FORM 10-KSB - ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-9680
CENTURY PROPERTIES FUND XV
(Name of small business issuer in its charter)
California 94-2625577
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (zip code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $10,386,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of a specified date within the past 60 days. Market value
information for registrant's partnership interests is not available. Should a
trading market develop for these interests, it is the Managing General Partner's
belief that the aggregate market value of the voting partnership interests would
not exceed $25 million.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Century Properties Fund XV (the "Partnership" or the "Registrant") was organized
in May 1980 as a California limited partnership under the Uniform Limited
Partnership Act of the California Corporations Code. The general partners are
Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a
California corporation, and Fox Realty Investors ("FRI"), a California general
partnership.
The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-66459), was declared effective by the Securities and Exchange
Commission on May 1, 1980. The Partnership marketed its securities pursuant to
its Prospectus dated May 1, 1980, as revised on May 29, 1980, and thereafter
supplemented (hereinafter the "Prospectus"). This Prospectus was filed with the
Securities and Exchange Commission pursuant to Rule 424 (b) of the Securities
Act of 1933. The principal business of the Partnership is and has been to
acquire, hold for investment and ultimately sell income-producing real property.
Beginning in July 1980 through April 1981, the Partnership offered $90,000,000
in Limited Partnership units and sold units having an initial cost of
$89,980,000.
The net proceeds of this offering were used to acquire seventeen income-
producing real properties. The Partnership's original property portfolio was
geographically diversified with properties acquired in eight states. The
Partnership's acquisition activities were completed in June 1982, and since then
the principal activity of the Partnership has been holding for investment and
ultimately selling its income-producing real property. In the period from 1986
through January 1992, six office buildings, three apartment buildings, and one
shopping center were sold or otherwise disposed of. The Partnership sold two of
its properties in 1995 and an office building in the first quarter of 1996. The
remaining commercial property was sold in January 1997 and an apartment building
was sold in the third quarter of 1997. See "Item 2. Description of Properties"
for a description of the Partnership's remaining properties.
The Managing General Partner of the Partnership intends to maximize the
operating results and, ultimately, the net realizable value of each of the
Partnership's properties in order to achieve the best possible return for the
investors. Such results may best be achieved through property sales,
refinancings, debt restructurings or relinquishment of the assets. The
Partnership intends to evaluate each of its holdings periodically to determine
the most appropriate strategy for each of the assets.
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. The limited partners have no right to
participate in the management or conduct of such business and affairs. NPI-AP
Management L.P. ("NPI-AP"), an affiliate of the Managing General Partner,
provides day-to-day management services to the Partnership's investment
properties. See "Item 12. Certain Relationships and Related Transactions" for
discussion of transactions with affiliated parties.
The business in which the Partnership is engaged is highly competitive, and the
Partnership is not a significant factor in its industry. Each of its apartment
properties is located in or near a major urban area and, accordingly, competes
for rentals not only with similar apartment properties in its immediate area but
with hundreds of similar apartment properties throughout the urban area,
including properties owned and/or managed by affiliates of the Partnership.
Such competition is primarily on the basis of location, rents, services and
amenities. In addition, the Partnership competes with significant numbers of
individuals and organizations (including similar partnerships, real estate
investment trusts and financial institutions) with respect to the sale of
improved real properties, primarily on the basis of the prices and terms of such
transactions.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the property
owned by the Partnership.
The Partnership monitors its property for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain
cases, environmental testing has been performed which resulted in no material
adverse conditions or liabilities. In no case has the Partnership received
notice that it is a potentially responsible party with respect to an
environmental clean up site.
Change in Control
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 Investment II, Inc. ("NPI
Equity"), the managing general partner of FRI, and National Property Investors,
Inc. ("NPI"). NPI was the sole shareholder of NPI Equity until December 31,
1996, at which time the stock of NPI Equity was acquired by Insignia Properties
Trust, an affiliate of Insignia. In connection with these transactions,
affiliates of Insignia appointed new officers and directors of NPI, NPI Equity
and FCMC. See "Item 9. Directors, Executive Officers, Promoters and Control
Persons, Compliance with Section 16(a) of the Exchange Act" for information on
the directors and executive officers of the Partnership.
Tender Offers
On January 19, 1996, DeForest Ventures I L.P., the entity which tendered for
units of the Partnership in 1994 and 1995, and certain of its affiliates sold
the units then held by them (35,473.17 units representing approximately 39% of
the total outstanding units at such time) to Riverside Drive L.L.C.
("Riverside"), an affiliate of Insignia. As a result, Riverside could be in a
position to significantly influence all voting decisions with respect to the
Partnership. Under the Partnership Agreement, unitholders holding a majority of
the Units are entitled to take action with respect to a variety of matters.
When voting on matters, Riverside would in all likelihood vote the Units it
acquired in a manner favorable to the interest of the Managing General Partner
because of its affiliation with the Managing General Partner. However,
Riverside has agreed for the benefit of non-tendering unitholders, that it will
vote its Units: (i) against any proposal to increase the fees and other
compensation payable by the Partnership to the Managing General Partner and any
of its affiliates; and (ii) with respect to any proposal made by the Managing
General Partner or any of its affiliates, in proportion to votes cast by other
unitholders. Except for the foregoing, no other limitations are imposed on
Riverside's right to vote each Unit acquired. In addition to the foregoing
units, Insignia Properties L.P. ("IPLP"), an affiliate of Insignia, acquired
4,222 units pursuant to its December 17, 1997, tender offer. See "Item 11.
