March 8, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Century Properties XVI
Form 10-KSB
File No. 0-10435
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
Managing General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
<PAGE>
------------------------------------------------------------------------------
FORM 10-KSB -- ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from _________to _________
Commission file number 0-10435
CENTURY PROPERTIES FUND XVI
(Name of small business issuer in its charter)
California 94-2704651
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
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___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB.
State issuer's revenues for its most recent fiscal year. $3,061,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
- --------------------------------------------------------------------------------
<PAGE>
PART I
Item 1. Description of Business
Century Properties Fund XVI (the "Partnership" or the "Registrant") was
organized in December 1980, as a California limited partnership under the
Uniform Limited Partnership Act of the California Corporations Code. Fox Capital
Management Corporation (the "Managing General Partner" or "FCMC"), a California
corporation, and Fox Realty Investors ("FRI"), a California general partnership,
are the general partners of the Registrant. NPI Equity Investments II Inc., a
Florida Corporation ("NPI Equity"), is the managing partner of FRI. Both FCMC
and NPI Equity are subsidiaries of Apartment Investment and Management Company
("AIMCO") (see "Transfer of Control"). The partnership agreement provides that
the Partnership is to terminate on December 31, 2025 unless terminated prior to
such date.
Beginning in August 1981 through April 1982, the Registrant offered and sold
130,000 Limited Partnership Units for an aggregate of $65,000,000. The net
proceeds of this offering were used to acquire ten income-producing real estate
properties. The Registrant's original property portfolio was geographically
diversified with properties acquired in six states. The Registrant's acquisition
activities were completed in 1983, and since then, the principal activity of the
Registrant has been managing its portfolio. During the period from 1986 through
1991, eight multi-family residential properties were either sold or otherwise
disposed. The Registrant continues to own and operate two of its originally
acquired properties. See "Item 2. Description of Properties."
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. The non-managing general partner and
the limited partners have no right to participate in the management or conduct
of such business and affairs. An affiliate of the Managing General Partner
provides day-to-day property management services to the Partnership's investment
properties.
The real estate business in which the Partnership is engaged is highly
competitive. There are other residential properties within the market area of
the Registrant's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the Managing General
Partner in such market area, could have a material effect on the rental market
for apartments at the Registrant's properties and the rents that may be charged
for such apartments. While the Managing General Partner and its affiliates own
and/or control a significant number of apartment units in the United States such
units represent an insignificant percentage of total apartment units in the
United States and, competition for apartments is local.
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential properties because such properties
are susceptible to the impact of economic and other conditions outside of the
control of the Partnership.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed, which resulted in no material adverse
conditions or liabilities. In no case has the Partnership received notice that
it is a potentially responsible party with respect to an environmental clean up
site.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operations" included in "Item 6" of this Form
10-KSB.
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 and NPI Equity.
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.
Item 2. Description of Properties:
The following table sets forth the Registrant's investment in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Ralston Place (formerly 06/82 Fee ownership subject Apartments
The Landings Apartments) to first mortgage (1) 200 units
Tampa, Florida
Woods of Inverness 07/82 Fee ownership subject Apartments
Apartments to first mortgage (1) 272 units
Houston, Texas
</TABLE>
(1) Property is held by a Limited Partnership which is wholly-owned by the
Registrant.
<PAGE>
Schedule of Properties:
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
- -------- ----- ------------ ---- ------ ---------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Ralston Place (formerly $ 6,315 $ 3,302 5-30 yrs (1) $ 1,272
The Landings Apartments)
Woods of Inverness 9,739 5,040 5-30 yrs (1) $ 1,998
------ ------ ------
Apartments $16,054 $ 8,342 $ 3,270
====== ====== ======
</TABLE>
(1) Straight - line
See "Item 7. Financial Statements, Note A" for a description of the
Partnership's depreciation policy and " Item 7. Financial Statements, Note J
Change in Accounting Principle".
