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 March 31, 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 0-10435
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.)
55 Beattie Place, P.O. 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 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)
March 31, 2000
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 325
Receivables and deposits 187
Restricted escrows 148
Other assets 230
Investment properties:
Land $ 1,409
Buildings and related personal property 14,814
16,223
Less accumulated depreciation (8,491) 7,732
$ 8,622
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 27
Accrued property taxes 63
Tenant security deposit liabilities 42
Other liabilities 134
Mortgage notes payable 7,243
Partners' (Deficit) Capital
General partners $ (3,828)
Limited partners (130,000 units issued and
outstanding) 4,941 1,113
$ 8,622
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b)
CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
2000 1999
Revenues:
Rental income $ 733 $ 737
Other income 33 26
Total revenues 766 763
Expenses:
Operating 307 296
General and administrative 47 52
Depreciation 149 130
Interest 150 153
Property taxes 52 64
Total expenses 705 695
Net income $ 61 $ 68
Net income allocated
to general partners (6.9%) $ 4 $ 5
Net income allocated
to limited partners (93.1%) 57 63
$ 61 $ 68
Net income per limited
partnership unit $ .44 $ .48
See Accompanying Notes to Consolidated Financial Statements
c)
CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENT 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 130,000 $ -- $65,000 $65,000
Partners' (deficit) capital
at December 31, 1999 130,000 $ (3,832) $ 4,884 $ 1,052
Net income for the three months
ended March 31, 2000 -- 4 57 61
Partners' (deficit) capital
at March 31, 2000 130,000 $ (3,828) $ 4,941 $ 1,113
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d)
CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 61 $ 68
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 149 130
Amortization of loan costs 8 8
Change in accounts:
Receivables and deposits 137 104
Other assets (7) 4
Accounts payable (87) (24)
Accrued property taxes (117) (107)
Other liabilities (58) 6
Net cash provided by operating activities 86 189
Cash flows from investing activities:
Property improvements and replacements (169) (56)
Net (deposits to) withdrawals from restricted escrows (38) 62
Net cash (used in) provided by investing activities (207) 6
Cash flows used in financing activities:
Payments on mortgage notes payable (22) (20)
Net (decrease) increase in cash and cash equivalents (143) 175
Cash and cash equivalents at beginning of period 468 366
Cash and cash equivalents at end of period $ 325 $ 541
Supplemental disclosure of cash flow information:
Cash paid for interest $ 143 $ 145
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e)
CENTURY PROPERTIES FUND XVI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated 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. The Partnership's general partners are Fox Capital
Management Corporation (the "Managing General Partner" or "FCMC") and Fox Realty
Investors ("FRI"). The Managing General Partner and the managing general partner
of FRI are subsidiaries of Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. In the opinion of the
Managing General Partner, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three month period ended March 31, 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 the Partnership
and its wholly owned subsidiaries.
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 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 (i) payments to
affiliates for services and (ii) reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. The following transactions with
affiliates of the Managing General Partner were paid during the three months
ended March 31, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $ 38 $ 38
Reimbursement for services of affiliates (included in
investment properties, general and administrative
and operating expenses) 27 26
During the three months ended March 31, 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 $38,000 for both the three
months ended March 31, 2000 and 1999.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $27,000 and
$26,000 for the three months ended March 31, 2000 and 1999, respectively.
AIMCO and its affiliates currently own 67,122.01 limited partnership units in
the Partnership representing 51.632% 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. As a result of its
ownership of 51.632% 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.
Note D - 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, consisting
of two apartment complexes, one of which is located in Tampa, Florida and the
other in Houston, 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 summary of significant accounting
policies 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 segment:
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 month periods ended March 31, 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.
2000 Residential Other Totals
Rental income $ 733 $ -- $ 733
Other income 32 1 33
Interest expense 150 -- 150
Depreciation 149 -- 149
General and administrative expense -- 47 47
Segment profit (loss) 107 (46) 61
Total assets 8,610 12 8,622
Capital expenditures for investment
properties 169 -- 169
1999 Residential Other Totals
Rental income $ 737 $ -- $ 737
Other income 23 3 26
Interest expense 153 -- 153
Depreciation 130 -- 130
General and administrative expense -- 52 52
Segment profit (loss) 117 (49) 68
Total assets 8,373 379 8,752
Capital expenditures for investment
properties 56 -- 56
Note E - 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, the 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 by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). 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 own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, 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 class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. 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.
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 Registrant from time to time. The
discussion of the Registrant'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 Registrant'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 apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 2000 and 1999:
Average Occupancy
Property 2000 1999
Ralston Place 96% 97%
(formerly The Landings Apartments)
Tampa, Florida
Woods of Inverness Apartments 92% 98%
Houston, Texas
The Managing General Partner attributes the decrease in occupancy at Woods of
Inverness Apartments to an increase in tenants purchasing homes and employee
transfers out of the Houston market.
