FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(As last amended in Rel. No. 312905, eff. 4/26/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 0-11934
CENTURY PROPERTIES FUND XVIII
(Exact name of small business issuer as specified in its charter)
California 94-2834149
(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) (Zip Code)
(864) 239-1000
(Issuer's telephone number)
Indicate by check mark whether the 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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CENTURY PROPERTIES FUND XVIII
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 1,066
Deferred financing costs, net 199
Other assets 502
Investment properties:
Land $ 7,296
Buildings and related personal property 19,218
26,514
Less accumulated depreciation (8,578) 17,936
$ 19,703
Liabilities and Partners' Capital (Deficit)
Liabilities
Accrued expenses and other liabilities $ 365
Mortgage notes payable 18,998
Partners' Capital (Deficit):
General partner $ (6,420)
Limited partners (75,000 units issued
and outstanding) 6,760 340
$ 19,703
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
b) CENTURY PROPERTIES FUND XVIII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Revenues:
Rental income $ 1,088 $ 1,041
Other income 81 49
Total revenues 1,169 1,090
Expenses:
Operating 519 481
General and administrative 85 58
Depreciation 166 158
Interest 352 370
Total expenses 1,122 1,067
Net income $ 47 $ 23
Net income allocated to general partner $ 5 $ 2
Net income allocated to limited partners 42 21
$ 47 $ 23
Net income per limited partnership unit $ .56 $ .28
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
c) CENTURY PROPERTIES FUND XVIII
STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 75,000 $ -- $ 75,000 $ 75,000
Partners' (deficit) capital
at December 31, 1995 75,000 $(6,425) $ 6,718 $ 293
Net income for the three
months ended March 31, 1996 -- 5 42 47
Partners' (deficit) capital
at March 31, 1996 75,000 $(6,420) $ 6,760 $ 340
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
d) CENTURY PROPERTIES FUND XVIII
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 47 $ 23
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 166 158
Amortization of loan costs 11 18
Change in accounts:
Other assets 125 139
Accrued expenses and other liabilities (51) (130)
Net cash provided by operating activities 298 208
Cash flows from investing activities:
Property improvements and replacements (37) (113)
Net cash used in investing activities (37) (113)
Cash flows from financing activities:
Payments on mortgage notes payable (133) (33)
Net cash used in financing activities (133) (33)
Increase in cash and cash equivalents 128 62
Cash and cash equivalents at beginning of period 938 972
Cash and cash equivalents at end of period $ 1,066 $ 1,034
Supplemental disclosure of cash flow information:
Cash paid for interest $ 337 $ 340
Supplemental disclosure of non-cash
financing activities:
Accrued interest added to mortgage notes
payable balance $ 4 $ 12
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
e) CENTURY PROPERTIES FUND XVIII
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements of Century Properties Fund XVIII
(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 the Managing General Partner, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three month period ended March 31, 1996,
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Note B - Transactions With Affiliated Parties
The Partnership has no employees and is dependent on NPI Equity Investments II,
Inc. ("NPI Equity" or the "Managing General Partner") and its affiliates for the
management and administration of all partnership activities. 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 transactions with affiliates of Insignia Financial Group, Inc.
("Insignia"), National Property Investors, Inc. ("NPI"), and affiliates of NPI
were charged to expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $ 58,000 $ 46,000
Reimbursement for services of affiliates
(included in general and administrative
and operating expenses) 62,000 36,000
Services relating to successful real estate tax
appeals (included in operating expenses) -- 7,000
</TABLE>
For the period from January 19, 1996, to March 31, 1996, the Partnership insured
its properties under a master policy through an agency and 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 current
year's master policy. The current agent assumed the financial obligations to
the affiliate of the Managing General Partner who received payments on these
obligations from the agent. The amount of the Partnership's insurance premiums
accruing to the benefit of the affiliate of the Managing General Partner by
virtue of the agent's obligations is not significant.
The general partner of the Partnership is Fox Partners, a California general
partnership, whose general partners are Fox Capital Management Corporation
("FCMC"), a California corporation, Fox Realty Investors ("FRI"), a California
general partnership and Fox Partners 82, a California general partnership.
