FORM 10-KSB-ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(D)
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-9242
CENTURY PROPERTIES FUND XIV
(Name of small business issuer 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) (zip code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
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
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $8,927,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests, as of a specified date within the past 60 days. Market value
information for Registrant's partnership interests is not available. Should a
trading market develop for these interests, it is the Managing General Partner's
belief that the aggregate market value of the voting partnership interests would
not exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Century Properties Fund XIV (the "Partnership" or the "Registrant") was
organized in 1978 as a California limited partnership under the Uniform Limited
Partnership Act of the California Corporations Code. Fox Capital Management
Corporation (the "Managing General Partner" or "FCMC"), a California
corporation, and Fox Realty Investors ("FRI"), a California general partnership,
are the general partners of the Partnership.
The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-63368), was declared effective by the Securities and Exchange
Commission on June 25, 1979. The Partnership marketed its securities pursuant
to its Prospectus dated June 25, 1979, and thereafter supplemented (hereinafter
the "Prospectus"). This Prospectus was filed with the Securities and Exchange
Commission pursuant to Rule 424 (b) of the Securities Act of 1933.
From June 1979 through December 1979, the Partnership offered and sold
$64,806,000 in Limited Partnership Units. The net proceeds of this offering
were used to purchase nineteen income-producing real properties, or interest
therein. The principal business of the Partnership is and has been to acquire,
hold for investment and ultimately sell income-producing real property. The
Partnership presently owns three residential apartment complexes located in
Nevada and Arizona. The Partnership sold three of its properties in 1995, three
in 1996, and one in 1997. See "Item 2. Description of Properties" for a
description of the Partnership's remaining properties and "Item 6. Management's
Discussion and Analysis or Plan of Operation" for a description of the 1996 and
1997 sales of the Partnership's properties.
The Managing General Partner of the Partnership intends to maximize the
operating results and, ultimately, the net realizable value of each of the
Partnership's properties in order to achieve the best possible return for the
investors. Such results may best be achieved through property sales,
refinancings, debt restructurings or relinquishment of the assets. The
Partnership intends to evaluate each of its holdings periodically to determine
the most appropriate strategy for each of the assets.
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. Limited partners have no right to
participate in the management or conduct of such business and affairs. NPI-AP
Management L.P. ("NPI-AP"), an affiliate of the Managing General Partner,
provides day-to-day management services for the Partnership's residential
investment properties. See "Item 12. Certain Relationships and Related
Transactions" for discussion of transactions with affiliated parties.
The business in which the Partnership is engaged is highly competitive, and the
Partnership is not a significant factor in its industry. Each of its apartment
properties is located in or near a major urban area and, accordingly, competes
for rentals not only with similar apartment properties in its immediate area but
with hundreds of similar apartment properties throughout the urban area,
including properties owned and/or managed by affiliates of the Partnership.
Such competition is primarily on the basis of location, rents, services and
amenities. In addition, the Partnership competes with significant numbers of
individuals and organizations (including similar partnerships, real estate
investment trusts and financial institutions) with respect to the sale of
improved real properties, primarily on the basis of the prices and terms of such
transactions.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins, and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed, which resulted in no material adverse
conditions or liabilities. In no case has the Partnership received notice that
it is a potentially responsible party with respect to an environmental clean up
site.
Change in Control
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 Investment II, Inc. ("NPI
Equity"), the managing general partner of FRI, and National Property Investors,
Inc. ("NPI"). NPI was the sole shareholder of NPI Equity until December 31,
1996, at which time the stock of NPI Equity was acquired by Insignia Properties
Trust, an affiliate of Insignia. In connection with these transactions,
affiliates of Insignia appointed new officers and directors of NPI, NPI Equity
and FCMC. See "Item 9. Directors, Executive Officers, Promoters and Control
Persons, Compliance with Section 16(a) of the Exchange Act" for information on
the directors and executive officers of the Partnership.
Tender Offers
On January 19, 1996, DeForest Ventures I L.P., the entity which tendered for
units of the Partnership in 1994 and 1995, and certain of its affiliates sold
the units then held by them (26,615.0543 units representing approximately 41% of
the total outstanding units at such time) to Riverside Drive L.L.C.
("Riverside"), an affiliate of Insignia. As a result, Riverside could be in a
position to significantly influence all voting decisions with respect to the
Partnership. Under the Partnership Agreement, unitholders holding a majority of
the Units are entitled to take action with respect to a variety of matters.
