-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S4VHHjhoJm9y5Fvrd/WpXohZe5UnmnNgLVe5Iwr2YZMHCQQ7MaIZ2sTGQ7uOhq09 q2o5BLN20vfijXcH5r4clw== 0000711642-01-500203.txt : 20020410 0000711642-01-500203.hdr.sgml : 20020410 ACCESSION NUMBER: 0000711642-01-500203 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010930 FILED AS OF DATE: 20011108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XV CENTRAL INDEX KEY: 0000314690 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942625577 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-09680 FILM NUMBER: 1777764 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391000 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 10QSB 1 cpf15.txt CPF15 FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2001 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to _________ Commission file number 0-9680 CENTURY PROPERTIES FUND XV (Exact name of small business issuer as specified in its charter) California 94-2625577 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, PO Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 PROPERTIES FUND XV CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) September 30, 2001
Assets Cash and cash equivalents $ 486 Receivables and deposits 202 Restricted escrows 131 Other assets 391 Investment properties: Land $ 5,766 Buildings and related personal property 37,305 43,071 Less accumulated depreciation (23,806) 19,265 $ 20,475 Liabilities and Partners' Deficit Liabilities Accounts payable $ 89 Tenant security deposit liabilities 122 Accrued property taxes 692 Other liabilities 411 Mortgage notes payable 27,463 Partners' Deficit General partners $ (1,402) Limited partners (89,980 units issued and outstanding) (6,900) (8,302) $ 20,475 See Accompanying Notes to Consolidated Financial Statements
b) CENTURY PROPERTIES FUND XV CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data)
Three Months Ended Nine Months Ended September 30, September 30, 2001 2000 2001 2000 Revenues: Rental income $ 1,953 $ 1,889 $ 5,714 $ 5,667 Other income 126 123 357 342 Casualty gain 119 -- 119 -- Total revenues 2,198 2,012 6,190 6,009 Expenses: Operating 745 636 2,108 1,870 General and administrative 159 77 333 361 Depreciation 387 377 1,192 1,107 Interest 574 584 1,729 1,678 Property taxes 224 207 701 677 Total expenses 2,089 1,881 6,063 5,693 Income before extraordinary loss 109 131 127 316 Extraordinary loss on early extinguishment of debt -- -- -- (474) Net income (loss) $ 109 $ 131 $ 127 $ (158) Net income (loss) allocated to general partners (2%) $ 3 $ 3 $ 3 $ (3) Net income (loss) allocated to limited partners (98%) 106 128 124 (155) $ 109 $ 131 $ 127 $ (158) Per limited partnership unit: Income before extraordinary loss $ 1.18 $ 1.42 $ 1.38 $ 3.45 Extraordinary loss -- -- -- (5.17) Net income (loss) $ 1.18 $ 1.42 $ 1.38 $ (1.72) Distributions per limited partnership unit $ 7.01 $ -- $ 7.50 $105.30 See Accompanying Notes to Consolidated Financial Statements
c) CENTURY PROPERTIES FUND XV CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 89,980 $ -- $89,980 $89,980 Partners' deficit at December 31, 2000 89,980 $(1,391) $(6,349) $(7,740) Distributions to partners -- (14) (675) (689) Net income for the nine months ended September 30, 2001 -- 3 124 127 Partners' deficit at September 30, 2001 89,980 $(1,402) $(6,900) $(8,302) See Accompanying Notes to Consolidated Financial Statements
d) CENTURY PROPERTIES FUND XV CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 2001 2000 Cash flows from operating activities: Net income (loss) $ 127 $ (158) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 1,192 1,107 Amortization of loan costs 35 35 Casualty gain (119) -- Extraordinary loss on early extinguishment of debt -- 474 Change in accounts: Receivables and deposits 73 357 Other assets (40) (41) Accounts payable 3 57 Tenant security deposit liabilities 27 23 Accrued property taxes (165) (144) Other liabilities 16 2 Net cash provided by operating activities 1,149 1,712 Cash flows from investing activities: Net withdrawals from (deposits to) restricted escrows 156 (171) Property improvements and replacements (1,051) (597) Insurance proceeds received 184 -- Net cash used in investing activities (711) (768) Cash flows from financing activities: Payments on mortgage notes payable (380) (235) Repayment of mortgage note payable -- (14,249) Proceeds from mortgage note payable -- 23,700 Debt extinguishment costs -- (411) Loan costs paid -- (254) Distributions to partners (689) (10,199) Net cash used in financing activities (1,069) (1,648) Net decrease in cash and cash equivalents (631) (704) Cash and cash equivalents at beginning of period 1,117 1,727 Cash and cash equivalents at end of period $ 486 $ 1,023 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,697 $ 1,480 At December 31, 2000, approximately $71,000 of property improvements and replacements were included in accounts payable. Distributions to partners of approximately $531,000 were accrued at December 31, 1999 and paid in January 2000. See Accompanying Notes to Consolidated Financial Statements
