<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
FOR QUARTER ENDED MARCH 31, 1996
COMMISSION FILE NUMBER 33-22857
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. EMPLOYER IDENTIFICATION NO. 95-4166241
9090 Wilshire Blvd., Suite 201
Beverly Hills, Calif. 90211
Registrant's Telephone Number,
Including Area Code (310) 278-2191
Securities Registered Pursuant to
Section 12(b) or 12(g) of the Act
NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed with the Commission by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding twelve 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
--- ---
<PAGE> 2
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
PART I. FINANCIAL INFORMATION
<TABLE>
<S> <C>
Item 1. Financial Statements and Notes to Financial Statements
Balance Sheets, March 31, 1996 and December 31, 1995 .................................. 1
Statements of Operations,
Three Months Ended March 31, 1996 and 1995..................................... 2
Statement of Partners' Capital (Deficiency)
Three Months Ended March 31, 1996 ............................................. 3
Statements of Cash Flows
Three Months Ended March 31, 1996 and 1995..................................... 4
Notes to Financial Statements ......................................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................................... 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings...................................................................... 12
Item 6. Exhibits and Reports on Form 8-K....................................................... 14
Signatures .......................................................................................... 15
</TABLE>
<PAGE> 3
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(a California limited partnership)
BALANCE SHEETS
MARCH 31, 1996 AND DECEMBER 31, 1995
ASSETS
<TABLE>
<CAPTION>
1996 1995
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
RENTAL PROPERTY (Notes 1, 2 and 3) $34,419,692 $34,772,331
CASH AND CASH EQUIVALENTS (Note 1) 3,093,938 2,738,045
RESTRICTED CASH (Notes 1 and 4) 158,700 158,700
OTHER ASSETS (Note 5) 9,382 15,102
DUE FROM RELATED PARTIES (Note 3) 183,095 --
----------- -----------
$37,864,807 $37,684,178
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES (Note 3) $ 492,853 $ 359,359
DUE TO GENERAL PARTNER (Note 3) 90,000 150,000
PREPAID RENT 44,272 46,965
SECURITY DEPOSITS 308,511 310,099
----------- -----------
935,636 866,423
COMMITMENTS AND CONTINGENCIES (Note 4)
PARTNERS' CAPITAL (Note 1) 36,929,171 36,817,755
----------- -----------
$37,864,807 $37,684,178
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(a California limited partnership)
STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
REVENUES
Rental income $1,262,662 $1,371,256
Interest and other income (Note 1) 63,403 104,705
---------- ----------
1,326,065 1,475,961
---------- ----------
EXPENSES
Operating (Note 3) 273,189 378,114
Property taxes 71,022 128,854
Management fee - related party in 1995 (Note 3) 39,058 59,921
General and administrative (Note 3) 110,405 99,913
Depreciation 177,639 178,889
---------- ----------
671,313 845,691
---------- ----------
NET INCOME $ 654,752 $ 630,270
========== ==========
NET INCOME PER LIMITED
PARTNERSHIP INTEREST $ 0.09 $ 0.09
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(a California limited partnership)
STATEMENT OF PARTNERS' CAPITAL (DEFICIENCY)
THREE MONTHS ENDED MARCH 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Special Limited
General Limited Partner
Partners Partners (Note 1) Total
------------- ------------ ----------------- ------------
<S> <C> <C> <C> <C>
PARTNERSHIP INTERESTS,
March 31, 1996 7,258,000
============
BALANCE, January 1, 1996 $ (287,786) $ 37,105,541 $ -- $ 36,817,755
Distributions (543,336) (543,336)
Net income for the three months
ended March 31, 1996 6,548 648,204 -- 654,752
------------ ------------ ----------------- ------------
BALANCE, March 31, 1996 $ (281,238) $ 37,210,409 $ -- $ 36,929,171
============ ============ ================= ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
CENTURY HILLCRESTE APARTMENTS INVESTORS, L.P.
