-----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, IIhtBJw94q6+9lEC/l0RqHPO9WTuCTfQRwemszVyVCFf/wQtlqAzzzv3yFVDIo2H lfZZTxM9nAT15kIoAYhsBw== 0000720392-97-000003.txt : 19970326 0000720392-97-000003.hdr.sgml : 19970326 ACCESSION NUMBER: 0000720392-97-000003 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970325 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: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10435 FILM NUMBER: 97562218 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 10KSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the fiscal year ended December 31, 1996 [ ] TRANSITION REPORT UNDER 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 0-10435 CENTURY PROPERTIES FUND XVI California 94-2704651 (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 Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Limited Partnership Units (Title of class) 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 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will 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-KSB or any amendment to this Form. X State issuer's revenues for its most recent fiscal year. $ 2,721,000. State the aggregate market value of the voting stock held by nonaffiliates 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 the past 60 days. Market value information for Registrant's Partnership Interests is not available. Should a trading market develop for these Interests, it is management's belief that such trading would not exceed $25 million. DOCUMENTS INCORPORATED BY REFERENCE SEE EXHIBIT INDEX PART I ITEM 1. DESCRIPTION OF BUSINESS Century Properties Fund XVI (the "Partnership" or "Registrant") was organized in December 1980, as a California limited partnership under the Uniform Limited Partnership Act of the California Corporations Code. Fox Capital Management Corporation (the "Managing General Partner" or "FCMC") a California corporation, and Fox Realty Investors ("FRI"), a California general partnership, are the general partners of the Registrant. The principal business of the Registrant is and has been to acquire, hold for investment and ultimately sell income-producing multi-family residential properties. Beginning in August 1981 through April 1982, the Registrant offered and sold $65,000,000 in Limited Partnership Units. The net proceeds of this offering were used to acquire ten income-producing real properties. The Registrant's original property portfolio was geographically diversified with properties acquired in six states. The Registrant's acquisition activities were completed in 1983, and since then, the principal activity of the Registrant has been managing its portfolio. In the period from 1986 through 1991, eight multi-family residential properties have been sold or otherwise disposed of. On August 10, 1994, an affiliate of Apollo Real Estate Advisors, L.P. ("Apollo") obtained general and limited partnership interests in NPI-AP Management, L.P. ("NPI-AP") which directly managed the Partnership's properties. On October 12, 1994, Apollo acquired one-third of the stock of National Property Investors, Inc. ("NPI"), the parent corporation of NPI Equity Investments II, Inc. Pursuant to the terms of the stock acquisition, Apollo was entitled to designate three of the seven directors of the Managing General Partner and NPI Equity Investments II, Inc. In addition, the approval of certain major actions on behalf of the Registrant required the affirmative vote of at least five directors of the Managing General Partner. On August 17, 1995, the stockholders of NPI entered into an agreement to sell to IFGP Corporation, a Delaware corporation, an affiliate of Insignia Financial Group, Inc., a Delaware corporation ("Insignia"), all of the issued and outstanding common stock of NPI, for an aggregate purchase price of $1,000,000. NPI is the sole shareholder of NPI Equity Investments II, Inc., the general partner of FRI, and the entity which controls the Managing General Partner. The closing of the transactions contemplated by the above mentioned agreement (the "Closing") occurred on January 19, 1996. Upon the Closing, the officers and directors of NPI, NPI Equity Investments II, Inc. and the Managing General Partner resigned and IFGP Corporation caused new officers and directors of each of those entities to be elected (See "Item 9."). On October 12, 1994, affiliates of Apollo acquired (i) one-third of the stock of the respective general partners of DeForest Ventures I L.P. ("DeForest I") and DeForest Ventures II L.P. and (ii) an additional equity interest in NPI-AP (bringing its total equity interest in such entity to one-third). NPI-AP is a limited partner of DeForest I which was formed for the purpose of making tender offers for limited partnership units in the Registrant as well as eleven affiliated limited