When voting on matters, Riverside would in all likelihood vote the Units it
acquired in a manner favorable to the interest of the Managing General Partner
because of its affiliation with the Managing General Partner. However,
Riverside has agreed for the benefit of non-tendering unitholders, that it will
vote its Units: (i) against any proposal to increase the fees and other
compensation payable by the Partnership to the Managing General Partner and any
of its affiliates; and (ii) with respect to any proposal made by the Managing
General Partner or any of its affiliates, in proportion to votes cast by other
unitholders. Except for the foregoing, no other limitations are imposed on
Riverside's right to vote each Unit acquired. In addition to the foregoing
units, Insignia Properties L.P. ("IPLP"), an affiliate of Insignia, acquired
2,926 units pursuant to its December 17, 1997, tender offer. See "Item 11.
Security Ownership of Certain Beneficial Owners and Management" for additional
information with respect to this tender offer.
ITEM 2. DESCRIPTION OF PROPERTIES.
The following table sets forth the Partnership's remaining investment
properties:
<TABLE>
<CAPTION>
Date of Type of
Property Purchase Ownership Use
<S> <C> <C> <C>
Torrey Pines Village Apartments 09/79 Fee ownership subject Apartment
Las Vegas, Nevada to a first mortgage 204 units
St. Charleston Village 09/79 Fee ownership subject Apartment
Apartments to a first mortgage 312 units
Las Vegas, Nevada
Sun River Apartments 11/80 Fee ownership subject Apartment
Tempe, Arizona to a first mortgage 334 units
</TABLE>
SCHEDULE OF PROPERTIES (IN THOUSANDS):
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
Torrey Pines $ 6,171 $ 3,302 5-30 SL $ 2,309
St. Charleston 9,659 5,243 5-30 SL 3,556
Sun River 10,829 5,529 5-30 SL 1,659
Total $ 26,659 $ 14,074 $ 7,524
See "Note A" to the consolidated financial statements included in "Item 7.
Financial Statements" for a description of the Partnership's depreciation
policy.
SCHEDULE OF MORTGAGES (IN THOUSANDS):
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1997 Rate Amortized Date Maturity
Torrey Pines $ 3,670 9.88% 30 years 7/1/01 $ 3,552
St. Charleston 6,165 9.88% 30 years 7/1/01 5,967
Sun River 6,232 9.88% 30 years 7/1/01 6,032
Total $ 16,067
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's properties and by pledge of revenues from the respective rental
properties. All mortgage notes payable include prepayment penalties if repaid
prior to maturity.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average Annual Average
Rental Rates Occupancy
Property 1997 1996 1997 1996
Torrey Pines $6,782/unit $6,654/unit 91% 94%
St. Charleston 6,929/unit 6,763/unit 93% 95%
Sun River 7,125/unit 6,708/unit 95% 97%
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other properties in the area. The Managing General Partner
believes that all of the properties are adequately insured. The multi-family
residential properties' lease terms are for one year or less. No individual
residential property tenant leases 10% or more of the available rental space.
Real estate taxes (in thousands) and rates in 1997 for each property were:
1997 1997
Billing Rate
Torrey Pines $ 82 3.01%
St. Charleston 126 3.01%
Sun River 98 1.23%
ITEM 3. LEGAL PROCEEDINGS.
The Partnership is unaware of any pending or outstanding litigation that is not
routine in 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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The unit holders of the Partnership did not vote on any matter during the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S EQUITY AND RELATED PARTNER MATTERS.
The Partnership, a publicly-held limited partnership, originally sold 64,806
Limited Partnership Units. As of January 1, 1998, the number of holders of
Limited Partnership Units was 3,605. There is no intention to sell additional
Limited Partnership Units nor is there an established public trading market for
these Units.
On November 12, 1997, the Partnership distributed approximately $1,478,000
($22.81 per limited partnership unit) to the limited partners and approximately
$30,000 to the general partners from the proceeds received from the sale of the
Partnership's Gateway Park property and from the Partnership's operations.
On January 11, 1996, the Partnership distributed $980,000 ($15.12 per limited
partnership 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 limited partnership unit) to the limited partners and approximately
$135,000 to the general partners. This distribution primarily represented
proceeds from the sales of University Square and Broadway Trade during the first
quarter of 1996.
During the first quarter of 1998, the Partnership plans to distribute
approximately $1,703,000 ($26.28 per limited partnership unit) to the limited
partners and approximately $35,000 to the general partners from proceeds from
the Waverley Apartments note and from operations. The Managing General Partner
anticipates making a distribution during the second half of 1998.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership realized net income for the year ended December 31, 1997, of
approximately $2,877,000 versus $2,727,000 for the year ended December 31, 1996.