(a California limited partnership)
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 654,752 $ 630,270
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 177,639 178,889
Decrease in other assets 5,720 171,198
Increase due to related parties (183,095) --
Increase in accounts payable and
accrued liabilities 133,494 6,384
Increase in due to general partner (60,000) (43,010)
(Decrease) increase in security deposits (1,588) 16,503
(Decrease) increase in prepaid rent (2,693) 4,345
----------- -----------
Net cash provided by operating activities 724,229 964,579
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments receivable pursuant to the minimum distribution guarantee 175,000 --
Distributions to partners (543,336) (548,825)
----------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 355,893 415,754
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,738,045 2,425,486
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 3,093,938 $ 2,841,240
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The information contained in the following notes to the financial
statements is condensed from that which would appear in the annual
financial statements; accordingly, the financial statements included
herein should be reviewed in conjunction with the financial statements
and related notes thereto contained in the Annual Report for the year
ended December 31, 1995 prepared by Century HillCreste Apartment
Investors, L.P. (the "Partnership"). Accounting measurements at interim
dates inherently involve greater reliance on estimates than at year
end. The results of operations for the interim periods presented are
not necessarily indicative of the results for the entire year.
In the opinion of the Partnership, the accompanying unaudited financial
statements contain all adjustments (consisting primarily of normal
recurring accruals) necessary to present fairly the financial position
as of March 31, 1996, and the results of operations and changes in cash
flows for the three months then ended.
ORGANIZATION
The Partnership, a California limited partnership, was formed on June
6, 1988, with National Partnership Investments Corp. ("NAPICO" or the
"Managing General Partner"), and HillCreste Properties Inc.
("Non-Managing General Partner") as general partners. On October 26,
1988, the Partnership issued to investors (the "Limited Partners")
7,258,000 depositary units (each depositary unit being entitled to the
beneficial interest of a limited partnership interest) for a total
amount raised of $72,580,000, through a public offering.
Concurrent with the issuance of the depositary units, the Partnership
purchased a 315-unit luxury apartment complex in West Los Angeles,
California (the "Property") from Casden Properties (hereinafter
referred to as the "Seller"). To complete the purchase of the Property,
the Seller purchased a 10% special limited partnership interest in the
Partnership for $6,855,000. For its contribution, the Seller has rights
to receive an allocation of the Partnership's net cash from operations
after the Limited Partners receive a specified priority return.
Among other provisions, the Partnership Agreement provides that the 10%
special limited partnership interest is subordinate to the other
Limited Partners' specified priority return in the case of
distributions of net cash flow from operations, plus the other Limited
Partners' return of capital in the case of net sales or refinancing
proceeds.
Casden Investment Corporation, an affiliate of the Seller, owns all of
the outstanding common stock of NAPICO. DA Group Holdings Inc. owns
100% of the stock of HillCreste Properties Inc.
5
<PAGE> 8
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
MINIMUM DISTRIBUTION GUARANTEE
The Minimum Distribution Guarantee Agreement (the "Guarantee
Agreement") required the Seller, who is also the special limited
partner of the Partnership, to make certain payments to the
Partnership, if and when necessary, in an amount sufficient to enable
the Partnership to provide the Limited Partners with distributions
sufficient to achieve a minimum annual return based upon the Limited
Partners' investment in the Partnership, through December 31, 1993, as
follows:
<TABLE>
<CAPTION>
Years Ended December 31, Annual Return on Investment
------------------------ ---------------------------
<S> <C>
1988 8.0%
1989 8.0%
1990 8.5%
1991 9.0%
1992 9.0%
1993 9.0%
</TABLE>
Pursuant to the Memorandum of Understanding entered into on August 11,
1995, the Seller agreed to pay to the Partnership, the sum of $350,000
in two equal installments of $175,000 each; the first such $175,000
payment was made in August 1995 and the second payment was made on May
1, 1996. These payments represent the amount of a real estate tax
refund received in 1994 for overpayment of prior year taxes which had
previously been offset against amounts receivable from the Seller under
the Guarantee Agreement.
Through March 31, 1996, the Seller has funded a total of $12,955,998
directly to the Partnership for distributions to the Limited Partners
pursuant to the Guarantee Agreement, which amount includes the $175,000
paid in August 1995, referred to above. The period covered by the
Guarantee Agreement expired on December 31, 1993. Except with respect
to the payments made pursuant to the Memorandum of Understanding,
commencing in 1994, distributions, if any, to the Partners are made
from cash flow from operations. The minimum distribution guarantee
payments from the Seller have been reflected as a reduction in the
carrying amount of the Property.
In addition, in August 1995, the Seller made an additional payment of
$135,000 to the Partnership pursuant to the Memorandum of Understanding
entered into on August 11, 1995, which amount represents interest on
late payments to the Partnership covering the period from the second
quarter of 1991 to the fourth quarter of 1993 pursuant to the Guarantee
Agreement.
