-----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, Rfq6bB8XLXrpQ62doJsieFo4i6qjkGVhfzP6hvGXLQo6OjDSqPclPQ6uXUJPxXjT jhDQZRBoLiKwG+tGykSxFg== 0000889812-95-000646.txt : 19951119 0000889812-95-000646.hdr.sgml : 19951119 ACCESSION NUMBER: 0000889812-95-000646 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 XVIII CENTRAL INDEX KEY: 0000704271 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942834149 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11934 FILM NUMBER: 95589837 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW - STE 370 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 0-11934 Century Properties Fund XVIII (Exact name of registrant as specified in its charter) California 94-2834149 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (770) 916-9090 N/A Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No_____ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No _____ APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date __________________. 1 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Balance Sheets September 30, December 31, 1995 1994 Assets Cash and cash equivalents $ 1,008,000 $ 972,000 Other assets 491,000 318,000 Real Estate: Real estate 26,421,000 26,159,000 Accumulated depreciation (8,233,000) (7,760,000) ----------- ----------- Real Estate, net 18,188,000 18,399,000 Deferred financing costs, net 310,000 364,000 ----------- ----------- Total assets $19,997,000 $20,053,000 =========== =========== Liabilities and Partners' Equity Notes payable $19,199,000 $19,303,000 Accrued expenses and other liabilities 476,000 453,000 ----------- ----------- Total liabilities 19,675,000 19,756,000 ----------- ----------- Commitments and Contingencies Partners' Equity (Deficit): General partner (6,423,000) (6,425,000) Limited partners (75,000 units outstanding at September 30, 1995 and December 31, 1994) 6,745,000 6,722,000 ----------- ----------- Total partners' equity (deficit) 322,000 297,000 ----------- ----------- Total liabilities and partners' equity $19,997,000 $20,053,000 =========== =========== See notes to financial statements. 2 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Nine Months Ended September 30, September 30, 1995 1994 Revenues: Rental $3,292,000 $3,384,000 Interest and other 44,000 28,000 Gain on sale of property - 1,246,000 ----------- ----------- Total revenues 3,336,000 4,658,000 ----------- ----------- Expenses: Operating 1,553,000 1,684,000 Interest 1,118,000 1,203,000 Depreciation 473,000 473,000 General and administrative 167,000 290,000 ----------- ----------- Total expenses 3,311,000 3,650,000 ----------- ----------- Net income $ 25,000 $1,008,000 =========== =========== Net income per limited partnership unit $ 0.30 $ 12.09 =========== =========== See notes to financial statements. 3 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Operations For the Three Months Ended September 30, September 30, 1995 1994 Revenues: Rental $1,110,000 $1,051,000 Interest and other 17,000 11,000 ----------- ----------- Total revenues 1,127,000 1,062,000 ----------- ----------- Expenses: Operating 582,000 502,000 Interest 372,000 335,000 Depreciation 158,000 158,000 General and administrative 45,000 54,000 ----------- ----------- Total expenses 1,157,000 1,049,000 ----------- ----------- Net (loss) income $ (30,000) $ 13,000 =========== =========== Net (loss) income per limited partnership unit $ (0.36) $ 0.16 =========== =========== See notes to financial statements. 4 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 Statements of Cash Flows For the Nine Months Ended September 30, September 30, 1995 1994 Operating Activities: Net income $ 25,000 $1,008,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 527,000 533,000 Gain on sale of property - (1,246,000) Changes in operating assets and liabilities: Other assets (173,000) 106,000 Accrued expenses and other liabilities 52,000 (252,000) ----------- ----------- Net cash provided by operating activities 431,000 149,000 ----------- ----------- Investing Activities: Additions to rental properties (262,000) (194,000) Net proceeds from sale of rental properties - 1,700,000 Property sales expenses - (210,000) ----------- ----------- Net cash (used in) provided by investing activities (262,000) 1,296,000 ----------- ----------- Financing Activities: Repayment of notes payable to affiliate of the general partner - (608,000) Notes payable principal payments (133,000) (190,000) ----------- ----------- Net cash (used in) financing activities (133,000) (798,000) ----------- ----------- Increase in Cash and Cash Equivalents 36,000 647,000 Cash and Cash Equivalents at Beginning of Period 972,000 363,000 ----------- ----------- Cash and Cash Equivalents at End of Period $1,008,000 $1,010,000 =========== =========== Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period $ 975,000 $1,507,000 =========== =========== Supplemental Disclosure of Non-Cash Financing and Investing Activities: Increase in notes payable due to debt modification $ - $1,084,000 =========== =========== Accrued interest added to notes payable balance $ 29,000 $ - =========== =========== Mortgage assumed during 1994 on property sale - See Note 3. See notes to financial statements. 