Included in net income for the year ended December 31, 1997, is approximately
$2,813,000 in gains from the sale of the Partnership's Gateway Park property in
1997, and the collection of a note receivable, which had previously been fully
reserved due to uncertainty regarding collectability, related to the sale in
1987 of the Partnership's Waverley Apartments (see discussion below). Included
in net income for the year ended December 31, 1996, is approximately $3,012,000
in gains on the sales of the Partnership's Broadway Trade Center, University
Square Shopping Center, and the Oaks Shopping Center properties. The sale of the
properties in 1996 and 1997 is largely responsible for the overall decrease in
rental income, other income, operating expenses, depreciation expense, property
tax expense, and interest expense. Also contributing to the decrease in other
income was a decrease in interest income due to lower average cash balances in
1997 compared to 1996. Average cash balances were higher in 1996 due to timing
of the distribution of property sale proceeds. General and administrative
expenses decreased during 1997 due to a decrease in professional fees from
1996. Professional fees for auditing and legal expenses decreased as the result
of the Partnership owning fewer properties in 1997. During the year ended
December 31, 1997 and 1996, the Partnership incurred extraordinary losses on the
early extinguishment of the Gateway Park debt in 1997 and the Broadway Trade
Center debt in 1996. The extraordinary loss in 1997 of approximately $19,000
represents the remaining unamortized loan costs related to the Gateway Park debt
at the time of its payoff. The extraordinary loss in 1996 of approximately
$315,000 represents the remaining unamortized mortgage discount of the Broadway
Trade Center debt at the time of its payoff.
With respect to the Partnership's remaining properties at December 31, 1997,
rental revenues increased by approximately $66,000 when compared with the year
ended December 31, 1996, due to increased rental rates which were partially
offset by small decreases in occupancy at all three of the remaining properties
in 1997. Depreciation, interest, and property tax expenses at the remaining
properties for the year ended December 31, 1997, were consistent with the year
ended December 31, 1996.
Included in operating expenses of the remaining properties is approximately
$130,000 of major repairs and maintenance comprised primarily of parking lot
repairs and landscaping during the year ended December 31, 1997. At the
remaining properties, approximately $290,000 of major repairs and maintenance
comprised primarily of exterior building repairs, landscaping, and swimming pool
repairs was spent during the year ended December 31, 1996.
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, however, collected in September 1997, and, as a result, is
reflected as a gain on sale of property on the consolidated statement of
operations for the year ended December 31, 1997. Previously, the note was fully
reserved due to uncertainty regarding collectability.
On April 26, 1996, the Partnership sold The Oaks Shopping Center located in
Beaumont, Texas, to an unaffiliated third party. 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.
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.
Liquidity and Capital Resources
At December 31, 1997, the Partnership had unrestricted cash and cash equivalents
of approximately $3,524,000 compared to approximately $1,985,000 at December 31,
1996. The net increase in cash and cash equivalents for the year ended December
31, 1997, was approximately $1,539,000 compared to a net decrease of
approximately $591,000, for the comparable period in 1996. Net cash provided by
operating activities remained relatively constant. Net cash provided by
investing activities decreased due to proceeds from the sale of Broadway Trade
Center and University Square Shopping Center in 1996 being greater than the
proceeds received from the sale of Gateway Park in 1997 and from the note
collected for the sale of the Waverley Apartments. 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 exceeding the
1997 distribution of the proceeds from the sale of Gateway Park and cash from
operations.
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 $16,067,000 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, and the availability of cash reserves. On November 12, 1997,
the Partnership distributed approximately $1,478,000 ($22.81 per limited
partnership unit) to the limited partners and approximately $30,000 to the
general partners from the proceeds received from the sale of the Partnership's
Gateway Park property and the Partnership's operations. On January 11, 1996,
the Partnership distributed $980,000 ($15.12 per limited partnership 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 limited
partnership 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. During the first quarter of 1998, the Partnership plans to distribute
approximately $1,703,000 ($26.28 per limited partnership unit) to the limited
partners and approximately $35,000 to the general partners from proceeds from
the Waverley Apartments note and from operations.
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 annual 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 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 annual 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.
ITEM 7. FINANCIAL STATEMENTS.
