-----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, FiClPWW9y5kpwBWVvFctwcZG3sn5RA6BCtl8+UkXrpoyA/9NsTyf6Bf55BhCqM3E cUtBQhyIB9dhC/bafTgqqw== 0000889812-95-000639.txt : 19951119 0000889812-95-000639.hdr.sgml : 19951119 ACCESSION NUMBER: 0000889812-95-000639 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11137 FILM NUMBER: 95589823 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW STREET 2: C/O METRIC MANAGEMENT INC CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: POST & HEYMANN STREET 2: 5665 NORTHSIDE DR NW CITY: ATLANTA STATE: GA ZIP: 30328 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _____________ Commission file number 0-11137 Century Properties Fund XVII (Exact name of Registrant as specified in its charter) California 94-2782037 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (770) 916-9090 N/A Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes _____ No _____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date __________________. 1 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets September 30, December 31, 1995 1994 Assets Cash and cash equivalents $ 2,165,000 $ 1,149,000 Reserve for capital improvements 860,000 1,596,000 Other assets 1,232,000 1,164,000 Real Estate: Real Estate 65,549,000 64,917,000 Accumulated depreciation (25,449,000) (23,970,000) Allowance for impairment of value (1,430,000) (1,430,000) ------------- ------------- Real estate, net 38,670,000 39,517,000 Deferred financing costs, net 516,000 615,000 ------------- ------------- Total assets $ 43,443,000 $ 44,041,000 ============= ============= Liabilities and Partners' Equity Accrued expenses and other liabilities $ 968,000 $ 1,036,000 Notes payable 35,061,000 35,800,000 ------------- ------------- Total liabilities 36,029,000 36,836,000 ------------- ------------- Partners' Equity (Deficit): General partners (6,856,000) (6,881,000) Limited partners (75,000 units outstanding at September 30, 1995 and December 31, 1994) 14,270,000 14,086,000 ------------- ------------- Total partners' equity 7,414,000 7,205,000 ------------- ------------- Total liabilities and partners' equity $ 43,443,000 $ 44,041,000 ============= ============= See notes to consolidated financial statements. 2 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Consolidated Statements of Operations For the Nine Months Ended September 30, September 30, 1995 1994 Revenues: Rental $ 8,890,000 $ 8,376,000 Interest income 112,000 68,000 ------------- ------------- Total revenues 9,002,000 8,444,000 ------------- ------------- Expenses: Operating 4,868,000 4,954,000 Interest 2,409,000 2,448,000 Depreciation 1,479,000 1,449,000 General and administrative 166,000 344,000 ------------- ------------- Total expenses 8,922,000 9,195,000 ------------- ------------- Net income (loss) from operations before extraordinary item 80,000 (751,000) Extraordinary item: Gain on extinguishment of debt 129,000 - ------------- ------------- Net income (loss) $ 209,000 $ (751,000) ============= ============= Net income (loss) per limited partnership unit: Net income (loss) before extraordinary item $ 0.93 $ (8.83) Extraordinary item 1.52 - ------------- ------------- Net income (loss) $ 2.45 $ (8.83) ============= ============= See notes to consolidated financial statements. 3 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Consolidated Statements of Operations For the Three Months Ended September 30, September 30, 1995 1994 Revenues: Rental $ 2,999,000 $ 2,863,000 Interest income 40,000 40,000 ------------- ------------- Total revenues 3,039,000 2,903,000 ------------- ------------- Expenses: Operating 1,760,000 1,845,000 Interest 792,000 821,000 Depreciation 493,000 483,000 General and administrative 47,000 52,000 ------------- ------------- Total expenses 3,092,000 3,201,000 ------------- ------------- Net loss from operations before extraordinary item (53,000) (298,000) Extraordinary item: Gain on extinguishment of debt 129,000 - ------------- ------------- Net income (loss) $ 76,000 $ (298,000) ============= ============= Net income (loss) per limited partnership unit: Net income (loss) before extraordinary item $ (0.63) $ (3.51) Extraordinary item 1.52 - ------------- ------------- Net income (loss) $ 0.89 $ (3.51) ============= ============= See notes to consolidated financial statements. 4 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Consolidated Statements of Cash Flows For the Nine Months Ended September 30, September 30, 1995 1994 Operating Activities: Net income (loss) $ 209,000 $ (751,000) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 2,174,000 2,163,000 Gain on extinguishment of debt (129,000) - Changes in operating assets and liabilities: Other assets (68,000) (371,000) Accrued expenses and other liabilities (68,000) 231,000 ------------- ------------- Net cash provided by operating activities 2,118,000 1,272,000 ------------- ------------- Investing Activities: Decrease in reserve for capital improvements 736,000 4,000 Additions to real estate (632,000) (936,000) ------------- ------------- Net cash provided by (used in) investing activities 104,000 (932,000) ------------- ------------- Financing Activities: Satisfaction of mortgages payable at a discount (910,000) - Notes payable principal payments (296,000) (278,000) ------------- ------------- Cash (used in) financing activities (1,206,000) (278,000) ------------- ------------- Increase in Cash and Cash Equivalents 1,016,000 62,000 Cash and Cash Equivalents at Beginning of Period 1,149,000 1,511,000 ------------- ------------- Cash and Cash Equivalents at End of Period $ 2,165,000 $ 1,573,000 ============= ============= Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period $ 1,718,000 $ 1,734,000 ============= ============= Supplemental Disclosure of Non-Cash Investing and Financing Activities: Amortization of Note Payable Discount $ 596,000 $ 596,000 ============= ============= See notes to consolidated financial statements. 