-----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, Ske9avHYImTMq7XioNl1jba5Mq6fjpt/w7xxAzBKEhTUbcu3YRbixTTGndDr3mX3 UkPjqfJNZSnbqUWq7OLmTg== /in/edgar/work/20000814/0000711642-00-000251/0000711642-00-000251.txt : 20000921 0000711642-00-000251.hdr.sgml : 20000921 ACCESSION NUMBER: 0000711642-00-000251 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XVII CENTRAL INDEX KEY: 0000356472 STANDARD INDUSTRIAL CLASSIFICATION: [6500 ] IRS NUMBER: 942782037 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-11137 FILM NUMBER: 697940 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: PO BOX 1089 C/O INSIGNIA FINANCIAL GROUP CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391000 MAIL ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 0001.txt SECOND QUARTER 10-QSB 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 June 30, 2000 [ ] 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 0-11137 CENTURY PROPERTIES FUND XVII (Exact name of small business issuer as specified in its charter) California 94-2782037 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, P.O. 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 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 XVII CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 2000
Assets Cash and cash equivalents $ 1,003 Receivables and deposits 556 Restricted escrows 177 Other assets 753 Investment properties: Land $ 7,078 Buildings and related personal property 64,210 71,288 Less accumulated depreciation (36,688) 34,600 $ 37,089 Liabilities and Partners' Deficit Liabilities Accounts payable $ 255 Tenant security deposit liabilities 344 Accrued property taxes 448 Other liabilities 461 Mortgage notes payable 48,397 Partners' Deficit General partner $ (8,451) Limited partners (75,000 units issued and outstanding) (4,365) (12,816) $ 37,089
See Accompanying Notes to Consolidated Financial Statements b) CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 2000 1999 2000 1999 Revenues: Rental income $ 3,497 $ 3,409 $ 6,970 $ 6,765 Other income 290 198 487 361 Total revenues 3,787 3,607 7,457 7,126 Expenses: Operating 1,209 1,147 2,393 2,300 General and administrative 83 105 155 174 Depreciation 709 621 1,401 1,232 Interest 963 890 1,937 1,784 Property taxes 221 205 490 403 Total expenses 3,185 2,968 6,376 5,893 Income before extraordinary loss 602 639 1,081 1,233 Extraordinary loss on early extinguishment of debt -- -- (102) -- Net income $ 602 $ 639 $ 979 $ 1,233 Net income allocated to general partner $ 71 $ 75 $ 116 $ 145 Net income allocated to limited partners 531 564 863 1,088 $ 602 $ 639 $ 979 $ 1,233 Per limited partnership unit: Income before extraordinary loss $ 7.08 $ 7.52 $ 12.71 $ 14.51 Extraordinary loss -- -- (1.20) -- Net income $ 7.08 $ 7.52 $ 11.51 $ 14.51 Distributions per limited partnership unit $ 37.03 $ -- $113.87 $ 30.31
See Accompanying Notes to Consolidated Financial Statements c) CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 75,000 $ -- $75,000 $ 75,000 Partners' (deficit) capital at December 31, 1999 75,000 $(8,023) $ 3,312 $ (4,711) Distributions to partners -- (544) (8,540) (9,084) Net income for the six months ended June 30, 2000 -- 116 863 979 Partners' deficit at June 30, 2000 75,000 $(8,451) $(4,365) $(12,816)
See Accompanying Notes to Consolidated Financial Statements d) CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 2000 1999 Cash flows from operating activities: Net income $ 979 $ 1,233 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,401 1,232 Amortization of loan costs and debt discounts 125 710 Extraordinary loss on debt refinancing 102 -- Loss on disposal of property 193 -- Change in accounts: Receivables and deposits 578 72 Other assets (35) (44) Accounts payable 3 (49) Tenant security deposit liabilities 36 22 Accrued property taxes (164) (145) Other liabilities 138 (48) Net cash provided by operating activities 3,356 2,983 Cash flows from investing activities: Property improvements and replacements (981) (944) Net withdrawals from restricted escrows 286 684 Insurance proceeds received 177 -- Net cash used in investing activities (518) (260) Cash flows from financing activities: Payments on mortgage notes payable (330) (199) Payoff of mortgage notes payable (21,943) -- Proceeds from mortgage notes payable 22,800 -- Loan costs paid (296) -- Prepayment penalty (79) -- Distributions to partners (9,084) (2,500) Net cash used in financing activities (8,932) (2,699) Net (decrease) increase in cash and cash equivalents (6,094) 24 Cash and cash equivalents at beginning of period 7,097 4,031 Cash and cash equivalents at end of period $ 1,003 $ 4,055 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,622 $ 1,075
