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, 1997
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period.........to.........
Commission file number 0-10435
CENTURY PROPERTIES FUND XVI
(Exact name of small business issuer as specified in its charter)
California 94-2704651
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
(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 past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XVI
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 422
Restricted - tenant security deposits 52
Other assets 284
Accounts receivable 10
Escrow for taxes 188
Restricted escrows 89
Investment properties:
Land $ 1,409
Buildings and related personal property 13,499
14,908
Less accumulated depreciation (7,183) 7,725
$ 8,770
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 50
Accrued taxes 176
Tenant security deposits 52
Other liabilities 92
Mortgage notes payable 7,440
Partners' (deficit) capital
General partners $(3,838)
Limited partners (130,000 units issued
and outstanding) 4,798 960
$ 8,770
See Notes to Consolidated Financial Statements
b) CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
Rental income $ 701 $ 628 $ 2,061 $ 1,899
Other income 27 43 82 109
Total revenues 728 671 2,143 2,008
Expenses:
Operating 279 295 792 875
General and administrative 50 33 152 192
Maintenance 105 245 248 455
Depreciation 122 115 358 342
Interest 155 171 466 469
Property tax 58 78 162 229
Total expenses 769 937 2,178 2,562
Loss on disposal of property -- -- (56) --
Net loss $ (41) $ (266) $ (91) $ (554)
Net loss allocated to
general partners (6.9%) $ (3) $ (18) $ (6) $ (38)
Net loss allocated to
limited partners (93.1%) (38) (248) (85) (516)
Net loss $ (41) $ (266) $ (91) $ (554)
Net loss per limited
partnership unit $ (.29) $ (1.91) $ (.65) $ (3.97)
See Notes to Consolidated Financial Statements
c) CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF PARTNERS'(DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners Partners Total
Original capital contributions 130,000 $ -- $ 65,000 $ 65,000
Partners' (deficit) capital
at December 31, 1996 130,000 $ (3,832) $ 4,883 $ 1,051
Net loss for the nine months
ended September 30, 1997 -- (6) (85) (91)
Partners' (deficit) capital
at September 30, 1997 130,000 $ (3,838) $ 4,798 $ 960
See Notes to Consolidated Financial Statements
d) CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (91) $ (554)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization 382 366
Loss on disposal of property 56 --
Change in accounts:
Security deposits and other assets (95) (126)
Accounts payable and accrued expenses (6) 185
Net cash provided by (used in) operating activities 246 (129)
Cash flows used in investing activities:
Property improvements and replacements (312) (155)
Cash flows from financing activities:
Payments on mortgage notes payable (47) (46)
Loan costs paid -- (3)
Net cash used in financing activities (47) (49)
Net decrease in unrestricted cash and cash
equivalents (113) (333)
Unrestricted cash and cash equivalents at
beginning of period 535 846
Unrestricted cash and cash equivalents at
end of period $ 422 $ 513
Supplemental information:
Cash paid for interest $ 408 $ 430
<FN>
See Notes to Consolidated Financial Statements
</FN>
</TABLE>
e) CENTURY PROPERTIES FUND XVI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Century Properties Fund XVI
(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 (the "Managing General
Partner" or "FCMC"), 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, 1997, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1997. For further information, refer to the financial
statements and footnotes thereto included in the Partnership's annual report on
Form 10-KSB for the year ended December 31, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on its general partners, Fox
Realty Investors ("FRI"), a California general partnership, and the Managing
General Partner, a California corporation and their affiliates for the
management and administration of all partnership activities. The Partnership
Agreement provides for payments to affiliates for services and as reimbursement
of certain expenses incurred by affiliates on behalf of the Partnership.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the
issued and outstanding shares of stock of FCMC, NPI Equity Investments II, Inc.
("NPI Equity"), the managing general partner of FRI, and National Property
Investors, Inc. ("NPI"). NPI Equity is a wholly-owned subsidiary of NPI. In
connection with these transactions, affiliates of Insignia appointed new
officers and directors of NPI Equity and FCMC.
On March 29, 1996, an affiliate of Insignia acquired all of the issued and
outstanding shares of stock of the general partners of the subsidiary
partnerships which hold title to The Landings Apartments and Woods of Inverness
Apartments, which general partners hold a 1% interest in profits, losses and
distributions of such subsidiary partnerships.
