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 September 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, except unit data)
September 30, 1996
Assets
Cash and cash equivalents $ 847
Deferred costs, net 556
Other assets 1,439
Investment properties:
Land $ 7,511
Buildings and related personal property 47,616
55,127
Less accumulated depreciation (23,681) 31,446
$ 34,288
Liabilities and Partners' Capital (Deficit)
Liabilities
Accrued expenses and other liabilities $ 1,295
Mortgages payable 23,094
Partners' Capital (Deficit):
Limited partners (89,980 units issued and
outstanding) $ 10,996
General partners (1,097) 9,899
$ 34,288
See Accompanying Notes to Consolidated Financial Statements
b) CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 2,395 $ 2,751 $ 7,112 $ 8,911
Interest income 16 63 65 106
Gain on disposal of
property -- -- 626 7,866
Total revenue 2,411 2,814 7,803 16,883
Expenses:
Operating 1,596 1,513 4,537 4,627
Interest 600 864 1,824 2,762
Depreciation 474 518 1,410 1,646
General and administrative 14 55 215 177
Total expenses 2,684 2,950 7,986 9,212
(Loss) income before
minority interest in joint
venture's operations and
extraordinary loss (273) (136) (183) 7,671
Minority interest in joint
venture's operations -- -- -- (854)
(Loss) income before
extraordinary loss (273) (136) (183) 6,817
Extraordinary loss on early
extinguishment of debt -- -- (96) (531)
Net (loss) income $ (273) $ (136) $ (279) $ 6,286
Net (loss) income allocated
to general partners $ (5) $ (2) $ 29 $ 126
Net (loss) income allocated
to limited partners (268) (134) (308) 6,160
Net (loss) income $ (273) $ (136) $ (279) $ 6,286
Net (loss) income per
limited partnership unit:
(Loss) income before
extraordinary loss $ (2.98) $ (1.48) $ (2.38) $ 74.24
Extraordinary loss -- -- (1.05) (5.78)
Net (loss) income per
limited partnership unit $ (2.98) $ (1.48) $ (3.43) $ 68.46
Distribution per limited
partnership unit $ 16.66 $ 70.00 $ 60.23 $ 70.00
<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> <C>
Partners' (deficit) capital
at December 31, 1995 89,980 $ (1,015) $ 16,723 $ 15,708
Distributions paid -- (111) (5,419) (5,530)
Net income (loss) for the nine
months ended September 30, 1996 -- 29 (308) (279)
Partners' (deficit) capital at
September 30, 1996 89,980 $ (1,097) $ 10,996 $ 9,899
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income $ (279) $ 6,286
Adjustments to reconcile net (loss) income to
cash provided by operating activities:
Depreciation 1,410 1,646
Amortization of loan costs and leasing commissions 138 397
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 (170) (110)
Other assets 318 (93)
Accrued expenses and other liabilities (3) (252)
Net cash provided by operating
activities 884 1,393
Cash flows from investing activities:
Property improvements and replacements (873) (1,082)
Proceeds from sale of property 4,154 12,344
Net cash provided by
investing activities 3,281 11,262
Cash flows from financing activities:
Satisfaction of notes payable (2,443) (4,604)
Mortgage principal payments (353) (456)
Joint venture partner distributions -- (1,626)
Distribution to partners (5,530) (6,427)
Net cash used in financing activities (8,326) (13,113)
Net decrease in cash and cash equivalents (4,161) (458)
Cash and cash equivalents at beginning of period 5,008 1,606
Cash and cash equivalents at end of period $ 847 $ 1,148
Supplemental information:
Cash paid for interest $ 1,725 $ 2,487
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CENTURY PROPERTIES FUND XV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Century Properties Fund XV
(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, a California 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 nine month periods ended September
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
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.
FCMC and Fox Realty Investors ("FRI"), a California general partnership, are
the co-general partners of the Partnership.
