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, 2000
[ ] 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.)
55 Beattie Place, PO Box 1089
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 preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XV
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 1,023
Receivables and deposits 309
Restricted escrows 296
Other assets 424
Investment properties:
Land $ 5,766
Buildings and related personal property 36,219
41,985
Less accumulated depreciation (22,351) 19,634
$ 21,686
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 95
Tenant security deposit liabilities 88
Accrued property taxes 650
Other liabilities 315
Mortgage notes payable 27,965
Partners' Deficit
General partners $ (1,384)
Limited partners (89,980 units issued and
outstanding) (6,043) (7,427)
$ 21,686
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
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,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,889 $ 1,942 $ 5,667 $ 5,792
Other income 123 79 342 231
Total revenues 2,012 2,021 6,009 6,023
Expenses:
Operating 636 621 1,870 1,779
General and administrative 77 168 361 380
Depreciation 377 334 1,107 1,023
Interest 584 445 1,678 1,339
Property taxes 207 211 677 571
Total expenses 1,881 1,779 5,693 5,092
Income before extraordinary
loss on early extinguishment
of debt 131 242 316 931
Extraordinary loss on early
extinguishment of debt -- -- (474) --
Net income (loss) $ 131 $ 242 $ (158) $ 931
Net income (loss) allocated to
general partners (2%) $ 3 $ 5 $ (3) $ 19
Net income (loss) allocated to
limited partners (98%) 128 237 (155) 912
$ 131 $ 242 $ (158) $ 931
Per limited partnership unit:
Income before extraordinary
loss $ 1.42 $ 2.63 $ 3.45 $ 10.14
Extraordinary loss -- -- (5.17) --
Net income (loss) $ 1.42 $ 2.63 $ (1.72) $ 10.14
Distributions per limited
partnership unit $ -- $ 9.80 $105.30 $ 14.70
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(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, 1999 89,980 $(1,188) $ 3,587 $ 2,399
Distribution to partners -- (193) (9,475) (9,668)
Net loss for the nine months
ended September 30, 2000 -- (3) (155) (158)
Partners' deficit at
September 30, 2000 89,980 $(1,384) $(6,043) $(7,427)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
CENTURY PROPERTIES FUND XV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net (loss) income $ (158) $ 931
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation 1,107 1,023
Amortization of loan costs 35 58
Extraordinary loss on early extinguishment of debt 474 --
Change in accounts:
Receivables and deposits 357 370
Other assets (41) (61)
Accounts payable 57 33
Tenant security deposit liabilities 23 (3)
Accrued property taxes (144) (187)
Other liabilities 2 (43)
Net cash provided by operating activities 1,712 2,121
Cash flows from investing activities:
Net (deposits to) withdrawals from restricted escrows (171) 29
Property improvements and replacements (597) (727)
Net cash used in investing activities (768) (698)
Cash flows from financing activities:
Payments on mortgage notes payable (235) (101)
Repayment of mortgage note payable (14,249) --
Proceeds from mortgage note payable 23,700 --
Debt extinguishment costs (411) --
Loan costs paid (254) --
Distributions to partners (10,199) (1,350)
Net cash used in financing activities (1,648) (1,451)
Net decrease in cash and cash equivalents (704) (28)
Cash and cash equivalents at beginning of period 1,727 1,143
Cash and cash equivalents at end of period $ 1,023 $ 1,115
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,480 $ 1,281
Distributions to partners of approximately $531,000 were accrued at December 31,
1999 and paid in January 2000.
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
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" or the "Registrant") 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, 2000, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2000. 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 fiscal year ended December 31, 1999.
Principles of Consolidation
The Partnership's financial statements include the accounts of Century Lakeside
Place, L.P., a limited partnership in which the Partnership owns a 99% limited
partnership interest. The Partnership has the ability to control the major
operating and financial policies of the partnership. All interpartnership
transactions have been eliminated.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Note C - 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.
The following transactions with affiliates of the Managing General Partner were
incurred during the nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $301 $302
Reimbursement for services of affiliates (included in
general and administrative expenses and investment
properties) 138 141
Partnership management fee (included in general and
administrative expense) 141 150
During the nine months ended September 30, 2000 and 1999, affiliates of the
Managing General Partner were entitled to receive 5% of gross receipts from both
of the Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $301,000 and $302,000 for the
nine months ended September 30, 2000 and 1999, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $138,000 and
$141,000 for the nine months ended September 30, 2000 and 1999, respectively.