CENTURY PROPERTIES FUND XIV
LIST OF FINANCIAL STATEMENTS
Independent Auditors' Report
Consolidated Balance Sheet - December 31, 1997
Consolidated Statements of Operations - Years ended December 31, 1997 and
1996
Consolidated Statements of Changes in Partners' Capital (Deficit) - Years
ended December 31, 1997 and 1996
Consolidated Statements of Cash Flows - Years ended December 31, 1997 and
1996
Notes to Consolidated Financial Statements
Independent Auditors' Report
To the Partners
Century Properties Fund XIV
Greenville, South Carolina
We have audited the accompanying consolidated balance sheet of Century
Properties Fund XIV (a limited partnership)(the "Partnership") and its
subsidiaries as of December 31, 1997, and the related consolidated statements of
operations, changes in partners' capital and cash flows for each of the two
years in the period ended December 31, 1997. These consolidated financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Century
Properties Fund XIV and its subsidiaries as of December 31, 1997, and the
results of its operations and its cash flows for each of the two years in the
period ended December 31, 1997, in conformity with generally accepted accounting
principles.
/s/ Imowitz Koenig & Co., LLP
Certified Public Accountants
New York, NY
January 15, 1998
CENTURY PROPERTIES FUND XIV
CONSOLIDATED BALANCE SHEET
December 31, 1997
(in thousands, except unit data)
Assets
Cash and cash equivalents $ 3,524
Receivables and deposits 322
Restricted escrows 237
Other assets 328
Investment properties (Notes A, D, and G):
Land $ 2,288
Buildings and related personal property 24,371
26,659
Less accumulated depreciation (14,074) 12,585
$16,996
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 129
Tenant security deposits payable 139
Accrued property taxes 49
Other liabilities 215
Mortgage notes payable (Note C) 16,067
Partners' Capital
General partners' $ 8
Limited partners' (64,806 units issued
and outstanding) 389 397
$16,996
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended
December 31,
1997 1996
<S> <C> <C>
Revenues:
Rental income $ 5,701 $ 6,211
Other income 413 507
Gain on sale of properties (Note D and E) 2,813 3,012
Total revenues 8,927 9,730
Expenses:
Operating 2,724 2,996
General and administrative 329 394
Depreciation 921 990
Interest 1,739 1,957
Property taxes 318 351
Total expenses 6,031 6,688
Income before extraordinary loss 2,896 3,042
Extraordinary loss on early extinguishment of debt (Note D) (19) (315)
Net income $ 2,877 $ 2,727
Net income allocated to general partners $ 43 $ 124
Net income allocated to limited partners 2,834 2,603
$ 2,877 $ 2,727
Net income per limited partnership unit:
Income before extraordinary loss $ 44.02 $ 44.93
Extraordinary loss on early extinguishment of debt (.29) (4.76)
Net income per limited partnership unit $ 43.73 $ 40.17
Distributions per limited partnership unit $ 22.81 $ 117.23
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(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 year
ended December 31, 1996 -- 124 2,603 2,727
Partners' deficit at
December 31, 1996 64,806 (5) (967) (972)
Distributions to partners -- (30) (1,478) (1,508)
Net income for the year
ended December 31, 1997 -- 43 2,834 2,877
Partners' capital at
December 31, 1997 64,806 $ 8 $ 389 $ 397
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended
December 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,877 $ 2,727
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 921 990
Amortization of loan costs, discounts and
lease commissions 72 94
Gain on sale of properties (2,813) (3,012)
Extraordinary loss on extinguishment of debt 19 315
Change in accounts:
Receivables and deposits 203 174
Other assets 7 (71)
Accounts payable (2) 117
Tenant security deposits payable (24) (66)
Accrued property taxes (3) (91)
Other liabilities (26) 116
Net cash provided by operating activities 1,231 1,293
Cash flows from investing activities:
Property improvements and replacements (432) (507)
Net deposits to restricted escrows (25) (83)
Proceeds from sale of properties 3,909 8,158
Net cash provided by investing activities 3,452 7,568
Cash flows from financing activities:
Payments on mortgage notes payable (130) (109)
Repayment of mortgage notes payable (1,506) (1,591)
Distributions to partners (1,508) (7,752)
Cash used in financing activities (3,144) (9,452)
Net increase (decrease) in cash and cash equivalents 1,539 (591)
Cash and cash equivalents at beginning of year 1,985 2,576
Cash and cash equivalents at end of year $ 3,524 $ 1,985
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,679 $ 1,866
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>
CENTURY PROPERTIES FUND XIV
Notes to Consolidated Financial Statements
December 31, 1997
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
Century Properties Fund XIV (the "Partnership") is a limited partnership
organized under the laws of the State of California to acquire, hold for
investment and ultimately sell income-producing real estate. The Partnership
currently owns three residential apartment complexes located in Nevada and
Arizona. The general partners are Fox Realty Investors ("FRI"), a California
general partnership, and Fox Capital Management Corporation ("FCMC" or the
"Managing General Partner"), a California Corporation. The original capital
contributions of $64,806,000 ($1,000 per unit) were made by the limited
partners, including 100 limited partnership units purchased by FCMC.