6
<PAGE> 9
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEPRECIATION
Depreciation is reported using the straight-line method over the
estimated useful lives of the buildings and equipment as follows:
Buildings 35 years
Furniture and equipment 5 years
CASH AND CASH EQUIVALENTS
Cash and cash equivalents consists of cash and bank certificates of
deposit with an original maturity of three months or less
RESTRICTED CASH
Restricted cash consists of bank certificates of deposits assigned to
the City of Los Angeles in lieu of purchasing a subdivision improvement
bond to effectuate the privatization of streets located within the
Property's perimeter (see Note 4).
INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements as such taxes, if any, are the liability of the
individual partners.
NET INCOME PER LIMITED PARTNERSHIP UNIT
Net income per limited partner unit was computed by dividing the
limited partners' share of net income (99%) by the number of limited
partner units outstanding during the year. The number of limited
partner units was 7,258,000 for the periods presented.
NOTE 2 - RENTAL PROPERTY
At March 31, 1996 and December 31, 1995, the rental property consists
of the following:
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Land $16,175,000 $16,175,000
Building 24,694,402 24,869,402
Furniture and equipment 3,870,000 3,870,000
----------- -----------
44,739,402 44,914,402
Less accumulated depreciation 10,319,710 10,142,071
----------- -----------
$34,419,692 $34,772,331
=========== ===========
</TABLE>
Minimum distribution guarantee payments have been reflected as a reduction in
the carrying value of the Property (Note 1).
7
<PAGE> 10
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
NOTE 3 - FEES PAID TO GENERAL PARTNERS AND AFFILIATES
In accordance with the Partnership Agreement certain fees and
reimbursements are paid to the general partners and their affiliates as
follows:
(a) A Partnership management fee payable to the Managing General
Partner of $50,000 annually. One quarter of this fee is
included in general and administrative expenses for each
quarter.
(b) Through December 31, 1995, the Property was managed by an
affiliate of the Managing General Partner for a fee of 3% of
rental revenue (5% prior to February 1, 1995). The property
management was transferred to an unaffiliated agent, on
January 1, 1996, who will manage the property for a management
fee of 3% of rental revenue.
(c) Partnership expense reimbursements, payable to the
Non-Managing General Partner, not to exceed $50,000 annually.
The 1990 reimbursement has been accrued and is included in
accounts payable and accrued liabilities at March 31, 1996 and
December 31, 1995. The Non-Managing General partner has
requested reimbursement for expenses for 1991 through March
31, 1996, however, the Managing General Partner is disputing
such reimbursement and none have been accrued.
(d) The Partnership is obligated to pay fees to the Managing
General Partner or its affiliates upon sale of the Property
based upon the form of such sale. The payment of such fees are
subordinated to certain preferred returns to the Limited
Partners.
(e) 1% of distributions (as defined in the Partnership Agreement)
is payable quarterly to the Managing General Partner.
At March 31, 1996, $90,000 was due to the Non-Managing General Partner
for reimbursement of professional fees paid on behalf of the
Partnership in connection with issues raised in the Memorandum of
Understanding and $183,095 was due from the Seller and the former
affiliated management company (Note 1), which amounts were paid on
May 1, 1996.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
a. Approvals from the City of Los Angeles were obtained to
"privatize" the streets and alleys providing access to the
Property and to construct wrought iron security fencing with
controlled entrances into the Property. The final resolution
vacating the streets and alleys was approved on December 31,
1994. Landscape and architectural drawings have been prepared
for the construction of the perimeter fencing and related
improvements, including a guardhouse at the Ambassador Street
entrance and a directory/trellis at the Peerless Street
location. These plans were approved and a building permit was
issued by the City of Los Angeles on June 20, 1995. This
permit was to expire on December 20, 1995, however, a six
month extension to June 20, 1996 was approved.
8
<PAGE> 11
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MARCH 31, 1996
NOTE 4 - COMMITMENTS AND CONTINGENCIES (CONTINUED)
As a condition to its approval of the proposed
"privatization", the City of Los Angeles requires the
construction of a storm drain and related improvements, for
which an improvement agreement and guarantee in the amount
$158,000 has been filed with the City of Los Angeles.
Presently, plans for the improvements are being bid out and
other construction coordination issues are being resolved.
Thereafter, the work on the improvements will commence.
b. The Managing General Partner of the Partnership is a plaintiff
in various lawsuits and has also been named as a defendant in
other lawsuits arising from transactions in the ordinary
course of business. In the opinion the Managing General
Partner, the claims will not result in any material liability
to the Partnership.
5. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair value
information about financial instruments. The carrying amount of assets
and liabilities reported on the balance sheets that require such
disclosure approximates fair value due to their short-term maturity.