Schedule of Property Indebtedness:
- ---------------------------------
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1999 Rate Amortized Date Maturity
-------- ---- ---- --------- ---- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Ralston Place (formerly
The Landings Apartments) $ 2,213 7.88% 30 years 1/2006 $ 2,016
Woods of Inverness
Apartments 5,052 7.88% 30 years 1/2006 4,602
------ ------
$ 7,265 $ 6,618
====== ======
</TABLE>
Each mortgage note payable is non-recourse and secured by a pledge of the
applicable Partnership property and the rental revenues derived therefrom.
See "Item 7. Financial Statements - Note C" for information with respect to the
Registrant's ability to prepay these loans and other specific details as to the
terms of the loans.
<PAGE>
Rental Rates and Occupancy:
Average annual rental rate and occupancy for 1999 and 1998 for each property:
Average Annual Average Annual
Rental Rates Occupancy
------------ ---------
(per unit)
Property 1999 1998 1999 1998
-------- ---- ---- ---- ----
Ralston Place (formerly $ 5,606 $ 5,374 96% 95%
The Landings Apartments)
Woods of Inverness Apartments 7,227 7,098 96% 97%
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other apartment complexes in the area. The Managing General
Partner believes that all of the properties are adequately insured. Each
property is an apartment complex which leases units for lease terms of one year
or less. No residential tenant leases 10% or more of the available rental space.
All of the properties are in good physical condition, subject to normal
depreciation and deterioration as is typical for assets of this type and age.
Real Estate Taxes and Rates:
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing Rate
(in thousands)
Ralston Place (formerly The
Landings Apartments) $ 75 2.50%
Woods of Inverness Apartments 169 2.75%
Capital Improvements:
Ralston Place (formerly The Landings Apartments): The Partnership completed
approximately $286,000 in capital expenditures at Ralston Place as of December
31, 1999, consisting primarily of flooring, appliances, recreation facility
additions, structural improvements, parking lot enhancements, landscaping and a
roofing project. These improvements were funded from cash flow and replacement
reserves. The Partnership is currently evaluating the capital improvement needs
of the property for the upcoming year. The minimum amount to be budgeted is
expected to be $300 per unit or $60,000. 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 Woods of Inverness Apartments: The Partnership completed approximately
$204,000 in capital expenditures at The Woods of Inverness Apartments as of
December 31, 1999, consisting primarily of flooring, structural improvements,
plumbing, fencing, electrical improvements, and landscaping. These improvements
were funded from cash flow and replacement reserves. The Partnership is
currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $81,600. 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 and 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.
Item 3. 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
"Item 7. Financial Statements, 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 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
During the quarter ended December 31, 1999, no matters were submitted to a vote
of security holders through the solicitation of proxies or otherwise.
<PAGE>
PART II
Item 5. Market for the Partnership's Common Equity and Related Partner Matters
The Partnership, a publicly-held limited partnership, offered and sold in 1981
and 1982, 130,000 Limited Partnership Units (the "Units") aggregating
$65,000,000. The Partnership currently has 130,000 Units outstanding held by
4,021 Limited Partners of record. Affiliates of the Managing General Partner own
66,851.01 Units or 51.42% at December 31, 1999. No public trading market has
developed for the Units, and it is not anticipated that such a market will
develop in the future.
The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999:
Distributions
Per Limited
Aggregate Partnership Unit
1/1/98 - 12/31/98 -- --
1/1/99 - 12/31/99 $225,000 (1) $1.61
(1) Distribution was made from cash from operations. See "Item 7. Financial
Statements, Note H" for more information.
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 required
capital expenditures, to permit any distributions to its partners in 2000 or
subsequent periods. See "Item 2. Description of Properties - Capital
Improvements" for information relating to anticipated capital expenditures at
the properties.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own
66,851.01 units of limited partnership units in the Partnership representing
51.42% of the outstanding units. 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. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the units are entitled
to take action with respect to a variety of matters. 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.
Item 6. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-KSB 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-KSB 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.
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Registrant's net income for year ended December 31, 1999 was approximately
$256,000 as compared to approximately $127,000 for the year ended December 31,
1998. (See "Item 7. Financial Statements, Note D" for a reconciliation of these
amounts to the Registrant's federal taxable income (loss)). The increase in net
income was due to an increase in total revenues and a decrease in total
expenses. The increase in total revenues is primarily attributable to an
increase in rental income as a result of an increase in average annual rental
rates at both investment properties, a decrease in rental concessions offered at
Woods of Inverness Apartments and an increase in occupancy at Ralston Place,
which more than offset a slight decrease in occupancy at Woods of Inverness
Apartments. Other income remained relatively consistent.