Principles of Consolidation:
The Partnership's financial statements include the accounts of Century St.
Charleston, LP, Century Sun River LP, and Century Torrey Pines, LP. The
Partnership owns a 99% interest in each of the partnerships and it has the
ability to control the major operating and financial policies of these
partnerships. All intercompany transactions have been eliminated.
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 amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Allocation of Income, Loss, and Distribution:
Net income, net loss, and distributions of cash of the Partnership are allocated
between general and limited partners in accordance with the provisions of the
Partnership Agreement.
Fair Value of Financial Instruments:
Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial Instruments," as amended by SFAS No. 119, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instrument could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's long term debt, after
discounting the scheduled loan payments to maturity, approximates its carrying
balance. Due to significant prepayment penalties associated with portions of
the debt, it would not be beneficial to the Partnership to refinance those
obligations.
Cash and Cash Equivalents:
The Partnership considers all highly liquid investments with an original
maturity of three months or less at the time of purchase to be cash equivalents.
At certain times, the amount of cash deposited at a bank may exceed the limit on
insured deposits.
Security Deposits:
The Partnership requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables and deposits. The security
deposits are refunded when the tenant vacates, provided the tenant has not
damaged its space, and is current on its rental payments.
Investment Properties:
Investment properties are stated at cost. Acquisition fees are capitalized as a
cost of real estate. In accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of",
the Partnership records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets may be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of these assets.
Depreciation:
Depreciation is computed by the straight-line method over estimated useful lives
ranging from 27.5 to 30 years for buildings and improvements and five to seven
years for furnishings.
Leases:
The Partnership generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases.
Advertising Costs:
Advertising costs of approximately $90,000 in 1997 and $85,000 in 1996 were
charged to expense as incurred and are included in operating expenses.
Deferred Costs:
Deferred costs represent financing costs and lease commissions. Deferred
financing costs are amortized as interest expense over the lives of the related
loans, or expensed, if financing is not obtained. At December 31, 1997,
deferred financing costs totaled approximately $438,000 and are included in
other assets. At December 31, 1997, accumulated amortization of deferred
financing costs totaled approximately $219,000. Deferred leasing commissions
related to Gateway Park, which was sold on August 13, 1997, were amortized over
the life of the applicable lease. Such amortization was charged to operating
expenses.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Reclassifications:
Certain reclassifications have been made to the 1996 balances 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.
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"). NPI was the sole stockholder of NPI Equity until December 31,
1996, at which time the stock of NPI Equity until December 31, 1996 at which
time the stock of NPI Equity was acquired by Insignia Properties Trust, an
affiliate of Insignia. 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 years ended December 31, 1997 and 1996 (in
thousands):
1997 1996
Property management fees (included in operating
expenses) $ 288 $ 277
Reimbursement for services of affiliates, including
$4,000 and $8,000 of construction service
reimbursements in 1997 and 1996, respectively
(included in operating and general and
administrative expenses) 147 160
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 master policy. The 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.
Pursuant to the Partnership Agreement, for managing the affairs of the
Partnership, the general partners are entitled to receive a partnership
management fee equal to 10% of the Partnership's adjusted cash from operations
as distributed. The general partners received approximately $67,000 and $7,000
in partnership management fees for the years ended December 31, 1997, and 1996,
respectively.
In December 1997, Insignia affiliates (the "Purchaser") commenced tender offers
for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 20,000 of the outstanding
units of limited partnership interest in the Partnership, at $150.00 per Unit,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 17, 1997.
In accordance with the Partnership Agreement, the general partners were
allocated their two percent continuing interest in the Partnership's net income
and taxable income. Gains from dispositions of Partnership properties were
allocated first to the general partners to the extent of the deficit in their
capital accounts at the time of the dispositions, then two percent of the
remainder after allocation to the limited partners to the extent of the deficit
in their capital accounts.
On November 12, 1997, the general partners received a distribution of
approximately $30,000 representing the general partners' two percent interest in
cash available for distributions, which was from the proceeds received on the
sale of the Partnership's Gateway Park property (see "Note D") and from the
Partnership's operations.
On July 3, 1996, the general partners received a distribution of approximately
$135,000, representing the general partners' two percent interest in cash
available for distribution, which was primarily from the proceeds received on
the sale of the Partnership's University Square and Broadway Trade properties
(see "Note D"). On January 11, 1996, the general partners received a
distribution of $20,000, representing the general partners' two percent interest
in cash available for distribution, which was primarily from the proceeds
received on the sale of the Partnership's Wingren Plaza property (see "Note D").
