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 September 30, 1995
OR
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 0-10435
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Century Properties Fund XVI
---------------------------
(Exact name of Registrant as specified in its charter)
California 94-2704651
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (770) 916-9090
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N/A
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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 ____
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 _____
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 __________________.
1 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
September 30, December 31,
1995 1995
Assets
Cash and cash equivalents $ 887,000 $ 932,000
Other assets 262,000 189,000
Real Estate:
Real estate 14,492,000 14,439,000
Accumulated depreciation (6,301,000) (5,958,000)
----------- -----------
Real estate, net 8,191,000 8,481,000
Deferred financing costs, net 126,000 181,000
----------- -----------
Total assets $ 9,466,000 $ 9,783,000
=========== ===========
Liabilities and Partners' Equity
Notes payable $ 7,000,000 $ 7,000,000
Accrued expenses and other liabilities 393,000 370,000
----------- -----------
Total liabilities 7,393,000 7,370,000
----------- -----------
Commitments and Contingencies
Partners' equity (deficit):
General partners (3,761,000) (3,738,000)
Limited partners (130,000 units outstanding at
September 30, 1995 and December 31, 1994) 5,834,000 6,151,000
----------- -----------
Total partner's equity 2,073,000 2,413,000
----------- -----------
Total liabilities and partners' equity $ 9,466,000 $ 9,783,000
=========== ===========
See notes to financial statements.
2 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Nine Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $1,991,000 $1,880,000
Interest income 30,000 29,000
---------- ----------
Total revenues 2,021,000 1,909,000
---------- ----------
Expenses:
Operating 1,255,000 1,315,000
Interest 596,000 548,000
Depreciation 343,000 343,000
General and administrative 167,000 247,000
---------- ----------
Total expenses 2,361,000 2,453,000
---------- ----------
Net loss $(340,000) $ (544,000)
========== ==========
Net loss per limited partnership unit $ (2.44) $ (3.89)
========== ==========
See notes to financial statements.
3 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Operations
For the Three Months Ended
September 30, September 30,
1995 1994
Revenues:
Rental $ 670,000 $ 645,000
Interest income 10,000 10,000
---------- ----------
Total revenues 680,000 655,000
---------- ----------
Expenses:
Operating 429,000 517,000
Interest 195,000 184,000
Depreciation 115,000 115,000
General and administrative 50,000 53,000
---------- ----------
Total expenses 789,000 869,000
---------- ----------
Net loss $ (109,000) $ (214,000)
========== ==========
Net loss per limited partnership unit $ (0.78) $ (1.53)
========== ==========
See notes to financial statements.
4 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
Statements of Cash Flows
For the Nine Months Ended
September 30, September 30,
1995 1994
Operating Activities:
Net loss $ (340,000) $ (544,000)
Adjustments to reconcile net loss to net
cash provided by (used in) operating
activities:
Depreciation and amortization 398,000 397,000
Changes in operating assets and liabilities:
Other assets (73,000) (173,000)
Accrued expenses and other liabilities 23,000 54,000
----------- ----------
Net cash provided by (used in) operating activities 8,000 (266,000)
----------- ----------
Investing Activities:
Proceeds from cash investments - 692,000
Additions to real estate (53,000) (34,000)
----------- ----------
Net cash (used in) provided by investing activities (53,000) 658,000
----------- ----------
(Decrease) Increase in Cash and Cash Equivalents (45,000) 392,000
Cash and Cash Equivalents at Beginning of Period 932,000 662,000
----------- ----------
Cash and Cash Equivalents at End of Period $ 887,000 $1,054,000
=========== ==========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 523,000 $ 473,000
=========== ==========
See notes to financial statements.
5 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 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, all adjustments necessary for a fair
presentation of such financial information have been included. All
adjustments are of a normal recurring nature.
The results of operations for the nine and three months ended
September 30, 1995 and 1994 are not necessarily indicative of the
results to be expected for the full year.