Total expenses decreased primarily due to a reduction in operating expenses,
which was partially offset by increases in general and administrative,
depreciation and property tax expenses. Interest expense remained relatively
constant for the comparable periods. Operating expenses decreased due to
reductions in maintenance, insurance and advertising expenses. Maintenance
expense decreased primarily due to the completion of exterior building and
tennis court repairs and various projects performed to enhance the appearance of
Woods of Inverness Apartments, and the completion of exterior building
improvements and parking lot resurfacing at Ralston Place during the year ended
December 31, 1998. Insurance expense decreased due to a refund of prior premiums
paid at Woods of Inverness Apartments upon cancellation of the prior policy and
reduced premiums at both properties due to a change in insurance carriers late
in 1998. Advertising expense decreased at the Woods of Inverness due to a
decrease in referral fees paid.
The increase in general and administrative expenses is primarily due to
increased legal costs related to the Nuanes matter and costs associated with
other legal matters which were closed during 1999 as disclosed in prior
quarters. The increase in depreciation expense is the result of the amounts
spent on capital improvements and replacements during 1999 and 1998. Property
taxes increased resulting from an increase in the assessment value of Woods of
Inverness Apartments.
Included in general and administrative expense at both December 31, 1999 and
1998 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.
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase net income by $33,000 ($.24 per limited partnership unit). The
cumulative effect, had this change been applied to prior periods, is not
material. The accounting principle change will not have an effect on cash flow,
funds available for distributions or fees payable to the Managing General
Partner or affiliates.
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 December 31, 1999, the Registrant had cash and cash equivalents of
approximately $468,000 as compared to approximately $366,000 at December 31,
1998. Cash and cash equivalents increased approximately $102,000 for the year
ended December 31, 1999. The increase in cash and cash equivalents is due to
approximately $828,000 of cash provided by operating activities, partially
offset by approximately $419,000 of cash used in investing activities and
approximately $307,000 of cash used in financing activities. Cash used in
investing activities consisted primarily of capital improvements and
replacements and, to a lesser extent, net deposits to restricted escrow accounts
maintained by the mortgage lender. Cash used in financing activities consisted
primarily of distributions to partners and, to a lesser extent, 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. The Partnership is currently
evaluating the capital improvement needs of the properties for the upcoming
year. The minimum to be budgeted is expected to be $300 per unit or $141,600.
Additional improvements may be considered and will depend on the physical
condition of the properties as well as replacement reserves and anticipated cash
flow generated by the properties.
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 $7,265,000 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.
A cash distribution from operations of approximately $225,000 was paid during
the year ended December 31, 1999, of which approximately $209,000 was paid to
limited partners ($1.61 per limited partnership unit). No cash distributions
were made during the year ended December 31, 1998. Future 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 required capital expenditures, to permit
distributions to its partners in 2000 or subsequent periods.
Tender Offer
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own
66,851.01 units of limited partnership units in the Partnership representing
51.42% of the outstanding units. 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. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the units are entitled
to take action with respect to a variety of matters. 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.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership have not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
<PAGE>
Item 7. Financial Statements
CENTURY PROPERTIES FUND XVI
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young, LLP Independent Auditors
Consolidated Balance Sheet - December 31, 1999
Consolidated Statements of Operations - Years ended December 31, 1999 and
1998
Consolidated Statements of Changes in Partners' (Deficit) Capital - Years
ended December 31, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended December 31, 1999 and
1998
Notes to Consolidated Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Century Properties Fund XVI
We have audited the accompanying consolidated balance sheet of Century
Properties Fund XVI as of December 31, 1999, and the related consolidated
statements of operations, changes in partners' (deficit) capital and cash flows
for each of the two years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Century Properties
Fund XVI at December 31, 1999, and the consolidated results of its operations
and its cash flows for each of the two years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.
