FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
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 September 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period.........to.........
Commission file number 0-9242
CENTURY PROPERTIES FUND XIV
(Exact name of small business issuer as specified in its charter)
California 94-2535195
(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 registrant (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 XIV
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 2,015
Deferred costs, net 340
Other assets 858
Investment properties:
Land $ 2,775
Buildings and related personal property 25,012
27,787
Less accumulated depreciation (13,630) 14,157
$ 17,370
Liabilities and Partners' Deficit
Liabilities
Accrued expenses and other liabilities $ 553
Mortgage notes payable 17,736
Partners' Deficit:
General partners' $ --
Limited partners' (64,806 units issued and
outstanding) (919) (919)
$ 17,370
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b) CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Rental income $ 1,447 $ 2,048 $ 4,740 $ 6,294
Other income 89 88 421 744
Gain on sale of properties -- -- 3,012 --
Total revenues 1,536 2,136 8,173 7,038
Expenses:
Operating 783 1,220 2,506 3,358
Interest 448 565 1,512 1,697
Depreciation 222 383 751 1,164
General and administrative 58 58 309 187
Loss on sale of property -- -- -- 605
Total expenses 1,511 2,226 5,078 7,011
Income (loss) before
extraordinary loss 25 (90) 3,095 27
Extraordinary loss on
extinguishment of debt -- -- (315) --
Net income (loss) $ 25 $ (90) $ 2,780 $ 27
Net income (loss) allocated to
general partners $ -- $ (2) $ 129 $ 1
Net income (loss) allocated to
limited partners 25 (88) 2,651 26
$ 25 $ (90) $ 2,780 $ 27
Net income (loss) per limited
partnership unit:
Income (loss) before
extraordinary loss $ .39 $ (1.36) $ 45.67 $ .40
Extraordinary loss on
extinguishment of debt -- -- (4.76) --
Net income (loss) per limited
partnership unit $ .39 $ (1.36) $ 40.91 $ .40
Distributions per limited
partnership unit $ 102.11 $ -- $ 117.23 $ --
See Accompanying Notes to Consolidated Financial Statements
c) CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partners' Partners' Total
Original capital contributions 64,806 $ -- $ 64,806 $ 64,806
Partners' capital at
December 31, 1995 64,806 $ 26 $ 4,027 $ 4,053
Distributions to partners -- (155) (7,597) (7,752)
Net income for the nine months
ended September 30, 1996 -- 129 2,651 2,780
Partners' deficit at
September 30, 1996 64,806 $ -- $ (919) $ (919)
See Accompanying Notes to Consolidated Financial Statements
d) CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,780 $ 27
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 825 1,309
Loss on sale of property -- 605
Gain on sale of properties (3,012) --
Extraordinary loss on extinguishment of debt 315 --
Change in accounts:
Deferred costs (25) (122)
Other assets 47 (87)
Accrued expenses and other liabilities 42 554
Net cash provided by operating activities 972 2,286
Cash flows from investing activities:
Property improvements and replacements (272) (1,109)
Proceeds from sale of properties 8,158 931
Net cash provided by (used in) investing
activities 7,886 (178)
Cash flows from financing activities:
Payments of mortgage notes payable (1,667) (168)
Distributions to partners (7,752) --
Net cash used in financing activities (9,419) (168)
Net (decrease) increase in cash and cash equivalents (561) 1,940
Cash and cash equivalents at beginning of period 2,576 714
Cash and cash equivalents at end of period $ 2,015 $ 2,654
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,436 $ 1,580
Supplemental disclosure of non-cash operating and
financing activities:
Accrued interest assumed by purchaser of The Oaks $ 667 $ --
Mortgage notes payable assumed by purchaser of The Oaks $ 2,173 $ --
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CENTURY PROPERTIES FUND XIV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Century Properties Fund XIV
(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"), a California corporation, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results for the three and nine month periods ended September
30, 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
consolidated 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 its general partners 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.
The general partners of the Partnership are Fox Realty Investors ("FRI"), a
California general partnership, and FCMC.
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired (i) control
of NPI Equity Investments II, Inc. ("NPI Equity"), the managing general partner
of FRI, and (ii) all of the issued and outstanding shares of stock of FCMC. NPI
Equity is a wholly-owned subsidiary of National Property Investors, Inc.