e) CENTURY PROPERTIES FUND XV NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements of Century Properties Fund XV (the "Partnership" or the "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. 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 nine month periods ended September 30, 2001, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2001. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000. The Managing General Partner is an affiliate of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. Principles of Consolidation The Partnership's financial statements include the accounts of Century Lakeside Place, L.P., a limited partnership in which the Partnership owns a 99% limited partnership interest. The Partnership has the ability to control the major operating and financial policies of the partnership. All interpartnership transactions have been eliminated. Segment Reporting Statement of Financial Standards ("SFAS") No. 131, "Disclosure about Segments of an Enterprise and Related Information" established standards for the way that public business enterprises report information about operating segments in annual financial statements and required that those enterprises report selected information about operating segments in interim financial reports. It also established standards for related disclosures about products and services, geographic areas, and major customers. As defined in SFAS No. 131, the Partnership has only one reportable segment. The Managing General Partner believes that segment-based disclosures will not result in a more meaningful presentation than the consolidated financial statements as currently presented. 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 incurred during the nine months ended September 30, 2001 and 2000: 2001 2000 (in thousands) Property management fees (included in operating expenses) $308 $301 Reimbursement for services of affiliates (included in general and administrative expenses and investment properties) 133 138 Partnership management fee (included in general and administrative expense) 77 141 Affiliates of the Managing General Partner are entitled to receive 5% of gross receipts from both of the Registrant's properties for providing property management services. The Registrant paid to such affiliates approximately $308,000 and $301,000 for the nine months ended September 30, 2001 and 2000, respectively. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $133,000 and $138,000 for the nine months ended September 30, 2001 and 2000, respectively. Pursuant to the Partnership Agreement, for managing the affairs of the Partnership, the Managing General Partner is entitled to receive a Partnership fee equal to 10% of the Partnership's adjusted cash from operations as distributed. Partnership management fees of approximately $77,000 and $141,000 were earned during the nine month period ended September 30, 2001 and 2000, respectively. An affiliate of the Managing General Partner has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. The Partnership has no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 57,345.84 limited partnership units (the "Units") in the Partnership representing 63.73% of the outstanding Units at September 30, 2001. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters which would include voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 63.73% of the outstanding Units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, Riverside Drive LLC, an affiliate of the Managing General Partner which owns 35,473.17 (39.42%) of the Units, is required to vote its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) with respect to any proposal made by the Managing General Partner or any of its affiliates, in proportion to votes cast by other unitholders. Except for the foregoing, no other limitations are imposed on AIMCO or its affiliates' right to vote each Unit acquired. Note C - Extraordinary Loss on Early Extinguishment of Debt The Partnership refinanced the mortgage encumbering Lakeside Place Apartments on February 4, 2000. The refinancing replaced indebtedness of approximately $14,249,000 with a new mortgage of $23,700,000. The mortgage was refinanced at an interest rate of 8.34% compared to the previous interest rate of 9.60%. Monthly installments of principal and interest are due monthly until March 1, 2020 at which time the mortgage will be fully amortized. Capitalized loan costs incurred for the refinancing were approximately $254,000 through September 30, 2000. The Partnership recognized an extraordinary loss on the early extinguishment of debt in the amount of approximately $474,000, consisting of a prepayment penalty and the write-off of unamortized loan costs on the previous mortgage. Note D - Distributions During the nine months ended September 30, 2001, the Partnership declared and paid distributions from operations of approximately $689,000 (approximately $675,000 to the limited partners or $7.50 per limited partnership unit). During the nine months ended September 30, 2000, the Partnership declared distributions of approximately $9,668,000 (approximately $9,475,000 to the limited partners or $105.30 per limited partnership unit) consisting of approximately $8,398,000 (approximately $8,230,000 to the limited partners or $91.46 per limited partnership unit) of refinancing proceeds from Lakeside Place and approximately $1,270,000 (approximately $1,245,000 to the limited partners or $13.84 per limited partnership unit) from operations. At December 31, 1999, a distribution payable of approximately $531,000 (approximately $520,000 to the limited partners or $5.78 per limited partnership unit) was accrued and subsequently paid in January 2000. Note E - Casualty Gain During the nine months ended September 30, 2001, a casualty gain of approximately $119,000 was recorded at Lakeside Place Apartments. The casualty gain related to a fire which damaged ten apartment units in November of 2000. The gain was a result of the receipt of insurance proceeds of approximately $184,000 offset by approximately $65,000 of undepreciated property improvements and replacements being written off. Note F - Legal Proceedings In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The Managing General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the