-----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, DhBBIHDlzALqAv8Dv/x7OfQzQIVa7bKirHQLUtIuyx25mOX08bUJEC9+FYloNMsk 2oqOK0TXRJVsIQQ56vnQRQ== 0000711642-97-000004.txt : 19970325 0000711642-97-000004.hdr.sgml : 19970325 ACCESSION NUMBER: 0000711642-97-000004 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970324 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XVII CENTRAL INDEX KEY: 0000356472 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942782037 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11137 FILM NUMBER: 97561387 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 C/O INSIGNIA FINANCIAL 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 EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 0-11137 CENTURY PROPERTIES FUND XVII California 94-2782037 (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 [X] 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 10-KSB.[X] State issuer's revenues for its most recent fiscal year. $12,587,000 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 XVII (the "Partnership" or "Registrant") was organized in November 1981 as a California limited partnership under the Uniform Limited Partnership Act of the California Corporations Code. Fox Partners, a California general partnership, is the general partner of the Registrant. The general partners of Fox Partners are Fox Capital Management Corporation (the "Managing General Partner"), a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners 82, a California general partnership. The principal business of the Registrant is and has been to acquire, hold for investment and ultimately sell income-producing multi-family residential properties. The Registrant is a "closed" limited partnership real estate syndicate formed to acquire multi-family residential properties. Beginning in March 1982 through October 1982, the Registrant offered and sold $75,000,000 in Limited Partnership Units. The net proceeds of this offering were used to acquire twelve income-producing real properties. The Registrant's original property portfolio was geographically diversified with properties acquired in four states. Since 1982, the principal activity of the Registrant has been managing its portfolio. Three apartment properties were sold in 1988. One apartment was acquired by the lender through a deed in-lieu of foreclosure in 1992. During 1993, two apartment properties were sold and one was acquired by the lender through foreclosure. 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"), an affiliate of the Managing General Partner. 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. ("Insignia"), a Delaware corporation, 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 II and the Managing General Partner resigned and an affiliate of Insignia 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 25,710.50 limited partnership units or approximately 34% 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. At this time, 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, it is anticipated at this time that some of the remaining properties will be held longer than originally expected. The ability to hold and operate these properties is dependent on the Registrant's ability to obtain additional financing, refinancing or debt restructuring as required. ITEM 2. DESCRIPTION OF PROPERTIES: The following table sets forth the Partnership's investments in properties: Date of Property Purchase Type of Ownership Use Cherry Creek Gardens Apartments 09/82 Fee ownership subject to Apartment Englewood, Colorado first mortgage 296 units Creekside Apartments 10/82 Fee ownership subject to Apartment Denver, Colorado first mortgage 328 units The Lodge Apartments 10/82 Fee ownership subject to Apartment Denver, Colorado first mortgage 376 units The Village in the Woods Apartments 10/82 Fee ownership subject to Apartment Cypress, Texas first mortgage 530 units Cooper's Pond Apartments 03/83 Fee ownership subject to Apartment Tampa, Florida first and second 463 units mortgage SCHEDULE OF PROPERTIES: (dollar amounts in thousands)
Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Cherry Creek Gardens Apartments $ 14,647 $ 6,419 5-30yrs S\L $ 2,900 Creekside Apartments 10,148 4,159 5-30yrs S\L 2,929 The Lodge Apartments 11,963 4,886 5-30yrs S\L 3,442 Cooper's Pond Apartments 14,197 6,593 5-30yrs S\L 2,828 $ 65,225 $ 28,140 $ 15,899