5 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. General The accompanying consolidated financial statements, footnotes and discussions should be read in conjunction with the consolidated financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1994. Certain accounts have been reclassified in order to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature, except as disclosed in Note 3. The results of operations for the nine and three months ended September 30, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. On August 17, 1995, the stockholders of National Property Investors, Inc. ("NPI, Inc."), the sole shareholder of NPI Equity Investments II, Inc. ("NPI Equity"), the entity which controls Fox Capital Management Corporation, the managing general partner of the Partnership's general partner, entered into an agreement to sell to IFGP Corporation, an affiliate of Insignia Financial Group, Inc. ("Insignia"), all of the issued and outstanding stock of NPI, Inc. The sale of the stock is subject to the satisfaction of certain conditions and is scheduled to close in January 1996. 2. Transactions with Related Parties (a) An affiliate of NPI, Inc. received reimbursement of administrative expenses amounting to $108,000 and $139,000 for the nine months ended September 30, 1995 and 1994, respectively. These reimbursements are included in general and administrative expenses. (b) An affiliate of NPI, Inc. is entitled to receive a management fee equal to 5% of the annual gross receipts from certain properties it manages. For the periods ended September 30, 1995 and 1994, affiliates of NPI, Inc. received $443,000 and $323,000, respectively, which are included in operating expenses. 3. Notes Payable 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 Partnership recognized an extraordinary gain on extinguishment of debt of $129,000 during the third quarter of 1995. 6 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Consolidated Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources Registrant holds investments in and operates residential real estate properties, with apartments leased to tenants subject to leases of up to one year. Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. As of November 1, 1995, seven of the twelve properties originally purchased by Registrant were sold or otherwise disposed. Registrant uses working capital reserves provided from any undistributed cash flow from operations, sales and refinancing proceeds as its primary source of liquidity. For the long term, cash from operations will remain Registrant's primary source of liquidity. There have been no distributions since 1985. All of Registrant's properties (except for Cooper's Pond) experienced positive cash flow during the nine months ended September 30, 1995. The Managing General Partner is currently evaluating the cash needs of Registrant in order to determine whether any cash distributions from operations can be made in the near future. The level of liquidity based upon cash and cash equivalents experienced a $1,016,000 increase at September 30, 1995, as compared to December 31, 1994. Registrant's $2,118,000 of net cash from operating activities and $104,000 of net cash provided by investing activities was partially offset by $1,206,000 of cash used in financing activities. Cash provided by operations improved at September 30, 1995, as compared to September 30, 1994, primarily due improved operations at all of Registrant's properties except for Cooper's Pond. Cash provided by investing activities consisted of $736,000 received from a reserve for capital improvements as reimbursement for Registrant's prior year real estate improvements. Registrant also spent $632,000 for real estate improvements during the nine months ended September 30, 1995. Cash used in financing activities consisted of $296,000 of notes payable principal payments and $910,000 in satisfaction of a mortgage payable at a discount. Other than the $860,000 that Registrant has in reserve for capital improvements, Registrant has no plans for significant capital expenditures. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities, none of which were significant. On August 3, 1995, Registrant paid $910,000 to satisfy in full the $1,039,000 second mortgage encumbering the Village in the Woods Apartments at a discount. Registrant recognized an extraordinary gain on extinguishment of debt of $129,000 during the third quarter of 1995. Working capital reserves are primarily invested in repurchase agreements secured by United States Treasury obligations. The Managing General Partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements and regular debt service payments for the next twelve months and the foreseeable future. Registrant has balloon payments due in 1999 totaling $10,768,000. Although the Managing General Partner is confident that all mortgages can be refinanced or extended in an orderly fashion, if the mortgages are not extended, or refinanced, or the properties not sold, the properties could be lost through foreclosure. 