On August 17, 1995, the stockholders of National Property
Investors, Inc. ("NPI, Inc."), the sole shareholder of NPI Equity
Investments II, Inc. ("NPI Equity"), the entity which controls Fox
Realty Investors and Fox Capital Management Corporation, the
general partners of the Partnership, entered into an agreement to
sell to IFGP Corporation, an affiliate of Insignia Financial Group,
Inc. ("Insignia"), all of the issued and outstanding stock of NPI,
Inc. The sale of the stock is subject to the satisfaction of
certain conditions and is scheduled to close in January 1996.
2. Transactions with Related Parties
(a) An affiliate of NPI, Inc. received reimbursement of
administrative expenses amounting to $108,000 and $135,000
during the nine months ended September 30, 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 nine months ended September 30,
1995 and 1994, affiliates of NPI, Inc. received fees of $99,000
and $71,000, respectively, which are included in operating
expenses.
6 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 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 nine months ended September 30, 1995, Registrant's Woods
of Inverness Apartments generated positive cash flow while The Landings
Apartments generated slightly negative cash flow due to improvements to
real estate. As of November 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
$45,000 decrease at September 30, 1995, as compared to December 31, 1994.
Registrant's $8,000 of net cash provided by operating activities was more
than offset by $53,000 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 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 until June 1997, when Registrant has
balloon mortgage payments due 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.
As required by the terms of the settlement of the actions brought against,
among others, DeForest Ventures I L.P. ("DeForest") relating to the tender
offer made by DeForest in October 1994 (the "First Tender Offer") for units
of limited partnership interest in Registrant and certain affiliated
partnerships, DeForest commenced a second tender offer (the "Second Tender
Offer") on June 2, 1995 for units of limited partnership interest in
Registrant. Pursuant to the Second Tender Offer, DeForest acquired an
additional 6,825 units of Registrant which, when added to the units
acquired during the First Tender Offer, represents approximately 36.0% of
the total number of outstanding units of Registrant. The Managing General
Partner believes that the tender will not have a significant impact on
future operations or liquidity of Registrant. Also in connection with the
settlement, an affiliate of the Managing General
7 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
Partner has made available to Registrant a credit line of up to $150,000
per property owned by Registrant. Registrant has no outstanding amounts
due under this line of credit. Based on present plans, management does not
anticipate the need to borrow in the near future. Other than cash and cash
equivalents the line of credit is Registrant's only unused source of
liquidity.
On August 17, 1995, Insignia Financial Group, Inc. and certain of its
affiliates (collectively, "Insignia") entered into agreements pursuant to
which (i) the stockholders of NPI, Inc., the sole shareholder of NPI
Equity, agreed to sell to Insignia all of the issued and outstanding stock
of NPI, Inc., (ii) DeForest agreed to sell its units of Registrant to
Insignia and (iii) Insignia would acquire all of the interests in NPI-AP
Management, L.P., the property manager at Registrant's properties. The
consummation of these transactions is subject to the satisfaction of
certain conditions (including, third party consents and other conditions
not within the control of the parties to the agreement) and is scheduled to
close in January 1996. Upon closing, it is expected that Insignia will
elect new officers and directors of NPI Equity.
Insignia is a fully integrated real estate service company specializing in
the ownership and operation of securitized real estate assets. According
to Commercial Property News and the National Multi-Housing Council, since
1992 Insignia has been the largest property manager in the United States.
The Managing General Partner does not believe these transactions will have
a significant effect on Registrant's liquidity or results of operation.
At this time, it appears that the investment objective of capital growth
will not be attainted 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 the next twelve months. 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.
8 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Results of Operations
Nine Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $204,000 for the nine months ended September
30, 1995, as compared to 1994, due to an increase in revenues of $112,000
and a decrease in expenses of $92,000.