NOTE C - MORTGAGE NOTES PAYABLE
The principle terms of mortgage notes payable are as follows (in thousands):
Principal Monthly Principal
Balance At Payment Balance
December 31, Including Interest Maturity Due At
Property 1997 Interest Rate Date Maturity
Torrey Pines $ 3,670 $ 33 9.88% 7/1/01 $ 3,552
St. Charleston 6,165 55 9.88% 7/1/01 5,967
Sun River 6,232 55 9.88% 7/1/01 6,032
$16,067 $ 143
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's rental properties and by pledge of revenues from the respective
rental properties. All mortgage notes payable include prepayment penalties if
repaid prior to maturity.
Scheduled principal payments of mortgage notes payable subsequent to December
31, 1997, are as follows:
1998 $ 130
1999 143
2000 158
2001 15,636
Total $16,067
Amortization of deferred financing costs totaled approximately $66,000 and
$68,000 for 1997 and 1996, respectively.
NOTE D - DISPOSITION OF RENTAL 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.
On April 26, 1996, the Partnership sold The Oaks Shopping Center located in
Beaumont, Texas, to an unaffiliated third party. 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 mortgages 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 the
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 E - NOTE RECEIVABLE FROM PROPERTY SALE
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, however, collected in September 1997, and, as a result,
reflected as a gain on sale of property on the consolidated statement of
operations for the year ended December 31, 1997. Previously, the note was fully
reserved due to uncertainty regarding collectability.
NOTE F - INCOME TAXES
The Partnership files its tax return on an accrual basis and has computed
depreciation for tax purposes using accelerated methods, which are not in
accordance with generally accepted accounting principles. A reconciliation of
the net income per the financial statements to the net taxable income to
partners is as follows (in thousands, except unit data)
1997 1996
Net income as reported $ 2,877 $ 2,727
Add (deduct):
Collection of note receivable (1,500) --
Mortgage notes payable discount amortization -- 322
Interest income on notes receivable 104 64
Depreciation differences 300 96
Unearned revenue -- 10
Property dispositions - net (166) 2,057
Other (16) (2)
Federal taxable income $ 1,599 $ 5,274
Federal taxable income per limited
partnership unit $ 24.18 $ 77.92
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
Net assets as reported $ 397
Differences resulted from:
Sales commissions and organization costs 6,749
Construction interest and financing costs (639)
Reduction of rental properties due to
lease payments 242
Depreciation (4,674)
Unearned revenue 14
Other 11
Net assets - Federal tax basis $ 2,100
NOTE G - INVESTMENT PROPERTIES AND ACCUMULATED DEPRECIATION (IN THOUSANDS)
Initial Cost
To Partnership
Buildings Net Costs
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Torrey Pines $ 3,670 $ 460 $ 4,595 $ 1,116
St. Charleston 6,165 751 7,322 1,586
Sun River 6,232 1,102 8,770 957
Total $ 16,067 $2,313 $20,687 $ 3,659
<TABLE>
<CAPTION>
Gross Amount at Which Carried
At December 31, 1997
Buildings Accumu- Year Date Deprec-
And Related lated of of iable
Personal Deprec- Construc- Acqui- Life-
Description Land Property Total iation tion sition Years
<S> <C> <C> <C> <C> <C> <C> <C>
Torrey Pines $ 455 $ 5,716 $ 6,171 $ 3,302 1980 09/79 5-30 yrs.
St. Charleston 743 8,916 9,659 5,243 1980 09/79 5-30 yrs.
Sun River 1,090 9,739 10,829 5,529 1981 11/80 5-30 yrs.
Total $2,288 $24,371 $26,659 $14,074
</TABLE>
Reconciliation of Investment Properties and Accumulated Depreciation:
Years Ended December 31,
1997 1996
Investment Properties
Balance at beginning of year $ 28,022 $ 41,575
Property improvements 432 507
Dispositions (1,795) (14,060)
Balance at end of year $ 26,659 $ 28,022
Accumulated Depreciation
Balance at beginning of year $ 13,868 $ 19,115
Additions charged to expense 921 990
Dispositions (715) (6,237)
Balance at end of year $ 14,074 $ 13,868
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1997 and 1996, is approximately $26,266,000 and $27,627,000,
respectively. The accumulated depreciation taken for Federal income tax purposes
at December 31, 1997 and 1996, is approximately $18,742,000 and $18,657,000,
respectively.