The following transactions with affiliates of Insignia, NPI and affiliates of
NPI were charged to expense in 1997 and 1996:
For the Nine Months Ended
September 30,
(in thousands)
1997 1996
Property management fees (included in operating
expenses) $ 106 $ 96
Reimbursement for services of affiliates (included
in general and administrative expenses) 78 106
For the period from January 19, 1996, to August 31, 1997, the Partnership
insured its properties under a master policy through an agency and insurer
unaffiliated with the Managing General Partner. An affiliate of the Managing
General Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the master policy. The agent assumed the financial obligations to the
affiliate of the Managing General Partner who receives payment on these
obligations from the agent. The amount of the Partnership's insurance premiums
that accrued to the benefit of the affiliate of the Managing General Partner by
virtue of the agent's obligations was not significant.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for each of
the nine month periods ended September 30, 1997 and 1996:
Average
Occupancy
Property 1997 1996
The Landings Apartments
Tampa, Florida 94% 93%
Woods of Inverness Apartments
Houston, Texas 96% 91%
The increase in average occupancy from September 30, 1996, to September 30,
1997, at both The Landings Apartments and the Woods of Inverness Apartments
properties is due to increased marketing efforts, combined with the availability
of attractive, well maintained units.
The Partnership's net loss for the three and nine month periods ended September
30, 1997, was $41,000 and $91,000, versus losses of $266,000 and $554,000,
respectively, for the same periods in 1996. The decrease in net loss for both
the three and nine month periods ended September 30, 1997, is due to an overall
increase in total revenues and a decrease in total expenses, partially offset by
the $56,000 loss on disposal of property (see discussion below). The increase
in total revenues is primarily due to the increase in occupancy at both The
Landings Apartments and the Woods of Inverness Apartments. Operating expenses
are down due to a decrease in utility costs and maintenance salaries at the
Woods of Inverness Apartments. Also, advertising expense decreased due to the
decreased need for concessions and referral fees as a result of the increase in
occupancy at both complexes. General and administrative expenses decreased
during the nine months ended September 30, 1997, versus the same time period in
1996 due to the decreased cost reimbursements as a result of the relocation of
the partnership administration offices in 1996. Maintenance expenses declined
due to numerous repairs to both the interior and exterior of the buildings,
consisting of plumbing and electric systems, interior painting, parking lot
repairs, as well as landscaping repairs, by the current management company in
1996, which did not re-occur in 1997. Property taxes decreased due to a decrease
in billing, as a result of re-valuations of the properties.
The loss on disposal of property of $56,000 at September 30, 1997, was the
result of a re-roofing project at the Woods of Inverness Apartments. This loss
was the result of the write-off of the old roof that was not fully depreciated
at the time of the replacement.
Included in maintenance expense for the nine months ended September 30, 1997, is
$51,000 of major repairs and maintenance comprised of parking lot repairs, major
landscaping, exterior painting and building improvements. Included in
maintenance expense for the nine months ended September 30, 1996, is $187,000 of
major repairs and maintenance comprised of exterior building improvements,
parking lot repairs, major landscaping and swimming pool repairs.
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 conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At September 30, 1997, the Partnership had unrestricted cash and cash
equivalents of $422,000, versus $513,000 at September 30, 1996. Net cash
provided by operating activities increased primarily due to the decreased net
loss, as previously explained, offset partially by a decrease in accounts
payable and accrued expenses. The Partnership experienced an increase in cash
used in investing activities due primarily to building improvements at The
Landings Apartments and the addition of the new roof at the Woods of Inverness
Apartments. Cash used in financing activities remained consistent for the nine
months ended September 30, 1997, versus the nine months ended September 30,
1996.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership has no outstanding amounts due under this line of
credit. Based on present plans, the Managing General Partner does not
anticipate the need to borrow in the near future. Other than cash and cash
equivalents, the line of credit is the Partnership's only unused source of
liquidity.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of $7,440,000 is based on a fixed interest rate, amortized
over a thirty-year period, with a balloon payment of $6,618,000 due January 1,
2006. Future cash distributions will depend on the levels of cash generated
from operations, property sales, and the availability of cash reserves. No cash
distributions were paid in 1996 or during the first nine months of 1997.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
b) Reports on Form 8-K: None filed during the period ended September 30,
1997.
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 XVI
By: Fox Capital Management Corporation,
Managing General Partner
By: /s/William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Vice President and Treasurer
Date:October 29, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XVI 1997 Third Quarter 10-QSB and is qualified in its entirety
by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000351931
<NAME> CENTURY PROPERTIES FUND XVI
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 422
<SECURITIES> 0
<RECEIVABLES> 10
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 14,908
<DEPRECIATION> 7,183
<TOTAL-ASSETS> 8,770
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 7,440
0
0
<COMMON> 0
<OTHER-SE> 960
<TOTAL-LIABILITY-AND-EQUITY> 8,770
<SALES> 0
<TOTAL-REVENUES> 2,143
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,178
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 466
<INCOME-PRETAX> (91)
<INCOME-TAX> 0
<INCOME-CONTINUING> (91)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (91)
<EPS-PRIMARY> (.65)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
