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 September 30, 1997
[ ] 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 0-9680
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, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 4,118
Receivables and deposits 988
Other assets 411
Investment properties:
Land $ 5,766
Buildings and related personal property 33,979
39,745
Accumulated depreciation (18,232) 21,513
$ 27,030
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 67
Tenant security deposits payable 99
Accrued property taxes 578
Other liabilities 274
Mortgage notes payable 19,052
Partners' Capital (Deficit):
Limited partners' (89,980 units issued and
outstanding) $ 8,057
General partners' (1,097) 6,960
$ 27,030
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
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,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 2,132 $ 2,316 $ 6,299 $ 6,874
Other income 87 95 302 303
Gain on sale of properties 1,843 -- 1,844 626
Total revenue 4,062 2,411 8,445 7,803
Expenses:
Operating 1,133 1,596 3,668 4,537
Interest 517 600 1,562 1,824
Depreciation 388 474 1,169 1,410
General and administrative 80 14 226 215
Total expenses 2,118 2,684 6,625 7,986
Income (loss) before
extraordinary loss 1,944 (273) 1,820 (183)
Extraordinary loss on early
extinguishment of debt (260) -- (493) (96)
Net income (loss) $ 1,684 $ (273) $ 1,327 $ (279)
Net income (loss) allocated
to general partners $ 93 $ (5) $ 86 $ 29
Net income (loss) allocated
to limited partners 1,591 (268) 1,241 (308)
$ 1,684 $ (273) $ 1,327 $ (279)
Net income (loss) per
limited partnership unit:
ncome (loss) before
extraordinary loss $ 20.51 $ (2.98) $ 19.16 $ (2.38)
Extraordinary loss on early
extinguishment of debt (2.83) -- (5.37) (1.05)
Net income (loss) per
limited partnership unit $ 17.68 $ (2.98) $ 13.79 $ (3.43)
Distribution per limited
partnership unit $ 31.62 $ 16.66 $ 31.62 $ 60.23
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</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>
Original capital contributions 89,980 $ -- $89,980 $89,980
Partners' (deficit) capital
at December 31, 1996 89,980 $(1,125) $ 9,661 $ 8,536
Distributions to partners -- (58) (2,845) (2,903)
Net income for the nine months
ended September 30, 1997 -- 86 1,241 1,327
Partners' (deficit) capital at
September 30, 1997 89,980 $(1,097) $ 8,057 $ 6,960
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
d) CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 1,327 $ (279)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation 1,169 1,410
Amortization of loan costs and leasing commissions 67 138
Gain on sale of properties (1,844) (626)
Loss on disposal of property 18 --
Extraordinary loss on early extinguishment of debt 493 96
Change in accounts:
Receivables and deposits 139 209
Other assets (29) 32
Accounts payable (243) 33
Tenant security deposits payable (67) (81)
Accrued property taxes 23 (88)
Other liabilities 39 133
Net cash provided by operating activities 1,092 977
Cash flows from investing activities:
Deposits to restricted escrows (130) (168)
Withdrawals from restricted escrows 385 96
Property improvements and replacements (518) (873)
Proceeds from property sales 11,194 4,154
Net cash provided by investing activities 10,931 3,209
Cash flows from financing activities:
Mortgage principal payments (190) (353)
Satisfaction of mortgage notes payable (5,402) (2,443)
Debt extinguishment costs (382) --
Loan costs (27) (21)
Distributions to partners (2,903) (5,530)
Net cash used in financing activities (8,904) (8,347)
Net increase (decrease) in cash and cash equivalents 3,119 (4,161)
Cash and cash equivalents at beginning of period 999 5,008
Cash and cash equivalents at end of period $ 4,118 $ 847
Supplemental information:
Cash paid for interest $ 1,532 $ 1,725
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
e) CENTURY PROPERTIES FUND XV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated 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 ("FCMC" or the "Managing
General Partner"), a California corporation, 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, 1997, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1997. 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,
1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 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 1996, affiliates of
Insignia Financial Group, Inc. ("Insignia") acquired all of the issued and
outstanding shares of stock of FCMC, NPI Equity Investments II, Inc. ("NPI
Equity"), the managing general partner of FRI, and National Property Investors,
Inc. ("NPI"), the sole stockholder of NPI Equity. In connection with these
transactions, affiliates of Insignia appointed new officers and directors of NPI
Equity and FCMC.
