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 March 31, 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 0-9242
Century Properties Fund XIV
(Exact name of Registrant as specified in its charter)
California 94-2535195
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (404) 916-9090
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 .
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CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Balance Sheets
March 31, December 31,
1995 1994
(Unaudited) (Audited)
Assets
Cash and cash equivalents $ 1,100,000 $ 714,000
Other assets 915,000 1,136,000
Real Estate:
Real estate 53,518,000 53,142,000
Accumulated depreciation (22,134,000) (21,751,000)
Allowance for impairment of value (4,205,000) (4,205,000)
-------------- --------------
Real estate, net 27,179,000 27,186,000
Deferred costs, net 619,000 639,000
-------------- --------------
Total assets $ 29,813,000 $ 29,675,000
============== ==============
Liabilities and Partners' Equity
Notes payable $ 21,433,000 $ 21,480,000
Accrued expenses and other liabilities 1,329,000 1,286,000
-------------- --------------
Total liabilities 22,762,000 22,766,000
-------------- --------------
Commitments and Contingencies
Partners' Equity:
General partners 28,000 25,000
Limited partners (64,806 units outstanding at
March 31, 1995 and December 31, 1994) 7,023,000 6,884,000
-------------- --------------
Total partners' equity 7,051,000 6,909,000
-------------- --------------
Total liabilities and partners' equity $ 29,813,000 $ 29,675,000
============== ==============
See notes to financial statements.
2 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
Statements of Operations (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Revenues:
Rental $ 2,119,000 $ 1,927,000
Interest income 8,000 41,000
-------------- --------------
Total revenues 2,127,000 1,968,000
-------------- --------------
Expenses:
Operating 962,000 986,000
Interest 565,000 621,000
Depreciation 383,000 383,000
General and administrative 75,000 173,000
-------------- --------------
Total expenses 1,985,000 2,163,000
-------------- --------------
Net income (loss) $ 142,000 $ (195,000)
============== ==============
Net income (loss) per limited partnership unit $ 2 $ (3)
============== ==============
See notes to financial statements.
3 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
Statements of Cash Flows (Unaudited)
For the Three Months Ended
March 31, 1995 March 31, 1994
Operating Activities:
Net income (loss) $ 142,000 $ (195,000)
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization 429,000 433,000
Provision for doubtful receivables 5,000 11,000
Leasing commissions paid (18,000) (31,000)
Changes in operating assets and liabilities:
Other assets 216,000 40,000
Accrued expenses and other liabilities 43,000 15,000
-------------- --------------
Net cash provided by operating activities 817,000 273,000
-------------- --------------
Investing Activities:
Additions to real estate (376,000) (16,000)
-------------- --------------
Cash (used in) investing activities (376,000) (16,000)
-------------- --------------
Financing Activities:
Notes payable principal payments (55,000) (90,000)
-------------- --------------
Cash (used in) financing activities (55,000) (90,000)
-------------- --------------
Increase in Cash and Cash Equivalents 386,000 167,000
Cash and Cash Equivalents at Beginning of Period 714,000 5,717,000
-------------- --------------
Cash and Cash Equivalents at End of Period $ 1,100,000 $ 5,884,000
============== ==============
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 526,000 $ 580,000
============== ==============
See notes to financial statements.
4 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
NOTES TO FINANCIAL STATEMENTS
1. General
The accompanying financial statements, footnotes and discussions should be read
in conjunction with the financial statements, related footnotes and discussions
contained in the Partnership's Annual Report for the year ended December 31,
1994.
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.
At March 31, 1995, the Partnership had approximately $395,000 invested in
overnight repurchase agreements earning approximately 6% per annum.
The results of operations for the three months ended March 31, 1995 and 1994 are
not necessarily indicative of the results to be expected for the full year.
2. Transactions with Related Parties
(a) An affiliate of NPI, Inc. received reimbursement of administrative
expenses amounting to $36,000 and $31,000 during the three months ended March
31, 1995 and 1994. These reimbursements are included in general and
administrative expenses.
