unit is computed by dividing
the net income (loss) allocated to the unit holders by 73,341 units outstanding.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Net Income Allocation:
In accordance with the partnership agreement, the general partner was allocated
its one percent continuing interest in the Partnership's net loss and taxable
loss and cash distributions. Net income and taxable income have been allocated
to the general partner in an amount equal to the amount of cash distributions
received by the general partner.
Reclassification:
Certain reclassifications have been made to the 1995 and 1994 balances 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 the Managing General Partner were
charged to expense in 1996, 1995 and 1994 (in thousands):
For the Year Ended
December 31,
1996 1995 1994
Partnership management fee (included in general
and administrative expenses) (i) $123 $123 $123
Real estate tax reduction fees -- 16 10
Reimbursement for services of affiliates (included
in general and administrative expenses) 126 97 88
(i) The Partnership Agreement provides for the payment of a partnership
management fee to the general partner equal to ten percent of cash available
for distribution. This management fee is intended to defray some of the
expenses related to services provided by the general partner, or an
affiliate, but not reimbursed by the Partnership.
For the period from January 19, 1996, to December 31, 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.
The general partner received cash distributions of $11,000 during the year ended
December 31, 1996, 1995, and 1994.
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 23, 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.
Summary financial information for Coral Palm Plaza Joint Venture is as follows
(in thousands):
December 31,
1996 1995
Total assets $ 7,301 $ 6,690
Total liabilities (468) (345)
Total ventures' equity $ 6,833 $ 6,345
December 31,
1996 1995
Total revenues $ 1,183 $ 1,656
Total expenses (807) (853)
Net income $ 376 $ 803
In 1996, the Partnership paid contributions of approximately $38,000 to the
Joint Venture. In 1995, the Partnership received distributions of approximately
$323,000 from the Joint Venture.
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.
Summary financial information for Minneapolis Business Park Joint Venture is as
follows (in thousands):
December 31,
1996 1995
Total assets $17,412 $16,459
Total liabilities (176) (157)
Total ventures' equity $17,236 $16,302
December 31,
1996 1995
Total revenues $ 3,136 $ 2,881
Total expenses (2,202) (2,133)
Net income $ 934 $ 748
In 1996, the Partnership did not receive a distribution from the Joint Venture.
In 1995, the Partnership received distributions of approximately $482,000 from
the Joint Venture.
Note D - Minimum Future Rental Revenues
Minimum future rental revenues from operating leases having non-cancelable lease
terms in excess of one year at December 31, 1996, are as follows (in thousands):
1997 $ 1,582
1998 1,428
1999 1,198
2000 961
2001 892
Thereafter 5,354
Total $11,415
The Partnership had one tenant at each of its properties whose rental revenue
was in excess of 10% of total Partnership rental revenue. At December 31, 1996,
1995 and 1994, the percentages were as follows:
Percentage of Total Rental Revenue
1996 1995 1994
Butler Square Center 14% 18% 15%
Kenilworth Commons Shopping Center 11% 15% 18%
Plantation Pointe Shopping Center 14% 18% 20%
Amortization of leasing commissions totaled $44,000, $38,000 and $20,000 in
1996, 1995 and 1994, respectively.