As discussed in Note J to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
February 21, 2000
<PAGE>
CENTURY PROPERTIES FUND XVI
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1999
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 468
Receivables and deposits 324
Restricted escrows 110
Other assets 231
Investment properties (Notes C and F):
Land $ 1,409
Buildings and related personal property 14,645
-------
16,054
Less accumulated depreciation (8,342) 7,712
------- ------
$ 8,845
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 114
Accrued property taxes 180
Tenant security deposit liabilities 42
Other liabilities 192
Mortgage notes payable (Notes C and F) 7,265
Partners' (Deficit) Capital
General partners $ (3,832)
Limited partners (130,000 units
issued and outstanding) 4,884 1,052
------ -----
$8,845
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years Ended December 31,
1999 1998
---- ----
Revenues:
Rental income $2,944 $2,855
Other income 117 121
----- -----
Total revenues 3,061 2,976
----- -----
Expenses:
Operating 1,150 1,319
General and administrative 255 186
Depreciation 538 501
Interest 607 612
Property tax 255 231
----- -----
Total expenses 2,805 2,849
----- -----
Net income $ 256 $ 127
===== =====
Net income allocated to general partners (6.9%) $ 18 $ 9
Net income allocated to limited partners (93.1%) 238 118
----- -----
$ 256 $ 127
===== =====
Net income per limited partnership unit $ 1.83 $ 0.91
===== =====
Distributions per limited partnership unit $ 1.61 $ --
===== =====
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(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, 1997 130,000 $(3,843) $ 4,737 $ 894
Net income for the year
ended December 31, 1998 -- 9 118 127
------- ------ ------ -------
Partners' (deficit) capital at
December 31, 1998 130,000 $(3,834) $ 4,855 $ 1,021
Distributions to partners -- (16) (209) (225)
Net income for the year
ended December 31, 1999 -- 18 238 256
------- ------ ------ -------
Partners' (deficit) capital
at December 31, 1999 130,000 $(3,832) $ 4,884 $ 1,052
======= ====== ====== =======
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XVI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income $ 256 $ 127
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 538 501
Amortization of loan costs 32 30
Change in accounts:
Receivables and deposits 46 (63)
Other assets (30) 5
Accounts payable (23) (32)
Accrued property taxes (65) 8
Tenant security deposit liabilities (9) 1
Other liabilities 83 13
----- ------
Net cash provided by operating activities 828 590
------ ------
Cash flows from investing activities:
Property improvements and replacements (409) (617)
Net (deposits to) withdrawals from restricted escrows (10) 9
------ ------
Net cash used in investing activities (419) (608)
------ ------
Cash flows from financing activities:
Distributions to partners (225) --
Payments on mortgage notes payable (82) (75)
------ ------
Net cash used in financing activities (307) (75)
------ ------
Net increase (decrease) in cash and cash equivalents 102 (93)
Cash and cash equivalents at beginning of year 366 459
------ -----
Cash and cash equivalents at end of year $ 468 $ 366
==== ====
Supplemental disclosure of cash flow information:
Cash paid for interest $ 576 $ 581
==== ====
Supplemental disclosure of non-cash activity:
Property improvements and replacements included in
accounts payable $ 81 $ --
=== ===
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XVI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Organization and Significant Accounting Policies
Organization: Century Properties Fund XVI (the "Partnership" or "Registrant") is
a California limited partnership organized in December 1980 to acquire and
operate residential apartment properties. The Partnership's general partners are
Fox Capital Management Corporation ("FCMC" or the "Managing General Partner")
and Fox Realty Investors ("FRI"). As of December 31, 1999, the Partnership
operates two residential apartment complexes located in Texas and Florida. The
Managing General Partner is a subsidiary of Apartment Investment and Management
Company ("AIMCO"), a publicly traded real estate investment trust. (See "Note B
- - Transfer of Control".) The Partnership Agreement provides that the Partnership
is to terminate on December 31, 2025 unless terminated prior to such date. The
directors and officers of the Managing General Partner also serve as executive
offers of AIMCO.
