SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-10435
Century Properties Fund XVI
(Exact name of Registrant as specified in its charter)
California 94-2704651
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (404) 916-9090
N/A
Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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
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APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12, 13, or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
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APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date .
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1 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
March 31, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 917,000 $ 932,000
Other assets 97,000 189,000
Real Estate:
Real estate 14,459,000 14,439,000
Accumulated depreciation (6,072,000) (5,958,000)
-------------- --------------
Real estate, net 8,387,000 8,481,000
Deferred financing costs, net 162,000 181,000
-------------- --------------
Total assets $ 9,563,000 $ 9,783,000
============== ==============
Liabilities and Partners' Equity
Notes payable $ 7,000,000 $ 7,000,000
Accrued expenses and other liabilities 268,000 370,000
-------------- --------------
Total liabilities 7,268,000 7,370,000
-------------- --------------
Commitments and Contingencies
Partners' Equity (Deficit):
General partners (3,746,000) (3,738,000)
Limited partners (130,000 units outstanding at
March 31, 1995 and December 31, 1994) 6,041,000 6,151,000
-------------- --------------
Total partners' equity 2,295,000 2,413,000
-------------- --------------
Total liabilities and partners' equity $ 9,563,000 $ 9,783,000
============== ==============
See notes to financial statements.
2 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
Statements of Operations (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Revenues:
Rental $ 664,000 $ 609,000
Interest 10,000 8,000
-------------- --------------
Total revenues 674,000 617,000
-------------- --------------
Expenses:
Operating 421,000 391,000
Interest 199,000 180,000
Depreciation 114,000 114,000
General and administrative 58,000 79,000
-------------- --------------
Total expenses 792,000 764,000
-------------- --------------
Net loss $ (118,000) $ (147,000)
============== ==============
Net loss per limited partnership unit $ (1) $ (1)
============== ==============
See notes to financial statements.
3 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
Statements of Cash Flows (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Operating Activities:
Net loss $ (118,000) $ (147,000)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 133,000 133,000
Changes in operating assets and liabilities:
Other assets 92,000 (11,000)
Accrued expenses and other liabilities (102,000) (75,000)
-------------- --------------
Net cash provided by (used in) operating
activities 5,000 (100,000)
-------------- --------------
Investing Activities:
Proceeds from cash investments - 692,000
Additions to real estate (20,000) -
Cash (used in) provided by investing activities (20,000) 692,000
-------------- --------------
(Decrease) Increase in Cash and Cash Equivalents (15,000) 592,000
Cash and Cash Equivalents at Beginning of Period 932,000 162,000
-------------- --------------
Cash and Cash Equivalents at End of Period $ 917,000 $ 754,000
============== ==============
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 173,000 $ 155,000
============== ==============
See notes to financial statements.
4 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
NOTES TO FINANCIAL STATEMENTS
1. General
The accompanying financial statements, footnotes and discussions should be read
in conjunction with the financial statements, related footnotes and discussions
contained in the Partnership's Annual Report for the year ended December 31,
1994. Certain accounts have been reclassified in order to conform to the current
period.
The financial information contained herein is unaudited. In the opinion of
management, however, all adjustments necessary for a fair presentation of such
financial information have been included. All adjustments are of a normal
recurring nature.
At March 31, 1995, the Partnership had approximately $232,000 invested in
overnight repurchase agreements earning approximately 6% per annum.
The results of operations for the three months ended March 31, 1995 and 1994 are
not necessarily indicative of the results to be expected for the full year.
2. Transactions with Related Parties
(a) An affiliate of NPI, Inc. received reimbursement of administrative
expenses amounting to $36,000 and $35,000 during the three months ended March
31, 1995 and 1994, respectively. These reimbursements are included in general
and administrative expenses.
(b) An affiliate of NPI, Inc. is entitled to receive a management fee
equal to 5% of the annual gross receipts from certain properties it manages.
For the three months ended March 31, 1995 and 1994, affiliates of NPI, Inc.
received fees of $33,000 and $9,000, respectively, which are included in
operating expenses.
5 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Financial Statements and
other Items contained elsewhere in this Report.
Liquidity and Capital Resources
Registrant holds investments in and operates two residential real estate
properties with apartments leased to tenants subject to leases of up to one
year. The properties are located in Texas and Florida. Registrant receives
rental income from its properties and is responsible for operating expenses,
administrative expenses, capital improvements and debt service payments. For
the three months ended March 31, 1995, both of Registrant's properties
generated positive cash flow. As of May 1, 1995, eight of the ten properties
originally purchased by Registrant were sold or otherwise disposed.
