FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] TRANSITION REPORT PURSUANT TO 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 small business issuer as specified in its charter)
California 94-2782037
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XVII
CONSOLIDATED BALANCE SHEET
(Unaudited)
June 30, 1998
(in thousands, except unit data)
Assets
Cash and cash equivalents $ 6,010
Receivables and deposits 682
Restricted escrows 683
Other assets 243
Investment properties
Land $ 7,078
Buildings and related personal property 59,898
66,976
Less accumulated depreciation (31,445) 35,531
$ 43,149
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 220
Tenant security deposit liabilities 268
Accrued property taxes 403
Other liabilities 320
Mortgage notes payable 37,869
Partners' Capital (Deficit)
General partner's $ (7,251)
Limited partners' (75,000 units issued
and outstanding) 11,320 4,069
$ 43,149
See Accompanying Notes to Consolidated Financial Statements
b)
CENTURY PROPERTIES FUND XVII
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues:
Rental income $3,251 $3,031 $6,415 $6,037
Other income 206 192 394 383
Total revenues 3,457 3,223 6,809 6,420
Expenses:
Operating 1,294 1,343 2,546 2,557
General and administrative 62 77 144 131
Depreciation 582 557 1,153 1,104
Interest 937 912 1,877 1,824
Property taxes 204 205 389 383
Loss on disposal of property -- 64 36 64
Total expenses 3,079 3,158 6,145 6,063
Net income $ 378 $ 65 $ 664 $ 357
Net income allocated to
general partner $ 44 $ 8 $ 78 $ 42
Net income allocated to
limited partners 334 57 586 315
$ 378 $ 65 $ 664 $ 357
Net income per limited
partnership unit $ 4.45 $ .76 $ 7.81 $ 4.20
See Accompanying Notes to Consolidated Financial Statements
c)
CENTURY PROPERTIES FUND XVII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner's Partners' Total
Original capital contributions 75,000 $ -- $ 75,000 $ 75,000
Partners' (deficit) capital at
December 31, 1997 75,000 $ (7,329) $ 10,734 $ 3,405
Net income for the six
months ended June 30, 1998 -- 78 586 664
Partners' (deficit) capital at
June 30, 1998 75,000 $ (7,251) $ 11,320 $ 4,069
See Accompanying Notes to Consolidated Financial Statements
d)
CENTURY PROPERTIES FUND XVII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1998 1997
Cash flows from operating activities:
Net income $ 664 $ 357
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,153 1,104
Amortization of loan costs and debt discounts 808 737
Loss on disposal of property 36 64
Change in accounts:
Receivables and deposits 353 (53)
Other assets 37 (89)
Accounts payable 14 (103)
Tenant security deposit liabilities 4 (3)
Accrued property taxes (187) (190)
Other liabilities (30) 66
Net cash provided by operating activities 2,852 1,890
Cash flows from investing activities:
Net withdrawals from (deposits to) restricted escrows 269 (29)
Property improvements and replacements (903) (593)
Net cash used in investing activities (634) (622)
Cash flows from financing activities:
Payments on mortgage notes payable (219) (195)
Net cash used in financing activities (219) (195)
Net increase in cash and cash equivalents 1,999 1,073
Cash and cash equivalents at beginning of period 4,011 4,441
Cash and cash equivalents at end of period $6,010 $5,514
Supplemental disclosure of cash flow information:
Cash paid for interest $1,071 $1,052
See Accompanying Notes to Consolidated Financial Statements
e)
CENTURY PROPERTIES FUND XVII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Century
Properties Fund XVII (the "Partnership") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of Fox Capital Management Corporation ("FCMC" or the "Managing
General Partner"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and six month periods ended June 30, 1998, are not
necessarily indicative of the results that may be expected for the fiscal year
ending December 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-KSB for the year ended December 31, 1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
Fox Partners, a California general partnership, is the general partner of the
Partnership. The general partners of Fox Partners are FCMC, a California
corporation, Fox Realty Investors ("FRI"), a California general partnership, and
Fox Partners 82, a California general partnership. NPI Equity Investments II,
Inc., a Florida corporation ("NPI Equity"), is the general partner of FRI.
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Managing General Partner and NPI Equity are wholly-
owned by Insignia Properties Trust ("IPT"), which is an affiliate of Insignia
Financial Group, Inc. ("Insignia"). The Partnership agreement provides for
payments to affiliates for services and as reimbursement of certain expenses
incurred by affiliates on behalf of the Partnership. The following payments were
made to the Managing General Partner and affiliates in 1998 and 1997 (in
thousands):
Six Months Ended
June 30,
1998 1997
Property management fees (included in operating expenses) $ 335 $ 317
Reimbursement for services of affiliates, (included in
general and administrative expenses) 81 78
In addition, the Partnership paid construction oversight reimbursements of
approximately $30,000 and $8,000 during the six months ended June 30, 1998 and
1997, respectively, to an affiliate of the Managing General Partner.
For the period from January 1, 1997 through August 31, 1997, the Partnership
insured its properties under a master policy through an agency affiliated with
the Managing General Partner, but with an insurer unaffiliated with the Managing
General Partner. An affiliate of the Managing General Partner acquired, in the
acquisition of a business, certain financial obligations from an insurance
agency which was later acquired by the agent who placed the master policy. The
agent assumed the financial obligations to the affiliate of the Managing General
Partner which received payments on these obligations from the agent. The amount
of the Partnership's insurance premiums that accrued to the benefit of the
affiliate of the Managing General Partner by virtue of the agent's obligations
was not significant.
