-----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, RCHMw6SqXGRF24St2W/I9c1bUr/Ei3Ov/23TFYmM2cz1RZWBXtVS/78BRaotkw3M 7YYXBzijnobt7oGE9x2zgg== 0000711642-98-000031.txt : 19980803 0000711642-98-000031.hdr.sgml : 19980803 ACCESSION NUMBER: 0000711642-98-000031 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980730 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XVI CENTRAL INDEX KEY: 0000351931 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942704651 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-10435 FILM NUMBER: 98673805 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ P STREET 2: PO BOX 1089 C/O INSIGNIA FINANICAL GROUP CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 10QSB 1 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 13 or 15(d) of The Securities Exchange Act of 1934 For the quarterly period ended June 30, 1998 [ ] Transition Report Pursuant to 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period.........to......... Commission file number 0-10435 CENTURY PROPERTIES FUND XVI (Exact name of small business issuer as specified in its charter) California 94-2704651 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (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 past 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 XVI CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1998 Assets Cash and cash equivalents $ 597 Receivables and deposits 265 Other assets 245 Restricted escrows 63 Investment properties: Land $ 1,409 Buildings and related personal property 13,652 15,061 Less accumulated depreciation (7,545) 7,516 $ 8,686 Liabilities and Partners' Capital Liabilities Accounts payable $ 69 Accrued property taxes 116 Tenant security deposit liabilities 51 Other liabilities 102 Mortgage notes payable 7,385 Partners' (Deficit) Capital General partners $(3,838) Limited partners (130,000 units issued and outstanding) 4,801 963 $ 8,686 See Accompanying Notes to Consolidated Financial Statements b) CENTURY PROPERTIES FUND XVI CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended Six Months Ended June 30, June 30, 1998 1997 1998 1997 Revenues: Rental income $ 714 $ 686 $ 1,421 $ 1,324 Other income 31 24 61 55 Total revenues 745 710 1,482 1,379 Expenses: Operating 365 328 664 620 General and administrative 46 67 99 102 Depreciation 121 119 242 236 Interest 153 155 307 311 Property tax 58 59 101 104 Loss on disposal of property -- 56 -- 56 Total expenses 743 784 1,413 1,429 Net income (loss) $ 2 $ (74) $ 69 $ (50) Net income (loss) allocated to general partners (6.9%) $ -- $ (5) $ 5 $ (3) Net income (loss) allocated to limited partners (93.1%) 2 (69) 64 (47) Net income (loss) $ 2 $ (74) $ 69 $ (50) Net income (loss) per limited partnership unit $ .02 $ (.53) $ .49 $ (.36) See Accompanying Notes to Consolidated Financial Statements c) CENTURY PROPERTIES FUND XVI CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (Unaudited) (in thousands, except unit data) Limited Partnership General Limited Units Partners Partners Total Original capital contributions 130,000 $ -- $65,000 $65,000 Partners' (deficit) capital at December 31, 1997 130,000 $(3,843) $ 4,737 $ 894 Net income for the six months ended June 30, 1998 -- 5 64 69 Partners' (deficit) capital at June 30, 1998 130,000 $(3,838) $ 4,801 $ 963 See Accompanying Notes to Consolidated Financial Statements d) CENTURY PROPERTIES FUND XVI CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Six Months Ended June 30, 1998 1997 Cash flows from operating activities: Net income (loss) $ 69 $ (50) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 258 252 Loss on disposal of property -- 56 Change in accounts: Receivables and deposits 42 48 Other assets 7 (22) Accounts payable (19) (38) Accrued property taxes (121) (69) Tenant security deposit liabilities 1 1 Other liabilities 6 19 Net cash provided by operating activities 243 197 Cash flows from investing activities: Property improvements and replacements (114) (271) Net withdrawals from (deposits to) restricted escrows 46 (78) Net cash used in investing activities (68) (349) Cash flows used in financing activities: Payments on mortgage notes payable (37) (30) Net increase (decrease) in cash and cash equivalents 138 (182) Cash and cash equivalents at beginning of period 459 535 Cash and cash equivalents at end of period $ 597 $ 353 Supplemental disclosure of cash flow information: Cash paid for interest $ 291 $ 261 See Accompanying Notes to Consolidated Financial Statements e) CENTURY PROPERTIES FUND XVI NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Century Properties Fund XVI (the "Partnership") 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. The Partnership's general partners are Fox Capital Management Corporation (the "Managing General Partner" or "FCMC") and Fox Realty Investors ("FRI"), both of which are affiliates of Insignia Financial Group, Inc. ("Insignia"). In the opinion of the Managing General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1998. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended December 31, 1997. Certain reclassifications have been made to the 1997 information to conform to the 1998 presentation. NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent upon the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Managing General Partner is a wholly-owned subsidiary of Insignia Properties Trust ("IPT"), an affiliate of Insignia. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in IPT, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the Managing General Partner of the Partnership. On March 29, 1996, an affiliate of Insignia acquired all of the issued and outstanding shares of stock of the general partners of the subsidiary partnerships which hold title to The Landings Apartments and Woods of Inverness Apartments. These general partners held a 1% interest in profits, losses and distributions of such subsidiary partnerships. Effective December 31, 1997, the Partnership acquired these 1% interests and therefore the subsidiary partnerships are wholly-owned by the Partnership. The following transactions with affiliates of Insignia were charged to expense in 1998 and 1997: For the Six Months Ended June 30, 1998 1997 (in thousands) Property management fees (included in operating expenses) $ 74 $ 70 Reimbursement for services of affiliates (included in general and administrative and operating expenses) 55 69 Included in reimbursements for services of affiliates is approximately $2,000 and $15,000 of construction oversight reimbursements for the periods ended June 30, 1998 and 1997, respectively. For the period from January 1, 1997, to August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the Managing General Partner with an 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 master policy. The agent assumed the financial obligations to the affiliate of the Managing General Partner which receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums that accrued to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations was not significant. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1998 and 1997: Average Occupancy Property 1998 1997 The Landings Apartments Tampa, Florida 95% 93% Woods of Inverness Apartments Houston, Texas 97% 96% The increase in average occupancy from June 30, 1997, to June 30, 1998, at both The Landings Apartments and Woods of Inverness Apartments is due to quality customer service and increased marketing efforts, combined with the availability of attractive, well maintained units. The Partnership recognized net income of approximately $2,000 and $69,000, for the three and six months ended June 30, 1998, versus net losses of approximately $74,000 and $50,000 for the same periods in 1997. The increase in net income is primarily attributable to an increase in rental income, partially offset by an increase in total expenses after excluding the loss on disposal of property recognized during the six months ended June 30, 1997. The increase in rental income is due to increases in occupancy at both The Landings Apartments and Woods of Inverness Apartments, along with an increase in the average annual rental rate at Woods of Inverness Apartments. The increase in expenses is primarily attributable to an increase in operating expense resulting from increased maintenance expense at both of the Partnership's investment properties. The parking lot was repaved and windows repaired at The Landings Apartments, while major landscaping was performed and tennis courts repaired at Woods of Inverness Apartments. During the six months ended June 30, 1997, the loss on disposal of property of $56,000 was the result of a re-roofing project at Woods of Inverness Apartments. Included in operating expense for the six months ended June 30, 1998, is approximately $69,000 of major repairs and maintenance mainly comprised of tennis court repairs, parking lot repairs, major landscaping, and gutter repairs, as previously mentioned. Included in operating expense for the six months ended June 30, 1997, is approximately $20,000 of major repairs and maintenance mainly comprised of exterior painting and building improvements. 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 conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. At June 30, 1998, the Partnership had cash and cash equivalents of approximately $597,000, versus approximately $353,000 at June 30, 1997. Cash and cash equivalents increased approximately $138,000 for the period ended June 30, 1998, and decreased approximately $182,000 for the period ended June 30, 1997. Net cash provided by operating activities increased primarily due to an increase in net income, as previously explained, partially offset by a decrease in accrued taxes. The decrease in accrued taxes is due to the timing of the payment of property taxes. The Partnership experienced a decrease in cash used in investing activities due to a decrease in property improvements and replacements along with increased withdrawals from restricted escrows. Building improvements were made at The Landings Apartments and a new roof was added at Woods of Inverness Apartments during the six months ended June 30, 1997. For the six months ended June 30, 1998, withdrawals were made from restricted escrows to fund major rehabilitation work at Woods of Inverness Apartments. Foundation work, replacement of rotten wood, power washing, painting and some fencing replacement, all anticipated to cost approximately $300,000, is now underway at this property. Cash used in financing activities results from payments on mortgage notes payable. 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 Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $7,385,000 is based on a fixed interest rate, amortized over a thirty-year period, with a balloon payment due January 1, 2006. No cash distributions were paid in 1997 or during the first six months of 1998. Future cash distributions will depend on the levels of cash generated from operations, property sales, and the availability of cash reserves. Year 2000 The Partnership is dependent upon the Managing General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed not later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The Managing General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Partnership. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 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. in the Superior Court of the State of California for the County of San Mateo. The Plaintiffs named as defendants, among others, the Partnership, the Managing General Partner and several of their affiliated partnerships and corporate entities. The complaint 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 the acquisition by Insignia and its affiliates of interests in certain general partner entities, past tender offers by Insignia affiliates to acquire limited partnership units, the management of partnerships by Insignia affiliates, as well as a recently announced agreement between Insignia and AIMCO. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. The Managing General Partner believes the action to be without merit, and intends to vigorously defend it. On June 24, 1998, the Managing General Partner filed a motion seeking dismissal of the action. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The Managing General Partner believes 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 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None. 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 XVI By: Fox Capital Management Corporation, Managing General Partner /s/William H. Jarrard, Jr. President and Director /s/Ronald Uretta Vice President and Treasurer Date: July 30, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Fund XVI 1998 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000351931 CENTURY PROPERTIES FUND XVI 1,000 6-MOS DEC-31-1998 JUN-30-1998 597 0 265 0 0 0 15,061 (7,545) 8,686 0 7,385 0 0 0 963 8,686 0 1,482 0 0 1,413 0 307 0 0 0 0 0 0 69 .49 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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