Registrant uses working capital reserves from any undistributed cash flows
from operations, sales and refinancing proceeds as its primary source of
liquidity. There have been no cash distributions since 1985. Although cash
flow from operations is expected to improve during the next twelve months, due
to balloon payments on mortgages maturing in 1997, it is not currently
anticipated that Registrant will make any distributions from operations in the
near future.
The level of liquidity based upon cash and cash equivalents experienced a
$15,000 decrease at March 31, 1995, as compared to December 31, 1994.
Registrant's $5,000 of net cash provided by operating activities was more than
offset by $20,000 of improvements to real estate (investing activities).
Registrant has no plans for material capital improvements during the next
twelve months. All other increases (decreases) in certain assets and
liabilities are the result of the timing of receipt and payment of various
operating activities.
Working capital reserves are invested in a money market account, United States
Treasury Bills or in repurchase agreements secured by United States Treasury
obligations. The Managing General Partner believes that, if market conditions
remain relatively stable, cash flow from operations, when combined with
working capital reserves, will be sufficient to fund required capital
improvements and regular debt service payments in 1995 and the foreseeable
future. Registrant, however, has balloon mortgage payments due in 1997 on The
Landings and Woods of Inverness Apartments of $3,000,000 and $4,000,000,
respectively. The ability to hold and operate these properties is dependent on
being able to obtain refinancings or debt modifications, as required. Although
management is confident that these loans can be refinanced, if the loans are
not refinanced or extended, or the properties are not sold, Registrant could
lose these properties through foreclosure.
Pursuant to the terms of a Settlement Agreement entered into in connection
with the Ruben and Andrews actions, DeForest Ventures I L.P. will make a
tender offer for an aggregate number of units of Registrant (including the
units purchased in the initial tender) constituting up to 49% of the total
number of units of Registrant at a price equal to the initial tender price
plus 15% less attorney's fees and expenses. In addition, pursuant to the
terms of the proposed settlement, the Managing General Partner will agree to
provide Registrant a credit line of $150,000 per property, borrowings under
which would bear interest at the lesser of prime plus 1% or the rate permitted
by the Partnership Agreement of Registrant. A hearing for final approval of
the settlement is scheduled for May 19, 1995. See Part II - Other
Information, "Item 1 - Legal Proceedings". If the settlement receives final
Court approval, it is expected that the tender offer will commence on or about
June 19, 1995. The Managing General Partner believes that the settlement will
not have an adverse effect on Registrant.
6 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
At this time, it appears that the investment objective of capital growth will
not be attained and that investors will not receive a return of all of their
invested capital. The extent to which invested capital is returned to
investors is dependent upon the performance of Registrant's remaining
properties and the markets in which such properties are located and on the
sales price of the remaining properties. In this regard, the remaining
properties have been held longer than originally expected. The ability to
hold and operate these properties is dependent on Registrant's ability to
obtain refinancing or debt modification as required.
Real Estate Market
The national real estate market has suffered from the effects of the real
estate recession including, but not limited to, a downward trend in market
values of existing residential properties. In addition, the bailout of the
savings and loan associations and sales of foreclosed properties by auction
reduced market values and caused a further restriction on the ability to
obtain credit. As a result, Registrant's ability to refinance or sell its
properties may be restricted. These factors caused a decline in market
property values and serve to reduce market rental rates and/or sales prices.
Compounding these difficulties have been relatively low interest rates, which
encourage existing and potential residential tenants to purchase homes. In
addition, there has been a significant decline nationally in new household
formation. Despite the above, the rental market appears to be experiencing a
gradual strengthening and management anticipates that increases in revenue
will generally exceed increases in expenses during 1995. Management believes
that the emergence of new institutional purchasers, including real estate
investment trusts and insurance companies, should create a more favorable
market value for Registrant's properties in the future.
Results of Operations
Three Months Ended March 31, 1995 vs. March 31, 1994
Operating results improved by $29,000 for the three months ended March 31,
1995, as compared to 1994, due to an increase in revenues of $57,000 which was
partially offset by an increase in expenses of $28,000.
Revenues increased by $57,000 for the three months ended March 31, 1995, as
compared to 1994, due to increases of $55,000 in rental income and $2,000 in
interest income. Rental revenue increased due to increased rental rates and
improved occupancy at both of Registrant's properties. Interest income
increased primarily due to the effect of higher interest rates.