partnerships. On January 19, 1996, DeForest I and certain of its affiliates sold all of its interest in the Registrant to Insignia NPI L.L.C. ("Insignia LLC"), an affiliate of Insignia. Pursuant to a Schedule 13-D filed by Insignia LLC with the Securities and Exchange Commission, Insignia LLC acquired 47,326.68 limited partnership units or approximately 36.4% of the total limited partnership units of the Registrant (See "Item 11."). The Partnership has no full time employees. The Managing General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership. The non-managing general partners and the limited partners have no right to participate in the management or conduct of such business and affairs. Insignia Residential Group, L.P. provides day-to- day management services to the Partnership's investment properties. The business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in its industry. Such competition is primarily on the basis of location, rents, services, and amenities. In addition, the Partnership 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. It appears that the original investment objective of capital growth from the inception of the Registrant will not be attained and that investors will not receive a return of all their invested capital. The extent to which invested capital is returned to investors is dependent upon the success of the Registrant's strategy as set forth in "Item 6" as well as upon significant improvement in the performance of the Registrant's remaining properties and the markets in which such properties are located and on the sales price of the remaining properties. In this regard, the remaining properties have been held longer than originally expected. ITEM 2. DESCRIPTION OF PROPERTIES: The following table sets forth the Partnership's investments in properties:
Date of Property Purchase Type of Ownership Use The Landings Apartments 06/82 Fee ownership subject to Residential Tampa, Florida first mortgage rental 200 units Woods of Inverness Apartments 07/82 Fee ownership subject to Residential Houston, Texas first mortgage rental 272 units
SCHEDULE OF PROPERTIES: (dollar amounts in thousands) Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis The Landings Apartments $ 5,725 $ 2,706 5-30 yrs (1) $ 958 Woods of Inverness Apartments 8,975 4,167 5-30 yrs (1) 1,452 $ 14,700 $ 6,873 $ 2,410 (1) Straight - line See "Note A" of the financial statements included in "Item 7." for a description of the Partnership's depreciation policy. SCHEDULE OF MORTGAGES: (dollar amounts in thousands) Principal Principal Balance At Balance December 31, Interest Period Maturity Due At Property 1996 Rate Amortized Date Maturity The Landings Apartments $ 2,282 7.88% 30 years 1/2006 $ 2,016 Woods of Inverness Apartments 5,205 7.88% 30 years 1/2006 4,602 $ 7,487 $ 6,618 SCHEDULE OF RENTAL RATES AND OCCUPANCY: Average Annual Average Rental Rates Occupancy Property 1996 1995 1996 1995 The Landings Apartments $ 5,196/unit $ 5,102/unit 93% 96% Woods of Inverness Apartments 6,683/unit 6,513/unit 92% 96% The decrease in average occupancy at The Landings Apartments is attributable to newly completed construction in the area. The decrease in average occupancy at the Woods of Inverness Apartments is due to a soft market in the area, as well as an increase in new home purchases. As noted under "Item 1. Description of Business", the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other apartment complexes in the area. The Managing General Partner believes that all of the properties are adequately insured. The multifamily residential properties lease terms are for one year or less. No residential tenant leases 10% or more of the available rental space. Real estate taxes and rates in 1996 for each property were (dollar amounts in thousands): 1996 1996 Billing Rate The Landings Apartments $ 51 2.53% Woods of Inverness Apartments 186 3.12% ITEM 3. LEGAL PROCEEDINGS The Registrant is unaware of any pending and 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 MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS The Partnership, a publicly-held limited partnership, offered and sold 130,000 Limited Partnership Units aggregating $65,000,000. The Partnership currently has 130,000 units outstanding and 5,544 Limited Partners of record. There is no intention to sell additional Limited Partnership Units nor is there an established market for these units. The Partnership has discontinued making cash distributions from operations until and unless the financial condition and other relevant factors warrant resumption of distributions. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Results of Operations The Partnership's net loss for the year ended December 31, 1996, was $667,000 versus $695,000 for the year ended December 31, 1995. The decrease in rental income is attributable to the decrease in occupancy rates at the Partnership's properties offset, in part, by an increase in average rental rates at the Partnership's properties. The increase in other income is attributed to an increase in lease cancellation fees. The increase in operating expense is primarily due to increased concessions in an effort to increase occupancy; the repair of a lake wall at The Landings Apartments; the repaving of portions of the parking lot; and the replacement of wood siding at the Woods of Inverness Apartments. The decrease in mortgage interest expense is attributable to the decrease in interest rates due to the more favorable terms of the mortgages which were refinanced in December 1995. In 1995, the Partnership recognized an extraordinary loss of $220,000 on the refinancings which consists of prepayment premiums, loan termination fees and the write-off of deferred financing costs. Included in operating expense for the year ended December 31, 1996 is $269,000 of major repairs and maintenance comprised of parking lot repairs, landscaping, interior and exterior building repairs, and gutter repairs. 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. Capital Resources and Liquidity At December 31, 1996, the Partnership had cash and cash equivalents of $535,000, as compared to $846,000 at December 31, 1995. Net cash provided by operating activities increased due to an increase in accrued expenses and other liabilities. The increase in cash used in investing activities relates to capital expenditures, primarily attributable to the Woods of Inverness Apartments, which had a number of roofs replaced and a seamless gutter system installed. The net cash used in financing activities is due to the amortization of the mortgage principal balance during the year ended December 31, 1996. Prior to refinancing in December 1995, mortgage payments were interest only. 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 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 total mortgage indebtedness of $7,487,000 is based on fixed interest rate notes, amortized over a thirty year period, with balloon payments of principal and interest due on the maturity date of January 1, 2006. Future cash distributions will depend on the levels of cash generated from operations, property sales, and the availability of cash reserves. No cash distributions were paid in 1995 or 1996. ITEM 7. FINANCIAL STATEMENTS CENTURY PROPERTIES INCOME FUND XVI LIST OF FINANCIAL STATEMENTS Independent Auditors' Report Consolidated Balance Sheet - December 31, 1996 Consolidated Statements of Operations - Years ended December 31, 1996 and 1995 Consolidated Statements of Changes in Partners' Capital (Deficit) - Years ended December 31, 1996 and 1995 Consolidated Statements of Cash Flows - Years ended December 31, 1996 and 1995 Consolidated Notes to Financial Statements To the Partners Century Properties Fund XVI Greenville, South Carolina Independent Auditors' Report We have audited the accompanying consolidated balance sheet of Century Properties Fund XVI (a limited partnership) (the "Partnership") as of December 31, 1996, and the related consolidated statements of operations, changes in partners' capital and cash flows for each of the two years in the period ended December 31, 1996. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated 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 consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Century Properties Fund XVI and its subsidiaries, as of December 31, 1996, and the consolidated results of its operations and its cash flows for each of the two 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 11, 1997 CENTURY PROPERTIES FUND XVI CONSOLIDATED BALANCE SHEET (in thousands, except unit data) December 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 535 Restricted - tenant security deposits 56 Other assets 294 Accounts receivable 15 Escrow for taxes and insurance 172 Restricted escrows 15 Investment properties (Notes B and E): Land $ 1,409 Buildings and related personal property 13,291 14,700 Less accumulated depreciation (6,873) 7,827 $ 8,914 Liabilities and Partners' Capital Liabilities Accounts payable $ 68 Accrued taxes 186 Tenant security deposits 56 Other liabilities 66 Mortgage notes payable (Notes B and E) 7,487 Partners' (Deficit) Capital General partners $(3,832) Limited partners (130,000 units issued and outstanding) 4,883 1,051 $ 8,914 See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVI CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except unit data) Year Ended December 31, 1996 1995 Revenues: Rental income $ 2,580 $ 2,654 Other income 141 108 Total revenues 2,721 2,762 Expenses: Operating 2,045 1,729 Interest 625 795 Depreciation 460 456 General and administrative 258 257 Total expenses 3,388 3,237 