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 Cherry Creek Gardens Apartments $ 7,766 8.630% 25 years 12/01/99 $ 7,335 Creekside Apartments 5,249 7.875% 25 years 07/01/00 4,882 The Lodge Apartments 5,775 7.875% 25 years 07/01/00 5,363 The Village in the Woods Apts. 14,421 (1) (1) 01/24/00 14,421 Cooper's Pond - 1st mortgage 3,637 8.000% 23 years 07/01/99 3,439 - 2nd mortgage 4,134 8.500% (2) 07/01/05 4,134 40,982 $ 39,574 Mortgage discount (4,608) $ 36,374 (1) Zero coupon note; discounted at an effective interest rate of 10.247% (2) Interest only
SCHEDULE OF RENTAL RATES AND OCCUPANCY: Average Annual Average Rental Rates Occupancy Property 1996 1995 1996 1995 Cherry Creek Gardens Apartments $ 8,378/unit $ 8,255/unit 96% 95% Creekside Apartments 6,210/unit 5,979/unit 97% 97% The Lodge Apartments 5,840/unit 5,541/unit 96% 97% The Village in the Woods Apartments 6,458/unit 6,434/unit 93% 94% Cooper's Pond Apartments 5,239/unit 5,069/unit 94% 94% The Village in the Woods Apartments is in a highly competitive market and construction of single family housing continues to increase. Although the Tampa market is a soft market, the average occupancy at Cooper's Pond's Apartments is slightly above the market for that area. 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 multi- family 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 Cherry Creek Gardens Apartments $ 126 10.46 Creekside Apartments 69 7.76 The Lodge Apartments 81 7.75 The Village in the Woods Apartments 295 2.75 Cooper's Pond Apartments 188 2.51 ITEM 3. LEGAL PROCEEDINGS The Registrant is unaware of any pending or 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 The unit holders of the Registrant did not vote on any matter during 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, sold 75,000 Limited Partnership Units aggregating $75,000,000 during its offering period. The Partnership currently has 75,000 units outstanding and 5,819 Limited Partners of record. There is no intention to sell additional Limited Partnership Units nor is there an established market for these Units. In October 1996, Unit holders received distributions from operations of $15.04 per Limited Partnership Unit. No distributions from operations were made in 1995. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION This item should be read in conjunction with the consolidated financial statements and other items contained elsewhere in this report. Results of Operations The Partnership realized net income of $133,000 for the year ended December 31, 1996, versus a net loss of $345,000 for the year ended December 31, 1995. The increase in net income can be attributed to increased revenue and decreased expenses. Rental revenues increased due to increases in average rental rates at all of the Partnership's investment properties. Other income increased due to an increase in interest income as a result of the increase in cash reserves held by the Partnership. Also contributing to the increase in other income was an increase in the collection of lease cancellation fees. Operating expense decreased due to fewer interior and exterior building repairs for the year ended December 31, 1996. This decrease in operating expense was offset by increases in depreciation and general and administrative expenses. Depreciation expense increased due to an increase in capital improvements at the Partnership's investment properties. The Partnership reimburses the Managing General Partner and its affiliates for its costs involved in the management and administration of all Partnership activities. While overall expense reimbursements have increased during the year ending December 31, 1996, the recurring expenses subsequent to the transition efforts to the new administration are expected to more closely approximate historical levels. The increase in expense reimbursements during the year ending December 31, 1996, is directly attributable to the combined transition efforts of the Greenville and Atlanta administrative offices during the year-end close, preparation of the 1995 10-K and tax return (including the limited partner K-1's), filing of the first two quarterly reports and transition of asset management responsibilities to the new administration. On August 3, 1995, the Partnership paid $910,000 to satisfy in full the $1,039,000 second mortgage encumbering the Village in the Woods Apartments at a discount. As a result, the Partnership recognized an extraordinary gain on early extinguishment of debt of $129,000. Included in operating expense for the year ended December 31, 1996 is $415,000 of major repairs and maintenance mainly comprised of interior building maintenance, exterior painting, exterior building maintenance, and gutter repair. 