("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 1996 and 1995:
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $ 204,000 $196,000
Reimbursement for services of affiliates (included
in general and administrative and operating expenses) 131,000 108,000
Partnership management fee (included in general
and administrative expenses) 7,000 --
</TABLE>
For the period from January 19, 1996, to September 30, 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.
NOTE C - DISPOSITION OF INVESTMENT PROPERTIES
On April 26, 1996, the Partnership sold The Oaks Shopping Center, located in
Beaumont, Texas. The buyer of the property assumed the outstanding debt on the
property, and the Partnership received net proceeds of $1,000. As a result of
the sale, the Partnership paid a disposition fee of approximately $16,000. For
financial statement purposes, the sale resulted in a gain of $65,000.
On March 7, 1996, the Partnership sold Broadway Trade Center located in San
Antonio, Texas, to an unaffiliated third party for $3,825,000. After repayment
of the first, second, and third mortgages totaling $1,591,000 and closing
expenses of $244,000 the net proceeds received by the Partnership were
$1,990,000. As a result of the loans being paid in full, an extraordinary loss
representing the remaining unamortized mortgage discount of $315,000 was
recorded. For financial statement purposes, the sale resulted in a gain of
$1,531,000. The Partnership had previously recorded a $1,421,000 provision for
impairment of value for the property.
On February 12, 1996, the Partnership sold University Square, located in
Bozeman, Montana, to an unaffiliated third party for $4,850,000. After closing
expenses of $231,000, the net proceeds received by the Partnership were
$4,619,000. For financial statement purposes, the sale resulted in a gain of
$1,416,000.
On November 9, 1995, the Partnership sold Wingren Plaza, located in Dallas,
Texas, for $1,000,000. After closing expenses of $68,000, the net proceeds
received by the Partnership were $932,000. For financial statement purposes,
the sale resulted in a gain of $239,000. The Partnership had previously
recorded a $1,901,000 provision for impairment of value in 1991.
On October 6, 1995, the Partnership sold Duck Creek Shopping Center, located in
Garland, Texas, for $2,250,000. After closing expenses of $138,000, the net
proceeds received by the Partnership were $2,112,000. For financial statement
purposes, the sale resulted in a loss of $36,000.
On September 12, 1995, the Partnership sold Greenbriar Plaza Shopping Center,
located in Duncanville, Texas, for $1,050,000. After closing expenses of
$70,000, the net proceeds received by the Partnership were $980,000. For
financial statement purposes, the sale resulted in a loss of $556,000. An
estimated provision for loss on the sale of Greenbriar Plaza Shopping Center of
$605,000 was recorded during the six months ended June 30, 1995.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's remaining investment properties consist of three residential
apartment complexes and one commercial property. The following table sets forth
the average occupancy of the properties for the nine months ended September 30,
1996 and 1995:
Average
Occupancy
Property 1996 1995
Torrey Pines Village Apartments 94% 96%
Las Vegas, Nevada
St. Charleston Village Apartments 95% 96%
Las Vegas, Nevada
Gateway Park 96% 90%
Dublin, California
Sun River Apartments 98% 98%
Tempe, Arizona
The Partnership earned net income for the nine months ended September 30, 1996,
of approximately $2,780,000 compared to $27,000 for the corresponding period of
1995. For the three months ended September 30, 1996, the Partnership earned net
income of approximately $25,000 compared to a net loss of approximately $90,000
for the three months ended September 30, 1995. The increase in net income for
the nine month period is attributable to the gain on the sales of Broadway Trade
Center, University Square Shopping Center, and The Oaks Shopping Center.