See Accompanying Notes to Consolidated Financial Statements e) CENTURY PROPERTIES FUND XVII NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements of Century Properties Fund XVII (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") the general partner of the Partnership's 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, 2000 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2000. 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, 1999. Principles of Consolidation The financial statements include all the accounts of the Partnership and Apartment CCG 17, L.P., which owns Cherry Creek Gardens Apartments, Apartment Creek 17, LLC, which owns Creekside Apartments and Apartment Lodge 17, LLC, which owns The Lodge Apartments. The Partnership ultimately holds a 100% interest in Apartment CCG 17, L.P., Apartment Creek 17, LLC, and Apartment Lodge 17, LLC. All intra-entity balances have been eliminated. Note B - Transfer of Control Pursuant to a series of transactions which closed on October 1, 1998 and February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust merged into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired a 100% ownership interest in the Managing General Partner. The Managing General Partner does not believe that this transaction has had or will have a material effect on the affairs and operations of the Partnership. Note C - 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 payments were made to the Managing General Partner and affiliates during the six months ended June 30, 2000 and 1999: 2000 1999 (in thousands) Property management fees (included in operating expenses) $371 $356 Reimbursement for services of affiliates (included in investment properties, general and administrative expense and operating expense) 104 121 Partnership management fee (included in general partner distributions) 370 181 During the six months ended June 30, 2000 and 1999, affiliates of the Managing General Partner were entitled to receive 5% of gross receipts from all of the Registrant's properties for providing property management services. The Registrant paid to such affiliates approximately $371,000 and $356,000 for the six months ended June 30, 2000 and 1999, respectively. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $104,000 and $121,000 for the six months ended June 30, 2000 and 1999, respectively. Pursuant to the Partnership Agreement, for managing the affairs of the Partnership, the general partner is entitled to receive a Partnership management fee equal to 10% of the Partnership's adjusted cash from operations as distributed. Approximately $370,000 and $181,000 in Partnership management fees were paid along with the distributions from operations made during the six months ended June 30, 2000 and 1999, 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. AIMCO and its affiliates currently own 41,637 limited partnership units in the Partnership representing 55.52% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates or affiliates of the Managing General Partner. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. In this regard, on July 24, 2000 an affiliate of AIMCO commenced a tender offer to purchase any and all of the remaining partnership interests for a purchase price of $309.00 per unit. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters. As a result of its ownership of 55.52% 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 their affiliation with the Managing General Partner. However, DeForest Ventures I L.P., from whom AIMCO, through its merger with Insignia, acquired its units, had agreed for the benefit of non-tendering unitholders, that it 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 unit holders. Except for the foregoing, no other limitations are imposed on AIMCO and its affiliates right to vote each Unit acquired. Note D - Distributions to Partners During the six months ended June 30, 2000, the Partnership declared and paid distributions of approximately $9,084,000 (approximately $8,540,000 to the limited partners or $113.87 per limited partnership unit) to its partners. The distributions consisted of approximately $3,695,000 (approximately $3,259,000 to the limited partners or $43.46 per limited partnership unit) from operations and approximately $5,389,000 (approximately $5,281,000 to the limited partners or $70.41 per limited partnership unit) from the proceeds of the refinancing of Cherry Creek Gardens Apartments in December 1999 and the refinancing of Cooper's Pond Apartments in February 2000. During the six months ended June 30, 1999, the Partnership paid a distribution of approximately $2,500,000 (approximately $2,273,000 to the limited partners or $30.31 per limited partnership unit) to its partners. The distribution consisted of approximately $1,811,000 (approximately $1,598,000 to the limited partners or approximately $21.31 per limited partnership unit) from operations and approximately $689,000 (approximately $675,000 to the limited partners or $9.00 per limited partnership unit) from the proceeds of the refinancing of Creekside Apartments and The Lodge Apartments in August 1998. Note E - Refinancing and Extraordinary Loss On December 10, 1999, the Partnership refinanced the mortgage encumbering Cherry Creek Gardens Apartments. The refinancing replaced indebtedness of approximately $7,320,000 with a new mortgage in the amount of $12,415,000. The new mortgage