SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-11137
Century Properties Fund XVII
(Exact name of Registrant as specified in its charter)
California 94-2782037
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (404) 916-9090
N/A
Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
-----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 12, 13, or 15(d) of the Securities Exchange
Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date .
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CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
March 31, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 2,399,000 $ 1,149,000
Reserve for capital improvements 896,000 1,596,000
Other assets 992,000 1,164,000
Real Estate:
Real Estate 65,085,000 64,917,000
Accumulated depreciation (24,463,000) (23,970,000)
Allowance for impairment of value (1,430,000) (1,430,000)
-------------- --------------
Real estate, net 39,192,000 39,517,000
Deferred financing costs, net 582,000 615,000
-------------- --------------
Total assets $ 44,061,000 $ 44,041,000
============== ==============
Liabilities and Partners' Equity
Accrued property taxes and other liabilities $ 875,000 $ 1,036,000
Notes payable 35,900,000 35,800,000
-------------- --------------
Total liabilities 36,775,000 36,836,000
-------------- --------------
Partners' Equity (Deficit):
General partners (6,871,000) (6,881,000)
Limited partners (75,000 units outstanding at
March 31, 1995 and December 31, 1994) 14,157,000 14,086,000
-------------- --------------
Total partners' equity 7,286,000 7,205,000
-------------- --------------
Total liabilities and partners' equity $ 44,061,000 $ 44,041,000
============== ==============
See notes to consolidated financial statements.
2 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Revenues:
Rental $ 2,903,000 $ 2,726,000
Interest 31,000 14,000
-------------- --------------
Total revenues 2,934,000 2,740,000
-------------- --------------
Expenses:
Operating 1,496,000 1,485,000
Interest 810,000 812,000
Depreciation 493,000 483,000
General and administrative 54,000 124,000
-------------- --------------
Total expenses 2,853,000 2,904,000
-------------- --------------
Net income (loss) $ 81,000 $ (164,000)
============== ==============
Net income (loss) per limited partnership unit $ 1 $ (2)
============== ==============
See notes to consolidated financial statements.
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CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
Consolidated Statements of Cash Flows (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Operating Activities:
Net income (loss) $ 81,000 $ (164,000)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 725,000 721,000
Changes in operating assets and liabilities:
Other assets 172,000 (481,000)
Accrued property taxes and other liabilities (161,000) (110,000)
----------- ------------
Net cash provided by (used in) operating activities 817,000 (34,000)
----------- ------------
Investing Activities:
Decrease in reserve for capital improvements 700,000 -
Additions to real estate (168,000) (101,000)
----------- ------------
Net cash provided by (used in) investing activities 532,000 (101,000)
----------- ------------
Financing Activities:
Notes payable principal payments (99,000) (89,000)
----------- ------------
Cash (used in) financing activities (99,000) (89,000)
----------- ------------
Increase (Decrease) in Cash and Cash Equivalents 1,250,000 (224,000)
Cash and Cash Equivalents at Beginning of Period 1,149,000 1,511,000
----------- ------------
Cash and Cash Equivalents at End of Period $2,399,000 $ 1,287,000
=========== ============
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 578,000 $ 574,000
============= ==============
Amortization of deferred debt discount $ 199,000 $ 199,000
============= ==============
See notes to consolidated financial statements.
4 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and
discussions should be read in conjunction with the consolidated financial
statements, related footnotes and discussions contained in the Partnership's
Annual Report for the year ended December 31, 1994. Certain balance sheet
accounts have been reclassified in order to conform to the current period.
The financial information contained herein is unaudited. In the opinion
of management, however, all adjustments necessary for a fair presentation of
such financial information have been included. All adjustments are of a normal
recurring nature.
The results of operations for the three months ended March 31, 1995 and
1994 are not necessarily indicative of the results to be expected for the full
year.
At March 31, 1995, the Partnership had approximately $1,127,000 invested
in overnight repurchase agreements earning approximately 6% per annum.
2. Transactions with Related Parties
(a) An affiliate of NPI, Inc. received reimbursement of administrative
expenses amounting to $36,000 and $39,000 for the three months ended March 31,
1995 and 1994, respectively. These reimbursements are included in general and
administrative expenses.
(b) An affiliate of MGP, is entitled to receive a management fee equal to
5% of the annual gross receipts from certain properties it manages. For the
periods ended March 31, 1995 and 1994, affiliates of NPI, Inc. received
$145,000 and $44,000, respectively, which are included in operating expenses.
5 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Consolidated Financial
Statements and other Items contained elsewhere in this Report.
Liquidity and Capital Resources
Registrant holds investments in and operates residential real estate
properties, with apartments leased to tenants subject to leases of up to one
year. Registrant receives rental income from its properties and is
responsible for operating expenses, administrative expenses, capital
improvements and debt service payments. As of May 1, 1995, seven of the
twelve properties originally purchased by Registrant were sold or otherwise
disposed.