7 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources (Continued) As required by the terms of the settlement of the actions brought against, among others, DeForest Ventures I L.P. ("DeForest") relating to the tender offer made by DeForest in October 1994 (the "First Tender Offer") for units of limited partnership interest in Registrant and certain affiliated partnerships, DeForest commenced a second tender offer (the "Second Tender Offer") on June 2, 1995 for units of limited partnership interest in Registrant. Pursuant to the Second Tender Offer, DeForest acquired an additional 3,861 units of Registrant which, when added to the units acquired during the First Tender Offer, represents approximately 34.1% of the total number of outstanding units of Registrant. The Managing General Partner believes that the tender will not have a significant impact on future operations or liquidity of Registrant. Also in connection with the settlement, an affiliate of the Managing General Partner has made available to Registrant a credit line of up to $150,000 per property owned by Registrant. Registrant has no outstanding amounts due under this line of credit. Based on present plans, management does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is Registrant's only unused source of liquidity. On August 17, 1995, Insignia Financial Group, Inc. and certain of its affiliates (collectively, "Insignia") entered into agreements pursuant to which (i) the stockholders of NPI, Inc., the sole shareholder of NPI Equity, agreed to sell to Insignia all of the issued and outstanding stock of NPI, Inc., (ii) DeForest agreed to sell its units of Registrant to Insignia and (iii) Insignia would acquire all of the interests in NPI-AP Management, L.P., the property manager at Registrant's properties. The consummation of these transactions is subject to the satisfaction of certain conditions (including, third party consents and other conditions not within the control of the parties to the agreement) and is scheduled to close in January 1996. Upon closing, it is expected that Insignia will elect new officers and directors of NPI Equity. Insignia is a fully integrated real estate service company specializing in the ownership and operation of securitized real estate assets. According to Commercial Property News and the National Multi-Housing Council, since 1992 Insignia has been the largest property manager in the United States. The Managing General Partner does not believe these transactions will have a significant effect on Registrant's liquidity or results of operation. At this time, it appears that the investment objective of capital growth will not be attained and that investors will not receive a return of all of their invested capital. The extent to which invested capital is returned to investors is dependent upon the performance of Registrant's properties and the markets in which such properties are located and on the sales price of the remaining properties. In this regard, all of the remaining properties have been held longer than originally expected. The ability to hold and operate these properties is dependent on Registrant's ability to obtain refinancing or debt modification as required. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including, but not limited to a downward trend in market values of existing residential properties. In addition, the bail out of the savings and loan associations and sales of foreclosed properties by auction reduced market 8 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Real Estate Market (Continued) values and caused a further restriction on the ability to obtain credit. As a result, Registrant's ability to refinance or sell its existing properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties have been relatively low interest rates, which encourage existing and potential tenants to purchase homes. In addition, there has been a significant decline nationally in new household formation. Despite the above, the rental market appears to be experiencing a gradual strengthening and management anticipates that increases in revenue will generally exceed increases in expenses during the next twelve months. Furthermore, management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies, should create a more favorable market for Registrant's properties in the future. Results of Operations Nine Months Ended September 30, 1995 vs. September 30, 1994 Operating results, before the extraordinary gain on extinguishment of debt, improved by $831,000 for the nine months ended September 30, 1995, as compared to 1994, due to an increase in revenues of $558,000 and a decrease in expenses of $273,000. Operating results improved primarily due to improved operations at all of Registrant's properties, except for Cooper's Pond Apartments. Revenues increased by $558,000 for the nine months ended September 30, 1995, as compared to 1994, due to increases in rental revenue of $514,000 and interest income of $44,000. Rental revenue increased primarily due to an increase in rental rates at all of Registrant's properties, which was partially offset by an increase in concessions at Village in the Woods Apartments. Occupancy remained relatively stable at all of Registrant's properties. Interest income increased due to an increase in average working capital reserves available for investment and the effect of