Note E - Reconciliation To Income Tax Method Of Accounting
The differences between the accrual method of accounting for income tax
reporting and the accrual method of accounting used in the financial statements
are as follows (in thousands):
1996 1995 1994
Net income (loss) - financial statements $ 986 $ 1,017 $ (871)
Differences resulted from:
Depreciation 132 130 114
Equity in unconsolidated joint ventures' operations (16) (178) 1,819
Other (38) (2) 3
Net income - income tax method $ 1,064 $ 967 $ 1,065
Taxable income per limited partnership assignee unit
after giving effect to the allocation to the general
partner $ 14 $ 13 $ 14
Partner's equity - financial statements $24,193 $24,318 $24,412
Differences resulted from:
Sales commissions 3,050 3,050 3,050
Organization expenses 2,452 2,452 2,452
Depreciation 961 829 699
Payments credited to rental properties 112 112 112
Equity in unconsolidated joint ventures' operations 3,534 3,550 3,728
Other (44) (6) (4)
Partners' equity - income tax method $34,258 $34,305 $34,449
Note F - Real Estate and Accumulated Depreciation
(in thousands)
Initial Cost to Partnership
Buildings Cost Capitalized
and Related (written down)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Butler Square Center $ -- $ 873 $ 5,396 $ 440
Kenilworth Commons
Shopping Center -- 1,701 2,895 (32)
Plantation Pointe
Shopping Center -- 1,865 4,563 75
TOTAL $ - $4,439 $12,854 $ 483
<TABLE>
<CAPTION>
Gross Amount at Which Carried
at December 31, 1996
Buildings Accumu- Year of
and lated Con-
Improve- Deprecia- struc- Date of Depreciable
Land ments Total tion tion Acquisition Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Butler Square Center $ 866 $ 5,843 $ 6,709 $ 1,689 1987 1/88 3 to 39 years
Kenilworth Commons
Shopping Center 1,679 2,885 4,564 804 1988 8/88 5 to 39 years
Plantation Pointe
Shopping Center 1,852 4,651 6,503 1,211 1988 4/89 4 to 39 years
TOTAL $4,397 $13,379 $17,776 $ 3,704
</TABLE>
Reconciliation of Real Estate and Accumulated Depreciation (in thousands):
Real Estate:
Years ended December 31,
1996 1995 1994
Balance at beginning of year $17,737 $17,324 $17,264
Property Improvements 39 413 60
$17,776 $17,737 $17,324
Accumulated Depreciation:
Balance at beginning of year $ 3,226 $ 2,764 $ 2,325
Additions charged to expense 478 462 439
Balance at end of year $ 3,704 $ 3,226 $ 2,764
The aggregate cost of the investment properties for Federal income tax purposes
at December 31, 1996, 1995 and 1994, is approximately $17,888,000, $17,849,000
and $17,436,000, respectively. The accumulated depreciation taken for Federal
income tax purposes at December 31, 1996, 1995 and 1994, is approximately
$2,743,000, $2,397,000 and $2,065,000, respectively.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
None
PART III
Item 10. Directors and Executive Officers of the Registrant
Neither the Registrant nor Fox Partners VI ("Fox"), the general partner of the
Registrant, has any officers or directors. Fox Capital Management Corporation
(the "Managing General Partner"), the managing general partner of Fox, manages
and controls substantially all of the Registrant's affairs and has general
responsibility and ultimate authority in all matters affecting its business.
The Managing General Partner is a wholly-owned affiliate of Insignia.
The names and ages of, as well as the positions held by the officers and
directors of the Managing General Partner are as follows. No family
relationships exist among any of the officers or directors of the Managing
General Partner:
Name Age Positions Held
William H. Jarrard, Jr. 50 President and Director
Ronald Uretta 40 Vice President and
Treasurer
John K. Lines, Esquire 37 Vice President and
Secretary
Kelley M. Buechler 39 Assistant Secretary
William H. Jarrard, Jr. has been Managing Director - Partnership Administration
of Insignia since January 1991. Mr. Jarrard served as Managing Director -
Partnership Administration & Asset Management from July 1994 until January 1996.
Ronald Uretta has been Insignia's Treasurer since January 1992. Since August
1996, he has also served as Chief Operating Officer. He also served as
Secretary from January 1992 to June 1994 and as Chief Financial Officer from
January 1992 to August 1996. Since September 1990, Mr. Uretta has also served as
the Chief Financial Officer and Controller of Metropolitan Asset Group.
John K. Lines, Esquire has been Vice President and Secretary of the Managing
General Partner since January 1996, Insignia's General Counsel since June 1994,
and General Counsel and Secretary since July 1994. From May 1993 until June
1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen
Financial Corporation, West Palm Beach, Florida. From October 1991 until May
1993, Mr. Lines was a Senior Attorney with Banc One Corporation, Columbus, Ohio.
