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 March 31, 1998
[ ] Transition Report Pursuant to 13 or 15(d) of the Securities Exchange
Act of 1934
For the transition period from_________to_________
Commission file number 0-9242
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, P. O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X . No .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31, 1998
(in thousands, except unit data)
Assets
Cash and cash equivalents $ 1,848
Receivables and deposits 359
Restricted escrows 256
Other assets 287
Investment properties:
Land $ 2,288
Buildings and related personal property 24,514
26,802
Less accumulated depreciation (14,292) 12,510
$15,260
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 76
Tenant security deposit liabilities 141
Accrued property taxes 75
Other liabilities 192
Mortgage notes payable 16,036
Partners' Deficit
General partners' $ (25)
Limited partners' (64,806 units issued and
outstanding) (1,235) (1,260)
$15,260
See Accompanying Notes to Consolidated Financial Statements
b)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1998 1997
Revenues:
Rental income $ 1,355 $ 1,453
Other income 102 91
Total revenues 1,457 1,544
Expenses:
Operating 573 519
General and administrative 94 52
Depreciation 218 228
Interest 412 448
Property taxes 79 84
Total expenses 1,376 1,331
Net income $ 81 $ 213
Net income allocated to general partners $ 2 $ 4
Net income allocated to limited partners 79 209
$ 81 $ 213
Net income per limited partnership unit $ 1.22 $ 3.22
Distributions per limited partnership unit $ 26.28 $ --
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, 1997 64,806 $ 8 $ 389 $ 397
Distributions to partners -- (35) (1,703) (1,738)
Net income for the three months
ended March 31, 1998 -- 2 79 81
Partners' deficit at
March 31, 1998 64,806 $ (25) $(1,235) $(1,260)
See Accompanying Notes to Consolidated Financial Statements
d)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1998 1997
Cash flows from operating activities:
Net income $ 81 $ 213
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 218 228
Amortization of loan costs and lease commissions 16 19
Change in accounts:
Receivables and deposits (37) --
Other assets 25 19
Accounts payable (53) (89)
Tenant security deposit liabilities 2 --
Accrued property taxes 26 32
Other liabilities (23) (14)
Net cash provided by operating activities 255 408
Cash flows from investing activities:
Property improvements and replacements (143) (110)
Net (deposits to) receipts from restricted escrows (19) 38
Net cash used in investing activities (162) (72)
Cash flows from financing activities:
Payments on mortgage notes payable (31) (34)
Distributions to partners (1,738) --
Net cash used in financing activities (1,769) (34)
Net (decrease) increase in cash and cash equivalents (1,676) 302
Cash and cash equivalents at beginning of period 3,524 1,985
Cash and cash equivalents at end of period $ 1,848 $ 2,287
Supplemental disclosure of cash flow information:
Cash paid for interest $ 397 $ 431
See Accompanying Notes to Consolidated Financial Statements
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 month period ended March 31,
1998, are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1998. 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, 1997.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES
The general partners of the Partnership are FCMC, a California corporation, and
Fox Realty Investors ("FRI"), a California general partnership. NPI Equity
Investments II, Inc., a Florida corporation ("NPI Equity"), is the general
partner of FRI.
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
partnership activities. The Managing General Partner and NPI Equity are wholly-
owned by Insignia Properties Trust ("IPT"), which is an affiliate of Insignia
Financial Group, Inc. ("Insignia"). 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 following transactions with affiliates of Insignia were incurred during the
three month periods ended March 31, 1998 and 1997 (in thousands):
1998 1997
Property management fees (included in operating
expenses) $ 72 $ 72
Reimbursement for services of affiliates, including
$2,000 of construction service reimbursements in
1997, (included in operating and general and
administrative expenses) 36 31
In addition, pursuant to the Partnership Agreement, for managing the affairs of
the Partnership, the Managing General Partner is entitled to receive a
partnership management fee equal to 10% of the Partnership's adjusted cash from
operations as distributed. The Managing General Partner received a partnership
management fee of approximately $26,000 during the three month period ended
March 31, 1998.
For the period from January 1, 1997, to August 31, 1997, the Partnership insured
its properties under a master policy through an agency affiliated with the
Managing General Partner with an 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 master policy. The
agent assumed the financial obligations to the affiliate of the Managing General
Partner which received payments on these obligations from the agent. The amount
of the Partnership's insurance that accrued to the benefit of the affiliate of
the Managing General Partner by virtue of the agent's obligations was not
significant.
On March 17, 1998, Insignia entered into an agreement to merge its national
residential property management operations, and its controlling interest in IPT,
with Apartment Investment and Management Company ("AIMCO"), a publicly traded
real estate investment trust. The closing, which is anticipated to happen in
the third quarter of 1998, is subject to customary conditions, including
government approvals and the approval of Insignia's shareholders. If the
closing occurs, AIMCO will then control the Managing General Partner of the
Partnership.
NOTE C - DISTRIBUTIONS
During the first quarter of 1998, the Partnership distributed approximately
$1,703,000 ($26.28 per limited partnership unit) to the limited partners and
approximately $35,000 to the general partners from proceeds collected from the
payoff of the Waverley Apartments note and from operations. When the
Partnership sold the Waverley Apartments in 1987, it received a note for
$1,500,000 with a July 1997 maturity date. The note was collected in September
1997, and the total proceeds were distributed to the partners in the first
quarter of 1998.