The following transactions with affiliates of Insignia, NPI, and affiliates of
NPI were incurred during the nine month periods ended September 30, 1997 and
1996 (in thousands):
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1997 1996
<S> <C> <C>
Property management fees (included in operating
expenses) $ 321 $ 309
Reimbursement for services of affiliates, including
$21,000 and $16,000 in construction services
reimbursements in 1997 and 1996, respectively
(included in investment properties and operating
and general and administrative expenses) 138 121
</TABLE>
Pursuant to the Partnership Agreement, for managing the affairs of the
Partnership, the general partners are entitled to receive a partnership
management fee equal to 10% of the Partnership's adjusted cash from operations
as distributed. The general partners received approximately $3,000 in
partnership management fees for the nine month period ended September 30, 1997.
The general partners were not entitled to receive a fee for the nine month
period ended September 30, 1996.
For the period from January 19, 1996, to August 31, 1997, 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 C - DISPOSITION OF RENTAL PROPERTIES
On September 24, 1997, the Partnership sold Summerhill Apartments, located in
Dallas, Texas, to an unrelated party for a contract price of $6,150,000. After
payment of the mortgage note payable, closing costs and related expenses, the
Partnership received proceeds of approximately $2,996,000. The carrying value
of the investment property at the time of the sale was approximately $4,148,000.
For financial statement purposes, the sale resulted in a gain of approximately
$1,843,000, and the payment of the mortgage note payable resulted in an
extraordinary loss on early extinguishment of debt of approximately $260,000.
On January 15, 1997, the Partnership sold Phoenix Business Park, located in
Atlanta, Georgia, to an unrelated party for a contract price of $5,600,000.
After payment of the mortgage note payable, closing costs and related expenses,
the Partnership received proceeds of approximately $2,414,000. The carrying
value of the investment property at the time of the sale was approximately
$5,031,000. For financial statement purposes, the sale resulted in a gain of
approximately $1,000. For financial statement purposes, the payment of the
mortgage note payable resulted in an extraordinary loss on early extinguishment
of debt of approximately $233,000.
On February 1, 1996, the Partnership sold its Northbank Office Complex, located
in Eugene, Oregon, to an unaffiliated third party for $4,605,000. After payment
of the mortgage note payable and closing expenses, 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 of approximately
$881,000 and an extraordinary loss on early extinguishment of debt of
approximately $96,000.
On December 29, 1995, the Partnership sold Farmers Lane Plaza which resulted in
a reported gain of approximately $3,618,000. During the first quarter of 1996,
the Partnership paid approximately $255,000 in additional costs in
connection with the sale. These costs were reported as a reduction in the gain
on the sale of properties during the nine month period ended September 30, 1996.
NOTE D - DISTRIBUTIONS
During the nine months ended September 30, 1997, the Partnership distributed
approximately $2,845,000 ($31.62 per limited partnership unit) to the limited
partners and approximately $58,000 to the general partners from the remaining
proceeds from the sale of Northbank Office Complex, the proceeds from the sale
of Phoenix Business Park and cash flows from operations.
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 approximately $111,000 to the general partners.
NOTE E - PRO FORMA FINANCIAL INFORMATION
The following pro forma consolidated statements of operations for six months
ended June 30, 1997 and 1996, give effect to the sale of Summerhill Apartments.
The adjustments to the pro forma consolidated income statements assume the
transaction was consummated at the beginning of the year presented. The sale
occurred on September 24, 1997.
The pro forma adjustments required are to eliminate the operating activity of
Summerhill Apartments. These pro forma adjustments are not necessarily
reflective of the results that actually would have occurred if the sale had been
in effect for the periods presented or what may be achieved in the future.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997
(in thousands, except unit data)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Revenues:
Rental income $ 4,167 $ (600) $ 3,567
Other income 215 (39) 176
Gain on sale of property 1 -- 1
Total revenues 4,383 (639) 3,744
Expenses:
Operating 2,535 (407) 2,128
Interest 1,045 (135) 910
Depreciation 781 (125) 656
General and administrative 146 -- 146
Total expenses 4,507 (667) 3,840
Loss before extraordinary item (124) 28 (96)
Extraordinary loss on early extinguishment
of debt (233) -- (233)
Net loss $ (357) $ 28 $ (329)
Net loss per limited partnership unit $ (3.89) $ .31 $ (3.58)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1996
(in thousands, except unit data)
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Rental income $ 4,558 $ (603) $ 3,955
Other income 208 (40) 168
Gain on sale of property 626 -- 626
Total revenues 5,392 (643) 4,749
Expenses:
Operating 2,941 (414) 2,527
Interest 1,224 (130) 1,094
Depreciation 936 (124) 812
General and administrative 201 -- 201
Total expenses 5,302 (668) 4,634
Income before extraordinary item 90 25 115
Extraordinary loss on early extinguishment
of debt (96) -- (96)
Net (loss) income $ (6) $ 25 $ 19
Net loss per limited partnership unit $ (.45) $ .27 $ (.18)
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's remaining investment properties consist of two residential
apartment complexes. The following table sets forth the average occupancy of
the properties for each of the nine month periods ended September 30, 1997 and
1996:
Average
Occupancy
Property 1997 1996
Lakeside Place Apartments 95% 92%
Houston, Texas
Preston Creek Apartments 94% 96%
Dallas, Texas
The Managing General Partner attributes the increase in occupancy at Lakeside
Place to the extensive improvements to the building exterior and grounds
resulting in improved curbside appeal.