Registrant uses working capital reserves provided from any undistributed cash
flow from operations, sales and refinancing proceeds as its primary source of
liquidity. There have been no distributions since 1985. All of Registrant's
properties (except for Cooper's Pond) experienced positive cash flow, during
the quarter ended March 31, 1995. It is not currently anticipated that
Registrant will make any distributions from operations in the near future.
The level of liquidity based upon cash and cash equivalents experienced a
$1,250,000 increase at March 31, 1995, as compared to December 31, 1994.
Registrant's $817,000 of net cash from operating activities and $532,000 of
net cash provided by investing activities was partially offset by $99,000 of
notes payable principal payments (financing activities). Cash provided by
investing activities consisted of $700,000 received from a reserve for capital
improvements as reimbursement for Registrant's prior year real estate
improvements. Registrant also spent $168,000 for real estate improvements
during the three months ended March 31, 1995. Registrant has no significant
capital expenditures planned for the year.
Working capital reserves are invested in a money market account or repurchase
agreements secured by United States Treasury obligations. The Managing
General Partner believes that, if market conditions remain relatively stable,
cash flow from operations, when combined with working capital reserves, will
be sufficient to fund required capital improvements and regular debt service
payments in 1995 and the foreseeable future. Registrant has balloon payments
due in 1998 and 1999 totaling $876,000 and $10,768,000, respectively.
Although the Managing General Partner is confident that all mortgages can be
refinanced or extended in an orderly fashion, if the mortgages are not
extended, or refinanced, or the properties not sold, the properties could be
lost through foreclosure.
Pursuant to the terms of a Settlement Agreement entered into in connection
with the Ruben and Andrews actions, DeForest Ventures I L.P. will make a
tender offer for an aggregate number of units of Registrant (including the
units purchased in the initial tender) constituting up to 49% of the total
number of units of Registrant at a price equal to the initial tender price
plus 15% less attorney's fees and expenses. In addition, pursuant to the
terms of the proposed settlement, the Managing General Partner will agree to
provide Registrant a credit line of $150,000 per property, borrowings under
which would bear interest at the lesser of prime plus 1% or the rate permitted
by the Partnership Agreement of Registrant. A hearing for final approval of
the settlement is scheduled for May 19, 1995. See Part II - Other
Information, "Item 1 - Legal Proceedings". If the settlement receives final
Court approval, it is expected that the tender offer will commence on or about
June 19, 1995. The Managing General Partner believes that the settlement will
not have an adverse effect on Registrant.
6 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
At this time, it appears that the investment objective of capital growth will
not be attained and that investors will not receive a return of all of their
invested capital. The extent to which invested capital is returned to
investors is dependent upon the performance of Registrant's properties and the
markets in which such properties are located and on the sales price of the
remaining properties. In this regard, all of the remaining properties have
been held longer than originally expected. The ability to hold and operate
these properties is dependent on Registrant's ability to obtain refinancing or
debt modification as required.
Real Estate Market
The national real estate market has suffered from the effects of the real
estate recession including, but not limited to a downward trend in market
values of existing residential properties. In addition, the bail out of the
savings and loan associations and sales of foreclosed properties by auction
reduced market values and caused a further restriction on the ability to
obtain credit. As a result, Registrant's ability to refinance or sell its
existing properties may be restricted. These factors caused a decline in
market property values and serve to reduce market rental rates and/or sales
prices. Compounding these difficulties have been relatively low interest
rates, which encourage existing and potential tenants to purchase homes. In
addition, there has been a significant decline nationally in new household
formation. Despite the above, the rental market appears to be experiencing a
gradual strengthening and management anticipates that increases in revenue
will generally exceed increases in expenses during 1995. Furthermore,
management believes that the emergence of new institutional purchasers,
including real estate investment trusts and insurance companies, should create
a more favorable market value for Registrant's properties in the future.
Results of Operations
Three Months Ended March 31, 1995 vs. March 31, 1994
Operating results improved by $245,000 for the three months ended March 31,
1995, as compared to 1994, due to increases in revenues of $194,000 and
decreases in expenses of $51,000.
Revenues increased by $194,000 for the three months ended March 31, 1995, as
compared to 1994 due to increases in rental revenue of $177,000 and interest
income of $17,000. Rental revenue increased primarily due to an increase in
rental rates at all of Registrant's properties, which were partially offset by
a slight increase in concessions at Village in the Woods and Coopers Pond
Apartments and a decrease in occupancy at Village in the Woods Apartments.
Occupancy at Registrant's other properties remained relatively constant.
Interest income increased due to an increase in average working capital
reserves available for investment and the effect of higher interest rates.