Loss before extraordinary item (667) (475) Extraordinary item - loss on extinguishment of debt (Note B) -- (220) Net loss $ (667) $ (695) Net loss allocated to general partners (6.9%) $ (46) $ (48) Net loss allocated to limited partners (93.1%) (621) (647) Net loss $ (667) $ (695) Net loss per limited partnership unit: Loss before extraordinary item $ (4.78) $ (3.40) Extraordinary item -- (1.58) Net loss $ (4.78) $ (4.98) See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVI CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (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, 1994 130,000 $(3,738) $ 6,151 $ 2,413 Net loss for the year ended December 31, 1995 (48) (647) (695) Partners' (deficit) capital at December 31, 1995 130,000 (3,786) 5,504 1,718 Net loss for the year ended ended December 31, 1996 (46) (621) (667) Partners' (deficit) capital at December 31, 1996 130,000 $(3,832) $ 4,883 $ 1,051 See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVI CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 1996 1995 Cash flows from operating activities: Net loss $ (667) $ (695) Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 491 529 Extraordinary item - loss on extinguishment of debt -- 220 Change in accounts: Other assets and deferred costs (39) (38) Accrued expenses and other liabilities 298 (292) Net cash provided by (used in) operating activities 83 (276) Cash flows used from investing activities: Property improvements and replacements (203) (58) Cash flows from financing activities: Payments on mortgage notes payable (63) -- Repayment of mortgage notes payable -- (7,000) Proceeds from long-term borrowings -- 7,550 Loan costs (128) (190) Cost paid to extinguish debt -- (112) Net cash (used in) provided by financing activities (191) 248 Net decrease in cash and cash equivalents (311) (86) Cash and cash equivalents at beginning of year 846 932 Cash and cash equivalents at end of year $ 535 $ 846 Supplemental disclosure of cash flow Cash paid for interest $ 578 $ 748 See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVI Notes to Consolidated Financial Statements December 31, 1996 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: Century Properties Fund XVI (the "Partnership or Registrant") is a California limited partnership organized in August 1981 to acquire and operate residential apartment properties. The Partnership's general partners are Fox Capital Management Corporation ("FCMC") and Fox Realty Investors ("FRI"). As of December 31, 1996, the Partnership operates two residential apartment complexes, located in Texas and Florida. Principles of Consolidation: The financial statements include all the accounts of the Partnership and its majority owned Partnerships. All significant interpartnership balances have been eliminated. Minority interest is immaterial and not shown seperately in the financial statements. Advertising Costs: Advertising costs, $87,000 in 1996 and $93,000 in 1995, are charged to expenses as they are incurred and are included in operating expenses. Allocations to Partners: Net income and losses (excluding those arising from the occurrence of sales or dispositions) of the Partnership will be allocated 5% to the general partners with the remainder allocated 2% to the general partners and 98% to the limited partners. Distributions of available cash, except as discussed below, are allocated 5% to the general partners with the remainder allocated 2% to the general partners and 98% to the limited partners. In accordance with the Partnership Agreement, any gain from the sale or other disposition of Partnership properties shall be allocated: (i) to the general partners to the extent they are entitled to receive distributions of cash; (ii) 7% to the general partners and 93% to the Limited Partnership Unit Holders, to the extent the general partners have a deficit capital balance; and (iii) to the limited partners. Cash from sales or other disposition, or refinancing and working capital reserves must be distributed in the following order: (i) first, an aggregate amount as discussed above to each Limited Partner which equals the total of their original invested capital contributed and 8% per year, as determined on a cumulative, noncompounded basis, on adjusted invested capital, adjusted as needed, of such Limited Partnership Unit Holder; (ii) second, to the General Partner 15% of any additional cash from sales or refinancing and working capital reserve available for distribution, and (iii) the remainder shall be allocated 98% to the limited partners and 2% to the general partners. Upon sale of all properties and termination of the Partnership, the general partners may be required to contribute certain funds to the Partnership in accordance with the partnership agreement. Depreciation: Depreciation is calculated by the straight-line