SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission file number 0-11137
Century Properties Fund XVII
(Exact name of Registrant as specified in its charter)
California 94-2782037
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office)
(Zip Code)
(404) 916-9090
Registrant's telephone number, including area code
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 __________________.
1 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
June 30, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 2,680,000 $ 1,149,000
Reserve for capital improvements 863,000 1,596,000
Other assets 967,000 1,164,000
Real Estate:
Real Estate 65,452,000 64,917,000
Accumulated depreciation (24,956,000) (23,970,000)
Allowance for impairment of value (1,430,000) (1,430,000)
------------ ------------
Real estate, net 39,066,000 39,517,000
Deferred financing costs, net 549,000 615,000
Total assets $ 44,125,000 $ 44,041,000
------------ ------------
Liabilities and Partners' Equity
Accrued property taxes and other liabilities $ 790,000 $ 1,036,000
Notes payable 35,997,000 35,800,000
------------ ------------
Total liabilities 36,787,000 36,836,000
------------ ------------
Partners' Equity (Deficit):
General partners (6,865,000) (6,881,000)
Limited partners (75,000 units outstanding at
June 30, 1995 and December 31, 1994) 14,203,000 14,086,000
------------ ------------
Total partners' equity 7,338,000 7,205,000
------------ ------------
Total liabilities and partners' equity $ 44,125,000 $ 44,041,000
============ ============
See notes to consolidated financial statements.
2 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Consolidated Statements of Operations (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $ 5,891,000 $ 5,513,000
Interest income 72,000 28,000
----------- -----------
Total revenues 5,963,000 5,541,000
----------- -----------
Expenses:
Operating 3,108,000 3,109,000
Interest 1,617,000 1,627,000
Depreciation 986,000 966,000
General and administrative 119,000 292,000
----------- -----------
Total expenses 5,830,000 5,994,000
----------- -----------
Net income (loss) $ 133,000 $ (453,000)
=========== ===========
Net income (loss) per limited partnership unit $ 2 $ (5)
=========== ===========
See notes to consolidated financial statements.
3 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended
June 30, 1995 June 30, 1994
Revenues:
Rental $ 2,988,000 $ 2,787,000
Interest income 41,000 14,000
----------- -----------
Total revenues 3,029,000 2,801,000
----------- -----------
Expenses:
Operating 1,612,000 1,624,000
Interest 807,000 815,000
Depreciation 493,000 483,000
General and administrative 65,000 168,000
----------- -----------
Total expenses 2,977,000 3,090,000
----------- -----------
Net income (loss) $ 52,000 $ (289,000)
=========== ===========
Net income (loss) per limited partnership unit $ 1 $ (3)
=========== ===========
See notes to consolidated financial statements.
4 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended
June 30, 1995 June 30, 1994
Operating Activities:
Net income (loss) $ 133,000 $ (453,000)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 1,449,000 1,442,000
Changes in operating assets and liabilities:
Other assets 197,000 (464,000)
Accrued property taxes and other liabilities (246,000) 46,000
----------- ----------
Net cash provided by operating activities 1,533,000 571,000
----------- ----------
Investing Activities:
Decrease (increase) in reserve for capital improvements 733,000 (273,000)
Additions to real estate (535,000) (385,000)
----------- ----------
Net cash provided by (used in) investing activities 198,000 (658,000)
----------- ----------
Financing Activities:
Notes payable principal payments (200,000) (183,000)
----------- ----------
Cash (used in) financing activities (200,000) (183,000)
----------- ----------
Net Increase (Decrease) in Cash and Cash Equivalents 1,531,000 (270,000)
Cash and Cash Equivalents at Beginning of Period 1,149,000 1,511,000
----------- -----------
Cash and Cash Equivalents at End of Period $ 2,680,000 $ 1,241,000
=========== ===========
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 1,154,000 $ 1,151,000
=========== ===========
Supplemental Disclosure of Non-Cash Financing
Activities:
Amortization of note payable discount $ 397,000 $ 397,000
=========== ===========
See notes to consolidated financial statements.
5 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 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 accounts have
been reclassified in order to conform to the current period.
The financial information contained herein is unaudited. In the opinion of
management, however, all adjustments necessary for a fair presentation of
such financial information have been included. All adjustments are of a
normal recurring nature.
The results of operations for the six and three months ended June 30, 1995
and 1994 are not necessarily indicative of the results to be expected for
the full year.
