FORM 10-QSB--QUARTERLY OR TRANSITIONAL
REPORT UNDER SECTION 13 OR 15 (D)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
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, 1997
[ ] 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 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, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 5,030
Receivables and deposits 504
Other assets 372
Investment properties:
Land $ 2,288
Buildings and related personal property 24,237
26,525
Less accumulated depreciation (13,846) 12,679
$18,585
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 63
Tenant security deposits payable 140
Accrued property taxes 73
Other liabilities 228
Mortgage notes payable 16,097
Partners' Capital
General partners' $ 39
Limited partners' (64,806 units issued and
outstanding) 1,945 1,984
$18,585
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
b) CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 1,404 $ 1,447 $ 4,340 $ 4,740
Other income 119 89 301 421
Gain on sale of properties 2,813 -- 2,813 3,012
Total revenues 4,336 1,536 7,454 8,173
Expenses:
Operating 896 783 2,263 2,506
Interest 431 448 1,326 1,512
Depreciation 233 222 693 751
General and administrative 71 58 197 309
Total expenses 1,631 1,511 4,479 5,078
Income before extraordinary loss 2,705 25 2,975 3,095
Extraordinary loss on early
extinguishment of debt (19) -- (19) (315)
Net income $ 2,686 $ 25 $ 2,956 $ 2,780
Net income allocated
to general partners $ 39 $ -- $ 44 $ 129
Net income allocated
to limited partners 2,647 25 2,912 2,651
$ 2,686 $ 25 $ 2,956 $ 2,780
Net income per limited
partnership unit:
Income before extraordinary loss $ 41.13 $ .39 $ 45.22 $ 45.67
Extraordinary loss on early
extinguishment of debt (.29) -- (.29) (4.76)
Net income per limited
partnership unit $ 40.84 $ .39 $ 44.93 $ 40.91
Distributions per limited
partnership unit $ -- $102.11 $ -- $117.23
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
c) CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners' Partners' Total
<S> <C> <C> <C> <C>
Original capital contributions 64,806 $ -- $ 64,806 $ 64,806
Partners' deficit at
December 31, 1996 64,806 $ (5) $ (967) $ (972)
Net income for the nine months
ended September 30, 1997 -- 44 2,912 2,956
Partners' capital at
September 30, 1997 64,806 $ 39 $ 1,945 $ 1,984
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
d) CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,956 $ 2,780
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 693 751
Amortization of loan costs, discounts and
lease commissions 56 74
Gain on sale of properties (2,813) (3,012)
Extraordinary loss on early extinguishment of debt 19 315
Change in accounts:
Receivables and deposits 218 133
Other assets (21) (50)
Accounts payable (68) 11
Tenant security deposits payable (23) (66)
Accrued property taxes 21 (40)
Other liabilities (13) 137
Net cash provided by operating activities 1,025 1,033
Cash flows from investing activities:
Property improvements and replacements (298) (272)
Deposits to restricted escrows (121) (114)
Withdrawals from restricted escrows 136 53
Proceeds from sale of properties 3,909 8,158
Net cash provided by investing activities 3,626 7,825
Cash flows from financing activities:
Mortgage principal payments (100) (76)
Repayment of mortgage (1,506) (1,591)
Distributions to partners -- (7,752)
Net cash used in financing activities (1,606) (9,419)
Net increase (decrease) in cash and cash equivalents 3,045 (561)
Cash and cash equivalents at beginning of period 1,985 2,576
Cash and cash equivalents at end of period $ 5,030 $ 2,015
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,282 $ 1,436
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
</FN>
</TABLE>
e) CENTURY PROPERTIES FUND XIV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated 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, 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 consolidated 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 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 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"), the sole stockholder of NPI Equity. 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 incurred during the nine month periods ended September 30, 1997 and
1996 (in thousands):
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1997 1996
<S> <C> <C>
Property management fees (included in operating
expenses) $ 217 $ 204
Reimbursement for services of affiliates, including
$3,000 and $4,000 of construction services
reimbursements in 1997 and 1996, respectively
(included in operating and general and
administrative expenses) 106 131
Partnership management fee (included in general -- 7
and administrative expenses)
</TABLE>
For the period from January 19, 1996, to August 31, 1997, 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 August 13, 1997, the Partnership sold Gateway Business Park, located in
Dublin, California, to an unaffiliated third party for $2,600,000. After
repayment of the mortgage note payable and closing expenses, the net proceeds
received by the Partnership were approximately $903,000. For financial statement
purposes, the sale resulted in a gain of approximately $1,313,000. An
extraordinary loss of approximately $19,000 representing the write off of the
unamortized loan costs related to the payoff of the mortgage note payable has
been recorded.