From May 1984 until October 1991, Mr. Lines was an attorney with Squire Sanders
& Dempsey, Columbus, Ohio.
Kelley M. Buechler has been the Assistant Secretary of the Managing General
Partner since January 1996 and Assistant Secretary of Insignia since 1991.
Each director and officer of the Managing General Partner will hold office until
the next annual meeting of stockholders of the Managing General Partner and
until his successor is elected and qualified.
Item 11. Executive Compensation
The Registrant is not required to and did not pay any compensation to the
officers or directors of the Managing General Partner. The Managing General
Partner does not presently pay any compensation to any of its officers or
directors. (See "Item 13, Certain Relationships and Related Transactions.")
Item 12. Security Ownership of Certain Beneficial Owners and Management
There is no person known to the Registrant who owns beneficially or of record
more than five percent of the voting securities of the Registrant.
The Registrant is a limited partnership and has no officers or directors. The
Managing General Partner, as managing general partner of Fox, has discretionary
control over most of the decisions made by or for the Registrant in accordance
with the terms of the Partnership Agreement. The directors and officers of the
Managing General Partner and its affiliates, as a group do not own any of the
Registrant's voting securities.
There are no arrangements known to the Registrant, the operation of which may,
at a subsequent date, result in a change in control of the Registrant.
Item 13. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Partnership Agreement provides for 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 the Managing General Partner were
charged to expense in 1996, 1995 and 1994 (in thousands):
For the Year Ended
December 31,
1996 1995 1994
Partnership management fee (included in general
and administrative expenses) (i) $123 $123 $123
Real estate tax reduction fees -- 16 10
Reimbursement for services of affiliates (included
in general and administrative expenses) 126 97 88
(i)The Partnership Agreement provides for the payment of a partnership
management fee to the general partner equal to ten percent of cash available
for distribution. This management fee is intended to defray some of the
expenses related to services provided by the general partner, or an
affiliate, but not reimbursed by the Partnership.
For the period from January 19, 1996, to December 31, 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.
In accordance with the partnership agreement, the general partner was allocated
its one percent continuing interest in the Partnership's net loss and taxable
loss and cash distributions. Net income and taxable income have been allocated
to the general partner in an amount equal to the amount of cash distributions
received by the general partner.
The general partner received cash distributions of $11,000 during the years
ended December 31, 1996, 1995, and 1994.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a)(1)(2) Financial Statements and Financial Statement Schedules:
See "Item 8" of this Form 10=K for Financial Statements of the
Registrant, Notes thereto, and Financial Statement Schedules. (A
Table of Contents to Financial Statements and Financial Statement
Schedules is included in "Item 8" and incorporated herein by
reference.)
(a)(3) Exhibits:
2. NPI, Inc. Stock Purchase Agreement, dated as of August 17, 1995,
incorporated by reference to the Registrant's Current Report on
Form 8-K dated August 17, 1995.
3 4. Agreement of Limited Partnership, incorporated by reference to
Exhibit A to the Prospectus of the Registrant dated June 9, 1986
and thereafter supplemented included in the Registrant's
Registration Statement on Form S-11 (Reg. No. 33-1261)
16. Letter dated April 27, 1994 from the Registrant's Former
Independent Auditors incorporated by reference to the
Registrant's Current Report on Form 8-K dated April 22, 1994.
27. Financial Data Schedule
99.1 Coral Palm Plaza Joint Venture and audited financial statements
for the years ended December 31, 1996, 1995 and 1994.
99.2 Minneapolis Business Parks Joint Venture and audited financial
statements for the years ended December 31, 1996, 1995 and 1994.
(b) Reports on Form 8-K:
None
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this 18th day of March
1997.
CENTURY PENSION INCOME FUND XXIV
By: Fox Partners VI
Its General Partner
By: Fox Capital Management Corporation
Its Managing General Partner
By: William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the date indicated.