Principles of Consolidation: The Partnership's consolidated financial statements
include the accounts of the Partnership and its wholly owned subsidiaries.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Allocation to Partners: Net income and losses (excluding those arising from the
occurrence of sales or dispositions) of the Partnership will be allocated 5% to
the general partners with the remainder allocated 2% to the general partners and
98% to the limited partners.
Distributions of available cash, except as discussed below, are allocated 5% to
the general partners with the remainder allocated 2% to the general partners and
98% to the limited partners.
In accordance with the Partnership Agreement, any gain from the sale or other
disposition of Partnership properties shall be allocated: (i) to the general
partners to the extent they are entitled to receive distributions of cash; (ii)
7% to the general partners and 93% to the limited partners, to the extent the
general partners have a deficit capital balance; and (iii) to the limited
partners.
Cash from sales or other disposition, or refinancing and working capital
reserves must be distributed in the following order: (i) first, an aggregate
amount as discussed above to each Limited Partner which equals the total of
their original invested capital contributed plus 8% per year, determined on a
cumulative, noncompounded basis, on adjusted invested capital, adjusted as
needed, of such Limited Partnership Unit Holder; (ii) second, to the general
partners 15% of any additional cash from sales or refinancing and working
capital reserve available for distribution, and (iii) the remainder shall be
allocated 98% to the limited partners and 2% to the general partners. Upon sale
of all properties and termination of the Partnership, the general partners may
be required to contribute certain funds to the Partnership in accordance with
the Partnership Agreement.
Cash and Cash Equivalents: Cash and cash equivalents include cash on hand, in
banks and money market accounts. At certain times, the amount of cash deposited
at a bank may exceed the limit on insured deposits.
Available Lines of Credit: 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.
Depreciation: Depreciation is calculated by the straight-line method over the
estimated lives of the rental properties and related personal property.
Effective January 1, 1999 the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping (Note J).
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. The Partnership recognizes income as earned on its leases. In addition,
the Managing General Partner's policy is to offer rental concessions during
particularly slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged against rental income as
incurred.
Tenant Security Deposits: The Partnership requires security deposits from
lessees for the duration of the lease and such deposits are included in
receivables and deposits. The security deposits are refunded when the tenant
vacates, provided the tenant has not damaged its space and is current on its
rental payments.
Loan Costs: Loan costs of $319,000 are included in other assets in the
accompanying consolidated balance sheet and are being amortized on a
straight-line basis over the life of the loans. At December 31, 1999,
accumulated amortization is $126,000. Amortization of loan costs is included in
interest expense.
Investment Properties: Investment properties consist of two apartment complexes
and are stated at cost. Acquisition fees are capitalized as a cost of real
estate. In accordance with Financial Accounting Standards Board Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of", the Partnership records impairment losses on
long-lived assets used in operations when events and circumstances indicate that
the assets might be impaired and the undiscounted cash flows estimated to be
generated by those assets are less than the carrying amounts of these assets.
Costs of apartment properties that have been permanently impaired have been
written down to appraised value. No adjustments for impairment of value were
recorded in the years ended December 31, 1999 or 1998.
Fair Value: Statement of Financial Accounting Standards ("SFAS") No. 107,
"Disclosures about Fair Value of Financial Instruments", as amended by SFAS No.
119, "Disclosures about Derivative Financial Instruments and Fair Value of
Financial Instruments" requires disclosure of fair value information about
financial instruments, whether or not recognized in the balance sheet, for which
it is practicable to estimate fair value. Fair value is defined in the SFAS as
the amount at which the instruments could be exchanged in a current transaction
between willing parties, other than in a forced or liquidation sale. The
Partnership believes that the carrying amount of its financial instruments
(except for long term debt) approximates their fair value due to the short term
maturity of these instruments. The fair value of the Partnership's long term
debt, after discounting the scheduled loan payments to maturity, approximates
its carrying value.
Advertising Costs: The Partnership expenses the costs of advertising as
incurred. Advertising costs of approximately $47,000 and $60,000 for the years
ended December 31, 1999 and 1998, respectively, were charged to operating
expenses.
Segment Reporting: SFAS No. 131, "Disclosure about Segments of an Enterprise and
Related Information" established standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. See "Note G" for disclosure.