Revenues increased by $112,000 for the nine months ended September 30,
1995, as compared to 1994, due to increases of $111,000 in rental income
and $1,000 in interest income. Rental revenue increased due to increased
rental rates at both of Registrant's properties. Occupancy remained
constant. Interest income remained relatively constant.
Expenses decreased by $92,000 for the nine months ended September 30, 1995,
as compared to 1994, due to decreases in operating expenses of $60,000 and
general and administrative expenses of $80,000, which were partially offset
by an increase in interest expense of $48,000.
Operating expenses decreased primarily due to decreases in exterior
painting and general repairs and maintenance at Registrant's The Landings
Apartments property. General and administrative expenses decreased due to
the decrease in asset management costs effective July 1, 1994. Interest
expense increased due to an increase in the variable interest rate on the
mortgage loans. Depreciation remained constant.
Three Months Ended September 30, 1995 vs. September 30, 1994
Operating results improved by $105,000 for the three months ended September
30, 1995, as compared to 1994, due to an increase in revenues of $25,000
and a decrease in expenses of $80,000.
Revenues increased by $25,000 for the three months ended September 30,
1995, as compared to 1994, due to an increase of $25,000 in rental income.
Rental revenue increased due to increased rental rates and relatively
constant occupancy at both of Registrant's properties. Interest income
remained relatively constant.
Expenses decreased by $80,000 for the three months ended September 30,
1995, as compared to 1994, due to decreases in operating expenses of
$88,000 and general and administrative expenses of $3,000, which were
partially offset by an increase in interest expense of $11,000.
Operating expenses decreased primarily due to decreases in exterior
painting and general repairs and maintenance at both of Registrant's
properties for the three months ended September 30, 1995. Interest expense
increased due to an increase in the variable interest rate on the mortgage
loans. General and administrative expenses and depreciation expense
remained relatively constant.
9 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 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
Average
Occupancy Rate (%)
---------------------------
Nine Months Three Months
Number Ended Ended
of Date of September 30, September 30,
Name and Location Units Purchase 1995 1994 1995 1994
- ----------------- ------ -------- ---- ---- ---- ----
The Landings Apartments 200 06/82 96 96 96 98
Tampa, Florida
Woods of Inverness
Apartments 272 07/82 96 96 97 96
Houston, Texas
10 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
2. NPI, Inc. Stock Purchase Agreement dated as of August 17,
1995 incorporated by reference to Exhibit 2 to
Registrant's Current Report on Form 8-K filed with the
Securities and Exchange Commission on August 24, 1995.
(b) Report on Form 8-K
On August 24, 1995, Registrant filed a Current Report on Form
8-K with the Securities and Exchange Commission with respect
to the sale of the stock of NPI, Inc. (Item 1, Change in
Control).
11 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 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
----------------------------------
Secretary/Treasurer and Director
(Principal Financial Officer)
12 of 13
CENTURY PROPERTIES FUND XVI - FORM 10-Q - SEPTEMBER 30, 1995
EXHIBIT INDEX
Exhibit Page No.
- ------- --------
2. NPI, Inc. Stock Purchase Agreement *
dated August 17, 1995
* Incorporated by reference to Exhibit 2 to Registrant's Current
Report on Form 8-K filed with the Securities and Exchange Commission
on August 24, 1995.
13 of 13
<TABLE> <S> <C>
<ARTICLE> 5
<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>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 887,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,492,000
<DEPRECIATION> (6,301,000)
<TOTAL-ASSETS> 9,466,000
<CURRENT-LIABILITIES> 0
<BONDS> 7,000,000
<COMMON> 0
0
0
<OTHER-SE> 2,073,000
<TOTAL-LIABILITY-AND-EQUITY> 9,466,000
<SALES> 0
<TOTAL-REVENUES> 1,991,000
<CGS> 0
<TOTAL-COSTS> 1,598,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 596,000
<INCOME-PRETAX> (340,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (340,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (340,000)
<EPS-PRIMARY> (2.44)
<EPS-DILUTED> (2.44)
</TABLE>