/s/ William H. Jarrard, Jr. President and
William H. Jarrard, Jr. Director
/s/ Ronald Uretta Principal Financial
Ronald Uretta Officer and Principal
Accounting Officer
EXHIBIT 99.1
CORAL PALM PLAZA JOINT VENTURE
FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 and 1994
List of Financial Statements
Independent Auditors' Reports
Balance Sheets - December 31, 1996 and 1995
Statements of Operations-Years Ended December 31, 1996, 1995 and 1994
Statements of Changes in Partners' Capital-Years Ended December 31,
1996, 1995 and 1994
Statements of Cash Flows-Years Ended December 31, 1996, 1995 and 1994
Notes to Financial Statements
To the Partners
Coral Palm Plaza Joint Venture
Greenville, South Carolina
Independent Auditors' Report
We have audited the accompanying balance sheets of Coral Palm Plaza Joint
Venture (the "Partnership") as of December 31, 1996 and 1995, and the related
statements of operations, changes in partners capital and cash flows for each of
the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Coral Palm Plaza Joint Venture
as of December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles.
/s/ Imowitz Koenig & Co., LLP
New York, N.Y.
February 18, 1997
BALANCE SHEETS
(in thousands)
December 31,
1996 1995
Assets
Cash and cash equivalents $ 458 $ 263
Receivables and other assets 613 424
Investment properties:
Land 2,393 2,393
Buildings and related personal property 7,133 6,656
9,526 9,049
Less accumulated depreciation (3,296) (3,046)
6,230 6,003
$ 7,301 $ 6,690
Liabilities and Partners' Capital
Accrued expenses and other liabilities $ 468 $ 345
Partners' Capital:
Century Pension Income Fund XXIII 4,557 4,231
Century Pension Income Fund XXIV 2,276 2,114
Total partners' capital 6,833 6,345
$ 7,301 $ 6,690
See Accompanying Notes to Financial Statements
STATEMENTS OF OPERATIONS
(in thousands)
Years Ended December 31,
1996 1995 1994
Revenues:
Rental $ 1,157 $ 939 $ 1,084
Other income 26 717 6
Total revenues 1,183 1,656 1,090
Expenses:
Provision for impairment
of value -- -- 4,500
Operating 541 625 573
Depreciation 250 217 351
General and administrative 16 11 15
Total expenses 807 853 5,439
Net income (loss) $ 376 $ 803 $(4,349)
Allocation of net income (loss):
Century Pension Income Fund XXIII $ 252 $ 535 $(2,899)
Century Pension Income Fund XXIV 124 268 (1,450)
$ 376 $ 803 $(4,349)
See Accompanying Notes to Financial Statements
STATEMENTS OF PARTNERS' CAPITAL
Years Ended December 31, 1996, 1995, and 1994
(in thousands)
Century Pension Century Pension
Income Fund Income Fund
XXIII XXIV Total
Partners' capital at January 1, 1994 $ 7,538 $ 3,769 $11,307
Net loss for the year ended
December 31, 1994 (2,899) (1,450) (4,349)
Distributions to partners (300) (150) (450)
Partners' capital at December 31, 1994 4,339 2,169 6,508
Net income for the year ended
December 31, 1995 535 268 803
Distributions to partners (643) (323) (966)
Partners' capital at December 31, 1995 4,231 2,114 6,345
Net income for the year ended
December 31, 1996 252 124 376
Contributions from partners 74 38 112
Partners' capital at December 31, 1996 $ 4,557 $ 2,276 $ 6,833
See Accompanying Notes to Financial Statements
STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1996 1995 1994
Cash Flows From Operating Activities:
Net income (loss) $ 376 $ 803 $(4,349)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 287 249 380
Provision for impairment of value -- -- 4,500
Change in accounts:
Receivables and other assets (226) 512 (663)
Accrued expenses and other liabilities 123 (499) 749
Net cash provided by operating activities 560 1,065 617
Cash Flows From Investing Activities:
Additions to real estate (477) (75) (26)
Cash used in investing activities (477) (75) (26)
Cash Flows From Financing Activities:
Joint venture partners'
distributions paid -- (966) (450)
Contributions received 112 -- --
Cash provided by (used in)
financing activities 112 (966) (450)
Increase in Cash and Cash Equivalents 195 24 141
Cash and Cash equivalents at Beginning of Year 263 239 98
Cash and Cash equivalents at End of Year $ 458 $ 263 $ 239
See Accompanying Notes to Financial Statements
Notes To Financial Statements
Note A - Organization And Summary Of Significant Accounting Policies
Organization:
Coral Palm Plaza Joint Venture (the "Partnership") is a general partnership
organized in 1987 under the laws of the State of California to acquire Coral
Palm Plaza, a shopping center located in Coral Springs, Florida. The general
partners are Century Pension Income Fund XXIII ("XXIII") and Century Pension
Income Fund XXIV ("XXIV"), California limited partnerships affiliated through
their general partners.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amount reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with an original
maturity date of three months or less at the time of purchase to be cash
equivalents. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits.