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 - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Balance
December 31, Including Interest Period Maturity Due At
Property 1999 Interest Rate Amortized Date Maturity
-------- ---- -------- ---- --------- ---- --------
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Ralston Place
(formerly The $ 2,213 $ 17 7.88% 30 years 1/2006 $ 2,016
Landings
Apartments)
Woods of Inverness
Apartments 5,052 38 7.88% 30 years 1/2006 4,602
------ ------ ------
$ 7,265 $ 55 $ 6,618
====== ====== ======
</TABLE>
The mortgage notes payable are nonrecourse and are secured by pledge of the
respective apartment properties and by pledge of revenues from the respective
apartment properties. Prepayment penalties are required if repaid prior to
maturity. Further, the properties may not be sold subject to existing
indebtedness.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1999 are as follows (in thousands):
2000 $ 88
2001 95
2002 103
2003 111
2004 120
Thereafter 6,748
-----
$ 7,265
Note D - Income Taxes
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Differences between the net income as reported and Federal taxable income result
primarily from depreciation over different methods and lives and on differing
cost basis. The following is a reconciliation of reported net income and Federal
taxable income:
1999 1998
---- ----
(in thousands, except unit data)
Net income as reported $ 256 $ 127
Add (deduct):
Depreciation differences 368 370
Miscellaneous (56) 155
---- ----
Federal taxable income $ 568 $ 652
==== ====
Federal taxable income per limited
partnership unit $4.07 $4.67
==== ====
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
1999
Net assets as reported $1,052
Land and buildings 926
Accumulated depreciation (5,368)
Syndication and distribution costs 8,258
Other 108
-----
Net assets - Federal tax basis $4,976
=====
<PAGE>
Note E - Transactions with Affiliated Parties
The Partnership has no employees and is dependent upon 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 expenses were paid to the
Managing General Partner and affiliates in 1999 and in 1998:
1999 1998
---- ----
(in thousands)
Property management fees (included in operating
expense) $153 $149
Reimbursement for services of affiliates (included
in investment property and general and
administrative and operating expenses) 101 133
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $153,000 and $149,000 for the
years ended December 31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $101,000 and
$133,000 for the years ended December 31, 1999 and 1998, respectively.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own
66,851.01 units of limited partnership units in the Partnership representing
51.42% of the outstanding units. 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. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the units are entitled
to take action with respect to a variety of matters. 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.
<PAGE>
Note F - Investment Properties and Accumulated Depreciation
Initial Cost
To Partnership
--------------
(in thousands)
<TABLE>
<CAPTION>
Costs
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
----------- ------------ ---- -------- -----------
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Ralston Place (formerly
The Landings Apartments) $ 2,213 $ 504 $ 4,702 $ 1,109
Woods of Inverness 5,052 1,292 10,305 (1,858)
------ ----- ------ ------
Total $ 7,265 $1,796 $15,007 $ (749)
====== ===== ====== ======
</TABLE>
Gross Amount At Which
Carried
At December 31, 1999
(in thousands)
<TABLE>
<CAPTION>
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
----------- ---- -------- ----- ------------ -------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Ralston Place (formerly
The Landings Apartments) $ 504 $ 5,811 $ 6,315 $3,302 06/82 5-30 years
Woods of Inverness 905 8,834 9,739 5,040 07/82 5-30 years
----- ------ ------ ------
Total $1,409 $14,645 $16,054 $8,342
===== ====== ====== =====
</TABLE>
Reconciliation of Investment Properties and Accumulated Depreciation:
Years Ended December 31,
1999 1998
---- ----
(in thousands)
Balance at beginning of year $15,564 $14,947
Property improvements 490 617
------ ------
Balance at end of year $16,054 $15,564
====== ======
Accumulated Depreciation
Balance at beginning of year $ 7,804 $ 7,303
Additions charged to expense 538 501
------ ------
Balance at end of year $ 8,342 $ 7,804
====== ======
The aggregate cost of the investment properties for Federal income tax purposes
at December 31, 1999 and 1998, is approximately $16,980,000 and $16,489,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1999 and 1998, is approximately $13,710,000 and $13,542,000,
respectively.