9
<PAGE> 12
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
CAPITAL RESOURCES AND LIQUIDITY
The Partnership raised proceeds of $72,580,000 from the sale of limited
partnership interests, pursuant to a public offering and received
additional capital contributions from the General Partners of $1,050 and
from the special limited partner of $6,855,000, all of which funds were
previously expended. Currently, the only sources of Partnership revenue
consist of income from rental operations at the Property and interest
earned on Partnership reserves.
Concurrent with the issuance of depositary units to the Limited
Partners, the Partnership received the Guarantee Agreement from the
Seller, (now an affiliate of the Managing General Partner), which
required the Seller to make payments or loans as provided therein, if
and when necessary, in an amount sufficient to enable the Partnership to
provide the Limited Partners with minimum distributions through December
1993.
Pursuant to the Memorandum of Understanding entered into on August 11,
1995, the Seller agreed to pay to the Partnership the sum of $350,000 in
two equal installments of $175,000 each; the first such $175,000 payment
was made in August 1995 and the second payment was made on May 1, 1996.
These payments represent the amount of a real estate tax refund received
in 1994 for overpayment of prior year taxes which had previously been
offset against amounts receivable from the Seller under the Guarantee
Agreement.
Through March 31, 1996, the Seller has funded $12,955,998 directly to
the Partnership for distributions to the Limited Partners pursuant to
the Guarantee Agreement, which includes the $175,000 made in August 1995
referred to above.
Concurrent with the execution of the Memorandum of Understanding on
August 11, 1995, the Partnership received the sum of $135,000 from the
Seller as compensation for late distribution payments under the
Guarantee Agreement. This amount was distributed pro rata to the Limited
Partners and represents interest on such late payments calculated at the
rate of approximately five percent (5%) per annum, from the date that
each such distribution was required to be made to Limited Partners to
the date such distribution was actually made.
Approvals from the City of Los Angeles were obtained to "privatize" the
streets and alleys providing access to the Property and to construct
wrought iron security fencing with controlled entrances into the
Property. The final resolution vacating the streets and alleys was
approved on December 31, 1994. Landscape and architectural drawings have
been prepared for the construction of the perimeter fencing and related
improvements, including a guardhouse at the Ambassador Street entrance
and a directory/trellis at the Peerless Street location. These plans
were approved and a building permit was issued by the City of Los
Angeles on June 20, 1995. This permit was to expire on December 20,
1995, however, a six month extension to June 20, 1996 was approved.
10
<PAGE> 13
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
SEPTEMBER 30, 1995
ITEM 2. MANAGEMENT'S ANALYSIS AND DISCUSSION OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS (CONTINUED)
As a condition to its approval of the proposed "privatization", the City
of Los Angeles requires the construction of a storm drain and related
improvements, for which an improvement agreement and guarantee in the
amount $158,000 has been filed with the City of Los Angeles.
Presently, plans for the improvements are being bid out and other
construction coordination issues are being resolved. Thereafter, the
work on the improvements will commence.
RESULTS OF OPERATIONS
Occupancy averaged 94% for three months ended March 31, 1996 as compared
to an average of 98% for the same time period in 1995. Operating
expenses decreased primarily due to the reduced rental demand.
Since the investigation and recommendation of the staff of the
Securities and Exchange Commission (the "Commission") (see "Legal
Proceedings" for further discussion) concerning the Partnership's
financial statements and Commission filings, a portion of the legal fees
incurred in responding to the staff have been allocated to and charged
to the Partnership. These legal fees primarily account for the increase
in general and administrative expenses in 1996. In the opinion of the
Managing General Partner, any action that might result from the
Commission staff's investigation is not likely to have a material
adverse effect on the Partnership.
11
<PAGE> 14
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1996
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Non-Managing General Partner, and certain of its affiliates, on their own
behalf and on behalf of the Partnership and certain other partnerships with
which they are associated and NAPICO, and certain of its affiliates, have
entered into a Memorandum of Understanding dated August 11, 1995 and a
Supplement to Memorandum of Understanding dated April 30, 1996, ("MOU"). In
addition to establishing certain Partnership controls, the MOU resolves and
settles various management and control issues which were under discussion for
some time and various claims which were raised in a lawsuit filed in the Los
Angeles Superior Court on June 9, 1995 by The Non-Managing General Partner, the
Partnership and others against, among others, the Managing General Partner ("the
Lawsuit"). All parties entered into the MOU without any admission of wrongdoing
or liability by any defendant as to any claim in the Lawsuit, in a desire to
avoid continued litigation that would be expensive, time consuming and complex.