Leases:
The Partnership leases certain commercial space to tenants under various lease
terms. The leases are accounted for as operating leases in accordance with
"Financial Accounting Standards Board Statement No. 13."
Some of the leases contain stated rental increases during their term. For
leases with fixed rental increases, rents are recognized on a straight-line
basis over the terms of the lease. This straight-line basis recognized $119,000
more in rental income than was collected in 1996. This amount will be collected
in future years as cash collections under the terms of the leases exceed the
straight-line basis of revenue recognition.
For all other leases, minimum rents are recognized over the terms of the leases.
Investment Properties:
Real estate is stated at cost. Acquisition fees are capitalized as a cost of
real estate. In 1995, the Partnership adopted "SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Asset to be Disposed Of",
which requires impairment losses to be recognized for long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows are not sufficient to recover the asset's carrying amount. The impairment
loss is measured by comparing the fair value of the asset to its carrying
amount. The adoption of the SFAS had no effect on the Partnership's financial
statements.
Depreciation:
Depreciation is computed by the straight-line method over estimated useful lives
ranging from 4 to 39 years for buildings and improvements.
Deferred Leasing Commission:
Leasing commissions are deferred and amortized over the lives of the related
leases, which range from one to eleven years. At December 31, 1996 and 1995,
accumulated amortization of deferred leasing commissions totaled $85,000 and
$90,000, respectively.
Net Income (Loss) Allocation:
Net income (loss) is allocated based on the ratio of each partner's capital
contribution to the joint venture.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Reclassification:
Certain reclassifications have been made to the 1995 and 1994 balances to
conform to the 1996 presentation.
Note B - Related Party Transactions
During 1996 and 1995, the Partnership paid an affiliate of the general partner a
$18,000 and $16,000 fee, respectively, relating to a successful real estate tax
appeal for the joint venture. These fees were allocated 66.67% to XXIII and
33.33% to XXIV, in accordance with the partnership agreement.
Note C - Allowance for impairment of Value
During 1994, based upon current economic conditions and projected future
operational cash flows, the Partnership determined that the decline in value of
the Coral Palm Plaza Shopping Center was other then temporary and that recovery
of its carrying value was not likely. Accordingly, the property's carrying
value was reduced by $4,500,000 to an amount equal to its estimated fair value.
Due to the current real estate market it is reasonably possible that the
Partnership's estimate of fair value will change within the next year.
Note D - Termination Agreement with Former Tenant
In December 1994, the Partnership accepted a lease buy-out of $800,000 from a
significant tenant that had occupied 27,000 square feet. The payment was
received in 1995. During 1995, management re-leased all of the unoccupied
space, on similar terms, and recognized the remaining portion of the lease buy-
out in the amount of $699,000 as other income.
In October 1995, the Partnership accepted a lease buy-out and termination
agreement with a former tenant at the Partnership's property. The $300,000
termination payment, has been deferred and is being amortized into income on a
straight-line basis over the remaining three years of the former tenant's lease.