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 the burden of increases in expenses. 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. Capital Resources and Liquidity The Partnership had unrestricted cash and cash equivalents of $4,441,000 at December 31, 1996, versus $2,623,000 at December 31, 1995. The increase in net cash provided by operating activities is attributable to an increase in net income and an increase in accrued expenses and other liabilities. Cash flows from investing activities decreased in 1996 as compared to 1995. This decrease results from an increase in property improvements and replacements and an increase in deposits to restricted escrows. The distribution to partners in October 1996 resulted in an increase in net cash used in financing activities for 1996 versus 1995. An affiliate of the Managing General Partner has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. The Partnership has no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $36,374,000, net of discount, is amortized over varying periods with maturity dates ranging from July 1999 to July 2005, at which time the properties will either be sold or refinanced. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. In 1996, Unit holders received distributions from operations of $1,128,000 ($15.04 per Limited Partnership Unit). There were no cash distributions in 1995. ITEM 7. FINANCIAL STATEMENTS CENTURY PROPERTIES FUND XVII 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 Statement 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 Notes to Consolidated Financial Statements Independent Auditors' Report To the Partners Century Properties Fund XVII Greenville, South Carolina We have audited the accompanying consolidated balance sheet of Century Properties Fund XVII, (a limited partnership) (the "Partnership") and its subsidiaries as of December 31, 1996, and the related consolidated statements of operations, changes in partners' capital (deficit) 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 XVII and its subsidiaries, as of December 31, 1996, and the 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. January 30, 1997 CENTURY PROPERTIES FUND XVII CONSOLIDATED BALANCE SHEET (in thousands, except unit data) December 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 4,441 Restricted--tenant security deposits 269 Escrow for taxes 422 Restricted escrows 881 Other assets 433 Investment properties (Notes B and E) Land $ 7,078 Buildings and related personal property 58,147 65,225 Less accumulated depreciation (28,140) 37,085 $ 43,531 Liabilities and Partners' Capital Liabilities Accrued expenses and other liabilities $ 588 Accrued taxes 586 Security deposit liabilities 269 Mortgage notes payable (Notes B and E) 36,374 Partners' (Deficit) Capital General partners $ (7,057) Limited partners (75,000 units issued and outstanding) 12,771 5,714 $ 43,531 See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except unit data) Years Ended December 31, 1996 1995 Revenues: Rental income $ 11,784 $ 11,589 Other income 803 604 Total revenues 12,587 12,193 Expenses: Operating 6,481 6,853 Interest 3,539 3,527 Depreciation 2,127 2,043 General and administrative 307 244 Total expenses 12,454 12,667 Income (loss) before extraordinary item 133 (474) Extraordinary item - gain on early extinguishment of debt -- 129 Net income (loss) (Note C) $ 133 $ (345) Net income (loss) allocated to general partners $ 16 $ (41) Net income (loss) allocated to limited partners 117 (304) Net income (loss) $ 133 $ (345) Per limited partnership unit: Income (loss) before extraordinary item $ 1.56 $ (5.57) Extraordinary item -- 1.52 Net income (loss) $ 1.56 $ (4.05) Cash distributions per limited partnership unit $ 15.04 $ -- See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (in thousands, except unit data) Limited Partnership General Limited Units Partners Partners Total Original capital contributions 75,000 $ -- $75,000 $75,000 Partners' (deficit) capital at December 31, 1994 75,000 $ (6,881) $14,086 $ 7,205 Net loss for the year ended December 31, 1995 -- (41) (304) (345) Partners' (deficit) capital at December 31, 1995 75,000 (6,922) 13,782 6,860 Distribution to the partners -- (151) (1,128) (1,279) Net income for the year ended ended December 31, 1996 -- 16 117 133 Partners' (deficit) capital at December 31, 1996 75,000 $ (7,057) $12,771 $ 5,714 See Accompanying Notes to Consolidated Financial Statements CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 