In connection with the sale of the Waverley Apartments in 1987, the Partnership
received a note for $1,500,000 with a maturity date of July 1997. The note
receivable was offset by deferred proceeds on the consolidated balance sheet.
The note receivable was collected in September 1997, and is reflected as a gain
on sale of property on the consolidated statements of operations for the three
and nine months ended September 30, 1997.
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 approximately $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
approximately $65,000. The Partnership had previously recorded a $883,000
provision for impairment of value in 1992.
On March 7, 1996, the Partnership sold Broadway Trade Center located in San
Antonio, Texas, to an unaffiliated third party for approximately $3,825,000.
After repayment of the first, second, and third mortgage notes payable and
closing expenses, the net proceeds received by the Partnership were
approximately $1,990,000. For financial statement purposes, the sale resulted in
a gain of approximately $1,531,000. As a result of the loans being paid in
full, an extraordinary loss representing the remaining unamortized mortgage
discount of approximately $315,000 was recorded. 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 approximately $4,850,000.
After payment of closing expenses, the net proceeds received by the Partnership
were approximately $4,619,000. For financial statement purposes, the sale
resulted in a gain of approximately $1,416,000.
NOTE D - DISTRIBUTIONS
On July 3, 1996, the Partnership distributed approximately $6,617,000 ($102.11
per limited partner unit) to the limited partners and approximately $135,000 to
the general partners. The distribution primarily represented proceeds from the
sales of University Square and Broadway Trade during the first quarter of 1996.
On January 11, 1996, the Partnership distributed approximately $980,000 ($15.12
per limited partner unit) to the limited partners and approximately $20,000 to
the general partners from the proceeds from the sale of Wingren Plaza in 1995.
No distributions were made during the nine month period ended September 30,
1997.
NOTE E - PRO FORMA FINANCIAL INFORMATION
The following pro forma consolidated statements of operations for the six months
ended June 30, 1997 and 1996, give effect to the sale of Gateway Park. The
adjustments to the pro forma consolidated income statements assume the
transaction was consummated at the beginning of the year presented. The sale
occurred on August 13, 1997.
The pro forma adjustments required are to eliminate the operating activity of
Gateway Park. These pro forma adjustments are not necessarily reflective of the
results that actually would have occurred if the sale had been in effect for the
periods presented or that may be achieved in the future.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1997
(in thousands, except unit data)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
<S> <C> <C> <C>
Revenues:
Rental income $ 2,936 $ (180) $ 2,756
Other income 182 (1) 181
Total revenues 3,118 (181) 2,937
Expenses:
Operating 1,367 (40) 1,327
Interest 895 (66) 829
Depreciation 460 (23) 437
General and administrative 126 -- 126
Total expenses 2,848 (129) 2,719
Net income $ 270 $ (52) $ 218
Net income per limited partnership unit $ 4.08 $ (.79) $ 3.29
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months ended June 30, 1996
(in thousands, except unit data)
Pro Forma
Historical Adjustments Pro Forma
Revenues:
Rental income $ 3,293 $ (170) $ 3,123
Other income 332 -- 332
Gain on sale of property 3,012 -- 3,012
Total revenues 6,637 (170) 6,467
Expenses:
Operating 1,723 (41) 1,682
Interest 1,064 (99) 965
Depreciation 529 (24) 505
General and administrative 251 -- 251
Total expenses 3,567 (164) 3,403
Income before extraordinary item 3,070 (6) 3,064
Extraordinary loss on early extinguishment
of debt (315) -- (315)
Net income $ 2,755 $ (6) $ 2,749
Net income per limited partnership unit $ 41.66 $ (.09) $ 41.57
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's remaining investment properties consist of three residential
apartment complexes. The following table sets forth the average occupancy of
the properties for the nine months ended September 30, 1997 and 1996:
Average
Occupancy
Property 1997 1996
St. Charleston Village Apartments 94% 95%
Las Vegas, Nevada
Sun River Apartments 96% 98%
Tempe, Arizona
Torrey Pines Village Apartments 92% 94%
Las Vegas, Nevada
The Partnership earned net income for the nine months ended September 30, 1997
and 1996, of approximately $2,956,000 and $2,780,000, respectively. For the
three months ended September 30, 1997 and 1996, the Partnership earned net
income of approximately $2,686,000 and $25,000, respectively. Included in income
for the three and nine month periods ended September 30, 1997, is approximately
$2,813,000 in gains from the sale of Gateway Park in August 1997 and the sale of
the Waverley Apartments in 1987 (see "Item 1. Note C - Disposition of Investment
Properties"). Included in income for the nine months ended September 30, 1996,
is approximately $3,012,000 in gains from the sales of Broadway Trade Center,