(b) An affiliate of NPI, Inc., is entitled to receive 5% of annual gross
receipts from all residential properties it manages. For the period ended March
31, 1995 and 1994, affiliates of NPI, Inc. received $64,000 and $19,000,
respectively, which are included in operating expenses.
3. Subsequent Event
In April 1995, the Partnership received $250,000 as a settlement with the City
of Bozeman in connection with a right of way agreement pertaining to the
condemnation of part of the property at the Partnership's University Square
Shopping Center property. The condemnation will enable the City of Bozeman and
State of Montana to undertake substantial road improvements. The condemnation
will not affect any of the structures at the property, nor does MGP believe it
will adversely affect the property. An additional parcel of land was acquired
in the settlement and will enable the Partnership to develop an out parcel with
separate access to the shopping center. The Partnership will, however, be
required to construct new access roads to the property and to move its shopping
center sign. The cost of which is expected to range from $50,000 to $100,000.
5 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Financial Statements and other
Items contained elsewhere in this Report.
Liquidity and Capital Resources
Registrant's real estate properties consist of seven commercial properties
located in Texas, California and Montana and three residential apartment
complexes located in Nevada and Arizona. The properties which are leased to
tenants subject to leases with original lease terms ranging from six months to
one year for residential properties and with remaining lease terms of up to
twenty years for commercial properties. Registrant receives rental income from
its properties and is responsible for operating expenses, administrative
expenses, capital improvements and debt service payments. As of May 1, 1995,
nine of the nineteen properties originally purchased by Registrant were sold or
otherwise disposed. All of Registrant's properties, except St. Charleston
Village, Torrey Pines and The Oaks, generated positive cash flow for the three
months ended March 31, 1995. The cash flow deficits of Registrant's St.
Charleston Village, Torrey Pines and The Oaks properties were attributable to
significant capital improvements incurred during the three months ended March
31, 1995. In April 1995, the Partnership reached a settlement with the City of
Bozeman in the amount of $250,000 in connection with a right of way agreement
pertaining to the condemnation of part of the property at the Partnership's
University Square Shopping Center property. The condemnation will enable the
City of Bozeman and State of Montana to undertake substantial road improvements.
The condemnation will not affect any of the structures at the property, nor does
MGP believe it will adversely affect the property. An additional parcel of land
was acquired in the settlement and will enable the Partnership to develop an out
parcel with separate access to the shopping center. The Partnership will,
however, be required to construct new access roads to the property and to move
its shopping center sign. The cost of which is expected to range from $50,000
to $100,000.
Registrant uses working capital reserves provided from any undistributed cash
flows from operations as its primary source of liquidity. In order to preserve
working capital reserves required for necessary capital improvements to
properties and to provide resources for potential refinancing of properties with
balloon payments (with maturity dates beginning in 1996), cash distributions
from operations remained suspended during the first quarter of 1995 as they were
in prior years. It is currently anticipated that cash distributions from
operations will continue to be suspended in the foreseeable future.
The level of liquidity based upon cash and cash equivalents improved by $386,000
at March 31, 1995, as compared to December 31, 1994. Registrant's $817,000 of
cash provided by operating activities was only partially offset by $376,000 of
cash used for improvements to real estate (investing activities) and $55,000 of
cash used in notes payable principal payments (financing activities). An
extensive siding repair program is required at St. Charleston Village and Torrey
Pines Village Apartments. The program began in 1994 and is expected to be
completed by the end of 1995. The estimated cost for the project is
approximately $1 million and is being funded from cash flow from operations,
established replacement reserves and working capital reserves. All other
increases (decreases) in certain assets and liabilities are the result of the
timing of receipt and payment of various operating activities.
Working capital reserves are invested in a money market account, United States
Treasury bills or 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
6 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Liquidity and Capital Resources (Continued)
service payments until May 1996, when a balloon payment of $2,160,000 is due on
The Oaks Shopping Center. Registrant will attempt to extend the due date of
this loan or find replacement financing. Although management is confident that
this loan can be refinanced, if the loan is not refinanced or extended, or the
property is not sold, Registrant could lose this property through foreclosure.