Partially offsetting the gain from the property sales was a decrease in rental
revenues due to the Partnership owning fewer properties. The decreases in
operating, interest, and depreciation expenses can also be attributed to the
property sales in 1995 and 1996. The decrease in other income for the nine
month period is partially attributable to a settlement in 1995 with the City of
Bozeman in connection with a right of way agreement pertaining to the
condemnation of a part of the University Square property, pursuant to which the
Partnership received net proceeds of $150,000. Also included in other income in
1995 were proceeds received for the re-lease of the assignor's guarantee from a
vacating tenant at The Oaks Shopping Center. General and administrative
expenses increased primarily due to an increase in expense reimbursements. As
noted in "Item 1, Note B - Transactions with Affiliated Parties," the
Partnership reimburses the Managing General Partner and its affiliates for its
costs involved in the management and administration of all partnership
activities. While overall expense reimbursements have increased during the nine
month period ended September 30, 1996, the recurring expenses subsequent to the
transition efforts to the new administration are expected to more closely
approximate historical levels. The increase in expense reimbursements during
the nine month period ended September 30, 1996, is directly attributable to the
combined transition efforts of the Greenville, South Carolina, and Atlanta,
Georgia, administrative offices during the year-end close, preparation of the
1995 10-K and tax return (including the limited partner K-1's), filing of the
first two quarterly reports and transition of asset management responsibilities
to the new administration. Also contributing to the increase in general and
administrative expenses were increases in professional fees and administrative
costs in 1996. During the nine months ended September 30, 1996, the Partnership
incurred an extraordinary loss on extinguishment of the Broadway Trade debt.
The extraordinary loss represents the remaining unamortized mortgage discount of
the Broadway Trade debt at the time of its payoff.
With respect to the remaining properties, rental revenues increased for the nine
months ended September 30, 1996, by $251,000 primarily due to increased rental
rates at St. Charleston Village Apartments, Sun River Apartments and Torrey
Pines Village Apartments and an increase in occupancy at Gateway Park. Operating
expenses at the remaining properties for the nine months ended September 30,
1996, were consistent with the nine months ended September 30, 1995. The
increase in rental revenues at the remaining properties also contributed to the
increase in net income for the three months ended September 30, 1996, compared
to the corresponding period of 1995.
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 September 30, 1996, the Partnership had unrestricted cash of $2,015,000
compared to $2,654,000 at September 30, 1995. Net cash provided by operating
activities decreased primarily as a result of a decrease in rental revenues as a
result of the property sales in 1995 and 1996. Net cash provided by investing
activities increased due to proceeds from the sale of Broadway Trade Center and
University Square Shopping Center in 1996. Net cash used in financing
activities increased due to a distribution of proceeds from the sale of Wingren
Plaza in January 1996 and a distribution in July 1996 of proceeds from the sales
of Broadway Trade Center and University Square Shopping Center. Also
contributing to the increase in cash used in financing activities was the payoff
of the mortgage notes encumbering Broadway Trade Center when the property was
sold 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. 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 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
remaining mortgage indebtedness of $17,736,000 matures at various times with
balloon payments due at maturity 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. On October 17, 1995, the Partnership distributed $3,001,000 ($46.31
per unit) to the limited partners and $61,000 to the general partners from the
proceeds of the sale of the Greenbriar Plaza Shopping Center and Duck Creek
Shopping Center properties. On January 11, 1996, the Partnership distributed
$980,000 ($15.12 per unit) to the limited partners and $20,000 to the general
partners from the proceeds received from the sale of the Partnership's Wingren
Plaza property. On July 3, 1996, the Partnership distributed approximately
$6,617,000 ($102.11 per unit) to the limited partners and approximately $135,000
to the general partners. This distribution primarily represented proceeds
received from the sales of University Square and Broadway Trade during the first
quarter of 1996.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) 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 September 30,
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 PROPERTIES FUND XIV
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: November 4, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Century Properties
Fund XIV 1996 Third Quarter 10-QSB and is qualified in its entirety by reference
to such 10-QSB filing.
</LEGEND>
<CIK> 0000278128
<NAME> CENTURY PROPERTIES FUND XIV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,015
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 27,787
<DEPRECIATION> 13,630
<TOTAL-ASSETS> 17,370
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 17,736
0
0
<COMMON> 0
<OTHER-SE> (919)
<TOTAL-LIABILITY-AND-EQUITY> 17,370
<SALES> 0
<TOTAL-REVENUES> 8,173
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,078
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,512
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (315)
<CHANGES> 0
<NET-INCOME> 2,780
<EPS-PRIMARY> 40.91<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
