FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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 June 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from.........to.........
Commission file number 0-11934
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)
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 XVIII
BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1997
Assets
Cash
Unrestricted $ 1,660
Restricted - tenant security deposits 95
Escrow for taxes 211
Restricted escrows 164
Other assets 189
Investment properties:
Land $ 7,296
Buildings and related personal property 19,470
26,766
Less accumulated depreciation (9,431) 17,335
$ 19,654
Liabilities and Partners' Capital
Liabilities
Other liabilities $ 155
Accrued taxes 191
Tenant security deposit liabilities 95
Mortgage notes payable 18,461
Partners' (deficit) capital
General partners $ (6,380)
Limited partners (75,000 units issued
and outstanding) 7,132 752
$ 19,654
See Accompanying Notes to Financial Statements
b) CENTURY PROPERTIES FUND XVIII
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 1,151 $ 1,102 $ 2,283 $ 2,190
Other income 93 90 162 171
Total revenues 1,244 1,192 2,445 2,361
Expenses:
Operating 296 321 600 638
General and administrative 68 84 105 169
Maintenance 107 107 206 224
Depreciation 170 170 340 336
Interest 344 349 686 701
Property tax 96 84 195 169
Total expenses 1,081 1,115 2,132 2,237
Net income $ 163 $ 77 $ 313 $ 124
Net income allocated to
general partner $ 16 $ 8 $ 31 $ 12
Net income allocated to
limited partners 147 69 282 112
Net income $ 163 $ 77 $ 313 $ 124
Net income per limited
partnership unit $ 1.96 $ .92 $ 3.76 $ 1.49
<FN>
See Accompanying Notes To Financial Statements
</TABLE>
c) CENTURY PROPERTIES FUND XVIII
STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(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, 1996 75,000 $ (6,411) $ 6,850 $ 439
Net income for the six
months ended June 30, 1997 -- 31 282 313
Partners' (deficit) capital
at June 30, 1997 75,000 $ (6,380) $ 7,132 $ 752
<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>
Six Months Ended
June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 313 $ 124
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 340 336
Amortization of loan costs 22 21
Change in accounts:
Other assets 155 56
Accrued expenses and other liabilities (150) 46
Net cash provided by operating activities 680 583
Cash flows used in investing activities:
Property improvements and replacements (65) (73)
Cash flows used in financing activities:
Payments on mortgage notes payable (214) (251)
Increase in unrestricted cash and cash equivalents 401 259
Unrestricted cash and cash equivalents at beginning
of period 1,259 938
Unrestricted cash and cash equivalents at end of period $ 1,660 $ 1,197
Supplemental disclosure of cash flow information:
Cash paid for interest $ 665 $ 678
Supplemental disclosure of non-cash
financing activities:
Accrued interest added to mortgage notes
payable balance $ -- $ 5
<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" or the "Registrant") 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 Corp. ("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, 1997, are not necessarily indicative
of the results that may be expected for the fiscal year ending December 31,
1997. For further information, refer to the financial statements and footnotes
thereto included in the Partnership's annual report on Form 10-KSB for the year
ended December 31, 1996.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The Partnership has no employees and is dependent on its general partner Fox
Realty Investors ("FRI"), a California general partnership, and the Managing
General Partner, a California corporation, and their 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.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the
issued and outstanding shares of stock of FCMC, NPI Equity Investments II, Inc.
("NPI Equity"), the managing general partner of FRI, and National Property
Investors, Inc. ("NPI"). NPI Equity is a wholly-owned subsidiary of NPI. In
connection with these transactions, affiliates of Insignia appointed new
officers and directors of NPI Equity and FCMC.
The following transactions with affiliates of Insignia, NPI, and affiliates of
NPI were charged to expense in 1997 and 1996:
Six Months Ended
June 30,
(in thousands)
1997 1996
Property management fees (included in operating
expenses) $ 121 $ 117
Reimbursement for services of affiliates
(included in general and administrative
expenses) 64 108
The Partnership insures 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.
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 six
months ended June 30, 1997 and 1996:
Average
Occupancy
Property 1997 1996
Oak Run Apartments
Dallas, Texas 97% 97%
Overlook Point Apartments
Salt Lake City, Utah 94% 97%
The Partnership's net income for the six months ended June 30, 1997, was
$313,000, of which $163,000 was reported in the second quarter. The
Partnership's net income for the corresponding periods in 1996 was $124,000 and
$77,000, respectively. The increase is attributable to an increase in rental
income and a decrease in expenses. Rental income increased, despite a drop in
occupancy at Overlook Point Apartments, due to rental rate increases at both of
the Partnership's investment properties. In addition to the increase in rental
income was a decrease in general and administrative expenses. The decrease in
general and administrative expenses is due to a decrease in expense
reimbursements related to the relocation of the partnership administration
offices during 1996. Partially offsetting these favorable variances was a
slight increase in property tax expense. This increase is due to the increased
assessed value at Oak Run Apartments.
Included in maintenance expense for the six months ended June 30, 1997 and 1996,
was $29,000 and $41,000, respectively, of exterior building improvements, major
landscaping, window coverings, and swimming pool repairs.
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 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, 1997, the Partnership had unrestricted cash and cash equivalents of
$1,660,000, as compared to $1,197,000 at June 30, 1996. Net cash provided by
operating activities for the six months ended June 30, 1997, increased as a
result of the increase in net income, as discussed above. Additionally, other
assets decreased primarily due to funds withdrawn from the tax escrow account to
pay the property taxes due. The payment of those taxes resulted in a decrease in
accrued expenses and other liabilities. Net cash used in investing activities
is consistent with that of the prior year. The decrease in net cash used in
financing activities is due to the increase in principal payments in 1996 on the
mortgage debt secured by Oak Run Apartments, as a result of increased cash flows
at the property. Cash flows at Oak Run Apartments 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 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 $18,461,000 is amortized over varying periods with
balloon payments due in 1999 and 2000 of $7,877,000 and $6,888,000,
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 during the first six months of 1997 or 1996.
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:
None were filed during the quarter ended June 30, 1997.
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 CAPITAL MANAGEMENT CORPORATION,
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 29, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XVIII 1997 Second 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,660
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,766
<DEPRECIATION> 9,431
<TOTAL-ASSETS> 19,654
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 18,461
0
0
<COMMON> 0
<OTHER-SE> 752
<TOTAL-LIABILITY-AND-EQUITY> 19,654
<SALES> 0
<TOTAL-REVENUES> 2,445
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,132
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 686
<INCOME-PRETAX> 313
<INCOME-TAX> 0
<INCOME-CONTINUING> 313
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 313
<EPS-PRIMARY> 3.76<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