method over the estimated lives of the rental properties and related personal property. Cash and Cash Equivalents: The Partnership considers all highly liquid investments with a maturity, when purchased, of three months or less 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 generally leases apartment units for twelve-month terms or less. Restricted Cash - Tenant Security Deposits: The Partnership requires security deposits from all apartment leases for the duration of the lease and are considered restricted cash. Deposits are refunded when the tenant vacates the apartment if there has been no damage to the unit. Loan Costs: Loan costs of $318,000 are included in "Other assets" in the accompanying balance sheet and are being amortized on a straight-line basis over the life of the loan. At December 31, 1996, accumulated amortization is $32,000. Amortization of loan costs is included in interest expense. Investment Properties: In 1995, the Partnership adopted "FASB Statement 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 recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The effect of adoption was not material. Fair Value: In 1995, the Partnership implemented "Statement of Financial Accounting Standards No. 107, Disclosure about 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 short- term maturities. The Partnership estimates the fair value of its fixed rate mortgage by discounted cash flow analysis, based on estimated borrowing rates currently available to the Partnership (See "Note B"). 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. Reclassifications: Certain reclassifications have been made to the 1995 balances to conform to the 1996 presentation. NOTE B - MORTGAGE NOTES PAYABLE On December 29, 1995, the Partnership refinanced its existing indebtedness secured by the Woods of Inverness (the "Woods") and The Landings Apartments (the "Landings") properties. The existing loans aggregating $7,000,000, maturing in June 1997, were refinanced with two new loans aggregating $7,550,000 with interest at 7.88 percent per annum, monthly payments of approximately $55,000 and maturities in January 2006. The loans may not be prepaid without penalty. In connection with the refinancings, the Partnership was required to transfer the assets and liabilities of the Woods and the Landings to Woods of Inverness CPF 16, L.P. and Landings CPF 16 L.P., respectively, both newly formed, wholly- owned subsidiaries. In connection with the refinancings, the Partnership incurred financing costs and fees of $315,000, of which $190,000 was paid in 1995. The Partnership recognized an extraordinary loss of $220,000 on the refinancings which consists of prepayment premiums, loan termination fees and the write-off of deferred financing costs. The principle terms of mortgage notes payable are as follows (dollar amounts in thousands): Monthly Principal Principal Payment Stated Balance Balance At Including Interest Maturity Due At December 31, Property Interest Rate Date Maturity 1996 The Landings Apartments $ 17 7.88% 1/2006 $ 2,016 $ 2,282 Woods of Inverness Apartments 38 7.88% 1/2006 4,602 5,205 $ 55 $ 6,618 $ 7,487 Scheduled principal payments on the mortgage note payable subsequent to December 31, 1996 are as follows (in thousands): (in thousands) 1997 $ 69 1998 75 1999 81 2000 88 2001 95 Thereafter 7,079 $ 7,487 The estimated fair value of the Partnership's debt approximates its carrying amount. NOTE C - 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. Differences between the net loss as reported and Federal taxable loss result primarily from depreciation over different methods and lives and on differing cost bases. The following is a reconciliation of reported net loss and Federal taxable loss: 1996 1995 (in thousands, except unit data) Net loss as reported $ (667) $ (695) Add (deduct): Depreciation differences (35) (32) Miscellaneous 17 Federal taxable loss $ (685) $ (727) Federal taxable loss per limited partnership unit $ (5) $ (5) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets (in thousands): 1996 Net assets as reported $ 1,051 Land and buildings 811 Accumulated depreciation (6,229) Syndication and distribution costs 8,258 Prepaid rent 15 Net assets - Federal tax basis $ 3,906 NOTE D - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on its general partners and their 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. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control of NPI Equity Investments II, Inc., the managing general partner of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI Equity Investments II, Inc. is a wholly-owned subsidiary of National Property Investors, Inc. ("NPI"). In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity Investments II, Inc. and FCMC. On March 29, 1996, an affiliate of Insignia acquired the corporate limited partners owning 1% of the subsidiary partnerships which own The Landings Apartments and Woods of Inverness Apartments. The following transactions with affiliates of Insignia, NPI, and affiliates of NPI were paid or accrued in 1996 and 1995: 1996 1995 (in thousands) Property management fees $132 $132 Reimbursement for services of affiliates 154 144 Financing fees -- 38 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the general partners. An affiliate of the general partners 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 general partners, who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the general partners by virtue of the agent's obligations is not significant. $93,000 of insurance premiums, which were paid to an affiliate of NPI under a master insurance policy arranged by such affiliate, are included in operating expenses for the year ended December 31, 1995. NOTE E - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION Initial Cost To Partnership (in thousands) Cost Buildings Capitalized and Related (Removed) Personal Subsequent to Description Encumbrances Land Property Acquisition The Landings Apartments $ 2,282 $ 504 $ 4,702 $ 519 Woods of Inverness Apartments 5,205 1,292 10,305 (2,622) Total $ 7,487 $ 1,796 $ 15,007 $ (2,103)
Gross Amount at Which Carried At December 31, 1996 (in thousands) Buildings And Related Year Personal Accumulated of Date Depreciable Description Land Property Total Depreciation Construction Acquired Life-Years The Landings Apartments $ 504 $ 5,221 $ 5,725 $ 2,706 1979 06/82 5-30 yrs Woods of Inverness Apartments 905 8,070 8,975 4,167 1981 07/82 5-30 yrs Total $ 1,409 $ 13,291 $ 14,700 $ 6,873
Reconciliation of Investment Properties and Accumulated Depreciation: Years Ended December 31, 1996 1995 (in thousands) Balance at beginning of year $ 14,497 $ 14,439 Property improvements 203 58 Balance at end of year $ 14,700 $ 14,497 Years Ended December 31, 1996 1995 (in thousands) Accumulated Depreciation Balance at beginning of year $ 6,413 $ 5,957 Additions charged to expense 460 456 Balance at end of year $ 6,873 $ 6,413 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1996 and 1995 is $15,512,000 and $15,306,000. The accumulated depreciation taken for Federal income tax purposes at December 31, 1996 and 1995 is $13,102,000 and $12,607,000. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL DISCLOSURES There were no disagreements with Imowitz & Koenig & Co., LLP regarding the 1996 or 1995 audits of the Partnership's financial statements. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The Registrant has no officers or directors. The Managing General Partner is Fox Capital Management Corporation. The names and ages of, as well as the positions and offices held by, the executive officers and directors of Fox Capital Management Corporation are set forth below. There are no family relationships between or among any officers or directors. Name Age Position William H. Jarrard, Jr. 50 President and Director Ronald Uretta 41 Vice President and Treasurer John K. Lines, Esq. 37 Vice President and Secretary and Director 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 MAG. John K. Lines, Esq. has been 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 is Assistant Secretary of Fox Capital Management Corporation and has served as Assistant Secretary of Insignia since 1991. ITEM 10. EXECUTIVE COMPENSATION No direct form of compensation or remuneration was paid by the Partnership to any officer or director of Fox Capital Management Corporation. The Partnership has no plan, nor does the Partnership presently propose a plan, which will result in any remuneration being paid to any officer or director upon termination of employment. However, fees and other payments have been made to the Partnership's Managing General Partner and its affiliates, as described in "Item 12. Certain Relationships and Related Transactions." ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information regarding limited partnership units of the Registrant owned by each person who is known by the Registrant to own beneficially or exercise voting or dispositive control over more than 5% of the Registrant's limited partnership units, by each of the directors and by all directors and executive officers of the Managing General Partner as a group as of December 31, 1996. Name of Amount and nature of Beneficial Owner Beneficial Owner % of Class Insignia NPI L.L.C. 47,326.68 36.4 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. As a result of its ownership of 47,326.68 of limited partnership units Insignia NPI L.L.C. could be in a position to significantly influence all voting decisions with respect to the Registrant. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters. When voting on matters, Insignia NPI L.L.C. 