University Square Shopping Center, and The Oaks Shopping Center in the first six
months of 1996. The decreases in rental income and operating, interest, and
depreciation expenses for the nine month period are primarily attributable to
the property sales in 1997 and 1996. Operating expenses increased for the three
month period ended September 30, 1997, from the corresponding period in 1996 due
to increased rental concessions, maintenance salaries and sewer expenses. For
the three and nine month periods ended September 30, 1997, other income
decreased primarily due to a decrease in interest income as a result of lower
average cash balances. General and administrative expenses decreased during 1997
primarily due to a decrease in professional fees and administrative costs
incurred in the nine months ended September 30, 1997, compared to the
corresponding period in 1996. Administrative costs associated with the cash
distributions decreased as a result of no distributions being made in the first
nine months of 1997 compared to two distributions being made in the first nine
months of 1996. Professional fees decreased as a result of the partnership
owning fewer properties. 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. The decrease in general and administrative expenses
during the nine month period ended September 30, 1997, is also partially
attributable to the decrease in expense reimbursements related to the transition
and relocation of the administrative offices during the first quarter of 1996.
During the nine month periods ended September 30, 1997 and 1996, the Partnership
incurred extraordinary losses on extinguishment of the Gateway Park debt in 1997
and the extinguishment of the Broadway Trade debt in 1996. The extraordinary
loss in 1997 represents the remaining unamortized loan costs related to the
Gateway Park debt at the time of its payoff. The extraordinary loss in 1996
represents the remaining unamortized mortgage discount of the Broadway Trade
debt at the time of its payoff.
With respect to the remaining properties, rental income increased by
approximately $90,000 for the nine months ended September 30, 1997, compared to
the corresponding period of 1996, primarily due to an increase in rental rates
at Sun River. Total expenses at the remaining properties remained relatively
stable for the nine month periods ended September 30, 1997 and 1996.
Included in operating expenses for the nine months ended September 30, 1997, is
approximately $94,000 of major repairs and maintenance comprised primarily of
parking lot repairs and major landscaping. Included in operating expenses for
the nine months ended September 30, 1996, is approximately $208,000 of major
repairs and maintenance comprised primarily of interior and exterior building
repairs and major landscaping.
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, 1997, the Partnership had unrestricted cash of approximately
$5,030,000 compared to approximately $2,015,000 at September 30, 1996. Net cash
provided by operating activities remained relatively stable. Net cash provided
by investing activities decreased due to proceeds from the sales of Broadway
Trade Center and University Square Shopping Center in 1996 being greater than
the proceeds received for the sale of Gateway in 1997. Net cash used in
financing activities decreased 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.
No distributions were made for the nine months ended September 30, 1997.
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 approximately $16,097,000 matures on July 1,
2001, with balloon payments due at maturity at which time the properties will
either be refinanced or sold. On January 11, 1996, the Partnership distributed
approximately $980,000 ($15.12 per limited partner unit) to the limited partners
and approximately $20,000 to the general partners from the proceeds from the
sale of Wingren Plaza in 1995. On July 3, 1996, the Partnership distributed
approximately $6,617,000 ($102.11 per limited partner 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. The Managing General Partner is
currently planning a distribution from cash reserves and from proceeds from the
sale of Gateway Park during the fourth quarter of 1997.
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: A Form 8-K dated August 13, 1997, was filed by the
Partnership reporting the sale of Gateway Park on August 27, 1997.
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
Vice President and Treasurer
Date: November 4, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XIV 1997 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,030
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,525
<DEPRECIATION> (13,846)
<TOTAL-ASSETS> 18,585
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 16,097
0
0
<COMMON> 0
<OTHER-SE> 1,984
<TOTAL-LIABILITY-AND-EQUITY> 18,585
<SALES> 0
<TOTAL-REVENUES> 7,454
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,479
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,326
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (19)
<CHANGES> 0
<NET-INCOME> 2,956
<EPS-PRIMARY> 44.93<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
