-----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, L2C2F8oCvL5QiuNw/mlDY2vYX2MC/jcwmXD/LHiz7MvyLgALBKKMrZyYV5wr2I8J /HMo0ggtdja/rvw5kMIRmQ== 0000763049-98-000002.txt : 19980803 0000763049-98-000002.hdr.sgml : 19980803 ACCESSION NUMBER: 0000763049-98-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980729 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: 10QSB SEC ACT: SEC FILE NUMBER: 000-11137 FILM NUMBER: 98673424 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 10QSB 1 FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT U.S. Securities and Exchange Commission Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period 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.) One Insignia Financial Plaza Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) CENTURY PROPERTIES FUND XVII CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 1998 (in thousands, except unit data) Assets Cash and cash equivalents $ 6,010 Receivables and deposits 682 Restricted escrows 683 Other assets 243 Investment properties Land $ 7,078 Buildings and related personal property 59,898 66,976 Less accumulated depreciation (31,445) 35,531 $ 43,149 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 220 Tenant security deposit liabilities 268 Accrued property taxes 403 Other liabilities 320 Mortgage notes payable 37,869 Partners' Capital (Deficit) General partner's $ (7,251) Limited partners' (75,000 units issued and outstanding) 11,320 4,069 $ 43,149 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, 1998 1997 1998 1997 Revenues: Rental income $3,251 $3,031 $6,415 $6,037 Other income 206 192 394 383 Total revenues 3,457 3,223 6,809 6,420 Expenses: Operating 1,294 1,343 2,546 2,557 General and administrative 62 77 144 131 Depreciation 582 557 1,153 1,104 Interest 937 912 1,877 1,824 Property taxes 204 205 389 383 Loss on disposal of property -- 64 36 64 Total expenses 3,079 3,158 6,145 6,063 Net income $ 378 $ 65 $ 664 $ 357 Net income allocated to general partner $ 44 $ 8 $ 78 $ 42 Net income allocated to limited partners 334 57 586 315 $ 378 $ 65 $ 664 $ 357 Net income per limited partnership unit $ 4.45 $ .76 $ 7.81 $ 4.20 See Accompanying Notes to Consolidated Financial Statements c) CENTURY PROPERTIES FUND XVII CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data) Limited Partnership General Limited Units Partner's Partners' Total Original capital contributions 75,000 $ -- $ 75,000 $ 75,000 Partners' (deficit) capital at December 31, 1997 75,000 $ (7,329) $ 10,734 $ 3,405 Net income for the six months ended June 30, 1998 -- 78 586 664 Partners' (deficit) capital at June 30, 1998 75,000 $ (7,251) $ 11,320 $ 4,069 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, 1998 1997 Cash flows from operating activities: Net income $ 664 $ 357 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,153 1,104 Amortization of loan costs and debt discounts 808 737 Loss on disposal of property 36 64 Change in accounts: Receivables and deposits 353 (53) Other assets 37 (89) Accounts payable 14 (103) Tenant security deposit liabilities 4 (3) Accrued property taxes (187) (190) Other liabilities (30) 66 Net cash provided by operating activities 2,852 1,890 Cash flows from investing activities: Net withdrawals from (deposits to) restricted escrows 269 (29) Property improvements and replacements (903) (593) Net cash used in investing activities (634) (622) Cash flows from financing activities: Payments on mortgage notes payable (219) (195) Net cash used in financing activities (219) (195) Net increase in cash and cash equivalents 1,999 1,073 Cash and cash equivalents at beginning of period 4,011 4,441 Cash and cash equivalents at end of period $6,010 $5,514 Supplemental disclosure of cash flow information: Cash paid for interest $1,071 $1,052 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") 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"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended December 31, 1997. Certain reclassifications have been made to the 1997 information to conform to the 1998 presentation. NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES Fox Partners, a California general partnership, is the general partner of the Partnership. The general partners of Fox Partners are FCMC, a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners 82, a California general partnership. NPI Equity Investments II, Inc., a Florida corporation ("NPI Equity"), is the general partner of FRI. 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 Managing General Partner and NPI Equity are wholly- owned by Insignia Properties Trust ("IPT"), which is an affiliate of Insignia Financial Group, Inc. ("Insignia"). The Partnership agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were made to the Managing General Partner and affiliates in 1998 and 1997 (in thousands): Six Months Ended June 30, 1998 1997 Property management fees (included in operating expenses) $ 335 $ 317 Reimbursement for services of affiliates, (included in general and administrative expenses) 81 78 In addition, the Partnership paid construction oversight reimbursements of approximately $30,000 and $8,000 during the six months ended June 30, 1998 and 1997, respectively, to an affiliate of the Managing General Partner. For the period from January 1, 1997 through August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the Managing General Partner, but with an insurer unaffiliated with the Managing General Partner. An affiliate of the Managing General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the master policy. The agent assumed the financial obligations to the affiliate of the Managing General Partner which received payments on these obligations from the agent. The amount of the Partnership's insurance premiums that accrued to the benefit of the affiliate of the Managing General Partner by virtue of the agent's obligations was not significant. On August 28, 1997, an Insignia affiliate commenced tender offers for limited partnership interests in six real estate limited partnerships (including the Partnership) in which various Insignia affiliates act as general partner. The Purchaser offered to purchase up to 22,500 of the outstanding units of limited partnership interest in the Partnership, at $225.00 per Unit, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 28, 1997 (the "Offer to Purchase") and the related Assignment of Partnership Interest attached as Exhibits (a)(1) and (a)(2), respectively, to the Tender Offer Statement on Schedule 14D-1 originally filed with the Securities and Exchange Commission on August 28, 1997. Because of the existing and potential future conflicts of interest (described in the Partnership's Statements of Schedule 14D-9 filed with the Securities and Exchange Commission), neither the Partnership nor the Managing General Partner expressed any opinion as to the Offer to Purchase and made no recommendation as to whether unit holders should tender their units in response to the Offer to Purchase. On October 6, 1997, Insignia Properties, L.P. closed the tender offer and acquired 3,369.5 Units of limited partnership interest. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in Insignia Properties Trust, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in the third quarter of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the Managing General Partner of the Partnership. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 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, 1998 and 1997: Average Occupancy Property 1998 1997 Cherry Creek Gardens Apartments Englewood, Colorado 95% 95% Creekside Apartments Denver, Colorado 97% 96% The Lodge Apartments Denver, Colorado 97% 97% The Village in the Woods Apartments Cypress, Texas 95% 94% Cooper's Pond Apartments Tampa, Florida 96% 94% The Partnership generated net income for the six months ended June 30, 1998, of approximately $664,000 compared to net income of approximately $357,000 for the corresponding period of 1997. For the three months ended June 30, 1998, the Partnership generated net income of approximately $378,000 compared to net income of approximately $65,000 for the three months ended June 30, 1997. The increase in net income for the three and six month periods ended June 30, 1998, is primarily attributable to an increase in rental income and a decrease in loss on disposal of property due to roof replacements. The increase in rental income was due to increases in average occupancy at Creekside Apartments, The Village in the Woods Apartments, and Cooper's Pond Apartments, and an increase in average rental rates at all of the Partnership's investment properties. The decrease in loss on disposal of property is the result of fewer write-offs of roofs that were not fully depreciated at the time of the replacement. Partially mitigating the increase in rental income and a decrease in loss on disposal was an increase in depreciation expense. The increase in depreciation expense is due to an increase in depreciable assets as a result of improvements made at all the Partnership's investment properties. Included in operating expenses for the six months ended June 30, 1998, is approximately $91,000 of major repairs and maintenance comprised primarily of parking lot and exterior building repairs. Included in operating expenses for the six months ended June 30, 1997, is approximately $110,000 of major repairs and maintenance comprised primarily of exterior building repairs and landscaping. 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 expense. 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. At June 30, 1998, the Partnership had cash and cash equivalents of approximately $6,010,000 compared to approximately $5,514,000 at June 30, 1997. For the six months ended June 30, 1998, net cash increased approximately $1,999,000 compared to an increase of approximately $1,073,000 for the corresponding period of 1997. Net cash provided by operating activities increased primarily as a result of an increase in rental income as previously discussed. Also contributing to the increase in cash provided by operating activities was an increase in cash received from receivables and deposits and other assets and a decrease in cash used for accounts payable due to the timing of receipts and payments. Net cash used in investing activities increased due to an increase in property improvements and replacements, which was partially offset by an increase in net withdrawals from restricted escrows. Net cash used in financing activities increased due to an increase in mortgage payments. 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 various 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 $37,869,000, 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 refinanced or sold. No distributions were made to the limited partners during the six months ended June 30, 1998 and 1997. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales and the availability of cash reserves. The Managing General Partner currently anticipates that a distribution of cash flow from operations will be made in September 1998. Year 2000 The Partnership is dependent upon the Managing General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed not later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The Managing General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Partnership. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The Plaintiffs named as defendants, among others, the Partnership, the Managing General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia and its affiliates of interests in certain general partner entities, past tender offers by Insignia affiliates to acquire limited partnership units, the management of partnerships by Insignia affiliates as well as a recently announced agreement between Insignia and AIMCO. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. The Managing General Partner believes the action to be without merit, and intends to vigorously defend it. On June 24, 1998, the Managing General Partner filed a motion seeking dismissal of the action. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The Managing General Partner believes all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition or operations of the Partnership. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed during the quarter ended June 30, 1998. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PROPERTIES FUND XVII By: Fox Capital Management Corporation, Its Managing General Partner By: /s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director BY: /s/ Ronald Uretta Ronald Uretta Vice President and Treasurer Date: July 28, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Century Properties Fund XVII 1998 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-31-1998 JUN-30-1998 6,010 0 0 0 0 0 66,976 31,445 43,149 0 37,869 0 0 0 4,069 43,149 0 6,809 0 0 6,145 0 1,877 0 0 0 0 0 0 664 7.81 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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