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, DeForest II, from whom Insignia NPI L.L.C. acquired its units, had agreed for the benefit of non-tendering unitholders, that would vote its Units: (i) against any increase in compensation payable to the Managing General Partner or to affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering units holders. Except for the foregoing, no other limitations are imposed on Insignia NPI L.L.C.'s right to vote each Unit acquired. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Century Properties Fund XVI (the "Partnership"), has no employees and is dependent on its general partners and their 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. Pursuant to a series of transactions which closed during the first half of 1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control of NPI Equity Investments II, Inc., the managing general partner of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI Equity Investments II, Inc. is a wholly-owned subsidiary of National Property Investors, Inc. ("NPI"). In connection with these transactions, affiliates of Insignia appointed new officers and directors of NPI Equity Investments II, Inc. and FCMC. On March 29, 1996, an affiliate of Insignia acquired the corporate limited partners owning 1% of the subsidiary partnerships which own The Landings Apartments and Woods of Inverness Apartments. The following transactions with affiliates of Insignia, NPI, and affiliates of NPI were paid or accrued in 1996 and 1995: 1996 1995 (in thousands) Property management fees $132 $132 Reimbursement for services of affiliates 154 144 Financing fees -- 38 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the general partners. An affiliate of the general partners 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 general partners, who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the general partners by virtue of the agent's obligations is not significant. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K (a) The Exhibits listed on the accompanying Index to Exhibits are filed as part of this Annual Report and incorporated in this Annual Report as set forth in said Index. (b) No reports on form 8-K were filed during the fourth quarter of 1996. 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. CENTURY PROPERTIES FUND XVI By: FOX CAPITAL MANAGEMENT CORPORATION, a General Partner By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director 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. Signature/Name Title Date /s/ William H. Jarrard, Jr. President and Director March 25, 1997 William H. Jarrard, Jr. /s/ Ronald Uretta Principal Financial March 25, 1997 Ronald Uretta Officer and Principal Accounting Officer EXHIBIT INDEX Exhibit Number Description of Exhibit 2.1 NPI, Inc. Stock Purchase Agreement (1) 2.2 Partnership Units Purchase Agreement (2) 2.3 Management Purchase Agreement (3) 2.4 Limited Liability Company Agreement of Riverside Drive L.L.C. (4) 2.5 Master Indemnity Agreement (5) 3.4 Agreement of Limited Partnership (6) 10.1 Form of First Mortgage Note dated as of December 29, 1995 from the Registrant to Secore Financial Corporation ("Secore") relating to the refinancing of the Landings and Woods of Inverness. 10.2 Form of First Mortgage and Security Agreement dated as of December 29, 1995 from the Registrant to Secore relating to the refinancing of the Landings and Woods of Inverness. 16 Letter from the Registrant's former (7) Independent Auditor dated April 27, 1994 27 Financial Data Schedule (1) Incorporated by reference to Exhibit 2 to the Registrant's Current Report on Form 8-K dated August 17, 1995. (2) Incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995. (3) Incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995. (4) Incorporated by reference to Exhibit 2.4 to Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995. (5) Incorporated by reference to Exhibit 2.5 to Form 8-K filed by Insignia Financial Group, Inc. with the Securities and Exchange Commission on September 1, 1995. (6) Incorporated by reference to Exhibit A to the Prospectus of the Registrant dated August 17, 1981 and thereafter supplemented June 25, 1979 and thereafter supplemented, included in the Registrant's Registration Statement on Form S-11 (Reg. No. 2-71473). (7) Incorporated by reference to Exhibit 10 to the Registrant's Current Report on Form 8-K dated April 22, 1994. EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Fund XVI 1996 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000351931 CENTURY PROPERTIES FUND XVI 1,000 12-MOS DEC-31-1996 DEC-31-1996 535 0 0 0 0 0 14,700 6,873 8,914 0 7,487 0 0 0 1,051 8,914 0 2,721 0 0 3,388 0 625 (667) 0 (667) 0 0 0 (667) (4.78) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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