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 June 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
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_____
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 __________________.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
June 30, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 921,000 $ 932,000
Other assets 146,000 189,000
Real Estate:
Real estate 14,476,000 14,439,000
Accumulated depreciation (6,186,000) (5,958,000)
------------ ------------
Real estate, net 8,290,000 8,481,000
Deferred financing costs, net 145,000 181,000
------------ ------------
Total assets $ 9,502,000 $ 9,783,000
============ ============
Liabilities and Partners' Equity
Notes payable $ 7,000,000 $ 7,000,000
Accrued expenses and other liabilities 320,000 370,000
------------ ------------
Total liabilities 7,320,000 7,370,000
------------ ------------
Commitments and Contingencies
Partners' equity (deficit):
General partners (3,754,000) (3,738,000)
Limited partners (130,000 units outstanding at
June 30, 1995 and December 31, 1994) 5,936,000 6,151,000
------------ ------------
Total partner's equity 2,182,000 2,413,000
------------ ------------
Total liabilities and partners' equity $ 9,502,000 $ 9,783,000
============ ============
See notes to financial statements.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
Statements of Operations (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $ 1,321,000 $ 1,235,000
Interest income 20,000 19,000
----------- -----------
Total revenues 1,341,000 1,254,000
----------- -----------
Expenses:
Operating 826,000 796,000
Interest 401,000 364,000
Depreciation 228,000 228,000
General and administrative 117,000 196,000
----------- -----------
Total expenses 1,572,000 1,584,000
----------- -----------
Net loss $ (231,000) $ (330,000)
=========== ===========
Net loss per limited partnership unit $ (2) $ (2)
=========== ===========
See notes to financial statements.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
Statements of Operations (Unaudited)
For the Three Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $ 657,000 $ 626,000
Interest income 10,000 11,000
--------- ---------
Total revenues 667,000 637,000
--------- ---------
Expenses:
Operating 405,000 410,000
Interest 202,000 184,000
Depreciation 114,000 114,000
General and administrative 59,000 112,000
--------- ---------
Total expenses 780,000 820,000
--------- ---------
Net loss $(113,000) $(183,000)
========= =========
Net loss per limited partnership unit $ (1) $ (1)
========= =========
See notes to financial statements.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
Statements of Cash Flows (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Operating Activities:
Net loss $ (231,000) $ (330,000)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 264,000 264,000
Changes in operating assets and liabilities:
Other assets 43,000 (87,000)
Accrued expenses and other liabilities (50,000) (9,000)
----------- -----------
Net cash provided by (used in) operating activities 26,000 (162,000)
----------- -----------
Investing Activities:
Proceeds from cash investments -- 692,000
Additions to real estate (37,000) (24,000)
----------- -----------
Net cash (used in) provided by investing activities (37,000) 668,000
----------- -----------
(Decrease) Increase in Cash and Cash Equivalents (11,000) 506,000
Cash and Cash Equivalents at Beginning of Period 932,000 662,000
----------- -----------
Cash and Cash Equivalents at End of Period $ 921,000 $ 1,168,000
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 351,000 $ 314,000
=========== ===========
See notes to financial statements.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 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, however, 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 six and three months ended June 30, 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 $72,000 and $99,000 during the six months ended
June 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 six months ended June 30, 1995 and 1994, affiliates
of NPI, Inc. received fees of $66,000 and $40,000, respectively,
which are included in operating expenses.
3. Legal Proceedings
On May 19, 1995 final approval was given by the Court to a settlement
agreement relating to the tender offer litigation. As required by the
terms of the settlement agreement, DeForest Ventures I L.P. ("DeForest")
commenced a second tender offer (the "Second Tender Offer") on June 2,
1995 for units of limited partnership in the Partnership. Pursuant to the
Second Tender Offer, DeForest acquired an additional 6,825 limited
partnership units of the Partnership.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 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 six months ended June 30, 1995, both of Registrant's properties generated
positive cash flow. As of August 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 an
$11,000 decrease at June 30, 1995, as compared to December 31, 1994.
Registrant's $26,000 of net cash provided by operating activities was more
than offset by $37,000 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.