1996 1995 Cash flows from operating activities: Net income (loss) $ 133 $ (345) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 3,475 3,299 Extraordinary gain on early extinguishment of debt -- (129) Change in accounts: Other assets 178 236 Accrued expenses and other liabilities 726 (358) Net cash provided by operating activities: 4,512 2,703 Cash flows from investing activities: Property improvements and replacements (1,007) (692) (Deposits to) withdrawals from restricted escrows, net (45) 760 Net cash (used in) provided by investing activities (1,052) 68 Cash flows from financing activities: Payments on mortgage notes payable (363) (387) Repayments of mortgage notes payable -- (910) Distribution to partners (1,279) -- Net cash used in financing activities: (1,642) (1,297) Net increase in cash and cash equivalents 1,818 1,474 Cash and cash equivalents at beginning of year 2,623 1,149 Cash and cash equivalents at end of year $ 4,441 $ 2,623 Supplemental disclosure of cash flow Cash paid for interest $ 2,043 $ 2,268 Property improvements and replacements in notes payable $ -- $ 39 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XVII Notes to Consolidated Financial Statements December 31, 1996 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization: Century Properties Fund XVII (the "Partnership" or "Registrant") is a California limited partnership organized in November 1981 to acquire and operate residential apartment complexes. The partnership currently owns five residential apartment complexes of which three are located in Colorado, and one each in Florida and Texas. The Partnership's General Partner is Fox Partners, an affiliate of Insignia Financial Group, Inc. Principles of Consolidation: The financial statements include all the accounts of the Partnership and its subsidiaries. All significant interpartnership balances have been eliminated. Minority interest is immaterial and not shown separately in the financial statements. 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 $1,104,000 are included in "Other assets" in the accompanying balance sheet and are being amortized on a straight-line basis over the life of the loans. At December 31, 1996, accumulated amortization is $729,000. Amortization of loan costs is included in "Interest" expense in the accompanying statement of operations. Investment Properties: During the fourth quarter of 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 that 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"). Advertising Costs: Advertising costs of $311,000, and $334,000 are charged to expense as incurred and are included in "Operating" expenses in the accompanying statement of operations. 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. Net Income (Loss) Per Limited Partnership Unit: Net income (loss) per limited partnership unit is calculated by dividing the net income (loss) allocated to the limited partners by the number of its units outstanding. NOTE B - MORTGAGE NOTES PAYABLE 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 Cherry Creek Gardens Apartments $ 67 8.630% 12/01/99 $ 7,335 $ 7,766 Creekside Apartments 42 7.875% 07/01/00 4,882 5,249 The Lodge Apartments 46 7.875% 07/01/00 5,363 5,775 The Village in the Woods Apts. -- (1) 01/24/00 14,421 14,421 Cooper's Pond Apartments - 1st mortgage 30 8.000% 07/01/99 3,439 3,637 - 2nd mortgage 29 8.500% 07/01/05 4,134 4,134 $ 39,574 40,982 Mortgage discount (4,608) $ 36,374
(1) Zero coupon note; discounted at an effective interest rate of 10.247% The estimated fair values of the Partnership's aggregate debt is approximately $39,000,000. This value represents a general approximation of possible valuation and is not necessarily indicative of the amounts the Partnership may pay in an actual market transaction. On August 3, 1995, the Partnership paid $910,000 to satisfy in full the $1,039,000 second mortgage encumbering The Village in the Woods Apartments at a discount. The debt forgiveness of $129,000 was recognized as an extraordinary item in 1995. Scheduled principal payments on the mortgage notes payable subsequent to December 31, 1996, are as follows (dollar amounts in thousands): 1997 $ 414 1998 449 1999 11,202 2000 24,783 2001 -- Thereafter 4,134 $ 40,982 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 income (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 income (loss) and Federal taxable income (loss): 1996 1995 (in thousands, except unit data) Net income (loss) as reported $ 133 $ (345) Add (deduct): Depreciation