At June 30, 1995, the Partnership had approximately $2,600,000 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 $72,000 and $98,000 for the six months ended June
30, 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 June 30, 1995 and 1994, affiliates of NPI, Inc.
received $293,000 and $182,000, respectively, which are included in
operating expenses.
3. Legal Proceedings
On May 19, 1995 final approval was given by the Court to a settlement
agreement relating to the tender offer litigation. As required by the terms
of the settlement agreement, DeForest Ventures I L.P. ("DeForest") commenced
a second tender offer (the "Second Tender Offer") on June 2, 1995 for units
of limited partnership in the Partnership. Pursuant to the Second Tender
Offer, DeForest acquired an additional 3,861 limited partnership units of
the Partnership.
4. Subsequent Event
On August 3, 1995, the Partnership paid $910,000 to satisfy in full the
$1,037,000 second mortgage encumbering the Village in the Woods Apartments
at a discount. The Partnership will recognize a $127,000 extraordinary gain
on extinguishment of debt during the third quarter of 1995.
6 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the 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 August 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
six months ended June 30, 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
$1,531,000 increase at June 30, 1995, as compared to December 31, 1994.
Registrant's $1,533,000 of net cash from operating activities and $198,000 of
net cash provided by investing activities was partially offset by $200,000 of
notes payable principal payments (financing activities). Cash provided by
operations improved at June 30, 1995, as compared to June 30, 1994, primarily
due improved operations. Cash provided by investing activities consisted of
$733,000 received from a reserve for capital improvements as reimbursement for
Registrant's prior year real estate improvements. Registrant also spent
$535,000 for real estate improvements during the six months ended June 30,
1995. Other than the $863,000 that Registrant has in reserve for capital
improvements, Registrant has no significant capital expenditures planned for
the year. All other increases (decreases) in certain assets and liabilities
are the result of the timing of receipt and payment of various operating
activities, none of which were significant.
On August 3, 1995, Registrant paid $910,000 to satisfy in full the $1,037,000
second mortgage encumbering the Village in the Woods Apartments at a discount.
Registrant will recognize a $127,000 extraordinary gain on extinguishment of
debt during the third quarter of 1995.
Working capital reserves are primarily invested in repurchase agreements
secured by United States Treasury obligations. The Managing General Partner
believes that, if market conditions remain relatively stable, cash flow from
operations, when combined with working capital reserves, will be sufficient to
fund required capital improvements and regular debt service payments in 1995
and the foreseeable future. Registrant 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.
As required by the terms of the settlement of the actions brought against,
among others, DeForest Ventures I L.P. ("DeForest") relating to the tender
offer made by DeForest in October 1994 (the "First Tender Offer") for units of
limited partnership interest in Registrant and certain affiliated
partnerships, DeForest commenced a second tender offer (the "Second Tender
Offer") on June 2, 1995 for units of limited partnership interest in
Registrant. Pursuant to the Second Tender Offer, DeForest acquired an
7 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
additional 3,861 units of Registrant which, when added to the units acquired
during the First Tender Offer, represents approximately 34.1% of the total
number of outstanding units of Registrant. The Managing General Partner
believes that the tender will not have a significant impact on future
operations or liquidity of Registrant (see Part II, Item 1, Litigation). Also
in connection with the settlement, an affiliate of the Managing General
Partner has made available to Registrant a credit line of up to $150,000 per
property owned by Registrant. Based on present plans, management does not
anticipate the need to borrow in the near future.
At this time, it appears that the investment objective of capital growth will
not be 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 for Registrant's properties in the future.
Results of Operations
Six Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $586,000 for the six months ended June 30, 1995,
as compared to 1994, due to increases in revenues of $422,000 and decreases in
expenses of $164,000.
Revenues increased by $422,000 for the six months ended June 30, 1995, as
compared to 1994, due to increases in rental revenue of $378,000 and interest
income of $44,000. Rental revenue increased primarily due to an increase in
rental rates at all of Registrant's properties, which was partially offset by
a slight increase in concessions at Village in the Woods Apartments.
Occupancy remained relatively stable at all of Registrant's properties.
Interest income increased due to an increase in average working capital
reserves available for investment and the effect of higher interest rates.
8 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Six Months Ended June 30, 1995 vs. June 30, 1994 (Continued)
Expenses declined by $164,000 for the six months ended June 30, 1995, as
compared to 1994, due to decreases in general and administrative expenses of
$173,000, operating expenses of $1,000 and interest expense of $10,000, which
were only slightly offset by an increase in depreciation expense of $20,000.
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.