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 (see Part II, Item 1, Litigation). Also
in connection with the settlement, an
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
affiliate of the Managing General Partner has made available to Registrant a
credit line of up to $150,000 per property owned by Registrant. Based on
present plans, management does not anticipate the need to borrow in the near
future.
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 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
Six Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $99,000 for the six months ended June 30, 1995,
as compared to 1994, due to an increase in revenues of $87,000 and a decrease
in expenses of $12,000.
Revenues increased by $87,000 for the six months ended June 30, 1995, as
compared to 1994, due to increases of $86,000 in rental income and $1,000 in
interest income. Rental revenue increased due to increased rental rates and
improved occupancy at both of Registrant's properties. Interest income
remained relatively constant.
Expenses decreased by $12,000 for the six months ended June 30, 1995, as
compared to 1994, due to a decrease in general and administrative expenses of
$79,000, which was partially offset by increases in operating expenses of
$30,000 and interest expense of $37,000.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Six Months Ended June 30, 1995 vs. June 30, 1994 (Continued)
General and administrative expenses decreased due to the decrease in asset
management costs effective July 1, 1994. 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.
Three Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $70,000 for the three months ended June 30,
1995, as compared to 1994, due to an increase in revenues of $30,000 and a
decrease in expenses of $40,000.
Revenues increased by $30,000 for the three months ended June 30, 1995, as
compared to 1994, due to an increase of $31,000 in rental income, which was
partially offset by a decrease of $1,000 in interest income. Rental revenue
increased primarily due to higher rental rates at both of Registrant's
properties, which was slightly offset by lower occupancy at both of
Registrant's properties. Interest income remained relatively constant.
Expenses decreased by $40,000 for the three months ended June 30, 1995, as
compared to 1994, due to decreases in operating expenses of $5,000 and general
and administrative expenses of $53,000, which were partially offset by an
increase in interest expense of $18,000.
Operating expenses decreased primarily due to a decrease in general repairs
and maintenance at both of Registrant's properties during the three months
ended June 30, 1995. 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.
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 (%)
----------------------------
Six Months Three Months
Number Ended Ended
of Date of June 30, June 30,
Name and Location Units Purchase 1995 1994 1995 1994
- ----------------- ------ -------- ---- ---- ---- ----
The Landings Apartments 200 06/82 96 95 97 98
Tampa, Florida
Woods of Inverness
Apartments 272 07/82 96 95 94 96
Houston, Texas
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 30, 1995
PART II - OTHER INFORMATION
Item 1. Litigation
Lawrence M. Whiteside, on behalf of himself and all others similarly
situated, v. Fox Capital Management Corporation et al., Superior Court
of the State of California, San Mateo County, Case No. 390018.
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.
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.
James Andrews, et al., on behalf of themselves and all others 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.
On May 19, 1995, the Court gave final approval to the settlement
agreement entered into, in March 1995, by the plaintiffs and the
defendants in the above actions. Pursuant to the Court's order, all
claims made by the plaintiffs were dismissed with prejudice subject to
the defendants compliance with the settlement agreement. As required by
the settlement agreement, DeForest Ventures I L.P. ("DeForest") and
DeForest Ventures II L.P. commenced a tender offer for units of limited
partnership interest in Registrant as well as 18 other affiliated
partnerships on June 2, 1995 and implemented the other provisions of the
settlement agreement. See Part I, Item 2, "Management's Discussion and
Analysis of Financial Condition."
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
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CENTURY PROPERTIES FUND XVI - FORM 10-Q - JUNE 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)
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<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 921,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 14,476,000
<DEPRECIATION> (6,186,000)
<TOTAL-ASSETS> 9,502,000
<CURRENT-LIABILITIES> 0
<BONDS> 7,000,000
<COMMON> 0
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0
<OTHER-SE> 2,182,000
<TOTAL-LIABILITY-AND-EQUITY> 9,502,000
<SALES> 0
<TOTAL-REVENUES> 1,321,000
<CGS> 0
<TOTAL-COSTS> 1,054,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 401,000
<INCOME-PRETAX> (231,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (231,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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