differences (1,014) (994) Amortization of discount 1,239 1,124 Miscellaneous 26 14 Federal taxable income (loss) $ 384 $ (201) Federal taxable loss per limited partnership unit $ 4.51 $ (2.36) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net liabilities (in thousands): Net assets as reported $ 5,714 Sales commissions and organization expense 9,324 Depreciation (28,932) Provision for impairment of value 1,430 Leaseback termination (1,365) Lease payments credited to rental properties 2,068 Amortization of discount on notes payable 11,725 Construction period interest and taxes (483) Debt forgiven (276) Interest capitalized for income tax reporting 195 Other (92) Net liabilities - Federal tax basis $ (692) NOTE D - 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 in 1996 and 1995: 1996 1995 (in thousands) Property management fees $ 617 $ 592 Reimbursement for services of affiliates 166 162 Included in "Reimbursement for services of affiliates" for 1996 is $13,000 in construction oversight costs. The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner 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 Managing General Partner by virtue of the agent's obligations is not significant. Included in operating expenses for the fiscal year ended December 31, 1995, are insurance premiums of approximately $399,000 which were paid to the Managing General Partner under a master insurance policy arranged for by the Managing General Partner. Property management fees and real estate tax reduction fees are included in operating expenses. Reimbursed expenses are primarily included in general and administrative expenses. In accordance with the partnership agreement, the Managing General Partner is entitled to receive cash distributions as follows: (1) a partnership management incentive not to exceed ten percent, determined on a cumulative, noncompounded basis, of cash from operations available for distribution (as defined in the partnership agreement) distributed to partners, and (2) a continuing interest representing a two percent share of cash distributions, after allocation of the partnership management incentive. Cash distributions to the Managing General Partner for the years ended December 31, 1996 and 1995 are as follows (in thousands): 1996 1995 Partnership management incentive $ 128 $ -- Continuing interest 23 -- Total $ 151 $ -- In accordance with the partnership agreement, the Managing General Partner received a partnership management incentive allocation equal to ten percent of net and taxable income (loss) before gains on property dispositions. The Managing General Partner is also allocated its two percent continuing interest in the Partnership's net and taxable income (loss) after preceding allocation. The Managing General Partner is also allocated gain on property dispositions to the extent it is entitled to receive distributions and then twelve percent of any remaining gain. Upon sale of all properties and termination of the Partnership, the Managing General Partner may be required to contribute certain funds to the Partnership in accordance with the partnership agreement. On March 29, 1996, an affiliate of Insignia acquired the corporate limited partners owning 1% of the subsidiary partnerships which own the Lodge Apartments, Creekside Apartments and Cherry Creek Apartments. 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 Cherry Creek Gardens Apts. $ 7,766 $ 1,320 $ 11,879 $ 1,448 Creekside Apartments 5,249 1,366 7,307 1,475 The Lodge Apartments 5,775 1,575 8,580 1,808 The Village in the Woods Apts. 9,813 2,852 20,915 (9,497) Cooper's Pond Apartments 7,771 1,476 12,505 216 Total $ 36,374 $ 8,589 $ 61,186 $ (4,550)
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 Cherry Creek Gardens Apartments $ 1,320 $ 13,327 $ 14,647 $ 6,419 1979 9/82 5-30 yrs Creekside Apartments 1,366 8,782 10,148 4,159 1974 10/82 5-30yrs The Lodge Apartments 1,577 10,386 11,963 4,886 1974 10/82 5-30 yrs Village in the Woods Apartments 1,500 12,770 14,270 6,083 1983 10/82 5-30 yrs Cooper's Pond Apts. 1,315 12,882 14,197 6,593 1979-1981 3/83 5-30 yrs Total $ 7,078 $ 58,147 $ 65,225 $ 28,140