Three Months Ended June 30, 1995 vs. June 30, 1994
Operating results improved by $341,000 for the three months ended June 30,
1995, as compared to 1994, due to increases in revenues of $228,000 and
decreases in expenses of $113,000.
Revenues increased by $228,000 for the three months ended June 30, 1995, as
compared to 1994, due to increases in rental revenue of $201,000 and interest
income of $27,000. Rental revenue increased primarily due to an increase in
rental rates at all of Registrant's properties, which was partially offset by
a decrease in occupancy at Coopers Pond 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 declined by $113,000 for the three months ended June 30, 1995, as
compared to 1994, due to decreases in general and administrative expenses of
$103,000, operating expenses of $12,000 and interest expense of $8,000, which
were only slightly offset by an increase in depreciation expense of $10,000.
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.
Properties
A description of the properties in which Registrant had an ownership interest
during the period covered by this Report, along with occupancy data, follows:
CENTURY PROPERTIES FUND XVII
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
---------------------------
Six Months Three Months
Number Ended Ended
of Date of June 30, June 30,
Name and Location Units Purchase 1995 1994 1995 1994
- ----------------- ----- -------- ---- ---- ---- ----
Cherry Creek Gardens
Apartments 296 09/82 97 97 98 98
Englewood, Colorado
9 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties (Continued)
Average
Occupancy Rate (%)
---------------------------
Six Months Three Months
Number Ended Ended
of Date of June 30, June 30,
Name and Location Units Purchase 1995 1994 1995 1994
- ----------------- ----- -------- ---- ---- ---- ----
Creekside Apartments 328 10/82 97 97 97 96
Denver, Colorado
The Lodge Apartments 376 10/82 98 97 98 96
Denver, Colorado
The Village in the Woods
Apartments 530 10/82 94 94 95 94
Cypress, Texas
Cooper's Pond Apartments 463 03/83 92 93 93 96
Tampa, Florida
10 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
PART II - OTHER INFORMATION
Item 1. Litigation
Lawrence M. Whiteside, on behalf of himself and all others similarly
situated, v. Fox Capital Management Corporation et al., Superior Court
of the State of California, San Mateo County, Case No. 390018.
Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all
others similarly situated, v. DeForest Ventures I L.P., et. al., United
States District Court, Northern District of Georgia, Atlanta Division,
Case No. 1-94-CV-2983-JEC.
Roger L. Vernon, individually and on behalf of all similarly situated
persons v. DeForest Ventures I L.P. et. al., Circuit Court of Cook
County, County Departments, Chancery Division, State of Illinois, Case
No. 94CH0100592.
James Andrews, et al., on behalf of themselves and all others similarly
situated v. Fox Capital Management Corporation, et al., United States
District Court, Northern District of Georgia, Atlanta Division, Case No.
1-94-CV-3351-JEC.
On May 19, 1995, the Court gave final approval to the settlement
agreement entered into, in March 1995, by the plaintiffs and the
defendants in the above actions. Pursuant to the Court's order, all
claims made by the plaintiffs were dismissed with prejudice subject to
the defendants compliance with the settlement agreement. As required by
the settlement agreement, DeForest Ventures I L.P. ("DeForest") and
DeForest Ventures II L.P. commenced a tender offer for units of limited
partnership interest in Registrant as well as 18 other affiliated
partnerships on June 2, 1995 and implemented the other provisions of the
settlement agreement. See Part I, Item 2, "Management's Discussion and
Analysis of Financial Condition."
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
11 of 12
CENTURY PROPERTIES FUND XVII - FORM 10-Q - JUNE 30, 1995
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTURY PROPERTIES FUND XVII
By: FOX CAPITAL MANAGEMENT CORPORATION,
A General Partner
/S/ ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
12 of 12
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 3,543,000<F1>
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 65,452,000
<DEPRECIATION> (26,386,000)<F2>
<TOTAL-ASSETS> 44,125,000
<CURRENT-LIABILITIES> 0
<BONDS> 35,997,000
<COMMON> 0
0
0
<OTHER-SE> 7,338,000
<TOTAL-LIABILITY-AND-EQUITY> 44,125,000
<SALES> 0
<TOTAL-REVENUES> 5,891,000
<CGS> 0
<TOTAL-COSTS> 4,094,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,617,000
<INCOME-PRETAX> 133,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 133,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 133,000
<EPS-PRIMARY> 2
<EPS-DILUTED> 2
<FN>
<F1> Cash includes $863,000 of cash reserved for capital improvements.
<F2> Depreciation includes $1,430,000 of allowance for impairment of value.
</FN>
</TABLE>