Note E - Minimum Future Rental Revenues
Minimum future rental revenues from operating leases having non-cancelable lease
terms in excess of one year at December 31, 1996 are as follows:
1997 $ 790
1998 772
1999 678
2000 652
2001 516
Thereafter 1,602
Total $5,010
Rental revenue from one tenant was 12 percent, 20 percent and 22 percent of
total rental revenues in 1996, 1995 and 1994, respectively. Rental revenue from
another tenant was 12 percent, 19 percent and 13 percent of total rental
revenues in 1996, 1995, and 1994, respectively.
Rental revenues included percentage and other contingent rentals of $33,000,
$59,000 and $40,000 in 1996, 1995 and 1994, respectively.
Amortization of deferred leasing commissions totaled $37,000, $32,000 and
$29,000 for the years ended December 31, 1996, 1995, and 1994, respectively.
Note F - Real Estate and Accumulated Depreciation
Initial Cost to Partnership
Cost
Capitalized
Related (removed)
Personal subsequent
Description Encumbrances Land Property to acquisition
( in thousands)
Coral Palm Plaza
Coral Springs,
Florida $ -- $ 5,009 $11,046 $(6,529)
<TABLE>
<CAPTION>
Gross Amount at Which Carried
at December 31, 1996
Accumulated
Buildings Depreciation
and and Provision Year of Date of Depreciable
Description Land Improvements Total for Impairment Construction Acquisition Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Coral Palm Plaza $2,393 $7,133 $9,526 $3,296 1985 1/87 4 to 39 yrs
</TABLE>
Reconciliation of Real Estate and Accumulated Depreciation (in thousands)
Real Estate:
Years ended December 31,
1996 1995 1994
Balance at beginning of year $ 9,049 $ 8,974 $13,448
Property improvements 477 75 26
Allowance for impairment of value -- -- (4,500)
$ 9,526 $ 9,049 $ 8,974
Accumulated Depreciation:
Balance at beginning of year $ 3,046 $ 2,829 $ 2,478
Additions charged to expense 250 217 351
Balance at end of year $ 3,296 $ 3,046 $ 2,829
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996, 1995 and 1994, is $17,044,000, $16,567,000 and $16,492,000,
respectively. The accumulated depreciation taken for Federal income tax
purposes at December 31, 1996 and 1995, is $3,324,000, $2,976,000 and
$2,637,000, respectively.
EXHIBIT 99.2
MINNEAPOLIS BUSINESS PARKS JOINT VENTURE
FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 and 1994
List of Financial Statements
Independent Auditors' Reports
Balance Sheets - December 31, 1996 and 1995
Statements of Operations-Years Ended December 31, 1996, 1995 and 1994
Statements of Changes in Partners' Capital-Years Ended December 31,
1996, 1995 and 1994
Statements of Cash Flows-Years Ended December 31, 1996, 1995 and 1994
Notes to Financial Statements
To the Partners
Minneapolis Business Parks Joint Venture
Greenville, South Carolina
Independent Auditors' Report
We have audited the accompanying balance sheets of Minneapolis Business Parks
Joint Venture (the "Partnership") as of December 31, 1996 and 1995, and the
related statements of operations, changes in partners' capital and cash flows
for each of the three years in the period ended December 31, 1996. These
financial statements are the responsibility of the Partnership's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Minneapolis Business Parks
Joint Venture as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996 in conformity with generally accepted accounting principles.
/s/ Imowitz Koenig & Co., LLP
New York, N.Y.