Security Ownership of Certain Beneficial Owners and Management" for additional
information with respect to this tender offer.
ITEM 2. DESCRIPTION OF PROPERTIES:
The following table sets forth the Partnership's investments in properties:
Date of
Property Purchase Type of Ownership Use
Lakeside Place Apartments 12/80 Fee ownership subject to Apartment-
Houston, Texas first mortgage 734 units
Preston Creek Apartments 8/81 Fee ownership subject to Apartment-
Dallas, Texas first mortgage 228 units
SCHEDULE OF PROPERTIES (IN THOUSANDS):
<TABLE>
<CAPTION>
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C> <C>
Lakeside Place $ 30,603 $ 14,825 5-30 yrs. SL $ 16,784
Preston Creek 9,281 3,734 5-30 yrs. SL 2,696
$ 39,884 $ 18,559 $ 19,480
</TABLE>
See "Note A" of the consolidated financial statements included in "Item 7.
Financial Statements" for a description of the Partnership's depreciation
policy.
SCHEDULE OF MORTGAGES (IN THOUSANDS):
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1997 Rate Amortized Date Maturity
<S> <C> <C> <C> <C> <C>
Lakeside Place $14,523 9.60% 30 yrs. 7/1/01 $14,029
Preston Creek 4,500 7.33% (1) 11/1/03 4,500
$19,023
<FN>
(1) Monthly payments are interest only.
</FN>
</TABLE>
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's rental properties and by pledge of revenues from the respective
rental properties. The mortgage notes payable include prepayment penalties if
repaid prior to maturity.
Effective November 1, 1996, the Partnership refinanced the mortgage encumbering
Preston Creek with a new first mortgage in the amount of $4,500,000. The new
mortgage carries a stated interest rate of 7.33% and matures on November 1,
2003, with a balloon payment of $4,500,000. Total capitalized loan costs related
to the refinancing were approximately $147,000. The early extinguishment of
debt resulted in an extraordinary loss of approximately $899,000, arising from
prepayment penalties of approximately $74,000 and unamortized debt discount of
approximately $825,000.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average Annual Average
Rental Rates Occupancy
Property 1997 1996 1997 1996
Lakeside Place $ 7,909/unit $ 7,684/unit 95% 93%
Preston Creek 7,865/unit 7,499/unit 93% 96%
The Managing General Partner attributes the decrease in occupancy at Preston
Creek to construction of new apartment complexes in the Dallas sub-market
resulting in an increased supply of available rental units.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other apartment complexes in the area. The Managing General
Partner believes that all of the properties are adequately insured. The multi-
family residential properties' lease terms are for one year or less. No
individual tenant leases 10% or more of the available rental space.
Real estate taxes (in thousands) and rates in 1997 for each property were:
1997 1997
Billing Rate
Lakeside Place Apartments $ 530 2.76%
Preston Creek Apartments 205 2.56%
ITEM 3. LEGAL PROCEEDINGS
The Partnership is unaware of any pending or outstanding litigation that is not
routine in nature. The Managing General Partner of the Partnership believes
that all such pending or outstanding litigation will be resolved without a
material adverse effect upon the business, financial condition, or operations of
the Partnership.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The unit holders of the Partnership did not vote on any matter during the fiscal
year covered by this report.
PART II
ITEM 5.MARKET FOR THE PARTNERSHIP'S COMMON EQUITY AND RELATED SECURITY HOLDER
MATTERS
The Partnership, a publicly-held limited partnership, originally sold 89,980
Limited Partnership Units aggregating $89,980,000. As of January 1, 1998, the
Partnership had 89,980 units outstanding held by 5,533 limited partners of
record. There is no intention to sell additional Limited Partnership Units nor
is there an established public trading market for these Units.
During the year ended December 31, 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, representing
proceeds received from the sale of Northbank Office Complex in 1996 and Phoenix
Business Park in 1997 and from operations. During the year ended December 31,
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,
representing the proceeds received from the sale of Farmer's Lane Plaza in 1995
and Northbank Office Complex in 1996. In January of 1998, the Partnership
distributed approximately $1,470,000 ($16.34 per limited partnership unit) to
the limited partners and approximately $30,000 to the general partners from the
proceeds from the sale of Summerhill Apartments. The Managing General Partner
anticipates making a distribution during the second quarter of 1998.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership realized net income for the year ended December 31, 1997, of
approximately $1,551,000, versus a net loss of approximately $1,642,000 for the
year ended December 31, 1996. Included in net income for the year ended
December 31, 1997, is approximately $1,844,000 in gains from the sale of the
Partnership's Phoenix Business Park and Summerhill Apartments in 1997. Included
in net loss for the year ended December 31, 1996, is approximately $626,000
consisting of a gain from the sale of the Partnership's Northbank Office Complex
and an additional loss due to additional costs related to the sale of Farmer's
Lane Plaza properties in 1996 (see discussion below). Also included in the
consolidated statement of operations for 1997 was an extraordinary loss on early
extinguishment of debt in connection with the payoff of the mortgages
encumbering Phoenix Business Park and Summerhill Apartments in 1997, of
approximately $493,000. In 1996, the Partnership recognized an extraordinary
loss on early extinguishment of debt in connection with the payoff of the
mortgages encumbering Preston Creek and Northbank Office Complex of
approximately $995,000 (see discussion below). Overall, the decrease in rental
income and total expenses is directly attributable to the sale of Northbank
Office Complex in February 1996, the sale of Phoenix Business Park in January
1997, and the sale of Summerhill Apartments in September 1997.