On December 6, 1993, the shareholders of FCMC entered into a Voting Trust
Agreement with NPI Equity pursuant to which NPI Equity was granted the right to
vote 100 percent of the outstanding stock of FCMC and NPI Equity became the
managing general partner of FRI. As a result, NPI Equity became responsible for
the operation and management of the business and affairs of the Partnership and
the other investment partnerships originally sponsored by FCMC and/or FRI. NPI
Equity is a wholly-owned subsidiary of NPI. The shareholders of FCMC and the
partners in FRI retain indirect economic interests in the Partnership and such
other investment limited partnerships, but have ceased to be responsible for the
operation and management of the Partnership and such other partnerships.
On August 17, 1995, the stockholders of NPI entered into an agreement to sell to
IFGP Corporation, a Delaware corporation, an affiliate of Insignia, a Delaware
corporation, all of the issued and outstanding common stock of NPI for an
aggregate purchase price of $1,000,000. The closing of the transactions
contemplated by the above mentioned agreement (the "Closing") occurred on
January 19, 1996.
Upon the Closing, the officers and directors of NPI and the Managing General
Partner resigned and IFGP Corporation caused new officers and directors of each
of those entities to be elected.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the three
months ended March 31, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Oak Run Apartments
Dallas, Texas 97% 99%
Overlook Point Apartments
Salt Lake City, Utah 97% 95%
The Partnership's net income for the three months ended March 31, 1996, was
approximately $47,000 versus $23,000 for the same period of 1995. The increase
in income is primarily attributable to an increase in rental income due to
rental rate increases at both of the Partnership's properties. In addition,
other income increased due to the receipt in 1996 of a property tax refund
relating to 1995 property taxes. Partially offsetting these increases to income
was an increase in general and administrative expenses due to an increase in
expense reimbursements related to the operation of two partnership
administration offices during the first quarter of 1996 and the relocation of
the partnership administration offices during the same period.
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 rent, 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 March 31, 1996, the Partnership had unrestricted cash of approximately
$1,066,000 as compared to $1,034,000 at March 31, 1995. Net cash provided by
operating activities for the three months ended March 31, 1996, increased
primarily as a result of the decrease in cash used by accrued expenses and other
liabilities including an increase in prepayments of rents. Also contributing to
the increase was the increase in net income as discussed above. Net cash used
in investing activities decreased due to a decrease in property improvements and
replacements due to the exterior renovations and the construction of a fitness
center at Oak Run in the first quarter of 1995. The increase in cash used in
financing activities is due to the increase in principal payments on Oak Run's
first and second mortgages, as a result of increased cash flows at the property
in 1996. Cash flows at Oak Run increased primarily as a result of the decrease
in capital expenditures in 1996.
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. At the present time, the Partnership has no outstanding amounts
due under this line of credit. Based on present plans, management 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 property 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 $18,998,000 is amortized over varying periods with balloon
payments due in 1999 and 2000 of approximately $7,869,000 and $6,489,000,
respectively, at which time the properties will either be refinanced or sold.
Future cash distributions will depend on the levels of cash generated from
operations, property sales, and the availability of cash reserves. No cash
distributions were made in 1995 or during the first quarter of 1996. 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.
PART II - OTHER INFORMATION
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:
A Form 8-K dated January 19, 1996, was filed reporting the change
in control of the Registrant.
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 XVIII
By: FOX PARTNERS
Its General Partner
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
Principal Financial Officer and
Principal Accounting Officer
Date: May 13, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties XVIII 1996 First Quarter 10-QSB and is qualified in its entirety by
reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000704271
<NAME> CENTURY PROPERTIES FUND XVIII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,066
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,514
<DEPRECIATION> 8,578
<TOTAL-ASSETS> 19,703
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 18,998
0
0
<COMMON> 0
<OTHER-SE> 340
<TOTAL-LIABILITY-AND-EQUITY> 19,703
<SALES> 0
<TOTAL-REVENUES> 1,169
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,122
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 352
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47
<EPS-PRIMARY> .56
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