Expenses decreased by $51,000 for the three months ended March 31, 1995, as
compared to 1994, as the increases in operating expenses of $11,000 and
depreciation expense of $10,000 were more than offset by the decreases in
general and administrative expenses of $70,000 and interest expense of $2,000.
General and administrative expenses decreased due to a reduction in asset
management costs effective July 1, 1994. Operating, interest and depreciation
expense remained relatively constant.
7 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties
A description of the properties in which Registrant has an ownership interest
during the period covered by this Report, along with occupancy data, follows:
CENTURY PROPERTIES FUND XVII
OCCUPANCY SUMMARY
For the Quarters Ended March 31, 1995 and 1994
Average
Number Occupancy Rate (%)
of Date of March 31,
Name and Location Units Purchase 1995 1994
- ----------------- ----- -------- ------------------
Cherry Creek Gardens
Apartments 296 09/82 96 97
Englewood, Colorado
Creekside Apartments 328 10/82 97 98
Denver, Colorado
The Lodge Apartments 376 10/82 98 97
Denver, Colorado
The Village in the Woods
Apartments 530 10/82 93 96
Cypress, Texas
Cooper's Pond Apartments 463 03/83 91 90
Tampa, Florida
8 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Lawrence M. Whiteside, on behalf of himself and all other similarly
situated, v. Fox Capital Management Corporation, et al., Superior Court of the
State of California, San Mateo County, Case No. 390018 ("Whiteside").
Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all
others similarly situated, v. DeForest Ventures I L.P., et al., United States
District Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-2983-JEC ("Ruben").
Roger L. Vernon, individually and on behalf of all similarly situated
persons v. DeForest Ventures I L.P., et al., Circuit Court of Cook County,
County Departments, Chancery Division, State of Illinois, Case No. 94CH0100592
("Vernon").
James Andrews, et al., on behalf of themselves and all other similarly
situated v. Fox Capital Management Corporation, et al., United States District
Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-3351-JEC ("Andrews").
On March 16, 1995 the United States District Court for the Northern
District of Georgia, Atlanta Division, entered an order which granted
preliminary approval to a settlement agreement in the Ruben and Andrews
actions, conditionally certified two classes for purpose of settlement, and
authorized the parties to give notice to the classes of the terms of the
proposed settlement. Plaintiffs counsel in the Vernon and Whiteside action
have joined in the Settlement Agreement as well. The two certified classes
constitute all limited partners of Registrant and the eighteen other
affiliated partnerships who either tendered their units in connection with the
October tender offers or continue to hold their units in Registrant and the
other affiliated partnerships. Pursuant to the terms of the proposed
settlement, which are described in the notice sent to the class members in
March 1995, (and more fully described in the Amended Stipulation of Settlement
submitted to the court on March 14, 1995) all claims which either were made or
could have been asserted in any of the class actions would be dismissed with
prejudice and/or released. In consideration for the dismissal and/or release
of such claims, among other things, DeForest I would pay to each unit holder
who tendered their units in Registrant an amount equal to 15% of the original
tender offer price less attorney's fees and expenses. In addition, DeForest I
will commence a second tender offer for an aggregate number of units of
Registrant (including the units purchased in the initial tender) constituting
up to 49% of the total number of units of Registrant at a price equal to the
initial tender price plus 15% less attorney's fees and expenses. Furthermore,
under the terms of the proposed settlement, the Managing General Partner would
agree, among other things, to provide Registrant a credit line of $150,000 per
property which would bear interest at the lesser of prime rate plus 1% and the
rate permitted under the partnership agreement of Registrant. A hearing on
the final approval of the settlement is scheduled for May 19, 1995.
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
9 of 10
CENTURY PROPERTIES FUND XVII - FORM 10-Q - MARCH 31, 1995
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY PROPERTIES FUND XVII
By: FOX CAPITAL MANAGEMENT CORPORATION,
A General Partner
/S/ARTHUR N. QUELER
---------------------------------------
ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
10 of 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XVII and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 3,295,000 <F1>
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 65,085,000
<DEPRECIATION> (25,893,000) <F2>
<TOTAL-ASSETS> 44,061,000
<CURRENT-LIABILITIES> 0
<BONDS> 35,900,000
<COMMON> 0
0
0
<OTHER-SE> 7,286,000
<TOTAL-LIABILITY-AND-EQUITY> 44,061,000
<SALES> 0
<TOTAL-REVENUES> 2,903,000
<CGS> 0
<TOTAL-COSTS> 1,989,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 810,000
<INCOME-PRETAX> 81,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 81,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,000
<EPS-PRIMARY> 1
<EPS-DILUTED> 1
<FN>
<F1> Cash includes $896,000 of cash reserved for capital improvements.
<F2> Depreciation includes $1,430,000 of allowance for impairment of value.
</FN>
</TABLE>