At the Partnership's two remaining properties, total revenue increased by
approximately $384,000 and operating expenses decreased by approximately
$1,045,000, primarily at Lakeside Place. Rental income at Lakeside Place
increased by approximately $310,000 due to increases in occupancy and rental
rates at the property, which can be attributed to the improvements made at the
property. The decrease in operating expenses is primarily due to decreases at
Lakeside Place as the result of cost cutting by the property's management as
well as a decrease in maintenance expense from the extensive repairs made in
1996 to improve the property's curbside appeal. Included in operating expenses
for the remaining properties for the year ended December 31, 1997, are
approximately $227,000 in major repairs and maintenance comprised primarily of
exterior painting at Lakeside Place. Included in operating expenses for the
remaining properties for the year ended December 31, 1996, are approximately
$903,000 in major repairs and maintenance comprised primarily of exterior and
interior building repairs, exterior painting and parking lot repairs at Lakeside
Place. Interest expense at the remaining properties decreased by approximately
$106,000 for the year ended December 31, 1997, as a result of refinancing the
mortgage debt at a lower rate on Preston Creek in the fourth quarter of 1996.
On September 24, 1997, the Partnership sold Summerhill Apartments, located in
Dallas, Texas, to an unrelated third 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 third 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 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 twelve month period ended December 31, 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.
Liquidity and Capital Resources
At December 31, 1997, the Partnership had unrestricted cash and cash equivalents
of approximately $4,612,000 compared to approximately $999,000 at December 31,
1996. The net increase in cash and cash equivalents for the year ended December
31, 1997, was approximately $3,613,000 compared to a net decrease in cash and
cash equivalents of approximately $4,009,000 for the comparable period in 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 the change in accounts payable due to the timing of
payments. Net cash provided by investing activities increased primarily due to
higher proceeds from the 1997 property sales. Net cash used in financing
activities increased as the net proceeds from the refinancing of the mortgage
encumbering Preston Creek were included in net cash used in financing activities
in 1996. The proceeds from the 1996 refinancing were partially offset by a
greater amount of cash distributed to the partners in 1996 versus 1997.
On November 1, 1996, the Partnership refinanced the mortgage encumbering Preston
Creek with a new first mortgage in the amount of $4,500,000. The new mortgage
carries a stated interest rate of 7.33% and matures on November 1, 2003, with a
balloon payment of $4,500,000. Total capitalized loan costs were approximately
$147,000. The early extinguishment of debt resulted in an extraordinary loss of
approximately $899,000, arising from prepayment penalties of approximately
$74,000 and unamortized debt discount of approximately $825,000.
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 properties 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 approximately $19,023,000 is amortized over varying
periods with maturity dates of July 2001 and November 2003. 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 Northbrook Office Complex, the proceeds from
the sale of Phoenix Business Park and cash flows from operations during the year
ended December 31, 1997. The Partnership distributed approximately $5,419,000
($60.23 per limited partnership unit) to the limited partners and $111,000 to
the general partners representing the proceeds received from the sale of
Farmer's Lane Plaza in 1995 and Northbank Office Complex in 1996 during the year
ended December 31, 1996. In January of 1998, the Partnership distributed
approximately $1,470,000 ($16.34 per limited partnership unit) to the limited
partners and approximately $30,000 to the general partners from the proceeds
from the sale of Summerhill Apartments. The Managing General Partner
anticipates making a distribution during the second quarter of 1998.
Year 2000
The Partnership is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are
not completed timely, the Year 2000 Issue could have a material impact on the
operations of the Partnership.
Other
Certain items discussed in this annual report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. Such
forward-looking statements speak only as of the date of this annual report. The
Partnership expressly disclaims any obligation or undertaking to release
publicly any updates of revisions to any forward-looking statements contained
herein to reflect any change in the Partnership's expectations with regard
thereto or any change in events, conditions or circumstances on which any such
statement is based.