On August 28, 1997, an Insignia affiliate commenced tender offers for limited
partnership interests in six real estate limited partnerships (including the
Partnership) in which various Insignia affiliates act as general partner. The
Purchaser offered to purchase up to 22,500 of the outstanding units of limited
partnership interest in the Partnership, at $225.00 per Unit, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated August 28, 1997 (the "Offer to Purchase") and the related
Assignment of Partnership Interest attached as Exhibits (a)(1) and (a)(2),
respectively, to the Tender Offer Statement on Schedule 14D-1 originally filed
with the Securities and Exchange Commission on August 28, 1997. Because of the
existing and potential future conflicts of interest (described in the
Partnership's Statements of Schedule 14D-9 filed with the Securities and
Exchange Commission), neither the Partnership nor the Managing General Partner
expressed any opinion as to the Offer to Purchase and made no recommendation as
to whether unit holders should tender their units in response to the Offer to
Purchase. On October 6, 1997, Insignia Properties, L.P. closed the tender offer
and acquired 3,369.5 Units of limited partnership interest.
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in
Insignia Properties Trust, with Apartment Investment and Management Company
("AIMCO"), a publicly traded real estate investment trust. The closing, which
is anticipated to happen in the third quarter of 1998, is subject to customary
conditions, including government approvals and the approval of Insignia's
shareholders. If the closing occurs, AIMCO will then control the Managing
General Partner of the Partnership.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of five apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 1998 and 1997:
Average
Occupancy
Property 1998 1997
Cherry Creek Gardens Apartments
Englewood, Colorado 95% 95%
Creekside Apartments
Denver, Colorado 97% 96%
The Lodge Apartments
Denver, Colorado 97% 97%
The Village in the Woods Apartments
Cypress, Texas 95% 94%
Cooper's Pond Apartments
Tampa, Florida 96% 94%
The Partnership generated net income for the six months ended June 30, 1998, of
approximately $664,000 compared to net income of approximately $357,000 for the
corresponding period of 1997. For the three months ended June 30, 1998, the
Partnership generated net income of approximately $378,000 compared to net
income of approximately $65,000 for the three months ended June 30, 1997. The
increase in net income for the three and six month periods ended June 30, 1998,
is primarily attributable to an increase in rental income and a decrease in loss
on disposal of property due to roof replacements. The increase in rental income
was due to increases in average occupancy at Creekside Apartments, The Village
in the Woods Apartments, and Cooper's Pond Apartments, and an increase in
average rental rates at all of the Partnership's investment properties. The
decrease in loss on disposal of property is the result of fewer write-offs of
roofs that were not fully depreciated at the time of the replacement. Partially
mitigating the increase in rental income and a decrease in loss on disposal was
an increase in depreciation expense. The increase in depreciation expense is
due to an increase in depreciable assets as a result of improvements made at all
the Partnership's investment properties. Included in operating expenses for the
six months ended June 30, 1998, is approximately $91,000 of major repairs and
maintenance comprised primarily of parking lot and exterior building repairs.
Included in operating expenses for the six months ended June 30, 1997, is
approximately $110,000 of major repairs and maintenance comprised primarily of
exterior building repairs and landscaping.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. 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.
At June 30, 1998, the Partnership had cash and cash equivalents of approximately
$6,010,000 compared to approximately $5,514,000 at June 30, 1997. For the six
months ended June 30, 1998, net cash increased approximately $1,999,000 compared
to an increase of approximately $1,073,000 for the corresponding period of 1997.
Net cash provided by operating activities increased primarily as a result of an
increase in rental income as previously discussed. Also contributing to the
increase in cash provided by operating activities was an increase in cash
received from receivables and deposits and other assets and a decrease in cash
used for accounts payable due to the timing of receipts and payments. Net cash
used in investing activities increased due to an increase in property
improvements and replacements, which was partially offset by an increase in net
withdrawals from restricted escrows. Net cash used in financing activities
increased due to an increase in mortgage payments.
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 various properties to adequately maintain the
physical assets and other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $37,869,000, net of discount, is amortized over
varying periods with maturity dates ranging from July 1999 to July 2005, at
which time the properties will either be refinanced or sold. No distributions
were made to the limited partners during the six months ended June 30, 1998 and
1997. Future cash distributions will depend on the levels of net cash generated
from operations, refinancings, property sales and the availability of cash
reserves. The Managing General Partner currently anticipates that a distribution
of cash flow from operations will be made in September 1998.
Year 2000
The Partnership is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are not
completed timely, the Year 2000 Issue could have a material impact on the
operations of the Partnership.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date of
this quarterly report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The Plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint 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 and its 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 as well as a recently announced agreement between
Insignia and AIMCO. The complaint seeks monetary damages and equitable relief,
including judicial dissolution of the Partnership. The Managing General Partner
believes the action to be without merit, and intends to vigorously defend it.
On June 24, 1998, the Managing General Partner filed a motion seeking dismissal
of the action.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature. The Managing General Partner believes all such
pending or outstanding litigation will be resolved without a material adverse
effect upon the business, financial condition or operations of the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
b) Reports on Form 8-K:
None filed during the quarter ended June 30, 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTURY PROPERTIES FUND XVII
By: Fox Capital Management Corporation,
Its Managing General Partner
By: /s/ William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
BY: /s/ Ronald Uretta
Ronald Uretta
Vice President and Treasurer
Date: July 28, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Century Properties Fund XVII 1998 Second Quarter 10-QSB and is qualified
in its entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000356472
<NAME> CENTURY PROPERTIES FUND XVII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 6,010
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 66,976
<DEPRECIATION> 31,445
<TOTAL-ASSETS> 43,149
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 37,869
0
0
<COMMON> 0
<OTHER-SE> 4,069
<TOTAL-LIABILITY-AND-EQUITY> 43,149
<SALES> 0
<TOTAL-REVENUES> 6,809
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 6,145
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,877
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 664
<EPS-PRIMARY> 7.81<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