Pursuant to a series of transactions which closed during the first half of
1996, affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i)
control of NPI Equity Investments II, Inc., ("NPI Equity") the managing general
partner of FRI, and (ii) all of the issued and outstanding shares of stock of
FCMC. NPI Equity is a wholly owned subsidiary of National Property Investors,
Inc. ("NPI"). In connection with these transactions, affiliates of Insignia
appointed new officers and directors of NPI Equity Investments II, Inc. and
FCMC.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES - CONTINUED
The following transactions with affiliates of Insignia, NPI, and affiliates
of NPI were charged to expense in 1996 and 1995:
For the Nine Months Ended
September 30,
1996 1995
Property management fees (included in operating
expenses) $ 309,000 $ 298,000
Reimbursement for services of affiliates (included
in operating expenses and general and
administrative expenses) 121,000 108,000
The reimbursement for services of affiliates for the nine month period ended
September 30, 1996, includes approxiamtely $16,000 for construction-related
services at Lakeside Place Apartments (see Item 2, "Management's Discussion and
Analysis or Plan of Operation" for further discussion).
For the period from January 19, 1996, to September 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.
During the nine months ended September 30, 1995, an affiliate of NPI was paid
$5,000 relating to a successful real estate tax appeal on the Partnership's
Farmer's Lane Plaza property. This fee is included in general and
administrative expenses.
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 - DISTRIBUTIONS
During the nine months ended September 30, 1996, the Partnership distributed
approximately $5,419,000 ($60.23 per limited partnership unit) to the limited
partners and $111,000 to the general partners.
During the nine months ended September 30, 1995, the Partnership distributed
$6,299,000 ($70.00 per limited partnership unit) to the limited partners and
$128,000 to the general partners.
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 nine month periods ended
September 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Lakeside Place Apartments 92% 95%
Houston, Texas
Summerhill Apartments 93% 96%
Dallas, Texas
Preston Creek Apartments 96% 97%
Dallas, Texas
Phoenix Business Park
Atlanta, Georgia 96% 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 earlier this year.
The Partnership's net loss for the nine month period ended September 30,
1996, was approximately $279,000 of which a net loss of $273,000 was related to
the three month period ended September 30, 1996. In 1995, the Partnership
reported net income of approximately $6,286,000 and a net loss of approximately
$136,000 for the corresponding nine and three month 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 losses reported for both the nine 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 Farmer's 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 a decrease in occupancy and has had some non-recurring
maintenance expenses related to the improvement of the appearance of the grounds
and the exteriors of the buildings at the property. Phoenix Business Park has
had improved operations for the nine and three month periods ended September 30,
1996, versus the corresponding periods in 1995. This improvement can be
partially attributed to space expansion by an existing tenant. Also
contributing to the improved operations is, as of September 30, 1996, Phoenix
Business Park was 100% occupied. Finally, the Partnership reported an
extraordinary loss on the early extinguishment of debt in the amount of $96,000
in 1996 versus $531,000 in 1995. This extraordinary loss in 1996 resulted from
the sale of the Northbank Office Complex. The extraordinary loss in 1995
resulted from the sale of Plumtree Apartments. General and administrative
expenses decreased during the three month period ended September 30, 1996, due
to non-recurring reimbursements being paid to affiliates of the Managing General
Partner during the first half of 1996.
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 September 30, 1996, the Partnership had unrestricted cash of approximately
$847,000 compared to approximately $1,148,000 at September 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. 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 properties. Net cash used in financing activities decreased due to the
payoff of two mortgage notes in 1995 related to the sales; only one has been
paid-off in 1996. Also, in 1995, an increased amount of cash was distributed to
the limited partners during the first nine months of 1995 versus the
corresponding period of 1996.
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 $23,094,000 is amortized over varying periods with maturity
dates from September 1999 to January 2010. The Partnership distributed
approximately $5,530,000 to the partners during the nine months ended September
30, 1996, and approximately $6,427,000 to the partners in 1995.
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 September 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: November 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XV 1996 Third 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 847
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 55,127
<DEPRECIATION> (23,681)
<TOTAL-ASSETS> 34,288
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 23,094
0
0
<COMMON> 0
<OTHER-SE> 9,899
<TOTAL-LIABILITY-AND-EQUITY> 34,288
<SALES> 0
<TOTAL-REVENUES> 7,803
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,986
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,824
<INCOME-PRETAX> (183)
<INCOME-TAX> 0
<INCOME-CONTINUING> (183)
<DISCONTINUED> 0
<EXTRAORDINARY> (96)
<CHANGES> 0
<NET-INCOME> (279)
<EPS-PRIMARY> (3.43)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