ITEM 7. FINANCIAL STATEMENTS
CENTURY PROPERTIES FUND XV
LIST OF CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditors' Report
Consolidated Balance Sheet - December 31, 1997
Consolidated Statements of Operations - Years ended December 31, 1997 and
1996
Consolidated Statements of Changes in Partners' Capital (Deficit) - Years
ended December 31, 1997 and 1996
Consolidated Statements of Cash Flows - Years ended December 31, 1997 and
1996
Notes to Consolidated Financial Statements
Independent Auditors' Report
To The Partners
Century Properties Fund XV
Greenville, South Carolina
We have audited the accompanying consolidated balance sheet of Century
Properties Fund XV (a limited partnership)(the "Partnership") and its subsidiary
as of December 31, 1997, and the related consolidated statements of operations,
changes in partners' capital and cash flows for each of the two years in the
period ended December 31, 1997. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the Partnership's management, as well as
evaluating the overall consolidated financial statement presentation. We
believe that out audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Century
Properties Fund XV and its subsidiary as of December 31, 1997, and the results
of its operations and its cash flows for each of the two years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
/s/Imowitz Koenig & Co., LLP
Certified Public Accountants
New York, New York
January 16, 1998
CENTURY PROPERTIES FUND XV
CONSOLIDATED BALANCE SHEET
December 31, 1997
(in thousands, except unit data)
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 4,612
Receivables and deposits 687
Restricted escrows 185
Other assets 357
Investment properties (Notes A and D):
Land $ 5,766
Buildings and related personal property 34,118
39,884
Less accumulated depreciation (18,559) 21,325
$ 27,166
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 101
Tenant security deposits payable 92
Accrued property taxes 510
Other liabilities 256
Mortgage notes payable (Note C) 19,023
Partners' Capital (Deficit):
General partners' $ (1,092)
Limited partners' (89,980 units issued and
outstanding) 8,276 7,184
$ 27,166
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1997 1996
Revenues:
Rental income $ 8,127 $ 9,179
Other income 415 372
Gain on sale of properties 1,844 626
Total revenues 10,386 10,177
Expenses:
Operating 3,697 5,281
General and administrative 280 285
Depreciation 1,496 1,892
Interest 2,008 2,430
Property taxes 861 936
Total expenses 8,342 10,824
Income (loss) before extraordinary item 2,044 (647)
Extraordinary loss on early extinguishment
of debt (Notes C and E) (493) (995)
Net income (loss) $ 1,551 $ (1,642)
Net income allocated to general partners $ 91 $ 1
Net income (loss) allocated to limited partners 1,460 (1,643)
$ 1,551 $ (1,642)
Net income (loss) per limited partnership unit:
Income (loss) before extraordinary item $ 21.60 $ (7.42)
Extraordinary item (5.37) (10.84)
Net income (loss) $ 16.23 $ (18.26)
Distribution per limited partnership unit $ 31.62 $ 60.23
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners' Partners' Total
<S> <C> <C> <C> <C>
Original Capital contributions 89,980 $ -- $ 89,980 $ 89,980
Partners' (deficit) capital at
December 31, 1995 89,980 $ (1,015) $ 16,723 $ 15,708
Distributions to partners -- (111) (5,419) (5,530)
Net income (loss) for the year
ended December 31,1996 -- 1 (1,643) (1,642)
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 year
ended December 31, 1997 -- 91 1,460 1,551
Partners' (deficit) capital
at December 31, 1997 89,980 $ (1,092) $ 8,276 $ 7,184
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1997 1996
Cash flows from operating activities:
Net income (loss) $ 1,551 $ (1,642)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation 1,496 1,892
Amortization of loan costs and leasing
commissions 85 178
Gain on sale of properties (1,844) (626)
Loss on disposal of property 18 --
Extraordinary loss on early extinguishment
of debt 493 995
Change in accounts:
Receivables and deposits 280 420
Other assets 3 82
Accounts payable (209) 251
Tenant security deposits payable (74) (90)
Accrued property taxes (45) (192)
Other liabilities 21 (1)
Net cash provided by operating activities 1,775 1,267
Cash flows from investing activities:
Property improvements and replacements (658) (1,269)
Net withdrawals from (deposits to)
restricted escrows 230 (351)
Net proceeds from property sales 11,194 4,154
Net cash provided by investing activities 10,766 2,534
Cash flows from financing activities:
Mortgage principal payments (219) (438)
Repayment of mortgage notes payable (5,402) (6,143)
Proceeds from mortgage note payable -- 4,500
Debt extinguishment costs (382) (74)
Loan costs (22) (125)
Distributions to partners (2,903) (5,530)
Net cash used in financing activities (8,928) (7,810)
Net increase (decrease) in cash and
cash equivalents 3,613 (4,009)
Cash and cash equivalents at beginning of year 999 5,008
Cash and cash equivalents at end of year $ 4,612 $ 999
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,963 $ 2,253
[FN]
See Accompanying Notes to Consolidated Financial Statements
</FN>
[/TABLE]
CENTURY PROPERTIES FUND XV
Notes to Consolidated Financial Statements
December 31, 1997
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
Century Properties Fund XV (the "Partnership") is a limited partnership
organized under the laws of the State of California to acquire, hold for
investment, and ultimately sell income-producing real estate. The Partnership
currently owns two residential apartment complexes located in Texas. The
general partners are Fox Capital Management Corporation ("FCMC" or the "Managing
General Partner") and Fox Realty Investors ("FRI"), a California general
partnership. The Partnership was organized in May 1980. Capital contributions of
$89,980,000 ($1,000 per unit) were made by the limited partners.
