FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
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, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
Commission file number 0-9680
CENTURY PROPERTIES FUND XV
(Exact name of small business issuer as specified in its charter)
California 94-2625577
(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 XV
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands)
June 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 2,380
Deferred costs, net 521
Other assets 1,290
Investment properties:
Land $ 7,511
Buildings and related personal property 47,434
54,945
Less accumulated depreciation (23,207) 31,738
$ 35,929
Liabilities and Partners' Capital (Deficit)
Liabilities
Accrued expenses and other liabilities $ 1,032
Mortgages payable 23,195
Partners' Capital (Deficit):
Limited partners $ 12,763
General partners (1,061) 11,702
$ 35,929
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b) CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 2,307 $ 2,826 $ 4,717 $ 6,160
Interest income 36 25 49 43
Gain on disposal of
property -- 7,866 626 7,866
Total revenue 2,343 10,717 5,392 14,069
Expenses:
Operating 1,500 1,475 2,941 3,114
Interest 603 904 1,224 1,898
Depreciation 473 541 936 1,128
General and administrative 92 59 201 122
Total expenses 2,668 2,979 5,302 6,262
(Loss) income before
minority interest in joint
venture's operations and
extraordinary loss (325) 7,738 90 7,807
Minority interest in joint
venture's operations -- (816) -- (854)
(Loss) income before
extraordinary loss (325) 6,922 90 6,953
Extraordinary loss on early
extinguishment of debt -- (531) (96) (531)
Net (loss) income $ (325) $ 6,391 $ (6) $ 6,422
Net (loss) income allocated
to general partners $ (6) $ 127 $ 34 $ 128
Net (loss) income allocated
to limited partners (319) 6,264 (40) 6,294
Net (loss) income $ (325) $ 6,391 $ (6) $ 6,422
Net (loss) income per
limited partnership unit:
Net (loss)income before
extraordinary loss $ (3.55) $ 75.39 $ .60 $ 75.72
Extraordinary loss -- (5.78) (1.05) (5.78)
Net (loss) income per
limited partnership unit $ (3.55) $ 69.61 $ (.45) $ 69.94
Distribution per limited
partnership unit $ -- $ -- $ 43.57 $ --
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited Total
Units Partners Partners Capital
<S> <C> <C> <C>
Partners' (deficit) capital at
December 31, 1995 89,980 $(1,015) $ 16,723 $ 15,708
Distributions paid -- (80) (3,920) (4,000)
Net income (loss) for the six
months ended June 30, 1996 -- 34 (40) (6)
Partners' (deficit) capital at
June 30, 1996 89,980 $(1,061) $ 12,763 $ 11,702
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (6) $ 6,422
Adjustments to reconcile net (loss) income to
cash provided by operating activities:
Depreciation 936 1,128
Amortization of loan costs and leasing commissions 93 277
Gain on disposal of property (626) (7,866)
Extraordinary loss on early extinguishment of debt 96 531
Minority interest in joint venture's operations -- 854
Change in accounts:
Deferred costs (107) (49)
Other assets 467 109
Accrued expenses and other liabilities (264) (418)
Net cash provided by operating
activities 589 988
Cash flows from investing activities:
Property improvements and replacements (691) (830)
Proceeds from sale of property 4,154 12,344
Net cash provided by
investing activities 3,463 11,514
Cash flows from financing activities:
Satisfaction of notes payable (2,443) (4,604)
Mortgage principal payments (237) (312)
Joint venture partner distributions -- (1,626)
Distribution to partners (4,000) --
Net cash used in financing activities (6,680) (6,542)
Net (decrease) increase cash and cash equivalents (2,628) 5,960
Cash and cash equivalents at beginning of period 5,008 1,606
Cash and cash equivalents at end of period $ 2,380 $ 7,566
Supplemental information:
Interest paid $ 1,158 $ 1,727
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CENTURY PROPERTIES FUND XV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements 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, 1996, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform
to the 1996 presentation.
Note B - Transactions with Affiliated Parties
Century Properties Fund XV (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 transactions with affiliates of Insignia Financial Group, Inc.
("Insignia"), National Property Investors, Inc.("NPI"), and affiliates were
charged to expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $204,000 $ 196,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 109,000 74,000
</TABLE>
For the period from January 19, 1996, to June 30, 1996, the Partnership
insured 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
received 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.
Note B - Transactions with Affiliated Parties - continued
FCMC, a California corporation, and Fox Realty Investors ("FRI"), a
California general partnership, are the general partners of the Partnership.
Pursuant to a series of transactions which closed during the first half of
1996, affiliates of Insignia acquired (i) control of NPI Equity Investments II,
Inc., the managing general partner of FRI, and (ii) all of the issued and
outstanding shares of stock of FCMC. In connection with these transactions,
affiliates of Insignia appointed new officers and directors of NPI Equity
Investments II, Inc. and FCMC.
Note C - Disposition of Rental Properties
On February 1, 1996, the Partnership sold its Northbank Office Complex
property, located in Eugene, Oregon to an unaffiliated third party for
$4,605,000. After payment of the mortgage totaling approximately $2,443,000 and
closing expenses of approximately $170,000, the net proceeds received by the
Partnership were approximately $1,992,000. The carrying value of the investment
property at the time of the sale was approximately $3,472,000. For financial
statement purposes, the sale resulted in a gain on disposal of property of
approximately $626,000 and an extraordinary loss on early extinguishment of debt
of approximately $96,000.