The depreciable lives included above are for the buildings and components. The depreciable lives for related personal property are for 5 to 7 years. Reconciliation of "Investment Properties and Accumulated Depreciation": Years Ended December 31, 1996 1995 (in thousands) Investment Properties Balance at beginning of year $ 64,218 $ 63,526 Property improvements 1,007 692 Balance at end of year $ 65,225 $ 64,218 Years Ended December 31, 1996 1995 (in thousands) Accumulated Depreciation Balance at beginning of year $ 26,013 $ 23,970 Additions charged to expense 2,127 2,043 Balance at end of year $ 28,140 $ 26,013 The aggregate cost of the real estate for Federal income tax purposes at December 31, 1996 and 1995 is $72,966,000 and $71,953,000, respectively. The accumulated depreciation taken for Federal income tax purposes at December 31, 1996 and 1995 is $57,071,000 and $53,929,000, respectively. 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 of the partnership 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 the Managing General Partner 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 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 and Asset Management from July 1994 until January 1996. Ronald Uretta served as Insignia's Chief Financial Officer and Treasurer from January 1992 until August 1996. Since August 1996, he has served as Chief Operating Officer of Insignia. He also served as Secretary from January 1992 to June 1994. Since September 1990, Mr. Uretta has served as the Chief Financial Officer and Controller of Metropolitan Asset Group. John K. Lines, Esq., has been Insignia's General Counsel from 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 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 the General Partners. 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 and address of Amount and nature of Beneficial Owner Beneficial Owner % of Class Insignia LLC 25,710.50 34.0 There are no arrangements known to the Registrant which may result in a change in control of the Registrant. As a result of its ownership of 25,710.50 of limited partnership units, Insignia LLC 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 LLC 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 LLC 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 LLC's right to vote each Unit acquired. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 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 in 1996 and 1995: 1996 1995 (in thousands) Property management fees $ 617 $ 592 Reimbursement for services of affiliates 166 162 Included in "Reimbursement for services of affiliates" for 1996 is $13,000 in construction oversight costs. The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Managing General Partner 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 Managing General Partner 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 XVII By: Fox Partners Its General Partner By: Fox Capital Management Corporation Its Managing 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 21, 1997 William H. Jarrard, Jr. /s/ Ronald Uretta Principal Financial March 21, 1997 Ronald Uretta Officer and Principal Accounting Officer EXHIBIT INDEX Exhibit Number Description of Exhibit 2.1 NPI, Inc. Stock Purchase Agreement, incorporated by reference to the Registrant's Current Report on Form 8-K dated August 17, 1995. 2.2 Partnership Units Purchase Agreement incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia Financial Group, Inc. ("Insignia") with the Securities and Exchange Commission on September 1, 1995. 2.3 Management Purchase Agreement incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia with the Securities and Exchange Commission on September 1, 1995. 2.4 Limited Liability Company Agreement of Riverside Drive L.L.C., incorporated by reference to Exhibit 2.4 to Form 8-K filed by Insignia with the Securities and Exchange Commission on September 1, 1995. 2.5 Master Indemnity Agreement incorporated by reference to Exhibit 2.5 to Form 8-K filed by Insignia with the Securities and Exchange Commission on September 1, 1995. 3.4 Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of the Registrant dated March 29, 1982, and as thereafter supplemented contained in the Registrant's Registration Statement on Form S-11 (Reg. No. 2- 75411). 16 Letter from the Registrant's former Independent Auditor dated April 27, 1994, incorporated by reference to exhibit 10 to the Registrant's Current Report on Form 8-K dated April 22, 1994. 27 Financial Data Schedule. EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Fund XVII 1996 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000356472 CENTURY PROPERTIES FUND XVII 1,000 12-MOS DEC-31-1996 DEC-31-1996 4,441 0 0 0 0 0 65,225 28,140 43,531 0 36,374 0 0 0 5,714 43,531 0 12,587 0 0 12,454 0 3,539 133 0 133 0 0 0 133 1.56 0 Registrant has an unclassified balance sheet.
-----END PRIVACY-ENHANCED MESSAGE-----