Principles of Consolidation:
The Partnership's financial statements include the accounts of Century Lakeside
Place, LP and Summerhill Properties, LP (which was dissolved in 1997). The
Partnership owns a 99% interest in each of the partnerships and it has the
ability to control the major operating and financial policies of these
partnerships. All intercompany transactions have been eliminated.
Use of Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Allocation of Income, Loss and Distribution:
Net income, net loss and distributions of cash of the Partnership are allocated
between general and limited partners in accordance with the provisions of the
Partnership Agreement.
Fair Value of Financial Instruments:
Statement of Financial Accounting Standards ("SFAS") No. 107 "Disclosures about
Fair Value of Financial Instruments", as amended by SFAS no. 119 "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments,"
requires disclosures of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's long term debt, after
discounting the scheduled loan payments to maturity, approximates its carrying
amount. Due to significant prepayment penalties associated with the debt, it
would not be beneficial to the Partnership to refinance this obligation.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with a maturity, when
purchased, of three months or less to be cash equivalents. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Security Deposits:
The Partnership requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables and deposits. The security
deposits are refunded when the tenant vacates, provided the tenant has not
damaged its space, and is current on its rental payments.
Investment Properties:
Investment properties are stated at cost. Acquisition fees are capitalized as a
cost of real estate. In accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
the Partnership records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets.
Depreciation:
Depreciation is calculated by the straight-line method over the estimated lives
of the rental properties and related personal property ranging from 5 to 30
years.
Leases:
The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases.
Advertising Costs:
Advertising costs of approximately $204,000 in 1997 and approximately $255,000
in 1996 were charged to expense as incurred and are included in operating
expenses.
Loan Costs and Lease Commissions:
Loan costs of approximately $540,000 are included in other assets in the
accompanying consolidated balance sheet and are being amortized on a straight-
line basis over the life of the loans. At December 31, 1997, accumulated
amortization was approximately $252,000. Amortization of loan costs is included
in interest expense. Deferred lease commissions on commercial space are
amortized using the straight-line method over the lives of the related leases.
Such amortization has been charged to operating expenses.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. No provision for income taxes is made in the consolidated
financial statements of the Partnership.
Reclassifications:
Certain reclassifications have been made to the 1996 balances 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.
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 Investment II, Inc. ("NPI
Equity"), the managing general partner of FRI, and National Property Investors,
Inc. ("NPI"). NPI was the sole shareholder of NPI Equity until December 31,
1996, at which time the stock of NPI Equity was acquired by Insignia Properties
Trust, an affiliate of Insignia. In connection with these transactions,
affiliates of Insignia appointed new officers and directors of NPI, NPI Equity
and FCMC.
The following transactions with affiliates of Insignia, NPI, and affiliates of
NPI were incurred during the twelve month periods ended December 31, 1997 and
1996 (in thousands):
1997 1996
Property management fees (included in operating
expenses) $ 422 $ 415
Reimbursement for services of affiliates, including
approximately $23,000 and $22,000 of construction
services reimbursement in 1997 and 1996,
respectively (included in investment properties,
operating expenses and general and
administrative expenses) 186 165
Partnership management fees (included in general
and administrative expenses) 3 --
In addition, in connection with the sale of Summerhill, an affiliate of the
Managing General Partner received approximately $70,000 as a sales commission
in 1997.
In addition, in connection with the refinancing of Preston Creek, an affiliate
of the Managing General Partner received approximately $8,000 in 1996. This
amount is included in other assets.
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 master policy. The 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.
In December 1997, Insignia affiliates (the "Purchaser") commenced tender offers
for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 36,000 of the outstanding
units of limited partnership interest in the Partnership, at $120.00 per Unit,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 17, 1997.
In accordance with the Partnership Agreement, the general partners were
allocated their two percent continuing interest in the Partnership's net income
(loss) and taxable income. Gains from dispositions of the Partnership's
properties were allocated first to the general partners, to the extent of
distributions received or entitled to receive, then two percent of the
remainder. Also in accordance with the Partnership Agreement, the general
partners received distributions of approximately $58,000 and $111,000 in 1997
and 1996, respectively. Upon the sale of all properties and termination of the
Partnership, the general partners may be required to contribute certain funds to
the Partnership in accordance with the Partnership Agreement.
NOTE C - MORTGAGE NOTES PAYABLE
The principle terms of mortgage notes payable are as follows (in thousands):
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1997 Interest Rate Date Maturity
<S> <C> <C> <C> <C> <C>
Lakeside Place $ 14,523 $ 126 9.60% 7/1/01 $ 14,029
Preston Creek 4,500 27 7.33% 11/1/03 4,500
Total $ 19,023 $ 153
</TABLE>
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's rental properties and by pledge of revenues from the respective
rental properties. The mortgage notes payable include prepayment penalties if
repaid prior to maturity.
Effective November 1, 1996, the Partnership refinanced the mortgage encumbering
Preston Creek with a new first mortgage in the amount of $4,500,000. The new
mortgage carries a stated interest rate of 7.33% and matures on November 1,
2003, with a balloon payment of $4,500,000. Total capitalized loan costs related
to the refinancing were approximately $147,000. The early extinguishment of
debt resulted in an extraordinary loss of approximately $899,000, arising from
prepayment penalties of approximately $74,000 and unamortized debt discount of
approximately $825,000.