The Partnership realized net income of approximately $1,684,000 and $1,327,000
for the three and nine months ended September 30, 1997, respectively. During
the corresponding periods ended September 30, 1996, the Partnership realized net
losses of approximately $273,000 and $279,000, respectively. The increase in
income for the three and nine month periods is primarily attributable to the
gain of approximately $1,844,000 on the sales of Phoenix Business Park and
Summerhill in 1997 versus a gain of $626,000 on the sales of Northbank Office
Complex and Farmer's Lane Plaza in 1996, as discussed in "Item 1. Note C -
Disposition of Rental Properties". Partially offsetting the increases in net
income from the property sales was the extraordinary loss on early
extinguishment of debt in connection with the payoff of the mortgages
encumbering Phoenix Business Park and Summerhill in 1997 of approximately
$493,000. In 1996 the Partnership recognized an extraordinary loss on early
extinguishment of debt of $96,000 in connection with the payoff of the mortgage
debt encumbering Northbank Office Complex. Overall, the decrease in rental
revenue and total expenses is the result of the sale of Northbank Office
Complex in February 1996 and the sale of Phoenix Business Park in January 1997.
At the remaining properties, rental income increased by approximately $242,000
and operating expenses decreased by approximately $496,000, both primarily at
Lakeside Place. The increase in rental income at Lakeside Place is due to
increases in occupancy and rental rates at the property. The decrease in
operating expenses at Lakeside Place is the result of a cost cutting effort by
property management as well as a decrease in maintenance expense from the
extensive repairs made in 1996 to improve curbside appeal. Included in
operating expenses for the remaining properties for the nine months ended
September 30, 1997, are approximately $176,000 in major repair and maintenance
costs, versus $586,000 for the corresponding period in 1996. The majority of
these costs are attributable to the exterior rehabilitation project,
landscaping, and parking lot repairs at Lakeside Place. Interest expense at the
remaining properties decreased by approximately $74,000 for the nine months
ended September 30, 1997, due to the debt refinancing for Preston Creek in the
fourth quarter 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.
At September 30, 1997, the Partnership had unrestricted cash of approximately
$4,118,000 compared to approximately $847,000 at September 30, 1996. Net cash
provided by operating activities increased as a result of improvements in
operations at the remaining properties as discussed above. This increase was
partially offset by changes in accounts payable and other liabilities due to the
timing of payments. Net cash provided by investing activities increased due to
an increase in the proceeds from the sale of properties. Net cash used in
financing activities increased due to the payoff of two mortgage notes in 1997
related to the sold properties. Partially offsetting the increase from the
mortgage payoffs was a decrease in cash distributed to the partners during the
first nine months of 1997 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 $19,052,000 is amortized over varying periods with maturity
dates of July 2001 and November 2003. Future cash distributions will depend on
the levels of cash generated from operations, property sales and the
availability of cash reserves. In July 1997, the Partnership distributed
approximately $2,845,000 ($31.62 per limited partnership unit) to the limited
partners and $58,000 to the general partners from the remaining proceeds from
the sale of Northbank Office Complex, the proceeds from the sale of Phoenix
Business Park and cash flows from operations. During the nine month period
ended September 30, 1996, the Partnership distributed approximately $5,419,000
($60.23 per limited partnership unit) to the limited partners and approximately
$111,000 to the general partners. The Managing General Partner is currently
evaluating the feasibility of a distribution of the Summerhill proceeds.
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: Form 8-K was filed by the Partnership, dated October 7,
1997, relating to the sale of Summerhill Apartments on September 24, 1997.
SIGNATURES
In accordance with 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 XV
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: November 4, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XV 1997 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,118
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 39,745
<DEPRECIATION> (18,232)
<TOTAL-ASSETS> 27,030
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 19,052
0
0
<COMMON> 0
<OTHER-SE> 6,960
<TOTAL-LIABILITY-AND-EQUITY> 27,030
<SALES> 0
<TOTAL-REVENUES> 8,445
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,625
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,562
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (493)
<CHANGES> 0
<NET-INCOME> 1,327
<EPS-PRIMARY> 13.79<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