Expenses increased by $28,000 for the three months ended March 31, 1995, as
compared to 1994, due to increases in operating expenses of $30,000 and
interest expense of $19,000, which was partially offset by a decrease in
general and administrative expenses of $21,000.
Operating expenses increased primarily due to an increase in general repairs
and maintenance at Registrant's Woods of Inverness Apartments property.
Interest expense increased due to an increase in the variable interest rate on
the mortgage loans. General and administrative expenses decreased due to the
decrease in asset management costs effective July 1, 1994.
7 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties
A description of the properties in which Registrant has an ownership interest
during the period covered by this Report, along with occupancy data, follows:
CENTURY PROPERTIES FUND XVI
OCCUPANCY SUMMARY
For the Quarters Ended March 31, 1995 and 1994
Average
Number Occupancy Rate (%)
of Date of March 31,
Name and Location Units Purchase 1995 1994
- ----------------- ----- -------- ------------------
The Landings Apartments 200 06/82 95 91
Tampa, Florida
Woods of Inverness
Apartments 272 07/82 98 94
Houston, Texas
8 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Lawrence M. Whiteside, on behalf of himself and all other similarly situated, v.
Fox Capital Management Corporation, et al., Superior Court of the State of
California, San Mateo County, Case No. 390018 ("Whiteside").
Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all others
similarly situated, v. DeForest Ventures I L.P., et al., United States District
Court, Northern District of Georgia, Atlanta Division, Case No. 1-94-CV-2983-JEC
("Ruben").
Roger L. Vernon, individually and on behalf of all similarly situated persons v.
DeForest Ventures I L.P., et al., Circuit Court of Cook County, County
Departments, Chancery Division, State of Illinois, Case No. 94CH0100592
("Vernon").
James Andrews, et al., on behalf of themselves and all other similarly situated
v. Fox Capital Management Corporation, et al., United States District Court,
Northern District of Georgia, Atlanta Division, Case No. 1-94-CV-3351-JEC
("Andrews").
On March 16, 1995 the United States District Court for the Northern District of
Georgia, Atlanta Division, entered an order which granted preliminary approval
to a settlement agreement in the Ruben and Andrews actions, conditionally
certified two classes for purpose of settlement, and authorized the parties to
give notice to the classes of the terms of the proposed settlement. Plaintiffs
counsel in the Vernon and Whiteside action have joined in the Settlement
Agreement as well. The two certified classes constitute all limited partners of
Registrant and the eighteen other affiliated partnerships who either tendered
their units in connection with the October tender offers or continue to hold
their units in Registrant and the other affiliated partnerships. Pursuant to
the terms of the proposed settlement, which are described in the notice sent to
the class members in March 1995, (and more fully described in the Amended
Stipulation of Settlement submitted to the court on March 14, 1995) all claims
which either were made or could have been asserted in any of the class actions
would be dismissed with prejudice and/or released. In consideration for the
dismissal and/or release of such claims, among other things, DeForest I would
pay to each unit holder who tendered their units in Registrant an amount equal
to 15% of the original tender offer price less attorney's fees and expenses. In
addition, DeForest I will commence a second tender offer for an aggregate number
of units of Registrant (including the units purchased in the initial tender)
constituting up to 49% of the total number of units of Registrant at a price
equal to the initial tender price plus 15% less attorney's fees and expenses.
Furthermore, under the terms of the proposed settlement, the Managing General
Partner would agree, among other things, to provide Registrant a credit line of
$150,000 per property which would bear interest at the lesser of prime rate plus
1% and the rate permitted under the partnership agreement of Registrant. A
hearing on the final approval of the settlement is scheduled for May 19, 1995.
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
9 of 10
CENTURY PROPERTIES FUND XVI - FORM 10-Q - MARCH 31, 1995
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY PROPERTIES FUND XVI
By: FOX CAPITAL MANAGEMENT CORPORATION,
A California Corporation,
its general partner
/S/ARTHUR N. QUELER
--------------------------------------
ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
10 of 10
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<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XVI and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 917,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,459,000
<DEPRECIATION> (6,072,000)
<TOTAL-ASSETS> 9,563,000
<CURRENT-LIABILITIES> 0
<BONDS> 7,000,000
<COMMON> 0
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<OTHER-SE> 2,295,000
<TOTAL-LIABILITY-AND-EQUITY> 9,563,000
<SALES> 0
<TOTAL-REVENUES> 664,000
<CGS> 0
<TOTAL-COSTS> 535,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 199,000
<INCOME-PRETAX> (118,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (118,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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<NET-INCOME> (118,000)
<EPS-PRIMARY> (1)
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