Scheduled principal payments of the mortgage notes payable subsequent to
December 31, 1997, are as follows (in thousands):
1998 $ 126
1999 138
2000 152
2001 14,107
2002 --
Thereafter 4,500
$ 19,023
Amortization of deferred financing costs totaled approximately $83,000 and
$70,000 for 1997 and 1996, respectively.
NOTE D - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION
(in thousands)
Initial Cost
To Partnership
Buildings Net Costs
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Lakeside Place $ 14,523 $ 3,659 $ 21,481 $ 5,463
Preston Creek 4,500 2,118 5,793 1,370
Total $ 19,023 $ 5,777 $ 27,274 $ 6,833
<TABLE>
<CAPTION>
Gross Amount at Which Carried
At December 31, 1997
Buildings Accumu- Deprec-
And lated Year of iable
Personal Depre- Construc- Date Life-
Description Land Property Total ciation tion Acquired Years
<S> <C> <C> <C> <C> <C> <C> <C>
Lakeside Place $ 3,659 $ 26,944 $30,603 $ 14,825 10/76 12/80 5-30 yrs.
Preston Creek 2,107 7,174 9,281 3,734 10/79 8/80 5-30 yrs.
Total $ 5,766 $ 34,118 $39,884 $ 18,559
</TABLE>
Reconciliation of Investment Properties and Accumulated Depreciation:
December 31,
1997 1996
Investment Properties
Balance at beginning of year $ 55,523 $ 59,945
Property improvements 658 1,269
Dispositions of property (16,297) (5,691)
Balance at end of year $ 39,884 $ 55,523
Accumulated Depreciation
Balance at beginning of year $ 24,163 $ 24,490
Additions charged to expense 1,496 1,892
Dispositions of property (7,100) (2,219)
Balance at end of year $ 18,559 $ 24,163
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1997 and 1996, is $46,077,000 and $62,974,000, respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1997 and 1996, is $26,597,000 and $38,165,000, respectively.
NOTE E - DISPOSITION OF RENTAL PROPERTIES
On September 24, 1997, the Partnership sold Summerhill Apartments, located in
Dallas, Texas, to an unrelated third 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 third 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 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 twelve month period ended December 31, 1996.
NOTE F - DISTRIBUTIONS
During the year ended December 31, 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 year ended December 31, 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 from the proceeds from the sales
of Farmer's Lane in 1995 and Northbank Office Complex in 1996.
NOTE G - INCOME TAXES
(in thousands)
Differences between the net income (loss) as reported and Federal taxable income
result primarily from (1) depreciation over different methods and lives and on
differing cost bases and (2) gains on property dispositions. The following is a
reconciliation of reported net income (loss) and Federal taxable income:
For the year ended
December 31,
1997 1996
Net income (loss) as reported $ 1,551 $(1,642)
Add (deduct):
Depreciation 161 (252)
Gain on property dispositions, net 4,488 1,909
Unearned revenue (2) 30
Amortization of notes payable
discount -- 893
Other 50 38
Federal taxable income $ 6,248 $ 976
Federal taxable income per limited
partnership unit $ 67 $ 10
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities:
1997
Net assets as reported $ 7,184
Depreciation (8,035)
Sales commission and organization expenses 10,322
Payments credited to rental properties 39
Unearned revenue 3
Land and buildings 6,191
Other --
Net assets - income tax method $ 15,704
NOTE H - SUBSEQUENT EVENT
In January of 1998, the Partnership distributed approximately $1,470,000 ($16.34
per limited partnership unit) to the limited partners and approximately $30,000
to the general partners from proceeds from the sale of Summerhill Apartments.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANT ON ACCOUNTING AND
FINANCIAL DISCLOSURES
There were no disagreements with Imowitz Koenig & Co., LLP regarding the 1997 or
1996 audits of the Partnership's financial statements.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Century Properties Fund XV (the "Partnership") has no officers or directors.
Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"),
manages and controls substantially all of the Partnership's affairs and has
general responsibility in all matters affecting its business.
The names, ages and positions held by executive officers and directors of the
Managing General Partner, as of January 29, 1998, are as follows:
Name Age Position
William H. Jarrard, Jr. 51 President and Director
Ronald Uretta 41 Vice President and Treasurer
Martha L. Long 38 Controller
Robert D. Long, Jr. 30 Vice President
Daniel M. LeBey 32 Vice President and Secretary
Kelley M. Buechler 40 Assistant Secretary
William H. Jarrard, Jr. has been President and Director of the Managing General
Partner since June 1996. He has acted as Senior Vice President of Insignia
Properties Trust ("IPT"), parent of the Managing General Partner, since May
1997. Mr. Jarrard previously acted as Managing Director - Partnership
Administration of Insignia Financial Group, Inc. ("Insignia") from January 1991
through September 1997 and served as Managing Director - Partnership
Administration and Asset Management of Insignia from July 1994 until January
1996.