Note G - 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 described in the summary of significant accounting policies.
Factors management used to identify the enterprise's reportable segment:
The Partnership's reportable segment consist 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 years 1999 and 1998 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.
1999 Residential Other Totals
- ---- ----------- ----- ------
Rental income $ 2,944 $ -- $ 2,944
Other income 106 11 117
Interest expense 607 -- 607
Depreciation 538 -- 538
General and administrative expense -- 255 255
Segment profit (loss) 500 (244) 256
Total assets 8,822 23 8,845
Capital expenditures 490 -- 490
1998 Residential Other Totals
---- ----------- ----- ------
Rental income $ 2,855 $ -- $ 2,855
Other income 105 16 121
Interest expense 612 -- 612
Depreciation 501 -- 501
General and administrative expense -- 186 186
Segment profit (loss) 297 (170) 127
Total assets 8,562 267 8,829
Capital expenditures 617 -- 617
Note H - Distributions
A cash distribution from operations of approximately $225,000 was paid during
the year ended December 31, 1999, of which approximately $209,000 was paid to
limited partners ($1.61 per limited partnership unit). No cash distributions
were made during the year ended December 31, 1998.
Note I - 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.
Note J - Change in Accounting Principle
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase net income by $33,000 ($.24 per limited partnership unit). The
cumulative effect, had this change been applied to prior periods, is not
material. The accounting principle change will not have an effect on cash flow,
funds available for distributions or fees payable to the Managing General
Partner or affiliates.
<PAGE>
Item 8. Changes in and Disagreements with Accountant on Accounting and Financial
Disclosures
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act
Century Properties Fund XVI (the "Partnership" or the "Registrant") has no
officers or directors. Fox Capital Management Corporation ("FCMC" or the
"Managing General Partner"), manages and controls substantially all of the
Partnership's affairs and has general responsibility in all matters affecting
its business.
The names and ages of, as well as the positions and offices held by, the present
executive officers and director of the Managing General Partner are set forth
below. There are no family relationships between or among any officers or
directors.
Name Age Position
Patrick J. Foye 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Martha L. Long has been Senior Vice President and Controller of the Managing
General Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia Financial Group, Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant under Rule 16a-3(e) during the Registrant's most recent fiscal
year and Forms 5 and amendments thereto furnished to the Registrant with respect
to its most recent fiscal year, the Registrant is not aware of any director,
officer, beneficial owner of more than ten percent of the units of limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms, reports required by section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years except as follows:
AIMCO Properties, L.P. and its joint filers failed to timely file a Form 3 with
respect to its acquisition of Units and AIMCO and its joint filers failed to
timely file a Form 4 with respect to its acquisition of Units.
Item 10. Executive Compensation
No direct form of compensation or remuneration was paid by the Partnership to
any officer or director of Fox Capital Management Corporation. However, fees and
other payments have been made to the Partnership's Managing General Partner and
its affiliates, as described in "Item 12. Certain Relationships and Related
Transactions."
Item 11. Security Ownership of Certain Beneficial Owners and Management
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1999.
Name of Percentage
Beneficial Owner Number of Units of Class
Insignia Properties, LP
(an affiliate of AIMCO) 47,488.68 36.53%
AIMCO Properties, LP
(an affiliate of AIMCO) 19,362.33 14.89%
Insignia Properties LP, is indirectly ultimately owned by AIMCO. Its business
address is 55 Beattie Place, Greenville, SC 29602.
AIMCO Properties LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Blvd, Denver, Colorado 80222.
No director or officer of the Managing General Partner owns any units.
Item 12. Certain Relationships and Related Transactions
The Partnership has no employees and is dependent upon 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 expenses were paid to the
Managing General Partner and affiliates in 1999 and in 1998:
1999 1998
---- ----
(in thousands)
Property management fees $153 $149
Reimbursement for services of affiliates 101 133
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties for providing property management services. The
Registrant paid to such affiliates approximately $153,000 and $149,000 for the
years ended December 31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $101,000 and
$133,000 for the years ended December 31, 1999 and 1998, respectively.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these tender offers, AIMCO and its affiliates currently own
66,851.01 units of limited partnership units in the Partnership representing
51.42% of the outstanding units. 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. Consequently, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. Under the
Partnership Agreement, unitholders holding a majority of the units are entitled
to take action with respect to a variety of matters. 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.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 18, Independent Accountants' Preferability Letter for
Change in Accounting Principle is filed as an exhibit to this
report.