On April 12, 1995, an affiliate of the Partnership's joint venture partner in
Plumtree Apartments acquired, pursuant to a right of first refusal, Plumtree
Apartments for $12,500,000. After repayment of existing loans of $4,604,000, a
prepayment premium of $42,000 and closing expenses of $114,000, net proceeds
received by the joint venture were $7,740,000. The Partnership retained
$6,219,000 of the $7,740,000 proceeds in accordance with the joint venture
agreement. For financial statement purposes, the sale resulted in a gain of
$7,866,000. In connection with the sale of this property and the repayment of
the related outstanding debt, the Partnership recognized an extraordinary loss
on extinguishment of debt of $531,000, consisting of the write-off of
unamortized discounts, deferred loan costs and prepayment premiums.
On December 29, 1995, the Partnership sold its Farmers Lane Plaza property,
located in Santa Rosa, California to an unaffiliated third party for $8,750,000.
Net proceeds to the Partnership after payment of closing costs and existing debt
were approximately $3,995,000. The sale resulted in a gain of $3,618,000.
Subsequent to the closing, Farmers' Lane paid $255,000 in additional costs in
connection with the sale.
Note D - Subsequent Event
On July 3, 1996, the Partnership distributed approximately $1,499,000 to the
limited partners and $31,000 to the general partners from the proceeds of the
sale of Northbank Office Complex.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of three residential
apartment complexes and one commercial property. The following table sets forth
the average occupancy of the properties for each of the six months ended June
30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Lakeside Place Apartments 91% 95%
Houston, Texas
Summerhill Apartments 93% 96%
Dallas, Texas
Preston Creek Apartments 96% 96%
Dallas, Texas
Phoenix Business Park
Atlanta, Georgia 93% 85%
The Managing General Partner attributes the increase in occupancy at Phoenix
Business Park to a tenant expanding their leased space and to the improved curb
appeal and continued economic growth attributable to the Olympic games held in
the Atlanta area this year. The Managing General Partner attributes the
decrease in occupancy at Lakeside Place Apartments to low mortgage rates and new
construction of both apartments and houses in the area.
The Partnership's net loss for the six months ended June 30, 1996, was
approximately $6,000 of which a net loss of $325,000 was for the three month
period ended June 30, 1996 versus net income of $6,422,000 and $6,391,000,
respectively, for the same periods in 1995. The decrease in income is primarily
attributable to a $7,866,000 gain on the sale of Plumtree Apartments, which
occurred on April 12, 1995, versus a net gain of only $626,000 in 1996 as
discussed in "Item 1, Note C - Disposition of Rental Properties." Despite the
net loss reported for both the six and three month periods, overall expenses
decreased in 1996 versus 1995. This decrease can be attributed to the sale of
Plumtree Apartments in April 1995 as well as the sales of Farmers Lane Plaza in
December 1995 and Northbank Office Complex in February 1996. All of the
remaining residential rental properties have experienced improved operations
with the exception of Lakeside. Thus far in 1996, Lakeside has experienced
decreased occupancy, as discussed above, and has had some non-recurring
maintenance expenses related to the improvement of the appearance of the grounds
and the building exterior at the property. In addition, Phoenix Business Park
has had improved operations for the six and three months ended June 30, 1996,
versus the corresponding periods in 1995. This improvement is attributable to a
tenant expanding their leased space. Offsetting these decreases in operating
expenses is an increase in general and administrative expenses during the first
six months of 1996 due to the transition of the Partnership administration
offices during the first quarter of 1996. Finally, the Partnership reported an
extraordinary loss on the early extinguishment of debt of $96,000 in 1996
versus $531,000 in 1995. This extraordinary loss in 1996 was in connection with
the sale of Northbank Office Complex. The extraordinary loss in 1995 was in
connection with the sale of Plumtree Apartments.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan. Phoenix Business
Park is currently being marketed for sale.
At June 30, 1996, the Partnership had unrestricted cash of approximately
$2,380,000 compared to $7,566,000 at June 30, 1995. Net cash provided by
operating activities decreased as a result of the sale of two properties in 1995
as discussed in "Item 1, Note C - Disposition of Rental Properties", and the
sale of Northbank Office Complex in 1996, thereby reducing income from operating
properties. In addition, the Partnership paid deferred costs for leasing
commissions in connection with leasing additional space at Phoenix Business
Park. Net cash provided by investing activities decreased due to a decrease in
the proceeds from the sale of property. Net cash used in financing activities
increased due to a distribution of sale proceeds to the partners and the payoff
of the mortgage note on Northbank Office Complex.
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 property 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 $23,195,000 is amortized over varying periods with maturity
dates from September 1999 to January 2010. The Partnership distributed
approximately $4,000,000 to the partners during the six months ended June 30,
1996, and approximately $6,427,000 to the partners in 1995. On July 3, 1996, the
Partnership distributed approximately $1,499,000 to the limited partners and
$31,000 to the general partners from the proceeds of the sale of Northbank
Office Complex. At this time, it appears that the original investment objective
of capital growth will not be attained and that investors will not receive a
return of all their invested capital.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) 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, 1996.
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant duly
caused this report to be signed on its behalf by the undersigned thereunto, duly
authorized.
CENTURY PROPERTIES FUND XV
By: FOX CAPITAL MANAGEMENT CORPORATION
MANAGING GENERAL PARTNER
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer
and Principal Accounting Officer
Date: August 12, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XV 1996 Second Quarter 10-QSB and is qualified in its entirety
by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000314690
<NAME> CENTURY PROPERTIES FUND XV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,380
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 54,945
<DEPRECIATION> (23,207)
<TOTAL-ASSETS> 35,929
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 23,195
0
0
<COMMON> 0
<OTHER-SE> 11,702
<TOTAL-LIABILITY-AND-EQUITY> 35,929
<SALES> 0
<TOTAL-REVENUES> 5,392
<CGS> 0
<TOTAL-COSTS> 5,302
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,224
<INCOME-PRETAX> 90
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (96)
<CHANGES> 0
<NET-INCOME> (6)
<EPS-PRIMARY> (.45)<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