higher interest rates. Expenses declined by $273,000 for the nine months ended September 30, 1995, as compared to 1994, due to decreases in general and administrative expenses of $178,000, operating expenses of $86,000 and interest expense of $39,000, which were only slightly offset by an increase in depreciation expense of $30,000. General and administrative expenses decreased due to a reduction in asset management costs, effective July 1, 1994. Operating expenses decreased due to exterior painting performed during the prior year comparative period at all of Registrant's properties except for Cooper's Pond Apartments, which was partially offset by an increase in maintenance at Cherry Creek Gardens, Cooper's Pond Apartments, Creekside Apartments and Village in the Woods Apartments. Interest expense declined due to the prepayment of the second mortgage encumbering Village in the Woods Apartments in August 1995 and the amortization of mortgage principal balances. Depreciation expense increased due to the effect of fixed asset additions during 1994. 9 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Three Months Ended September 30, 1995 vs. September 30, 1994 Operating results, before the gain on extinguishment of debt, improved by $245,000 for the three months ended September 30, 1995, as compared to 1994, due to an increase in revenues of $136,000 and a decrease in expenses of $109,000. Operating results improved primarily due to improved operations at all of Registrant's properties, except for Cooper's Pond Apartments which decreased slightly and Village in the Woods Apartments which remained relatively constant. Revenues increased by $136,000 for the three months ended September 30, 1995, as compared to 1994, due to an increase in rental revenue. Rental revenue increased primarily due to an increase in rental rates at all of Registrant's properties, coupled with an increase in occupancy at Registrant's Village in the Woods and Cooper's Pond Apartments, which was partially offset by decreases in occupancy at Cherry Creek Gardens and Creekside Apartments. Occupancy at The Lodge Apartments property remained constant. Interest income remained constant as the increase in working capital reserves available for investment and the effect of higher interest rates, were offset by an adjustment in interest income during the three months ended September 30, 1994. Expenses declined by $109,000 for the three months ended September 30, 1995, as compared to 1994, due to decreases in operating expenses of $85,000, interest expense of $29,000 and general and administrative expenses of $5,000, which were only slightly offset by an increase in depreciation expense of $10,000. Operating expenses decreased due to exterior painting performed during the prior year comparative period at Registrant's Creekside and The Lodge Apartments which was partially offset by an increase in maintenance at Cherry Creek Gardens and the Village in the Woods Apartments. Interest expense declined due to the prepayment of the second mortgage encumbering Village in the Woods Apartments in August 1995 and the amortization of mortgage principal balances. General and administrative expenses remained relatively constant. Depreciation expense increased due to the effect of fixed asset additions during 1994. 10 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Properties A description of the properties in which Registrant has an ownership interest during the period covered by this Report, along with occupancy data, follows: CENTURY PROPERTIES FUND XVII OCCUPANCY SUMMARY Average Occupancy Rate (%) Nine Months Three Months Number Ended Ended of Date of September 30, September 30, Name and Location Units Purchase 1995 1994 1995 1994 - ----------------- ----- -------- ---- ---- ---- ---- Cherry Creek Gardens Apartments 296 09/82 97 98 95 99 Englewood, Colorado Creekside Apartments 328 10/82 97 97 97 99 Denver, Colorado The Lodge Apartments 376 10/82 98 97 97 97 Denver, Colorado The Village in the Woods Apartments 530 10/82 95 94 96 93 Cypress, Texas Cooper's Pond Apartments 463 03/83 93 94 96 94 Tampa, Florida 11 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a)Exhibits 2. NPI, Inc. Stock Purchase Agreement dated as of August 17, 1995 incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. (b) Report on Form 8-K On August 24, 1995, Registrant filed a Current Report on Form 8-K with the Securities and Exchange Commission with respect to the sale of the stock of NPI, Inc. (Item 1, Change in Control). 12 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CENTURY PROPERTIES FUND XVII By: FOX CAPITAL MANAGEMENT CORPORATION, A General Partner /S/ ARTHUR N. QUELER Secretary/Treasurer and Director (Principal Financial Officer) 13 of 14 CENTURY PROPERTIES FUND XVII - FORM 10-Q - SEPTEMBER 30, 1995 EXHIBIT INDEX Exhibit Page No. 2. NPI, Inc. Stock Purchase Agreement * dated August 17, 1995 * Incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. 14 of 14 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Properties Fund XVII and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 3,025,000 0 0 0 0 0 65,549,000 (26,879,000) 43,443,000 0 35,061,000 0 0 0 7,414,000 43,443,000 0 8,890,000 0 6,347,000 0 0 2,409,000 209,000 0 209,000 0 0 0 209,000 2.45 2.45 Cash includes $860,000 of cash reserved for capital improvements. Depreciation includes $1,430,000 of allowance for impairment of value.
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