Pursuant to the terms of a Settlement Agreement entered into in connection with
the Ruben and Andrews actions, DeForest Ventures I L.P. will make a tender offer
for an aggregate number of units of Registrant (including the units purchased in
the initial tender) constituting up to 49% of the total number of units of
Registrant at a price equal to the initial tender price plus 15% less attorney's
fees and expenses. In addition, pursuant to the terms of the proposed
settlement, the Managing General Partner will agree to provide Registrant a
credit line of $150,000 per property, borrowings under which would bear interest
at the lesser of prime plus 1% or the rate permitted by the Partnership
Agreement of Registrant. A hearing for final approval of the settlement is
scheduled for May 19, 1995. See Part II - Other Information, "Item 1 - Legal
Proceedings". If the settlement receives final Court approval, it is expected
that the tender offer will commence on or about June 19, 1995. The Managing
General Partner believes that the settlement will not have an adverse effect on
Registrant.
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 their invested
capital. The extent to which invested capital is returned to investors is
dependent upon the performance of Registrant's remaining properties and the
markets in which such properties are located and on the sales price of the
remaining properties. In this regard, some or 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 financing,
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 properties. In addition, the bailout 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 properties may be restricted.
These factors caused a decline in market property values and serve to reduce
market rental rates and/or sales prices. Management believes, however, that the
emergence of new institutional purchasers, including real estate investment
trusts and insurance companies should create a more favorable market value for
Registrant's properties in the future.
Results of Operations
Three Months Ended March 31, 1995 vs. March 31, 1994
Operating results improved by $337,000 for the three months ended March 31,
1995, as compared to 1994, due to an increase in revenues of $159,000 and a
decrease in expenses of $178,000.
7 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Three Months Ended March 31, 1995 vs. March 31, 1994 (Continued)
Revenues increased by $159,000 due to an increase in rental income of $192,000,
which was only partially offset by a decrease in interest income of $33,000.
Rental revenues increased primarily due to an increase in occupancy at
Registrant's Broadway Trade Center and Gateway Park properties, which was
partially offset by decreased occupancy at Registrant's The Oaks Shopping Center
property. Occupancy remained relatively constant at Registrant's other
properties. In addition, rental rates increased at Registrant's St. Charleston
Village Apartments, University Square and Oaks Shopping Centers, which were
slightly offset by a decrease in rental rates at Registrant's Duck Creek
Shopping Center property. Interest income decreased due to a decrease in
average working capital reserves available for investment.
Expenses decreased by $178,000 due to a decrease in operating expense of
$24,000, interest expense of $56,000 and general and administrative expense of
$98,000. Operating expenses decreased due to a decrease in non-recurring
expenditures at Registrant's St. Charleston Village Apartments, The Oaks
Shopping Center and University Square Shopping Center properties. Interest
expense declined primarily due to the pay-off of the mortgage encumbering Duck
Creek Shopping Center in September 1994 and mortgage principal amortization.
General and administrative expenses decreased due to a reduction in asset
management costs. Depreciation expense remained constant.
Properties
A description of the properties in which Registrant has an ownership interest
during the period covered by this Report, along with occupancy data, follows:
CENTURY PROPERTIES FUND XIV
OCCUPANCY SUMMARY
For the Quarters Ended March 31, 1995 and 1994
Number of
Units or Average
Square Date of Occupancy Rate (%)
Name and Location Footage Type Purchase 1995 1994
- ----------------- ------- ---- -------- ------------------
Torrey Pines Village
Apartments 204 Apartment 09/79 96 95
Las Vegas, Nevada Building
St. Charleston Village
Apartments 312 Apartment 09/79 95 97
Las Vegas, Nevada Building
University Square
Shopping Center 127,000 Shopping 12/79 97 95
Bozeman, Montana Center
8 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties (Continued)
Number of
Units or Average
Square Date of Occupancy Rate (%)
Name and Location Footage Type Purchase 1995 1994
- ----------------- ------- ---- -------- ------------------
Gateway Park 33,000 Industrial 10/80 93 85
Dublin, California Park
Wingren Plaza 39,000 Office 06/80 87 88
Dallas, Texas Building
Greenbriar Plaza Shopping
Center 66,000 Shopping 12/79 88 88
Duncanville, Texas Center
The Oaks Shopping Center 82,000 Shopping 09/80 85 95
Beaumont, Texas Center
Sun River Apartments 334 Apartment 11/80 98 96
Tempe, Arizona Building
Broadway Trade Center 121,000 Industrial 01/81 97 85
San Antonio, Texas Park
Duck Creek Shopping
Center 58,000 Shopping 01/81 100 98
Garland, Texas Center
9 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 1995
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Lawrence M. Whiteside, on behalf of himself and all other similarly situated, v.