carries a stated interest rate of 7.99%. Interest on the old mortgage was 8.63%. Payments on the mortgage loan are due monthly until the loan matures on January 1, 2020. In addition, the Partnership was required to establish a repair escrow of $110,000 with the lender for certain capital replacements. Total capitalized loan costs were approximately $92,000 at December 31, 1999. Additional loan costs of approximately $6,000 were capitalized during the six months ended June 30, 2000. On January 28, 2000, the Partnership refinanced the mortgage encumbering Village in the Woods Apartments. The refinancing replaced indebtedness of approximately $14,421,000 with a new mortgage in the amount of $14,500,000. The new mortgage carries a stated interest rate of 8.56%. The refinanced mortgage was a zero coupon note which was discounted at an effective interest rate of 10.247%. Payments on the mortgage loan are due monthly until the loan matures on February 1, 2020. Total capitalized loan costs were approximately $143,000 at June 30, 2000. On February 15, 2000, the Partnership refinanced the first and second mortgages encumbering Cooper's Pond Apartments. The refinancing replaced indebtedness of approximately $7,522,000 with a new mortgage in the amount of $8,300,000. The new mortgage carries a stated interest rate of 8.47%. Interest rates on the refinanced mortgages were 8.0% and 8.5%. Payments on the mortgage loan are due monthly until the loan matures on March 1, 2020. Total capitalized loan costs were approximately $147,000 at June 30, 2000. The Partnership recognized an extraordinary loss on the early extinguishment of debt of approximately $102,000 due to the write-off of unamortized loan costs and a prepayment penalty. Note F - Casualty Event In November 1999, a fire occurred at The Village in the Woods Apartments which caused damage to sixteen units of the complex. As of June 30, 2000, the loss and expenditures associated with this casualty have been offset by insurance proceeds. The financial impact may change in future months depending on final negotiations with the insurance company. Note G - Segment Reporting Description of the types of products and services from which the reportable segment derives its revenues: The Partnership has one reportable segment: residential properties. The Partnership's residential property segment consists of five apartment complexes, three of which are located in Colorado and one each in Texas and Florida. The Partnership rents apartment units to tenants for terms that are typically twelve months or less. Measurement of segment profit or loss: The Partnership evaluates performance based on segment profit (loss) before depreciation. The accounting policies of the reportable segment are the same as those described in the Partnership's Annual Report on Form 10-KSB for the year ended December 31, 1999. Factors management used to identify the enterprise's reportable segments: The Partnership's reportable segment consists of investment properties that offer similar products and services. Although each of the investment properties is managed separately, they have been aggregated into one segment as they provide services with similar types of products and customers. Segment information for the three and six month periods ended June 30, 2000 and 1999 is shown in the tables below (in thousands). The "Other" column includes Partnership administration related items and income and expense not allocated to the reportable segment. Six months ended June 30, 2000 Residential Other Totals Rental income $ 6,970 $ -- $ 6,970 Other income 443 44 487 Interest expense 1,937 -- 1,937 Depreciation 1,401 -- 1,401 General and administrative expense -- 155 155 Extraordinary loss on early extinguishment of debt (102) -- (102) Segment profit (loss) 1,090 (111) 979 Total assets 36,846 243 37,089 Capital expenditures for investment properties 981 -- 981 Three months ended June 30, 2000 Residential Other Totals Rental income $ 3,497 $ -- $ 3,497 Other income 281 9 290 Interest expense 963 -- 963 Depreciation 709 -- 709 General and administrative expense -- 83 83 Segment profit (loss) 676 (74) 602 Six months ended June 30, 1999 Residential Other Totals Rental income $ 6,765 $ -- $ 6,765 Other income 337 24 361 Interest expense 1,784 -- 1,784 Depreciation 1,232 -- 1,232 General and administrative expense -- 174 174 Segment profit (loss) 1,383 (150) 1,233 Total assets 40,498 605 41,103 Capital expenditures for investment properties 944 -- 944 Three months ended June 30, 1999 Residential Other Totals Rental income $ 3,409 $ -- $ 3,409 Other income 184 14 198 Interest expense 890 -- 890 Depreciation 621 -- 621 General and administrative expense -- 105 105 Segment profit (loss) 730 (91) 639 Note H - 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, 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 the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; the management of partnerships by the Insignia affiliates; and the Insignia Merger. 