-----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, L0kbN+cvKAHEOsnzY3L9HO2VL5MU3f20JjsZ7Bo9lqYPN1Gc4e8kLPKhHD5kZzgh G9WVD1OqTPe/Ab6+lFTZEA== 0000889812-95-000631.txt : 19951119 0000889812-95-000631.hdr.sgml : 19951119 ACCESSION NUMBER: 0000889812-95-000631 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10435 FILM NUMBER: 95589699 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR 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 0-10435 ------- Century Properties Fund XVI --------------------------- (Exact name of Registrant as specified in its charter) California 94-2704651 ------------------------------------------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 ------------------------------------------------------------------------ (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (770) 916-9090 -------------- N/A ------------------------------------------------------------------------ Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes _____ No _____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date __________________. 1 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Balance Sheets September 30, December 31, 1995 1995 Assets Cash and cash equivalents $ 887,000 $ 932,000 Other assets 262,000 189,000 Real Estate: Real estate 14,492,000 14,439,000 Accumulated depreciation (6,301,000) (5,958,000) ----------- ----------- Real estate, net 8,191,000 8,481,000 Deferred financing costs, net 126,000 181,000 ----------- ----------- Total assets $ 9,466,000 $ 9,783,000 =========== =========== Liabilities and Partners' Equity Notes payable $ 7,000,000 $ 7,000,000 Accrued expenses and other liabilities 393,000 370,000 ----------- ----------- Total liabilities 7,393,000 7,370,000 ----------- ----------- Commitments and Contingencies Partners' equity (deficit): General partners (3,761,000) (3,738,000) Limited partners (130,000 units outstanding at September 30, 1995 and December 31, 1994) 5,834,000 6,151,000 ----------- ----------- Total partner's equity 2,073,000 2,413,000 ----------- ----------- Total liabilities and partners' equity $ 9,466,000 $ 9,783,000 =========== =========== See notes to financial statements. 2 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Nine Months Ended September 30, September 30, 1995 1994 Revenues: Rental $1,991,000 $1,880,000 Interest income 30,000 29,000 ---------- ---------- Total revenues 2,021,000 1,909,000 ---------- ---------- Expenses: Operating 1,255,000 1,315,000 Interest 596,000 548,000 Depreciation 343,000 343,000 General and administrative 167,000 247,000 ---------- ---------- Total expenses 2,361,000 2,453,000 ---------- ---------- Net loss $(340,000) $ (544,000) ========== ========== Net loss per limited partnership unit $ (2.44) $ (3.89) ========== ========== See notes to financial statements. 3 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Three Months Ended September 30, September 30, 1995 1994 Revenues: Rental $ 670,000 $ 645,000 Interest income 10,000 10,000 ---------- ---------- Total revenues 680,000 655,000 ---------- ---------- Expenses: Operating 429,000 517,000 Interest 195,000 184,000 Depreciation 115,000 115,000 General and administrative 50,000 53,000 ---------- ---------- Total expenses 789,000 869,000 ---------- ---------- Net loss $ (109,000) $ (214,000) ========== ========== Net loss per limited partnership unit $ (0.78) $ (1.53) ========== ========== See notes to financial statements. 4 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Cash Flows For the Nine Months Ended September 30, September 30, 1995 1994 Operating Activities: Net loss $ (340,000) $ (544,000) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 398,000 397,000 Changes in operating assets and liabilities: Other assets (73,000) (173,000) Accrued expenses and other liabilities 23,000 54,000 ----------- ---------- Net cash provided by (used in) operating activities 8,000 (266,000) ----------- ---------- Investing Activities: Proceeds from cash investments - 692,000 Additions to real estate (53,000) (34,000) ----------- ---------- Net cash (used in) provided by investing activities (53,000) 658,000 ----------- ---------- (Decrease) Increase in Cash and Cash Equivalents (45,000) 392,000 Cash and Cash Equivalents at Beginning of Period 932,000 662,000 ----------- ---------- Cash and Cash Equivalents at End of Period $ 887,000 $1,054,000 =========== ========== Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period $ 523,000 $ 473,000 =========== ========== See notes to financial statements. 5 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 NOTES TO FINANCIAL STATEMENTS 1. General The accompanying financial statements, footnotes and discussions should be read in conjunction with the financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1994. Certain accounts have been reclassified in order to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature. The results of operations for the nine and three months ended September 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. On August 17, 1995, the stockholders of National Property Investors, Inc. ("NPI, Inc."), the sole shareholder of NPI Equity Investments II, Inc. ("NPI Equity"), the entity which controls Fox Realty Investors and Fox Capital Management Corporation, the general partners of the Partnership, entered into an agreement to sell to IFGP Corporation, an affiliate of Insignia Financial Group, Inc. ("Insignia"), all of the issued and outstanding stock of NPI, Inc. The sale of the stock is subject to the satisfaction of certain conditions and is scheduled to close in January 1996. 