Pursuant to the Partnership Agreement, for managing the affairs of the
Partnership, the Managing General Partner is entitled to receive a Partnership
management fee equal to 10% of the Partnership's adjusted cash from operations
as distributed. Partnership management fees of approximately $141,000 and
$150,000 were earned during the nine month period ended September 30, 2000 and
1999, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 55,926.84 limited
partnership units in the Partnership representing 62.155% of the outstanding
units. A number of these units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Under the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the Managing General Partner. As
a result of its ownership of 62.155% of the outstanding units, AIMCO is in a
position to influence all voting decisions with respect to the Registrant. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Managing General Partner because of
their affiliation with the Managing General Partner. However, Riverside Drive
LLC, an affiliate of the Managing General Partner which owns 35,473.17 of the
limited partnership units, is required to 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 unit holders. Except for the foregoing, no
other limitations are imposed on AIMCO or its affiliates right to vote each Unit
acquired.
Note D - Extraordinary Loss on Early Extinguishment of Debt
The Partnership refinanced the mortgage encumbering Lakeside Place Apartments on
February 4, 2000. The refinancing replaced indebtedness of approximately
$14,249,000 with a new mortgage of $23,700,000. The mortgage was refinanced at
an interest rate of 8.34% compared to the previous interest rate of 9.60%.
Monthly installments of principal and interest of approximately $203,000
commenced on April 1, 2000 and will end on March 1, 2020. Capitalized loan costs
incurred for the refinancing were approximately $254,000. The Partnership
recognized an extraordinary loss on the early extinguishment of debt in the
amount of approximately $474,000, consisting of a prepayment penalty and the
write-off of unamortized loan costs on the previous mortgage.
Note E - Distributions
The Partnership distributed approximately $9,668,000 (approximately $9,475,000
to the limited partners or $105.30 per limited partnership unit) during the nine
months ended September 30, 2000. The distributions consisted of approximately
$8,398,000 (approximately $8,230,000 to the limited partners or $91.46 per
limited partnership unit) of refinance proceeds from Lakeside Place and
approximately $1,270,000 (approximately $1,245,000 to the limited partners or
$13.84 per limited partnership unit) from operations. At December 31, 1999, a
distribution payable of approximately $531,000 (approximately $520,000 to the
limited partners or $5.78 per limited partnership unit) was accrued and
subsequently paid in January 2000. Cash distributions from operations of
approximately $1,350,000 (approximately $1,323,000 to the limited partners or
$14.70 per limited partnership unit) were made during the nine months ended
September 30, 1999.
Subsequent to September 30, 2000, a cash distribution was approved and paid from
operations of approximately $270,000 of which approximately $265,000 was paid to
the limited partners ($2.95 per limited partnership unit).
Note F - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of two apartment complexes
located in Texas. The Partnership rents apartment units to tenants for terms
that are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Factors management used to identify the enterprise's reportable segments:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
is managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the three and nine month periods ended September 30,
2000 and 1999 is shown in the tables below (in thousands). The "Other" column
includes partnership administration related items and income and expense not
allocated to the reportable segment.
Three Months Ended September 30, 2000 Residential Other Totals
Rental income $ 1,889 $ -- $ 1,889
Other income 122 1 123
Interest expense 584 -- 584
Depreciation 377 -- 377
General and administrative expense -- 77 77
Segment profit (loss) 207 (76) 131
Nine Months Ended September 30, 2000 Residential Other Totals
Rental income $ 5,667 $ -- $ 5,667
Other income 293 49 342
Interest expense 1,678 -- 1,678
Depreciation 1,107 -- 1,107
General and administrative expense -- 361 361
Extraordinary loss (474) -- (474)
Segment profit (loss) 154 (312) (158)
Total assets 21,396 290 21,686
Capital expenditures for
investment properties 597 -- 597
Three Months Ended September 30, 1999 Residential Other Totals
Rental income $ 1,942 $ -- $ 1,942
Other income 74 5 79
Interest expense 445 -- 445
Depreciation 334 -- 334
General and administrative expense -- 168 168
Segment profit (loss) 405 (163) 242
Nine Months Ended September 30, 1999 Residential Other Totals
Rental income $ 5,792 $ -- $ 5,792
Other income 212 19 231
Interest expense 1,339 -- 1,339
Depreciation 1,023 -- 1,023
General and administrative expense -- 380 380
Segment profit (loss) 1,292 (361) 931
Total assets 22,432 65 22,497
Capital expenditures for
investment properties 727 -- 727
Note G - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to final court approval, on behalf of the Partnership
and all limited partners who owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. The Managing General Partner does not anticipate that costs associated
with this case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operation. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's investment properties consist of two residential apartment
complexes. The following table sets forth the average occupancy of the
properties for the nine months ended September 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Lakeside Place Apartments (1) 92% 95%
Houston, Texas
Preston Creek Apartments 94% 95%
Dallas, Texas
(1) The Managing General Partner attributes the decrease in occupancy to
increased construction of other apartment complexes in the area.