February 18, 1997
BALANCE SHEETS
(in thousands)
December 31,
1996 1995
Assets
Cash and cash equivalents $ 1,543 $ 159
Receivables and other assets 507 436
Investment Properties:
Land 4,523 4,523
Building and related personal property 16,035 15,944
20,558 20,467
Less accumulated depreciation (5,196) (4,603)
15,362 15,864
$17,412 $16,459
Liabilities and Partners' Capital
Accrued expenses and other liabilities $ 176 $ 157
Partners' Capital:
Century Pension Income Fund XXIII 11,668 11,033
Century Pension Income Fund XXIV 5,568 5,269
Total partners' capital 17,236 16,302
$17,412 $16,459
See Accompanying Notes to Financial Statements
STATEMENTS OF OPERATIONS
(in thousands)
Years Ended December 31,
1996 1995 1994
Revenues:
Rental $3,000 $2,833 $2,648
Other income 136 48 18
Total revenues $3,136 2,881 2,666
Expenses:
Operating 1,593 1,521 1,402
Depreciation 593 604 613
General and administrative 16 8 11
Total expenses 2,202 2,133 2,026
Net income $ 934 $ 748 $ 640
Allocation of net income:
Century Pension Income Fund XXIII $ 635 $ 509 $ 435
Century Pension Income Fund XXIV 299 239 205
$ 934 $ 748 $ 640
See Accompanying Notes to Financial Statements
STATEMENTS OF PARTNERS' CAPITAL
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
(in thousands)
Century Pension Century Pension
Income Fund Income Fund
XXIII XXIV Total
Partners' capital at January 1, 1994 $11,113 $5,307 $16,420
Net income for the year ended
December 31, 1994 435 205 640
Partners' capital at December 31, 1994 11,548 5,512 17,060
Net income for the year ended
December 31, 1995 509 239 748
Distributions to partners (1,024) (482) (1,506)
Partners' capital at December 31, 1995 11,033 5,269 16,302
Net income for the year ended
December 31, 1996 635 299 934
Partners' capital at December 31, 1996 $11,668 $5,568 $17,236
See Accompanying Notes to Financial Statements
STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1996 1995 1994
Cash Flows From Operating Activities:
Net income $ 934 $ 748 $ 640
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 677 683 685
Change in accounts:
Receivables and other assets (155) (167) (221)
Accrued expenses and other liabilities 19 6 8
Net cash provided by operating activities 1,475 1,270 1,112
Cash Flows From Investing Activities:
Additions to real estate (91) (253) (560)
Cash used in investing activities (91) (253) (560)
Cash Flows From Financing Activities:
Joint venture partners' distributions paid -- (1,506) --
Cash used in financing activities -- (1,506) --
Increase (decrease) in Cash and Cash Equivalents 1,384 (489) 552
Cash and Cash equivalents at Beginning of Year 159 648 96
Cash and Cash equivalents at End of Year $1,543 $ 159 $ 648
See Accompanying Notes to Financial Statements
Note A - Organization and Summary of Significant Accounting Policies
Minneapolis Business Parks Joint Venture (the "Partnership") is a general
partnership organized in 1987 under the laws of the State of California to
acquire three business parks in Minnesota. The general partners are Century
Pension Income Fund XXIII ("XXIII") and Century Pension Income Fund XXIV
("XXIV"), both are California limited partnerships which are affiliated through
their general partners.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with an original
maturity date of three months or less at the time of purchase to be cash
equivalents. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits.
Leases:
The Partnership leases certain commercial space to tenants under various lease
terms. The leases are accounted for as operating leases in accordance with
"Financial Accounting Standards Board Statement No. 13."
Some of the leases contain stated rental increases during their term. For
leases with fixed rental increases, rents are recognized on a straight-line
basis over the terms of the lease. This straight-line basis recognized $96,000
more in rental income than was collected in 1996. This amount will be collected
in future years as cash collections under the terms of the leases exceed the
straight-line basis of revenue recognition.
For all other leases, minimum rents are recognized over the terms of the leases.
Investment Properties:
Real estate is stated at cost. Acquisition fees are capitalized as a cost of
real estate. In 1995, the Partnership adopted "SFAS No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Asset to be Disposed Of",
which requires impairment losses to be recognized for long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows are not sufficient to recover the asset's carrying amount. The impairment
loss is measured by comparing the fair value of the asset to its carrying
amount. The adoption of the SFAS had no effect on the Partnership's financial
statements.