Managing General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the Managing General Partner and its affiliates filed a demurrer to the third amended complaint. On May 14, 2001, the Court heard the demurrer to the third amended complaint. On July 10, 2001, the Court issued an order sustaining defendants' demurrer on certain grounds. On July 20, 2001, plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer. On September 7, 2001, plaintiffs filed a fourth amended class and derivative action complaint. On September 12, 2001, the Court denied plaintiffs' motion for reconsideration. On October 5, 2001, the Managing General Partner and affiliated defendants filed a demurrer to the fourth amended complaint, which, together with a demurrer filed by other defendants, is currently scheduled to be heard on November 15, 2001. The Court has set the matter for trial in January 2003. During the third quarter of 2001, a complaint (the "Heller action") was filed against the same defendants that are named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed a first amended complaint. The first amended complaint in the Heller action is brought as a purported derivative action, and asserts claims for among other things breach of fiduciary duty; unfair competition; conversion, unjust enrichment; and judicial dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the Heller action with the Nuanes action and stated that the Heller action was filed in order to preserve the derivative claims that were dismissed without leave to amend in the Nuanes action by the Court order dated July 10, 2001. On October 5, 2001, the Managing General Partner and affiliated defendants moved to strike the first amended complaint in its entirety for violating the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer in the Nuanes action, or alternatively, to strike certain portions of the complaint based on the statute of limitations. Other defendants in the action demurred to the fourth amended complaint, and, alternatively, moved to strike the complaint. The matters are currently scheduled to be heard on November 15, 2001. The Managing General Partner does not anticipate that any costs, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The matters discussed in this Form 10-QSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-QSB and the other filings with the Securities and Exchange Commission made by the Partnership from time to time. The discussion of the Partnership's business and results of operations, including forward-looking statements pertaining to such matters, does not take into account the effects of any changes to the Partnership's business and results of operation. Accordingly, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. The Partnership's investment properties consist of two residential apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 2001 and 2000: Average Occupancy Property 2001 2000 Lakeside Place Apartments 93% 92% Houston, Texas Preston Creek Apartments (1) 88% 94% Dallas, Texas (1) The Managing General Partner attributes the decrease in occupancy at Preston Creek Apartments to eviction of undesirable tenants and an increase in market competition. Results of Operations The Partnership's net income for the nine months ended September 30, 2001 was approximately $127,000 compared to a net loss of approximately $158,000 for the nine months ended September 30, 2000. The increase in net income is primarily due to the recognition of an extraordinary loss on the early extinguishment of debt (see "Liquidity and Capital Resources" for further discussion) during the nine months ended September 30, 2000, and the recognition of a casualty gain at Lakeside Apartments during the nine months ended September 30, 2001. During the nine months ended September 30, 2001, a casualty gain of approximately $119,000 was recorded at Lakeside Place Apartments. The casualty gain related to a fire which damaged ten apartment units in November of 2000. The gain was a result of the receipt of insurance proceeds of approximately $184,000 offset by approximately $65,000 of undepreciated property improvements and replacements being written off. Income before the extraordinary loss on early extinguishment of debt for the nine months ended September 30, 2001, was approximately $127,000 compared to approximately $316,000 for the corresponding period in 2000. Income before the extraordinary loss on early extinguishment of debt decreased due to an increase in total expenses partially offset by an increase in total revenues. The Partnership's net income for the three months ended September 30, 2001 was approximately $109,000 compared to net income of approximately $131,000 for the three months ended September 30, 2000. The decrease in net income is primarily due to an increase in total expenses offset partially by an increase in total revenues. Total revenues increased due to an increase in rental and other income. Rental income increased due to an increase in the average rental rates at both of the Partnership's investment properties and a slight increase in occupancy at Lakeside Place Apartments partially offset by a decrease in occupancy at Preston Creek Apartments. Other income increased due to an increase in tenant reimbursements at Lakeside Place Apartments offset by a decrease in interest income due to lower average cash balances held in interest bearing accounts. Total expenses for the three and nine months ended September 30, 2001 increased due to increases in operating, depreciation, and property tax expenses. Interest expense also increased for the nine months ended September 30, 2001. These increases were partially