Results of Operations
The Registrant's net income for the three months ended March 31, 2000 was
approximately $61,000 as compared to approximately $68,000 for the corresponding
period in 1999. Net income decreased slightly for the three months ended March
31, 2000 as compared to the same period in 1999 as a result of an increase in
total expenses which more than offset an increase in total revenues. The
increase in total expenses is primarily attributable to an increase in operating
and depreciation expenses which were partially offset by reductions in property
taxes and general and administrative expenses. Operating expense increased due
to an increase in advertising expense at both investment properties. The
increase in depreciation expense is primarily attributable to the increase in
depreciable assets put into service in the last twelve months. Property taxes
decreased at the Woods of Inverness Apartments resulting from the timing of the
receipt of tax bills for 1999 which affected the accruals recorded at March 31,
2000 and 1999. The decrease in general and administrative expenses is primarily
due to decreased legal costs as a result of the settlement of a legal proceeding
in the first quarter of 1999.
Included in general and administrative expense for both of the three month
periods ended March 31, 2000 and 1999 are management reimbursements to the
Managing General Partner allowed under the Partnership Agreement. In addition,
costs associated with the quarterly and annual communications with investors and
regulatory agencies and the annual audit required by the Partnership Agreement
are also included.
Total revenues remained relatively constant for the comparable three month
periods as a $4,000 decrease in rental revenue was more than offset by a $7,000
increase in other income.
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 March 31, 2000, the Registrant had cash and cash equivalents of approximately
$325,000 as compared to approximately $541,000 at March 31, 1999. Cash and cash
equivalents decreased approximately $143,000 for the period ended March 31, 2000
from the Registrant's fiscal year end. The decrease in cash and cash equivalents
is due to approximately $207,000 of cash used in investing activities and
approximately $22,000 of cash used in financing activities, partially offset by
$86,000 of cash provided by operating activities. Cash used in investing
activities consisted of capital improvements and replacements and net deposits
to restricted escrow accounts maintained by the mortgage lender. Cash used in
financing activities consisted of payments of principal made on the mortgages
encumbering the Registrant's properties. 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.
Woods of Inverness: For 2000 the Partnership has budgeted approximately $210,000
for capital improvements at Woods of Inverness consisting primarily of appliance
and flooring replacements, parking lot and structural improvements. As of March
31, 2000 the property has spent approximately $123,000 in capital expenditures
consisting primarily of appliances, floor covering replacements, air
conditioning replacements, major landscaping, parking lot resurfacing, and
structural improvements. These improvements were funded primarily from
replacement reserves and operations. Additional improvements may be considered
and will depend on the physical condition of the property as well as replacement
reserves and anticipated cash flow generated by the property.
Ralston Place: For 2000 the Partnership has budgeted approximately $283,000 for
capital improvements at Ralston Place consisting primarily of appliances,
plumbing, air conditioning and flooring replacements, fencing, major
landscaping, recreational facility, pool and structural improvements. As of
March 31, 2000 the property has spent approximately $46,000 in capital
expenditures consisting primarily of plumbing fixture replacements, appliances,
and floor covering replacements. These improvements were funded primarily from
replacement reserves and operations. Additional improvements may be considered
and will depend on the physical condition of the property as well as 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 Registrant's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $7,243,000 is amortized over 360 months with a
balloon payment of approximately $6,618,000 due January 1, 2006. The Managing
General Partner will attempt to refinance such indebtedness and/or sell the
properties prior to such maturity date. If the properties cannot be refinanced
or sold for a sufficient amount, the Registrant will risk losing such properties
through foreclosure.
The Partnership did not make any distributions to its partners during three
months ended March 31, 2000 and 1999. 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. The Partnership's distribution policy is reviewed on a semi-annual basis.
There can be no assurance, however, that the Partnership will generate
sufficient funds from operations, after planned capital expenditures, to permit
distributions to its partners during the remainder of 2000 or subsequent
periods.
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, the 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 by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). 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 own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, 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 class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. 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) 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 March 31, 2000.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Partnership 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/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President and
Controller
Date: May 5, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XVI 2000 First 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 325
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 16,223
<DEPRECIATION> 8,491
<TOTAL-ASSETS> 8,622
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 7,243
0
0
<COMMON> 0
<OTHER-SE> 1,113
<TOTAL-LIABILITY-AND-EQUITY> 8,622
<SALES> 0
<TOTAL-REVENUES> 766
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 705
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 150
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61
<EPS-BASIC> 0.44 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