5 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 NOTES TO FINANCIAL STATEMENTS 1. General The accompanying financial statements, footnotes and discussions should be read in conjunction with the financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1994. Certain accounts have been reclassified in order to conform to the current period. The financial information contained herein is unaudited. In the opinion of management, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature, except as disclosed in Note 3 below. 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 reimbursements of administrative expenses amounting to $108,000 and $132,000, during the nine months ended September 30, 1995 and 1994, respectively. These reimbursements are primarily included in general and administrative expenses. (b) An affiliate of NPI, Inc. is entitled to receive a management fee equal to 5% of the annual gross receipts from certain properties it manages. For the nine months ended September 30, 1995 and 1994, affiliates of NPI, Inc. received $156,000 and $116,000, respectively. These fees are included in operating expenses. (c) An affiliate of NPI, Inc. was paid $7,000 relating to a successful real estate tax appeal on the Partnership's Overlook Point Apartments property during the nine months ended September 30, 1995. This fee is included in operating expenses. 3. Disposition of Rental Property In February 1994, the Partnership sold Plantation Ridge Apartments, located in Marietta, Georgia for $15,353,000. The existing loans of $13,653,000 were assumed by the buyer at the time of sale. After assumption of the existing loans and costs of the sale of $210,000, proceeds to the Partnership were $1,490,000. At the date of sale, the carrying amount of real estate was $13,897,000. For financial statement purposes, the Partnership recorded a $1,246,000 gain on sale of property during 1994. 6 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources Registrant's remaining real estate properties consist of two residential apartment complexes located in Utah and Texas, which are currently 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. Both of Registrant's remaining properties generated positive cash flow for the nine months ended September 30, 1995. As of November 1, 1995, ten 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, refinancing proceeds and sales proceeds as its primary source of liquidity. For the long term, it is anticipated that cash from operations will remain Registrant's primary source of liquidity. Cash distributions from operations remained suspended during the third quarter of 1995. In order to preserve working capital reserves required for future capital improvements to properties and potential debt modifications, it is not currently anticipated that Registrant will make any distributions from operations in the foreseeable future. The level of liquidity based upon cash and cash equivalents experienced a $36,000 increase at September 30, 1995, as compared to December 31, 1994. Registrant's $431,000 of cash provided by operating activities was only partially offset by $262,000 of improvements to real estate (investing activities) and $133,000 of mortgage principal payments (financing activities). Additions to real estate consisted of exterior renovations at Registrant's Oak Run Apartments property and parking lot improvements at Registrant's Overlook Point Apartments property. Registrant has no plans for significant capital improvements at either of its properties during 1995 and the foreseeable future. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are invested in a money market account or 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 in 1995 and the foreseeable future. Registrant has substantial balloon payments due in 1999 and 2000 of approximately $7,869,000 and $6,489,000, respectively. Although management is confident that these mortgages can be replaced, if the mortgages are not extended or refinanced, or the properties are not sold, the properties could be lost through foreclosure. As required by the terms of the settlement of the actions brought against, among others, DeForest Ventures I L.P. ("DeForest") relating to the tender offer made by DeForest in October 1994 (the "First Tender Offer") for units of limited partnership interest in Registrant and certain affiliated partnerships, DeForest commenced a second tender offer (the "Second Tender Offer") on June 2, 1995 for units of limited partnership interest in Registrant. Pursuant to the Second Tender Offer, DeForest acquired an additional 3,667 units of Registrant which, when added to the units acquired during the First Tender Offer, represents approximately 28.5% of the total number of outstanding units of Registrant. The 7 of 13 CENTURY PROPERTIES FUND XVIII - 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) 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. At the present time, 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, the remaining properties have been held longer than originally expected. The ability to hold and operate these properties is dependent on Registrant's ability to obtain refinancing or debt modification as required. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including, but not limited to, a downward trend in market values of existing residential properties. In addition, the bailout of the savings and loan associations and sales of foreclosed properties by auction reduced market values and caused a further restriction on the ability to obtain credit. As a result, Registrant's ability to refinance or sell its properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties have been relatively low interest rates, which encourage existing and potential 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 8 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Real Estate Market (Continued) that increases in revenue will generally exceed increases in expenses during 1995. Furthermore, management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies, should create a more favorable market value for Registrant's properties in the future. Results of Operations Nine Months Ended September 30, 1995 vs. September 30, 1994 Operating results declined by $983,000 for the nine months ended September 30, 1995, as compared to 1994. The decline in operating results is due to the $1,246,000 gain on the disposition of Plantation Ridge Apartments recognized in February 1994. Revenues declined by $1,322,000 for the nine months ended September 30, 1995, as compared to 1994, primarily due to the previously mentioned property disposition. With respect to the remaining properties, rental revenue increased by $255,000 due to an increase in rental rates, coupled with a slight increase in occupancy at both of Registrant's remaining properties. Interest income increased by $16,000 due to an increase in average working capital reserves available for investment and the effect of higher interest rates. Expenses decreased by $339,000 for the nine months ended September 30, 1995, as compared to 1994, due to the disposition of Plantation Ridge Apartments in February 1994. With respect to the remaining properties, expenses increased by $230,000, due to an increase in operating expenses of $134,000 and interest expense of $96,000. Operating expenses increased primarily due to exterior painting at Registrant's Overlook Point Apartments property. Interest expense increased due to higher interest rates on the variable rate mortgage encumbering Registrant's Oak Run Apartments property, which was only slightly offset by the modification of Registrant's Overlook Apartments at a lower interest rate in February 1994. Depreciation expense remained constant. General and administrative expenses declined by $123,000 primarily due to a reduction in asset management costs effective July 1, 1994. Three Months Ended September 30, 1995 vs. September 30, 1994 Operating results declined by $43,000 for the three months ended September 30, 1995, as compared to 1994, due to an increase in revenues of $65,000, which was more than offset by an increase in expenses of $108,000. Revenues increased by $65,000 for the three months ended September 30, 1995, as compared to 1994, primarily due to increases in rental revenue of $59,000 and interest income of $6,000. Rental revenue increased at both of Registrant's remaining properties due to an increase in rental rates. Occupancy remained constant at both properties. Interest income increased due to an increase in average working capital reserves available for investment and the effect of higher interest rates. 9 of 13 CENTURY PROPERTIES FUND XVIII - 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 (Continued) Expenses increased by $108,000 for the three months ended September 30, 1995, as compared to 1994, due to increases in operating expenses of $80,000 and interest expense of $37,000, which was only partially offset by a decrease in general and administrative expenses of $9,000. Operating expenses increased primarily due to exterior painting at Registrant's Overlook Point Apartments property. Interest expense increased due to higher interest rates on the variable rate mortgage at Registrant's Oak Run Apartments property. General and administrative expenses declined due to a reduction in reimbursed expenses. Depreciation expense remained constant. 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 XVIII OCCUPANCY SUMMARY Average Occupancy Rate (%) ------------------------- Nine Months Three Months Number Date Ended Ended of of September 30, September 30, Name and Location Units Purchase 1995 1994 1995 1994 - ----------------- ----- -------- ---- ---- ---- ---- Overlook Point Apartments 304 07/83 96 95 96 96 Salt Lake City, Utah Oak Run Apartments 420 11/83 98 97 98 98 Dallas, Texas 10 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 2. NPI, Inc. Stock Purchase Agreement dated as of August 17, 1995 incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. (b) Report on Form 8-K On August 24, 1995, Registrant filed a Current Report on Form 8-K with the Securities and Exchange Commission with respect to the sale of the stock of NPI, Inc. (Item 1, Change in Control). 11 of 13 CENTURY PROPERTIES FUND XVIII - 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 XVIII By: FOX PARTNERS, Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION, A General Partner /S/ ARTHUR N. QUELER -------------------------------------- Secretary/Treasurer and Director (Principal Financial Officer) 12 of 13 CENTURY PROPERTIES FUND XVIII - FORM 10-Q - SEPTEMBER 30, 1995 EXHIBIT INDEX Exhibit Page No. 2. NPI, Inc. Stock Purchase Agreement * dated August 17, 1995 * Incorporated by reference to Exhibit 2 to Registrant's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 1995. 13 of 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Properties Fund XVIII and is qualified in its entirety by reference to such financial statements. 1 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 1,008,000 0 0 0 0 0 26,421,000 (8,233,000) 19,997,000 0 19,199,000 0 0 0 322,000 19,997,000 0 3,292,000 0 2,026,000 0 0 1,118,000 25,000 0 25,000 0 0 0 25,000 0.30 0.30
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