By virtue of the MOU, the parties thereto have agreed, among other things, to
the following:
1. To compensate the Partnership and its Limited Partners for
guarantee and distribution payments that were not made on a timely
basis in 1991, 1992, 1993, and 1994, the Partnership received the
sum of $135,000 from its property management company, Mayer
Management, Inc. ("MMI"), such amount was distributed pro rata to
the Limited Partners.
2. Casden Properties paid to the Partnership $350,000, representing
the amount of a real estate tax rebate which had previously been
offset against amounts due from Casden Properties under the
Guarantee Agreement. Although the parties disagree about the
appropriate accounting treatment for this tax rebate, Casden
Properties has agreed to repay this rebate to the Partnership in
two equal installments of $175,000 each; the first such $175,000
payment was made on August 11, 1995 and the second payment was
made on May 1, 1996.
3. An analysis was prepared of the books and records of the
Partnership including an analysis of the books and records of the
master disbursement account maintained by the Partnership's former
property management company, MMI. On May 1, 1996, based on the
analysis, MMI paid the Partnership $8,095 in interest related to
funds it maintained in the master disbursement account.
4. Property management responsibility for the HillCreste property was
transferred from MMI to an independent property management
company, Trammell Crow Residential Services effective January 1,
1996.
5. On May 1, 1996, the Partnership reimbursed The Non-Managing
General Partner $90,000 for professional fees, which were
estimated to have been paid on behalf of the Partnership in
connection with issues raised in the MOU.
12
<PAGE> 15
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1996
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS (CONTINUED)
6. The Partnership has employed an independent Cash Manager,
designated by the Non-Managing General Partner and approved by the
Managing General Partner, to perform cash management services,
including maintenance of the Partnership's bank accounts and
reserves, payment of property management fees and other accounts
payable, payments to affiliates of your Managing General Partner,
and payment of cash distributions to the Limited Partners. The
Managing General Partner has agreed to prepare detailed annual
budgets to be approved by the Non-Managing General Partner and
thereafter used by the Cash Manager as a guide and control over
Partnership operations.
7. Upon the uncured breach of certain provisions of the MOU or upon a
future breach of NAPICO's fiduciary duties, the Non-Managing
General Partner may cause the Managing General Partner to (i)
surrender its rights as Managing General Partner of the
Partnership or (ii) resign as the Managing General Partner of the
Partnership and become a limited partner thereof.
The staff of the Securities and Exchange Commission (the "Commission") informed
the Partnership and NAPICO in August, 1995 that it intends to recommend that
the Commission institute a civil action and/or administrative proceeding against
the Partnership, NAPICO and others that would be based, in part, on allegations
that certain of the Partnership's financial statements in 1991, 1992 and 1993
should have characterized certain current assets deposited in the master
disbursement account of the Partnership's property management company as
accounts receivable from a related party rather than as cash. Since the staff's
investigation and its recommendation concern the Partnership's financial
statements and Commission filings, a portion of the legal fees incurred in
responding to the staff have been allocated to and charged to the Partnership.
These legal fees primarily account for the increase in general and
administrative expenses in 1996, compared to 1995. The Partnership and NAPICO
strenuously disagree with the staff's contentions, which have not yet been
considered by the Commission. Moreover, in the opinion of NAPICO, any action
that might result from the staff's recommendation is not likely to have a
material adverse effect on the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) No reports on Form 8-K were filed during the quarter ended March 31,
1996.
13
<PAGE> 16
CENTURY HILLCRESTE APARTMENT INVESTORS, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
MARCH 31, 1996
SIGNATURES
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 HILLCRESTE APARTMENT INVESTORS, L.P.
(a California limited partnership)
By: National Partnership Investments Corp.
Managing General Partner
Date: _____________________________________
By: _____________________________________
Charles Boxenbaum
Chairman of the Board
Date: _____________________________________
By: _____________________________________
Shawn Horwitz
Executive Vice President and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENT OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,252,638
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,445,115
<PP&E> 44,739,402
<DEPRECIATION> 10,319,710
<TOTAL-ASSETS> 37,864,807
<CURRENT-LIABILITIES> 492,853
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 36,924,171
<TOTAL-LIABILITY-AND-EQUITY> 37,864,807
<SALES> 0
<TOTAL-REVENUES> 1,326,065
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<INCOME-PRETAX> 654,752
<INCOME-TAX> 0
<INCOME-CONTINUING> 654,752
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 654,752
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