Results of Operations
The Partnership's net loss for the nine months ended September 30, 2000 was
approximately $158,000 compared to net income of approximately $931,000 for the
nine months ended September 30, 1999. The Partnership's net income for the three
months ended September 30, 2000 and 1999 was approximately $131,000 and
$242,000, respectively. The increase in net loss during the nine months ended
September 30, 2000 is primarily due to the recognition of an extraordinary loss
on the early extinguishment of debt during the nine months ended September 30,
2000 (see discussion below), an increase in total expenses, and a decrease in
total revenues. The decrease in net income during the three months ended
September 30, 2000 is primarily due to an increase in total expenses and a
decrease in total revenues. The increase in total expenses for the nine months
ended September 30, 2000 is primarily due to an increase in interest, property
tax, depreciation, and operating expenses partially offset by a decrease in
general and administrative expense. The increase in total expenses for the three
months ended September 30, 2000 is primarily due to increases in interest,
depreciation, and operating expenses partially offset by a decrease in general
and administrative expenses. The increase in property tax expense is due to the
timing of the receipt of the tax bills which affected the accrual of taxes at
September 30, 2000 and 1999. Interest expense increased as a result of the
mortgage refinancing at Lakeside Apartments in February 2000, as discussed
below. Depreciation expense increased due to capital improvements completed
during the past twelve months that are now being depreciated. Operating expenses
increased primarily due to an increase in property and insurance expenses. The
increase in property expense is primarily due to an increase in utility expenses
at Lakeside Place Apartments. The increase in insurance expense is primarily due
to the receipt of an insurance policy refund in April 1999 which reduced
insurance expense recorded in 1999.
General and administrative expense decreased as a result of fees paid to the
Managing General Partner due to the timing of operating distributions paid in
2000 compared to 1999 as allowed under the Partnership Agreement. Included in
general and administrative expenses at both September 30, 2000 and 1999, are
reimbursements to the Managing General Partner allowed under the Partnership
Agreement associated with its management of the Partnership. In addition, costs
associated with the quarterly communications with investors and regulatory
agencies and the annual audit required by the Partnership Agreement are also
included.
Total revenues during the three and nine months ended September 30, 2000
decreased as compared to 1999 due to a decrease in rental income which was
partially offset by an increase in other income. The decrease in rental income
was primarily due to an increase in concessions and a decrease in occupancy at
Lakeside Place Apartments which was partially offset by increases in average
rental rates at both of the Partnership's investment properties. The increase in
other income is primarily due to an increase in interest income as a result of
higher average cash balances held in interest bearing accounts, an increase in
utility reimbursements at Lakeside Place Apartments, and an increase in late
charges at Preston Creek Apartments.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
Liquidity and Capital Resources
At September 30, 2000, the Registrant had cash and cash equivalents of
approximately $1,023,000 as compared to approximately $1,115,000 at September
30, 1999. For the nine months ended September 30, 2000, cash and cash
equivalents decreased by approximately $704,000 from the Partnership's year
ended December 31, 1999. The decrease in cash and cash equivalents is due to
approximately $1,648,000 of cash used in financing activities and approximately
$768,000 of cash used in investing activities which was partially offset by
approximately $1,712,000 of cash provided by operating activities. Cash used in
financing activities consisted of the principal payoff of the debt encumbering
Lakeside Place, principal payments made on the mortgage encumbering Lakeside
Place Apartments, debt extinguishment costs, loan costs paid, and distributions
to the partners partially offset by proceeds from the refinancing of the
mortgage encumbering Lakeside Place. Cash used in investing activities consisted
of capital improvements and replacements and net deposits to escrow accounts
maintained by the mortgage lenders. The Registrant invests its working capital
reserves in money market accounts.