Exhibit 27, Financial Data Schedule is filed as an exhibit to
this report.
(b) Reports on Form 8-K filed during the quarter ended December 31,
1999.
None.
<PAGE>
SIGNATURES
In accordance with section 13 or 15(d) 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/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Senior Vice President and
Controller
Date:
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf by the registrant and in the capacities and on the
date indicated.
/s/Patrick J. Foye Date:
- ------------------
Patrick J. Foye
Executive Vice President
and Director
/s/Martha L. Long Date:
- -----------------
Martha L. Long
Senior Vice President and
Controller
<PAGE>
CENTURY PROPERTIES FUND XVI
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 Agreement and Plan of Merger, dated as of October 1,
1999, by and between AIMCO and IPT (incorporated by
reference to Exhibit 2.1 of IPT's Current Report or Form
8-K, file No. 1-4179, dated October 1, 1999. (Page 1)
2.5 Master Indemnity Agreement incorporated by reference to
Exhibit 2.5 to Form 8-K filed by Insignia Financial Group,
Inc. with the Securities and Exchange Commission on
September 1, 1995. (Page 2)
3.4 Agreement of Limited Partnership incorporated by reference to
Exhibit A to the Prospectus of the Registrant dated August 17,
1981 and thereafter supplemented June 25, 1979 and thereafter
supplemented, included in the Registrant's Registration
Statement on Form S-11 (Reg.
No. 2-71473). (Page 3)
10.1 Form of First Mortgage Note dated as of December 29, 1995 from
the Registrant to Secore Financial Corporation ("Secore")
relating to the refinancing of the Landings and Woods of
Inverness incorporated by reference to Exhibit 10.1 to the
Registrant's Annual Report of Form 10-KSB for the year ended
December 31, 1995.
(Page 4)
10.2 Form of First Mortgage Note dated as of December 29, 1995 from
the Registrant to Secore relating to the refinancing of the
Landings and Woods of Inverness incorporated by reference to
Exhibit 10.2 to the Registrant's Annual Report of Form 10-KSB
for the year ended December 31, 1995. (Page 4)
18 Independent Accountants' Preferability Letter for Change in
Accounting Principle.
27 Financial Data Schedule.
<PAGE>
Exhibit 18
February 7, 2000
Mr. Patrick J. Foye
Executive Vice President
Fox Capital Management Corporation
Managing General Partner for Century Properties Fund XVI
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
Dear Mr. Foye:
Note J of Notes to the Consolidated Financial Statements of Century Properties
Fund XVI included in its Form 10-KSB for the year ended December 31, 1999
describes a change in the method of accounting to capitalize exterior painting
and major landscaping, which would have been expensed under the old policy. You
have advised us that you believe that the change is to a preferable method in
your circumstances because it provides a better matching of expenses with the
related benefit of the expenditures and is consistent with policies currently
being used by your industry and conforms to the policies of the Managing General
Partner.
There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting for exterior painting and major landscaping is to an acceptable
alternative method which, based on your business judgment to make this change
for the reasons cited above, is preferable in your circumstances.
Very truly yours,
/s/ Ernst & Young LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted fromCentury
Properties XVI 1999 Fourth Quarter 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000351931
<NAME> CENTURY PROPERTIES XVI
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 468
<SECURITIES> 0
<RECEIVABLES> 324
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 16,054
<DEPRECIATION> (8,342)
<TOTAL-ASSETS> 8,845
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 7,265
0
0
<COMMON> 0
<OTHER-SE> 1,052
<TOTAL-LIABILITY-AND-EQUITY> 8,845
<SALES> 0
<TOTAL-REVENUES> 3,061
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,805
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 607
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 256
<EPS-BASIC> 1.83 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