NOTE D - DISPOSITION OF RENTAL PROPERTY
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.
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 three months ended March 31, 1998 and 1997:
Average
Occupancy
Property 1998 1997
St. Charleston Village Apartments 93% 95%
Las Vegas, Nevada
Sun River Apartments 96% 97%
Tempe, Arizona
Torrey Pines Village Apartments 88% 93%
Las Vegas, Nevada
The Managing General Partner attributes the decrease in occupancy at Torrey
Pines to a softening local market due to 20,000 new units being built in the
area over the last year.
The Partnership's net income for the three months ended March 31, 1998 was
approximately $81,000 versus net income of $213,000 for the three months ended
March 31, 1997. The decrease in net income is primarily attributable to
decreased rental income and increased operating and general and administrative
expenses. Rental income decreased primarily due to the sale of Gateway Business
Park in August 1997. For the three month period ended March 31, 1997, Gateway's
rental revenue totaled approximately $90,000. In addition, average occupancy
decreased at the Partnership's three remaining properties for the period ended
March 31, 1998 compared to the corresponding period in 1997. Included in
operating expense for the three months ended March 31, 1998, is approximately
$27,000 of major repairs and maintenance comprised primarily of landscaping.
Included in operating expense for the three months ended March 31, 1997, is
approximately $2,000 of major repairs and maintenance. General and
administrative expenses increased due to a partnership management fee of
approximately $26,000 being paid during the first quarter of 1998 relating to
the portion of the 1998 distribution representing cash from operations. Also
contributing to the increase in general and administrative expenses was an
increase in expense reimbursements and miscellaneous administrative costs
related to the distribution.
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 expenses. 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 March 31, 1998, the Partnership had cash and cash equivalents of
approximately $1,848,000 compared to approximately $2,287,000 at March 31,
1997. The net decrease in cash and cash equivalents for the period ended March
31, 1998 was $1,676,000 compared to a net increase of $302,000 for the period
ended March 31, 1997. Net cash provided by operating activities decreased due
to the decrease in rental revenue and increases in operating and general and
administrative costs, as discussed above, and the decrease in cash provided by
receivables and deposits due to the timing of payments. Net cash used in
investing activities increased due to increased property improvements and
decreased receipts from restricted escrows in 1998. Net cash used in financing
activities increased due to distributions made to the partners in the first
quarter of 1998.
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 $16,036,000 matures in July
2001, with balloon payments totaling approximately $15,551,000 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, refinancings and the availability of cash reserves. During the
three month period ended March 31, 1998, the Partnership distributed
approximately $1,738,000 to the partners from proceeds from the Waverley
Apartments note and from operations. When the Partnership sold the Waverley
Apartments in 1987, it received a note for $1,500,000 with a July 1997 maturity
date. The note was collected in September 1997, and the total proceeds were
distributed to the partners in the first quarter of 1998. The Managing General
Partner anticipates making another distribution of cash from operations during
the fourth quarter of 1998.
Year 2000
The Partnership is dependent upon the Managing General Partner and Insignia for
management and administrative services. Insignia has completed an assessment
and will have to modify or replace portions of its software so that its computer
systems will function properly with respect to dates in the year 2000 and
thereafter (the "Year 2000 Issue"). The project is estimated to be completed
not later than December 31, 1998, which is prior to any anticipated impact on
its operating systems. The Managing General Partner believes that with
modifications to existing software and conversions to new software, the Year
2000 Issue will not pose significant operational problems for its computer
systems. However, if such modifications and conversions are not made, or are not
completed timely, the Year 2000 Issue could have a material impact on the
operations of the Partnership.
Other
Certain items discussed in this quarterly report may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 (the "Reform Act") and as such may involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Partnership to be materially different from any future
results, performance or achievements expressed or implied by such forward-
looking statements. Such forward-looking statements speak only as of the date
of this quarterly report. The Partnership expressly disclaims any obligation or
undertaking to release publicly any updates of revisions to any forward-looking
statements contained herein to reflect any change in the Partnership's
expectations with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia and its affiliates of
interests in certain general partner entities, past tender offers by Insignia
affiliates to acquire limited partnership units, the management of partnerships
by Insignia affiliates, as well as a recently announced agreement between
Insignia and AIMCO. The complaint seeks monetary damages and equitable relief,
including judicial dissolution of the Partnership. The Managing General Partner
was only recently served with the complaint, which it believes to be without
merit, and intends to vigorously defend the action.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature. The Managing General Partner of the Partnership
believes that all such pending or outstanding litigation will be resolved
without a material adverse effect upon the business, financial condition or
operations of the Partnership.
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 first quarter of 1998.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTURY PROPERTIES FUND 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: May 13, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Century Properties Fund XIV 1998 First 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,848
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,802
<DEPRECIATION> 14,292
<TOTAL-ASSETS> 15,260
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 16,036
0
0
<COMMON> 0
<OTHER-SE> (1,260)
<TOTAL-LIABILITY-AND-EQUITY> 15,260
<SALES> 0
<TOTAL-REVENUES> 1,457
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,376
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 412
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81
<EPS-PRIMARY> 1.22<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
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