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 Registrant and to comply with Federal,
state, and local legal and regulatory requirements. Capital improvements planned
for the Partnership's properties are detailed below.
Lakeside Place Apartments
Approximately $398,000 has been budgeted for capital improvements at Lakeside
Place Apartments for the year 2000 consisting primarily of furniture and fixture
replacements, floor covering replacements, plumbing enhancements, air
conditioning improvements, appliance replacements, and electrical enhancements.
During the nine month period ended September 30, 2000, the Partnership completed
approximately $476,000 of budgeted and unbudgeted capital improvements at
Lakeside Place Apartments consisting primarily of HVAC condensing units
replacements, light fixture enhancements, major landscaping, appliance
replacements, floor covering replacements, exterior painting, structural
improvements, and roof replacements. These improvements were funded from
operations and replacement reserves. Additional improvements may be considered
and will depend on the physical condition of the property as well as the
replacement reserves and anticipated cash flow generated by the property.
Preston Creek Apartments
Approximately $137,000 has been budgeted for capital improvements at Preston
Creek Apartments for the year 2000 consisting primarily of interior decoration,
floor covering replacements, and parking lot improvements. During the nine month
period ended September 30, 2000, the Partnership completed approximately
$121,000 of capital improvements at Preston Creek Apartments consisting
primarily of submetering equipment, appliance replacements, floor covering
replacements, and interior decoration. These improvements were funded from
replacement reserves. Additional improvements may be considered and will depend
on the physical condition of the property as well as the replacement reserves
and anticipated cash flow generated by the property.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any, may be adversely affected at least in the short term.
The Partnership refinanced the mortgage encumbering Lakeside Place Apartments on
February 4, 2000. The refinancing replaced indebtedness of approximately
$14,249,000 with a new mortgage of $23,700,000. The mortgage was refinanced at
an interest rate of 8.34% compared to the previous interest rate of 9.60%.
Monthly installments of principal and interest, of approximately $203,000
commenced on April 1, 2000 and will end on March 1, 2020. Capitalized loan costs
incurred for the refinancing were approximately $254,000. The Partnership
recognized an extraordinary loss on the early extinguishment of debt in the
amount of approximately $474,000 which consisted of a prepayment penalty and the
write-off of unamortized loan costs on the previous mortgage.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $27,965,000 is amortized over varying periods with
maturity dates of November 2003 and March 2020. The Managing General Partner
will attempt to refinance such indebtedness and/or sell the properties prior to
such maturity dates. If the properties cannot be refinanced or sold for a
sufficient amount, the Registrant will risk losing such properties through
foreclosure.
The Partnership distributed approximately $9,668,000 (approximately $9,475,000
to the limited partners or $105.30 per limited partnership unit) during the nine
months ended September 30, 2000. The distributions consisted of approximately
$8,398,000 (approximately $8,230,000 to the limited partners or $91.46 per
limited partnership unit) of refinance proceeds from Lakeside Place and
approximately $1,270,000 (approximately $1,245,000 to the limited partners or
$13.84 per limited partnership unit) from operations. At December 31, 1999, a
distribution payable of approximately $531,000 (approximately $520,000 to the
limited partners or $5.78 per limited partnership unit) was accrued and
subsequently paid in January 2000. Cash distributions from operations of
approximately $1,350,000 (approximately $1,323,000 to the limited partners or
$14.70 per limited partnership unit) was made during the nine months ended
September 30, 1999. Subsequent to September 30, 2000, a cash distribution was
approved and paid from operations of approximately $270,000 of which
approximately $265,000 was paid to the limited partners ($2.95 per limited
partnership unit). The Partnership's distribution policy is reviewed on a
semi-annual basis. Future cash distributions will depend on the levels of net
cash generated from operations, the availability of cash reserves and the timing
of debt maturities, refinancings and/or property sales. There can be no
assurance, however, that the Registrant will generate sufficient funds from
operations after required capital expenditures to permit further distributions
to its partners during the remainder of 2000 or subsequent periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, its Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to final court approval, on behalf of the Partnership
and all limited partners who owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. The Managing General Partner does not anticipate that costs associated
with this case will be material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
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, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements 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
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