offset by a decrease in general and administrative expenses for the nine months ended September 30, 2001 while general and administrative expenses increased for the three months ended September 30, 2001. Operating expense increased due to increases in utilities at both properties, particularly the cost of natural gas, and increased insurance expense at Lakeside Place. Depreciation expense increased as a result of property improvements and replacements placed into service at each of the Partnership's properties during the past twelve months which are now being depreciated. Interest expense increased as a result of the refinancing of the mortgage encumbering Lakeside Place Apartments. Property tax expense increased due to an increase in the assessed value at Preston Creek Apartments. General and administrative expenses decreased for the nine months ended September 30, 2001 and increased for the three months ended September 30, 2001 primarily due to the timing of the Partnership management fees paid to the Managing General Partner. Pursuant to the Partnership Agreement, the Managing General Partner is entitled to receive a fee equal to 10% of the Partnership's adjusted cash from operations as distributed. Distributions from operations of approximately $644,000 and $689,000 were made during the three and nine months ended September 30, 2001, respectively, while distributions from operations of zero and approximately $1,270,000 were made during the corresponding periods in 2000. Included in general and administrative expenses are reimbursements to the Managing General Partner allowed under the Partnership Agreement associated with its management of the Partnership. In addition, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included. 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. Liquidity and Capital Resources At September 30, 2001, the Registrant had cash and cash equivalents of approximately $486,000 as compared to approximately $1,023,000 at September 30, 2000. Cash and cash equivalents decreased approximately $631,000 since December 31, 2000 due to approximately $711,000 and $1,069,000 of cash used in investing and financing activities, respectively, which was partially offset by approximately $1,149,000 of cash provided by operating activities. Cash used in investing activities consisted of property improvements and replacements partially offset by net withdrawals from escrow accounts maintained by the mortgage lenders and insurance proceeds from a casualty at Lakeside Place Apartments. Cash used in financing activities consisted of principal payments on the note encumbering Lakeside Place and distributions to the partners. The Registrant invests its working capital reserves in interest bearing accounts. An affiliate of the Managing General Partner has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. The Partnership has no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. 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 properties to adequately maintain the physical assets and other operating needs of the Registrant and to comply with Federal, state, and local legal and regulatory requirements. Capital improvements planned for the Partnership's properties are detailed below. Lakeside Place Apartments Approximately $202,000 has been budgeted for capital improvements at Lakeside Place Apartments for the year 2001 consisting primarily of floor covering replacements. During the nine month period ended September 30, 2001, the Partnership completed approximately $579,000 of budgeted and unbudgeted capital improvements at Lakeside Place Apartments consisting primarily of structural improvements, roof replacement, floor covering replacements and appliances. In addition, approximately $270,000 was capitalized during the nine months ended September 30, 2001, associated with the repairs of the ten units damaged by fire in November 2000. These improvements were funded from operations, replacements reserves and insurance proceeds. Additional improvements may be considered and will depend on the physical condition of the property as well as the replacement reserves and anticipated cash flow generated by the property. Preston Creek Apartments Approximately $246,000 has been budgeted for capital improvements at Preston Creek Apartments for the year 2001 consisting primarily of floor covering and appliance replacements. During the nine month period ended September 30, 2001, the Partnership completed approximately $131,000 of capital improvements at Preston Creek Apartments consisting primarily of appliance and floor covering replacements and interior decoration. These improvements were funded from operations. Additional improvements may be considered and will depend on the physical condition of the property as well as the replacement reserves and anticipated cash flow generated by the property. The additional capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that such budgeted capital improvements are completed, the Registrant's distributable cash flow, if any, may be adversely affected at least in the short term. The Partnership refinanced the mortgage encumbering Lakeside Place Apartments on February 4, 2000. The refinancing replaced indebtedness of approximately $14,249,000 with a new mortgage of $23,700,000. The mortgage was refinanced at an interest rate of 8.34% compared to the previous interest rate of 9.60%. Monthly installments of principal and interest are due monthly until March 1, 2020 at which time the mortgage will be fully amortized. Capitalized loan costs incurred for the refinancing were approximately $254,000 through September 30, 2000. The Partnership recognized an extraordinary loss