Ronald Uretta has been Vice President and Treasurer of the Managing General
Partner since June 1996 and Insignia's Treasurer since January 1992. Since
August 1996, he has also served as Insignia's Chief Operating Officer. He has
also served as Insignia's Secretary from January 1992 to June 1996 and as
Insignia's Chief Financial Officer from January 1992 to August 1996.
Martha L. Long has been Controller of the Managing General Partner since
December 1996 and Senior Vice President - Finance and Controller of Insignia
since January 1997. In June 1994, Ms. Long joined Insignia as its Controller,
and was promoted to Senior Vice President - Finance in January 1997. Prior to
that time, she was Senior Vice President and Controller of the First Savings
Bank, in Greenville, SC.
Robert D. Long, Jr. has been Vice President of the Managing General Partner
since January 2, 1998. Mr. Long joined Metropolitan Asset Enhancement, L.P.
("MAE"), an affiliate of Insignia, in September 1993. Since 1994 he has acted
as Vice President and Chief Accounting Officer of the MAE subsidiaries. Mr.
Long was an accountant for Insignia until joining MAE in 1993. Prior to joining
Insignia, Mr. Long was an auditor for the State of Tennessee and was associated
with the accounting firm of Harsman Lewis and Associates.
Daniel M. LeBey has been Vice President and Secretary of the Managing General
Partner since January 29, 1998 and Insignia's Assistant Secretary since April
30, 1997. Since July 1996 he has also served as Insignia's Associate General
Counsel. From September 1992 until June 1996, Mr. LeBey was an attorney with
the law firm of Alston & Bird LLP, Atlanta, Georgia.
Kelley M. Buechler has been Assistant Secretary of the Managing General Partner
since June 1996 and Assistant Secretary of Insignia since 1991.
No family relationships exist among any of the officers or directors of the
Managing General Partner.
ITEM 10. EXECUTIVE COMPENSATION
No direct form of compensation or remuneration was paid by the Partnership to
any officer or director of the Managing General Partner. The Partnership has no
plan, nor does the Partnership presently propose a plan, which will result in
any remuneration being paid to any officer or director upon termination of
employment. However, reimbursements and other payments have been made to the
Partnership's Managing General Partner and its affiliates, as described in "Item
12. Certain Relationship and Related Transactions" below.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding limited partnership
units of the Partnership owned by each person who is known by the Partnership to
own beneficially or exercise voting or dispositive control over more than 5% of
the Partnership's limited partnership units, by each of the Managing General
Partner's directors and by all directors and executive officers of the Managing
General Partner as a group as of January 1, 1998.
Name and address of Amount and nature of
Beneficial Owner Beneficial Ownership % of Class
Riverside Drive LLC 35,473.17 39.4%
One Insignia Financial Plaza
Greenville, SC 29602
All directors and
executive officers as
a group (six persons) -- --
As a result of its ownership of 35,473.17 limited partnership units, Riverside
Drive L.L.C. ("Riverside") could be in a position to significantly influence all
voting decisions with respect to the Partnership. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, Riverside
would in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner. However, Riverside has agreed for the benefit of non-
tendering unitholders, that it will vote its Units: (i) against any proposal to
increase the fees and other compensation payable by the Partnership to the
Managing General Partner and any of its affiliates; and (ii) with respect to any
proposal made by the Managing General Partner or any of its affiliates, in
proportion to votes cast by other unitholders. Except for the foregoing, no
other limitations are imposed on Riverside's right to vote each Unit acquired.
During December 1997, Insignia affiliates (the "Purchaser") commenced tender
offers for limited partnership interests in ten real estate limited partnership
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 36,000 of the outstanding
units of limited partnership interest in the Partnership at $120 per Unit, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated December 17, 1997 (the "Offer to Purchase") and the
related Assignment of Partnership Interest attached as Exhibits(a)(1) and
(a)(2), respectively, to the Tender Offer Statement on Schedule 14D-1 originally
filed with the Securities and Exchange Commission on December 17, 1997. Because
of the existing and potential future conflicts of interest (described in the
Partnership's Statements on Schedule 14D-9 filed with the Securities and
Exchange Commission), neither the Partnership nor the Managing General Partner
express any opinion as to the Offer to Purchase and made no recommendation as to
whether unit holders should tender their units in response to the Offer to
Purchase. In addition, because of these conflicts of interests, including as a
result of the Purchaser's affiliation with various Insignia affiliates, the
manner in which the Purchaser votes its limited partner interests in the
Partnership may not always be consistent with the best interests of the other
limited partners. As a result of the tender offer, the Purchaser acquired 4,222
units as of January 30, 1998, the date the tender offer closed.
There are no arrangements known to the Partnership, the operation of which may,
at a subsequent date, result in a change in control of the Partnership.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transactions have occurred between the Partnership and any officer or
director of the Managing General Partner.
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.
Pursuant to a series of transactions which closed during 1996, affiliates of
Insignia acquired all of the issued and outstanding shares of stock of FCMC, NPI
Equity Investment II, Inc. ("NPI Equity"), the managing general partner of FRI,
and National Property Investors, Inc. ("NPI"). NPI was the sole shareholder of
NPI Equity until December 31, 1996, at which time the stock of NPI Equity was
acquired by Insignia Properties Trust, an affiliate of Insignia. In connection
with these transactions, affiliates of Insignia appointed new officers and
directors of NPI, NPI Equity and FCMC.