2. Transactions with Related Parties (a) An affiliate of NPI, Inc. received reimbursement of administrative expenses amounting to $108,000 and $135,000 during the nine months ended September 30, 1995 and 1994, respectively. These reimbursements are included in general and administrative expenses. (b) An affiliate of NPI, Inc. is entitled to receive a management fee equal to 5% of the annual gross receipts from certain properties it manages. For the nine months ended September 30, 1995 and 1994, affiliates of NPI, Inc. received fees of $99,000 and $71,000, respectively, which are included in operating expenses. 6 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources Registrant holds investments in and operates two residential real estate properties with apartments leased to tenants subject to leases of up to one year. The properties are located in Texas and Florida. Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. For the nine months ended September 30, 1995, Registrant's Woods of Inverness Apartments generated positive cash flow while The Landings Apartments generated slightly negative cash flow due to improvements to real estate. As of November 1, 1995, eight of the ten properties originally purchased by Registrant were sold or otherwise disposed. Registrant uses working capital reserves from any undistributed cash flows from operations, sales and refinancing proceeds as its primary source of liquidity. There have been no cash distributions since 1985. Although cash flow from operations is expected to improve during the next twelve months, due to balloon payments on mortgages maturing in 1997, it is not currently anticipated that Registrant will make any distributions from operations in the near future. The level of liquidity based upon cash and cash equivalents experienced a $45,000 decrease at September 30, 1995, as compared to December 31, 1994. Registrant's $8,000 of net cash provided by operating activities was more than offset by $53,000 of improvements to real estate (investing activities). Registrant has no plans for material capital improvements during the next twelve months. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are invested in a money market account or in repurchase agreements secured by United States Treasury obligations. The Managing General Partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements and regular debt service payments until June 1997, when Registrant has balloon mortgage payments due on The Landings and Woods of Inverness Apartments of $3,000,000 and $4,000,000, respectively. The ability to hold and operate these properties is dependent on being able to obtain refinancings or debt modifications, as required. Although management is confident that these loans can be refinanced, if the loans are not refinanced or extended, or the properties are not sold, Registrant could lose these properties through foreclosure. As required by the terms of the settlement of the actions brought against, among others, DeForest Ventures I L.P. ("DeForest") relating to the tender offer made by DeForest in October 1994 (the "First Tender Offer") for units of limited partnership interest in Registrant and certain affiliated partnerships, DeForest commenced a second tender offer (the "Second Tender Offer") on June 2, 1995 for units of limited partnership interest in Registrant. Pursuant to the Second Tender Offer, DeForest acquired an additional 6,825 units of Registrant which, when added to the units acquired during the First Tender Offer, represents approximately 36.0% of the total number of outstanding units of Registrant. The Managing General Partner believes that the tender will not have a significant impact on future operations or liquidity of Registrant. Also in connection with the settlement, an affiliate of the Managing General 7 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources (Continued) Partner has made available to Registrant a credit line of up to $150,000 per property owned by Registrant. Registrant has no outstanding amounts due under this line of credit. Based on present plans, management does not anticipate the need to borrow in the near future. Other than cash and cash equivalents the line of credit is Registrant's only unused source of liquidity. On August 17, 1995, Insignia Financial Group, Inc. and certain of its affiliates (collectively, "Insignia") entered into agreements pursuant to which (i) the stockholders of NPI, Inc., the sole shareholder of NPI Equity, agreed to sell to Insignia all of the issued and outstanding stock of NPI, Inc., (ii) DeForest agreed to sell its units of Registrant to Insignia and (iii) Insignia would acquire all of the interests in NPI-AP Management, L.P., the property manager at Registrant's properties. The consummation of these transactions is subject to the satisfaction of certain conditions (including, third party consents and other conditions not within the control of the parties to the agreement) and is scheduled to close in January 1996. Upon closing, it is expected that Insignia will elect new officers and directors of NPI Equity. Insignia is a fully integrated real estate service company specializing in the ownership and operation of securitized real estate assets. According to Commercial Property News and the National Multi-Housing Council, since 1992 Insignia has been the largest property manager in the United States. The Managing General Partner does not believe these transactions will have a significant effect on Registrant's liquidity or results of operation. At this time, it appears that the investment objective of capital growth will not be attainted and that investors will not receive a return of all of their invested capital. The extent to which invested capital is returned to investors is dependent upon the performance of 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. The ability to hold and operate these properties is dependent on Registrant's ability to obtain refinancing or debt modification as required. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including, but not limited to, a downward trend in market values of existing residential properties. In addition, the bailout of the savings and loan associations and sales of foreclosed properties by auction reduced market values and caused a further restriction on the ability to obtain credit. As a result, Registrant's ability to refinance or sell its properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties have been relatively low interest rates, which encourage existing and potential residential tenants to purchase homes. In addition, there has been a significant decline nationally in new household formation. Despite the above, the rental market appears to be experiencing a gradual strengthening and management anticipates that increases in revenue will generally exceed increases in expenses during the next twelve months. Management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies, should create a more favorable market value for Registrant's properties in the future. 8 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Results of Operations Nine Months Ended September 30, 1995 vs. September 30, 1994 Operating results improved by $204,000 for the nine months ended September 30, 1995, as compared to 1994, due to an increase in revenues of $112,000 and a decrease in expenses of $92,000. Revenues increased by $112,000 for the nine months ended September 30, 1995, as compared to 1994, due to increases of $111,000 in rental income and $1,000 in interest income. Rental revenue increased due to increased rental rates at both of Registrant's properties. Occupancy remained constant. Interest income remained relatively constant. Expenses decreased by $92,000 for the nine months ended September 30, 1995, as compared to 1994, due to decreases in operating expenses of $60,000 and general and administrative expenses of $80,000, which were partially offset by an increase in interest expense of $48,000. Operating expenses decreased primarily due to decreases in exterior painting and general repairs and maintenance at Registrant's The Landings Apartments property. General and administrative expenses decreased due to the decrease in asset management costs effective July 1, 1994. Interest expense increased due to an increase in the variable interest rate on the mortgage loans. Depreciation remained constant. Three Months Ended September 30, 1995 vs. September 30, 1994 Operating results improved by $105,000 for the three months ended September 30, 1995, as compared to 1994, due to an increase in revenues of $25,000 and a decrease in expenses of $80,000. Revenues increased by $25,000 for the three months ended September 30, 1995, as compared to 1994, due to an increase of $25,000 in rental income. Rental revenue increased due to increased rental rates and relatively constant occupancy at both of Registrant's properties. Interest income remained relatively constant. Expenses decreased by $80,000 for the three months ended September 30, 1995, as compared to 1994, due to decreases in operating expenses of $88,000 and general and administrative expenses of $3,000, which were partially offset by an increase in interest expense of $11,000. Operating expenses decreased primarily due to decreases in exterior painting and general repairs and maintenance at both of Registrant's properties for the three months ended September 30, 1995. Interest expense increased due to an increase in the variable interest rate on the mortgage loans. General and administrative expenses and depreciation expense remained relatively constant. 9 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Properties A description of the properties in which Registrant has an ownership interest during the period covered by this Report, along with occupancy data, follows: CENTURY PROPERTIES FUND XVI OCCUPANCY SUMMARY Average Occupancy Rate (%) --------------------------- Nine Months Three Months Number Ended Ended of Date of September 30, September 30, Name and Location Units Purchase 1995 1994 1995 1994 - ----------------- ------ -------- ---- ---- ---- ---- The Landings Apartments 200 06/82 96 96 96 98 Tampa, Florida Woods of Inverness Apartments 272 07/82 96 96 97 96 Houston, Texas 10 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 2. NPI, Inc. Stock Purchase Agreement dated as of August 17, 1995 incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. (b) Report on Form 8-K On August 24, 1995, Registrant filed a Current Report on Form 8-K with the Securities and Exchange Commission with respect to the sale of the stock of NPI, Inc. (Item 1, Change in Control). 11 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTURY PROPERTIES FUND XVI By: FOX CAPITAL MANAGEMENT CORPORATION, A California Corporation, its general partner /S/ ARTHUR N. QUELER ---------------------------------- Secretary/Treasurer and Director (Principal Financial Officer) 12 of 13 CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995 EXHIBIT INDEX Exhibit Page No. - ------- -------- 2. NPI, Inc. Stock Purchase Agreement * dated August 17, 1995 * Incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. 13 of 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Properties Fund XVI and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 887,000 0 0 0 0 0 14,492,000 (6,301,000) 9,466,000 0 7,000,000 0 0 0 2,073,000 9,466,000 0 1,991,000 0 1,598,000 0 0 596,000 (340,000) 0 (340,000) 0 0 0 (340,000) (2.44) (2.44)
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