on the early extinguishment of debt in the amount of approximately $474,000 which consisted of a prepayment penalty and the write-off of unamortized loan costs on the previous mortgage. The Partnership's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. The mortgage encumbering Preston Creek Apartments of $4,500,000 is due in November 2003 at which time a balloon payment of $4,500,000 is due. The Managing General Partner will attempt to refinance the Preston Creek indebtedness and/or sell the property prior to its maturity date. If the property cannot be refinanced or sold for a sufficient amount, the Registrant will risk losing Preston Creek through foreclosure. During the nine months ended September 30, 2001, the Partnership declared and paid a distributions from operations of approximately $689,000 (approximately $675,000 to the limited partners or $7.50 per limited partnership unit). During the nine months ended September 30, 2000, the Partnership declared distributions of approximately $9,668,000 (approximately $9,475,000 to the limited partners or $105.30 per limited partnership unit) consisting of approximately $8,398,000 (approximately $8,230,000 to the limited partners or $91.46 per limited partnership unit) of refinancing proceeds from Lakeside Place and approximately $1,270,000 (approximately $1,245,000 to the limited partners or $13.84 per limited partnership unit) from operations. At December 31, 1999, a distribution payable of approximately $531,000 (approximately $520,000 to the limited partners or $5.78 per limited partnership unit) was accrued and subsequently paid in January 2000. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves and the timing of debt maturities, refinancings and/or property sales. The Registrant's distribution policy is reviewed on a monthly basis. There can be no assurance that the Registrant will generate sufficient funds from operations after required capital expenditures to permit further distributions to its partners during the remainder of 2001 or subsequent periods. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 57,345.84 limited partnership units (the "Units") in the Partnership representing 63.73% of the outstanding Units at September 30, 2001. A number of these Units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters which would include voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 63.73% of the outstanding Units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, Riverside Drive LLC, an affiliate of the Managing General Partner which owns 35,473.17 (39.42%) of the Units, is required to vote its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) with respect to any proposal made by the Managing General Partner or any of its affiliates, in proportion to votes cast by other unitholders. Except for the foregoing, no other limitations are imposed on AIMCO or its affiliates' right to vote each Unit acquired. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the Managing General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs filed an amended complaint. The Managing General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the Managing General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the Managing General Partner and its affiliates filed a demurrer to the third amended complaint. On May 14, 2001, the Court heard the demurrer to the third amended complaint. On July 10, 2001, the Court issued an order sustaining defendants' demurrer on certain grounds. On July 20, 2001, plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer. On September 7, 2001, plaintiffs filed a fourth amended class and derivative action complaint. On September 12, 2001, the Court denied plaintiffs' motion for reconsideration. On October 5, 2001, the Managing General Partner and affiliated defendants filed a demurrer to the fourth amended complaint, which, together with a demurrer filed by other defendants, is currently scheduled to be heard on November 15, 2001. The Court has set the matter for trial in January 2003. During the third quarter of 2001, a complaint (the "Heller action") was filed against the same defendants that are named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed a first amended complaint. The first amended complaint in the Heller action is brought as a purported derivative action, and asserts claims for among other things breach of fiduciary duty; unfair competition; conversion, unjust enrichment; and judicial dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the Heller action with the Nuanes action and stated that the Heller action was filed in order to preserve the derivative claims that were dismissed without leave to amend in the Nuanes action by the Court order dated July 10, 2001. On October 5, 2001, the Managing General Partner and affiliated defendants moved to strike the first amended complaint in its entirety for violating the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer in the Nuanes action, or alternatively, to strike certain portions of the complaint based on the statute of limitations. Other defendants in the action demurred to the fourth amended complaint, and, alternatively, moved to strike the complaint. The matters are currently scheduled to be heard on November 15, 2001. The Managing General Partner does not anticipate that any costs, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: None. b) Reports on Form 8-K: None filed during the quarter ended September 30, 2001. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PROPERTIES FUND XV By: FOX CAPITAL MANAGEMENT CORPORATION Managing General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: -----END PRIVACY-ENHANCED MESSAGE-----