The following transactions with affiliates of Insignia, NPI, and affiliates of
NPI were incurred during the twelve month periods ended December 31, 1997 and
1996 (in thousands):
1997 1996
Property management fees $ 422 $ 415
Reimbursement for services of affiliates, including
approximately $23,000 and $22,000 of construction
services reimbursement in 1997 and 1996,
respectively 186 165
Partnership management fees 3 --
In addition, in connection with the sale of Summerhill, an affiliate of the
Managing General Partner received approximately $70,000 as a sales commission in
1997.
In addition, in connection with the refinancing of Preston Creek, an affiliate
of the Managing General Partner received approximately $8,000 in 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 master policy. The 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.
In accordance with the Partnership Agreement, the general partners were
allocated their two percent continuing interest in the Partnership's net income
(loss) and taxable income. Gains from dispositions of the Partnership's
properties were allocated first to the general partners, to the extent of
distributions received or entitled to receive, then two percent of the
remainder. Also in accordance with the Partnership Agreement, the general
partners received distributions of $58,000 and $111,000 in 1997 and 1996,
respectively. Upon the sale of all properties and termination of the
Partnership, the general partners may be required to contribute certain funds to
the Partnership in accordance with the Partnership Agreement.
In December 1997, Insignia affiliates (the "Purchaser") commenced tender offers
for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 36,000 of the outstanding
units of limited partnership interest in the Partnership, at $120.00 per Unit,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 17, 1997. As a result of the
tender offer, the Purchaser acquired 4,222 of the outstanding limited
partnership units of the Partnership as of January 30, 1998.
During 1996, an affiliate of Insignia acquired approximately 39% of the limited
partnership units of the Partnership, as discussed in "Item 11. Security
Ownership of Certain Beneficial Owners and Management" above.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1997: None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
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
Date: March 12, 1998
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Signature/Name Title Date
/s/William H. Jarrard, Jr. President and March 12, 1998
William H. Jarrard, Jr. Director
/s/Ronald Uretta Vice President and March 12, 1998
Ronald Uretta Treasurer
CENTURY PROPERTIES INCOME FUND XV
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of
August 17, 1996, incorporated by reference to the
Partnership's Current Report on Form 8-K dated August
17, 1996.
2.2 Partnership Units Purchase Agreement dated as of
August 17, 1996 incorporated by reference to Exhibit
2.1 to Form 8-K filed by Insignia Financial Group,
Inc. ("Insignia") with the Securities and Exchange
Commission on September 1, 1996.
2.3 Management Purchase Agreement dated as of August 17,
1996 incorporated by reference to Exhibit 2.2 to Form
8-K filed by Insignia with the Securities and
Exchange Commission on September 1, 1996.
2.4 Limited Liability Company Agreement of Riverside
Drive L.L.C., dated as of August 17, 1996
incorporated by reference to Exhibit 2.4 to Form 8-K
filed by Insignia with the Securities and Exchange
Commission on September 1, 1995.
2.5 Master Indemnity Agreement dated as of August 17,
1996 incorporated by reference to Exhibit 2.5 to Form
8-K filed by Insignia with the Securities and
Exchange Commission on September 1, 1996.
3.4 Agreement of Limited Partnership, incorporated by
reference to Exhibit A to the Prospectus of the
Partnership dated September 20, 1983, as amended on
June 13, 1989, and as thereafter supplemented
contained in the Partnership's Registration Statement
on Form S-11 (Reg. No. 2-79007).
10.1 Deed of Trust Note dated June 1, 1994, made by
Century Lakeside Place, L.P. in favor of Value Line
Mortgage Corporation, incorporated by reference to
the Partnership's Form 10-Q for the quarter ended
June 30, 1994.
10.2 Deed of Trust, Security Agreement and Assignment of
Leases and Rents dated June 1, 1994, from Lakeside
Place, L.P. to Jeffrey H. Gelman for the benefit of
Value Line Mortgage Corporation, incorporated by
reference to the Partnership's Form 10-Q for the
quarter ended September 30, 1994.
10.3 Multifamily Note dated November 1, 1997, by and
between the Partnership and Lehman Brothers Holdings,
Inc. for Preston Creek Apartments incorporated by
reference to Exhibit 10.6 to the Partnership's Form
10-KSB for the fiscal year ended December 31, 1996.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XV 1997 Year-End 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000314690
<NAME> CENTURY PROPERTIES FUND XV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 4,612
<SECURITIES> 0
<RECEIVABLES> 687
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 39,884
<DEPRECIATION> 18,559
<TOTAL-ASSETS> 27,166
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 19,023
0
0
<COMMON> 0
<OTHER-SE> 7,184
<TOTAL-LIABILITY-AND-EQUITY> 27,166
<SALES> 0
<TOTAL-REVENUES> 10,386
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,334
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,008
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (493)
<CHANGES> 0
<NET-INCOME> 1,551
<EPS-PRIMARY> 16.23<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