Fox Capital Management Corporation, et al., Superior Court of the State of
California, San Mateo County, Case No. 390018 ("Whiteside").
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
("Ruben").
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
("Vernon").
James Andrews, et al., on behalf of themselves and all other 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
("Andrews").
On March 16, 1995 the United States District Court for the Northern District of
Georgia, Atlanta Division, entered an order which granted preliminary approval
to a settlement agreement in the Ruben and Andrews actions, conditionally
certified two classes for purpose of settlement, and authorized the parties to
give notice to the classes of the terms of the proposed settlement. Plaintiffs
counsel in the Vernon and Whiteside action have joined in the Settlement
Agreement as well. The two certified cla sses constitute all limited partners of
Registrant and the eighteen other affiliated partnerships who either tendered
their units in connection with the October tender offers or continue to hold
their units in Registrant and the other affiliated partnerships. Pursuant to the
terms of the proposed settlement, which are described in the notice sent to the
class members in March 1995, (and more fully described in the Amended
Stipulation of Settlement submitted to the court on March 14, 1995) all claims
which either were made or could have been asserted in any of the class actions
would be dismissed with prejudice and/or released. In consideration for the
dismissal and/or release of such claims, among other things, DeForest I would
pay to each unit holder who tendered their units in Registrant an amount equal
to 15% of the original tender offer price less attorney's fees and expenses. In
addition, DeForest I will commence a second tender offer for an aggregate number
of units of Registrant (including the unit s purchased in the initial tender)
constituting up to 49% of the total number of units of Registrant at a price
equal to the initial tender price plus 15% less attorney's fees and expenses.
Furthermore, under the terms of the proposed settlement, the Managing General
Partner would agree, among other things, to provide Registrant a credit line of
$150,000 per property which would bear interest at the lesser of prime rate plus
1% and the rate permitted under the partnership agreement of Registrant. A
hearin g on the final approval of the settlement is scheduled for May 19, 1995.
Item 6. Exhibits and Reports on Form 8-K.
No report on Form 8-K was required to be filed during the period.
10 of 11
CENTURY PROPERTIES FUND XIV - FORM 10-Q - MARCH 31, 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 XIV
By: FOX CAPITAL MANAGEMENT CORPORATION,
A General Partner
/S/ARTHUR N. QUELER
----------------------------------------
ARTHUR N. QUELER
Secretary/Treasurer and Director
(Principal Financial Officer)
11 of 11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from Century
Properties Fund XIV and is qualified in its entirety by reference to such
financial statements. </LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 1,100,000
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 53,518,000
<DEPRECIATION> (26,339,000) <F1>
<TOTAL-ASSETS> 29,813,000
<CURRENT-LIABILITIES> 0
<BONDS> 21,433,000
<COMMON> 0
0
0
<OTHER-SE> 7,051,000
<TOTAL-LIABILITY-AND-EQUITY> 29,813,000
<SALES> 0
<TOTAL-REVENUES> 2,119,000
<CGS> 0
<TOTAL-COSTS> 1,345,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 565,000
<INCOME-PRETAX> 142,000
<INCOME-TAX> 0
<INCOME-CONTINUING> 142,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 142,000
<EPS-PRIMARY> 2
<EPS-DILUTED> 2
<FN>
<F1> Depreciation includes a $4,205,000 allowance for impairment of value.
</FN>
</TABLE>