Depreciation:
Depreciation is computed by the straight-line method over estimated useful lives
ranging from 30 to 39 years for buildings and improvements.
Deferred Leasing Commission:
Leasing commissions are deferred and amortized over the lives of the related
leases, which range from one to eleven years. At December 31, 1996 and 1995,
accumulated amortization of deferred leasing commissions totaled $221,000 and
$205,000, respectively.
Net Income Allocation:
Net income is allocated based on the ratio of each partner's capital
contribution to the joint venture.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Reclassification:
Certain reclassifications have been made to the 1995 and 1994 balances to
conform to the 1996 presentation.
Note B - Related Party Transactions
During 1995, the Partnership paid an affiliate of the general partner a $33,000
fee relating to a successful real estate tax appeal on Alpha and Westpoint
Business Center joint venture properties. These fees were allocated 68% to
XXIII and 32% to XXIV, in accordance with the partnership agreement.
Note C - Minimum Future Rental Revenues
Minimum future rental revenues from operating leases having non-cancelable lease
terms in excess of one year at December 31, 1996, are as follows:
1997 $ 2,351
1998 1,943
1999 1,310
2000 765
2001 463
Thereafter 403
Total $ 7,235
Amortization of deferred leasing commissions totaled $84,000, $79,000, and
$72,000 for the years ended December 31, 1996, 1995, and 1994, respectively.
Note D - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>
December 31, 1996
Initial Cost to Partnership
Buildings and Cost Capitalized
Related Personal (removed) subsequent
Description Encumbrances Land Property to acquisition
(Amounts in Thousands)
<S> <C> <C> <C> <C>
Alpha Business Center $ -- $3,199 $ 6,735 $485
Plymouth Service -- 475 2,306 (40)
Westpoint Business -- 1,166 5,987 245
Total $ -- $4,840 $15,028 $690
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried
at December 31, 1996
Buildings and Accumulated Year of Date of Depreciable
Description Land Improvements Total Depreciation Construction Acquisition Life-Years
(amounts in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Alpha Business Center $3,002 $ 7,417 $10,419 $2,448 1979 5/87 30-39 Years
Plymouth Service 419 2,322 2,741 712 1979 5/87 30-39 Years
Westpoint Business 1,102 6,296 7,398 2,036 1979 5/87 30-39 Years
Total $4,523 $16,035 $20,558 $5,196
</TABLE>
Notes To Financial Statements
Years Ended December 31, 1996, 1995 and 1994
Reconciliation of Real Estate and Accumulated Depreciation (in thousands)
Real Estate:
Years ended December 31,
1996 1995 1994
Balance at beginning of year $20,467 $20,214 $19,654
Property improvements 91 253 560
Balance at end of year $20,558 $20,467 $20,214
Accumulated Depreciation:
Balance at beginning of year $ 4,603 $ 3,999 $ 3,386
Additions charged to expense 593 604 613
Balance at end of year $ 5,196 $ 4,603 $ 3,999
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1996, 1995 and 1994, is $21,891,000, $21,800,000 and $21,547,000,
respectively. The accumulated depreciation taken for Federal income tax
purposes at December 31, 1996, 1995 and 1994, is $4,496,000, $3,993,000 and
$3,499,000, respectively.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Pension Income Fund XXIV 1996 Year-End 10-K and is qualified in its entirety by
reference to such 10-K filing.
</LEGEND>
<CIK> 0000780590
<NAME> CENTURY PENSION INCOME FUND XXIV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,929
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 17,776
<DEPRECIATION> (3,704)
<TOTAL-ASSETS> 24,333
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 24,193
<TOTAL-LIABILITY-AND-EQUITY> 24,333
<SALES> 0
<TOTAL-REVENUES> 2,250
<CGS> 0
<TOTAL-COSTS> 1,687
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 986
<EPS-PRIMARY> 13.30<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