NOTE H - DISTRIBUTIONS
On November 12, 1997, the Partnership distributed approximately $1,478,000
($22.81 per limited partnership unit) to the limited partners and approximately
$30,000 to the general partners from the proceeds received from the
Partnership's Gateway Park property and from the Partnership's operations.
On January 11, 1996, the Partnership distributed $980,000 ($15.12 per limited
partnership 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 limited partnership unit) to the limited partners and $135,000 to
the general partners. The distribution primarily represented proceeds received
from the sales of University Square and Broadway Trade during the first quarter
of 1996.
NOTE I - SUBSEQUENT EVENT
During the first quarter of 1998, the Partnership plans to distribute
approximately $1,703,000 ($26.28 per limited partnership unit) to the limited
partners and approximately $35,000 to the general partners from proceeds from
the Waverley Apartments note and from operations.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There were no disagreements with Imowitz Koenig & Co., LLP regarding the 1997
and 1996 audits of the Partnership's financial statements.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Century Properties Fund XIV (the "Partnership") does not have any officers or
directors. The managing general partner of the Partnership, Fox Capital
Management Corporation ("FCMC" or the "Managing General Partner"), manages and
controls substantially all of the Partnership's affairs and has general
responsibility and ultimate authority in all matters affecting its business.
The names of the directors and executive officers of the Managing General
Partner as of January 29, 1998, their ages and nature of all positions with FCMC
presently held by them are as follows:
Name Age Position
William H. Jarrard, Jr. 51 President and Director
Ronald Uretta 41 Vice President and Treasurer
Martha L. Long 38 Controller
Robert D. Long, Jr. 30 Vice President
Daniel M. LeBey 32 Vice President and Secretary
Kelley M. Buechler 40 Assistant Secretary
William H. Jarrard, Jr. has been President and Director of the Managing General
Partner since June 1996. He has acted as Senior Vice President of Insignia
Properties Trust ("IPT"), parent of the Managing General Partner, since May
1997. Mr. Jarrard previously acted as Managing Director - Partnership
Administration of Insignia Financial Group, Inc. ("Insignia") from January 1991
through September 1997 and served as Managing Director - Partnership
Administration and Asset Management of Insignia from July 1994 until January
1996.
Ronald Uretta has been Vice President and Treasurer of the Managing General
Partner since June 1996 and Insignia's Treasurer since January 1992. Since
August 1996, he has also served as Insignia's Chief Operating Officer. He has
also served as Insignia's Secretary from January 1992 to June 1996 and as
Insignia's Chief Financial Officer from January 1992 to August 1996.
Martha L. Long has been Controller of the Managing General Partner since
December 1996 and Senior Vice President - Finance and Controller of Insignia
since January 1997. In June 1994, Ms. Long joined Insignia as its Controller,
and was promoted to Senior Vice President - Finance in January 1997. Prior to
that time, she was Senior Vice President and Controller of the First Savings
Bank, in Greenville, SC.
Robert D. Long, Jr. has been Vice President of the Managing General Partner
since January 2, 1998. Mr. Long joined Metropolitan Asset Enhancement, L.P.
("MAE"), an affiliate of Insignia, in September 1993. Since 1994 he has acted
as Vice President and Chief Accounting Officer of the MAE subsidiaries. Mr.
Long was an accountant for Insignia until joining MAE in 1993. Prior to joining
Insignia, Mr. Long was an auditor for the State of Tennessee and was associated
with the accounting firm of Harsman Lewis and Associates.
Daniel M. LeBey has been Vice President and Secretary of the Managing General
Partner since January 29, 1998 and Insignia's Assistant Secretary since April
30, 1997. Since July 1996 he has also served as Insignia's Associate General
Counsel. From September 1992 until June 1996, Mr. LeBey was an attorney with
the law firm of Alston & Bird LLP, Atlanta, Georgia.
Kelley M. Buechler has been Assistant Secretary of the Managing General Partner
since June 1996 and Assistant Secretary of Insignia since 1991.
No family relationships exist among any of the officers or directors of the
Managing General Partner.
ITEM 10. EXECUTIVE COMPENSATION.
No direct form of compensation or remuneration was paid by the Partnership to
any officer or director of the Managing General Partner. The Partnership has no
plan, nor does the Partnership presently propose a plan, which will result in
any remuneration being paid to any officer or director upon termination of
employment. However, reimbursements and other payments have been made to the
Partnership's Managing General Partner and its affiliates, as described in "Item
12. Certain Relationships and Related Transactions" below.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth certain information regarding limited partnership
units of the Partnership owned by each person who is known by the Partnership to
own beneficially or exercise voting or dispositive control over more than 5% of
the Partnership's limited partnership units, by each of the Managing General
Partner's directors and by all directors and executive officers of the Managing
General Partner as a group as of January 1, 1998.