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 have 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 final 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. The Court will entertain applications for lead counsel which must be filed by August 4, 2000. The Court has scheduled a hearing on August 21, 2000 to address the issue of appointing lead counsel. The Managing General Partner does not anticipate that costs associated with this case 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 Registrant from time to time. The discussion of the Registrant'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 Registrant's business and results of operations. 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 five apartment complexes. The following table sets forth the average occupancy of the properties for the six months ended June 30, 2000 and 1999: Average Occupancy Property 2000 1999 Cherry Creek Gardens Apartments 96% 97% Englewood, Colorado Creekside Apartments 97% 98% Denver, Colorado The Lodge Apartments 98% 98% Denver, Colorado The Village in the Woods Apartments 90% 93% Cypress, Texas Cooper's Pond Apartments 96% 96% Tampa, Florida The Managing General Partner attributes the decrease in occupancy at The Village in the Woods to an increase in home purchases and increased competition due to the construction of new apartment complexes in the area. Results of Operations The Partnership realized net income for the six months ended June 30, 2000 of approximately $979,000 as compared to net income of approximately $1,233,000 for the corresponding period of 1999. The Partnership's net income for the three months ended June 30, 2000 was approximately $602,000 compared to approximately $639,000 for the three months ended June 30, 1999. The decrease in net income for the six month period ended June 30, 2000 was primarily due to recognition of a $102,000 extraordinary loss on the extinguishment of debt. Income before extraordinary loss for the six months ended June 30, 2000 and 1999 was approximately $1,081,000 and $1,233,000, respectively. This decrease was due to an increase in total revenues which was more than offset by an increase in total expenses. The extraordinary loss on extinguishment of debt relates to the refinancing of the mortgage at Cooper's Pond Apartments (see discussion below). The decrease in net income for the three month period ended June 30, 2000 was due to an increase in total expenses partially offset by an increase in total revenues. Total revenues increased for the three and six month periods ended June 30, 2000 due to an increase in rental income and other income. The increase in rental income was due to an increase in average rental rates at all of the Partnership's investment properties. These increases were partially offset by decreases in occupancy at Cherry Creek Gardens Apartments, Creekside Apartments, and Village in the Woods Apartments, as well as increased concession costs and bad debt expense at Village in the Woods Apartments and Cherry Creek Gardens Apartments. The increase in other income is due primarily to an increase in interest income due to higher average cash balances in interest bearing accounts and an increase in income from utility charges at Cherry Creek Gardens Apartments and Creekside Apartments. Total expenses increased for the three and six month periods ended June 30, 2000 primarily due to increased depreciation expense, property tax expense and interest expense which was partially offset by decreased general and administrative expenses. Depreciation expense increased due to property improvements and replacements put into service during the last twelve months. Property tax expense increased due to an increase in the assessed value at Village in the Woods Apartments. Interest expense increased due to the refinancings of Cherry Creek Gardens Apartments in December 1999, Village in the Woods Apartments in January 2000, and Cooper's Pond Apartments in February 2000, as discussed below. General and administrative expenses decreased due to a decrease in professional fees associated with the administration of the Partnership. Included in general and administrative expenses at both June 30, 2000 and 1999 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 communications with investors and regulatory agencies required by the Partnership Agreement are included. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each 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 June 30, 2000, the Partnership had cash and cash equivalents of approximately $1,003,000 compared to approximately $4,055,000 at June 30, 1999. The decrease in cash and cash equivalents of approximately $6,094,000 from the Partnership's year ended December 31, 1999 is due to approximately $8,932,000 of cash used in financing activities and approximately $518,000 of cash used in investing activities, which was partially offset by approximately $3,356,000 of cash provided by operating activities. Cash used in financing activities consisted of payments of principal made on the mortgages encumbering the Partnership's properties, the payoff of the previous mortgages encumbering Village in the Woods Apartments and Cooper's Pond Apartments, loan costs paid, the payment of a prepayment penalty on the refinancing of Cooper's Pond Apartments, and distributions to partners which was partially offset by the proceeds from the debt refinancing of Village in the Woods Apartments and Cooper's Pond Apartments. Cash used in investing activities consisted of property improvements and replacements largely offset by net withdrawals from escrow accounts maintained by the mortgage lenders and insurance proceeds received. The Partnership invests its working capital reserves in money market accounts. On December 10, 1999, the Partnership refinanced the mortgage encumbering Cherry Creek Gardens Apartments. The refinancing replaced indebtedness of approximately $7,320,000 with a new mortgage in the amount of $12,415,000. The new mortgage carries a stated interest rate of 7.99%. Interest on the old mortgage was 8.63%. Payments on the mortgage loan are due monthly until the loan matures on January 1, 2020. In addition, the Partnership was required to establish a repair escrow of $110,000 with the lender for certain capital replacements. Total capitalized loan costs were approximately $92,000 at December 31, 1999. Additional loan costs of approximately $6,000 were capitalized during the six months ended June 30, 2000. On January 28, 2000, the Partnership refinanced the mortgage encumbering The Village in the Woods Apartments. The refinancing replaced indebtedness of approximately $14,421,000 with a new mortgage in the amount of $14,500,000. The new mortgage carries a stated interest rate of 8.56%. The refinanced mortgage was a zero coupon note which was discounted at an effective interest rate of 10.247%. Payments on the mortgage loan are due monthly until the loan matures on February 1, 2020. Total capitalized loan costs were approximately $143,000 at June 30, 2000. On February 15, 2000, the Partnership refinanced the first and second mortgages encumbering Cooper's Pond Apartments. The refinancing replaced indebtedness of approximately $7,522,000 with a new mortgage in the amount of $8,300,000. The new mortgage carries a stated interest rate of 8.47%. Interest rates on the refinanced mortgages were 8.0% and 8.5%. Payments on the mortgage loan are due monthly until the loan matures on March 1, 2020. Total capitalized loan costs were approximately $147,000 at June 30, 2000. The Partnership recognized an extraordinary loss on the early extinguishment of debt of approximately $102,000 due to the write-off of unamortized loan costs and a prepayment penalty. 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 and to comply with Federal, state, and local legal and regulatory requirements. Capital improvements planned for each of the Partnership's properties are detailed below. Cherry Creek Gardens Apartments During the six months ended June 30, 2000, the Partnership completed approximately $169,000 of capital improvements at the property, consisting primarily of swimming pool upgrades, exterior painting, carpet and vinyl replacements, parking area improvements, and water heater replacements. These improvements were funded from operating cash flow. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted for 2000 is approximately $626,000, consisting primarily of swimming pool upgrades, clubhouse renovations, carpet replacement, appliances, and other building improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Creekside Apartments During the six months ended June 30, 2000, the Partnership completed approximately $84,000 of capital improvements at the property, consisting primarily of roof replacement, air conditioning unit replacement, carpet and vinyl replacements, and water heater replacements. These improvements were funded from operating cash flow and the Partnership's reserves. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted for 2000 is approximately $443,000, consisting primarily of appliances, carpet replacement, and submetering improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. The Lodge Apartments During the six months ended June 30, 2000, the Partnership completed approximately $56,000 of capital improvements at the property, consisting primarily of carpet and vinyl replacements and HVAC condensing units. These improvements were funded from operating cash flow and the Partnership's reserves. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted for 2000 is approximately $450,000, consisting primarily of carpet replacements and submetering improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. The Village in the Woods Apartments During the six months ended June 30, 2000, the Partnership completed approximately $390,000 of budgeted and non-budgeted capital improvements at the property, consisting primarily of parking area improvements, office equipment, carpet replacements, and other building improvements. In addition, the Partnership completed repairs and replacements related to a fire in November 1999. These improvements were funded from operating cash flow and insurance proceeds. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted for 2000 is approximately $223,000, consisting primarily of appliances, air conditioning unit replacement, and carpet and vinyl replacements. Additional improvements may be considered and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. Cooper's Pond Apartments During the six months ended June 30, 2000, the Partnership completed approximately $282,000 of capital improvements at the property, consisting primarily of carpet and vinyl replacements, appliances, light fixture replacements, swimming pool improvements, and plumbing upgrades. These improvements were funded from Partnership reserves. The Partnership has evaluated the capital improvement needs of the property for the year. The amount budgeted for 2000 is approximately $558,000, consisting primarily of air conditioning unit replacement, carpet and vinyl replacement, major landscaping, swimming pool improvements, plumbing upgrades, and structural improvements. Additional improvements may be considered and will depend on the physical condition of the property as well as 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 Partnership's distributable cash flow, if any, may be adversely affected at least in the short term. The Partnership's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness of approximately $48,397,000 is amortized over varying periods with maturity dates ranging from September 2008 at Creekside Apartments and The Lodge Apartments to March 2020 at Cooper's Pond Apartments. The Managing General Partner will attempt to refinance such indebtedness and/or sell the properties prior to such maturity dates. If the properties cannot be refinanced or sold for a sufficient amount, the Partnership will risk losing such properties through foreclosure. During the six months ended June 30, 2000, the Partnership declared and paid distributions of approximately $9,084,000 (approximately $8,540,000 to the limited partners or $113.87 per limited partnership unit) to its partners. The distributions consisted of approximately $3,695,000 (approximately $3,259,000 to the limited partners or $43.46 per limited partnership unit) from operations and approximately $5,389,000 (approximately $5,281,000 to the limited partners or $70.41 per limited partnership unit) from the proceeds of the refinancing of Cherry Creek Gardens Apartments in December 1999 and the refinancing of Cooper's Pond Apartments in February 2000. During the six months ended June 30, 1999, the Partnership paid a distribution of approximately $2,500,000 (approximately $2,273,000 to the limited partners or $30.31 per limited partnership unit) to its partners. The distribution consisted of approximately $1,811,000 (approximately $1,598,000 to the limited partners or approximately $21.31 per limited partnership unit) from operations and approximately $689,000 (approximately $675,000 to the limited partners or $9.00 per limited partnership unit) from the proceeds of the refinancing of Creekside Apartments and The Lodge Apartments in August 1998. 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 Partnership's distribution policy is reviewed on a quarterly basis. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital improvements to permit further distributions to its partners during the remainder of 2000 or subsequent periods. 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, 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 the acquisition of interests in certain general partner entities by Insignia Financial Group, Inc. and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; the management of partnerships by the Insignia affiliates; and the Insignia Merger. 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 have 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 final 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. The Court will entertain applications for lead counsel which must be filed by August 4, 2000. The Court has scheduled a hearing on August 21, 2000 to address the issue of appointing lead counsel. The Managing General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K filed during the quarter ended June 30, 2000: None. SIGNATURES In accordance with the requirements of the Exchange Act, the Partnership caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PROPERTIES FUND XVII By: FOX PARTNERS Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION Its 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: EX-27 2 0002.txt SECOND QUARTER 10-QSB
5 This schedule contains summary financial information extracted from CENTURY PROPERTIES FUND XVII 2000 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000356472 CENTURY PROPERTIES FUND XVII 1,000 6-MOS DEC-31-2000 APR-01-2000 JUN-30-2000 1,003 0 556 0 0 0 71,288 (36,688) 37,089 0 48,397 0 0 0 (12,816) 37,089 0 7,457 0 0 6,376 0 1,937 0 0 0 0 (102) 0 979 11.51 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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