Name and address of Amount and nature of
Beneficial Owner Beneficial Ownership % of Class
Riverside Drive LLC (1) 26,615.0543 41.06%
All directors and
executive officers as
a group (6 persons) -- --
(1) The business address is One Insignia Financial Plaza, Greenville, South
Carolina 29602.
In December 1997, Insignia affiliates (the "Purchaser") commenced tender offers
for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 20,000 of the outstanding
units of limited partnership interest in the Partnership, at $150.00 per Unit,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 17, 1997 (the "Offer to Purchase")
and the related Assignment of Partnership Interest attached as Exhibits (a)(1)
and (a)(2), respectively, to the Tender Offer Statement on Schedule 14D-1
originally filed with the Securities and Exchange Commission on December 17,
1997. Because of the existing and potential future conflicts of interest
(described in the Partnership's Statements on Schedule 14D-9 filed with the
Securities and Exchange Commission), neither the Partnership nor the Managing
General Partner expressed any opinion as to the Offer to Purchase and made no
recommendation as to whether unit holders should tender their units in response
to the Offer to Purchase. In addition, because of these conflicts of interests,
including as a result of the Purchaser's affiliation with various Insignia
affiliates, the manner in which the Purchaser votes its limited partner
interests in the Partnership may not always be consistent with the best
interests of the other limited partners. As a result of the tender offer, the
Purchaser acquired 2,926 units as of January 30, 1998, the date the tender offer
closed.
As a result of its ownership of 26,615.0543 limited partnership units, Riverside
Drive L.L.C. ("Riverside") could be in a position to significantly influence all
voting decisions with respect to the Partnership. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, Riverside
would in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner. However, Riverside has agreed for the benefit of non-
tendering unitholders, that it will vote its Units: (i) against any proposal to
increase the fees and other compensation payable by the Partnership to the
Managing General Partner and any of its affiliates; and (ii) with respect to any
proposal made by the Managing General Partner or any of its affiliates, in
proportion to votes cast by other unitholders. Except for the foregoing, no
other limitations are imposed on Riverside's right to vote each Unit acquired.
There are no arrangements known to the Managing General Partner, the operation
of which may, at a subsequent date, result in a change in control of the
Partnership.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
No transactions have occurred between the Partnership and any officer or
director of the Managing General Partner.
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.
Pursuant to a series of transactions which closed during 1996, affiliates of
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"). NPI was the sole stockholder of
NPI Equity until December 31, 1996, at which time the stock of NPI Equity was
acquired by Insignia Properties Trust, an affiliate of Insignia. 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 years ended December 31, 1997 and 1996 (in
thousands):
1997 1996
Property management fees $ 288 $ 277
Reimbursement for services of affiliates, including
$4,000 and $8,000 of construction service
reimbursements in 1997 and 1996, respectively 147 160
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 master policy. The 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.
Pursuant to the Partnership Agreement, for managing the affairs of the
Partnership, the general partners are entitled to receive a partnership
management fee equal to 10% of the Partnership's adjusted cash from operations
as distributed. The general partners received approximately $67,000 and $7,000
in partnership management fees for the years ended December 31, 1997 and 1996,
respectively.
In accordance with the Partnership Agreement, the general partners were
allocated their two percent continuing interest in the Partnership's net income
and taxable income. Gains from dispositions of Partnership properties were
allocated first to the general partners to the extent of the deficit in their
capital accounts at the time of the dispositions, then two percent of the
remainder, after allocation to the limited partners to the extent of the deficit
in their capital accounts.
On November 12, 1997, the general partners received a distribution of
approximately $30,000 representing the general partners' two percent interest in
cash available for distributions, which was from the proceeds received on the
sale of the Partnership's Gateway Park property and from the Partnership's
operations.
On July 3, 1996, the general partners received a distribution of approximately
$135,000, representing the general partners' two percent interest in cash
available for distribution, which was primarily from the proceeds received on
the sale of the Partnership's University Square and Broadway Trade properties.
On January 11, 1996, the general partners received a distribution of $20,000,
representing the general partners' two percent interest in cash available for
distribution, which was primarily from the proceeds received on the sale of the
Partnership's Wingren Plaza property.
In December 1997, Insignia affiliates (the "Purchaser") commenced tender offers
for limited partnership interests in ten real estate limited partnerships
(including the Partnership) in which various Insignia affiliates act as general
partner. The Purchaser offered to purchase up to 20,000 of the outstanding
units of limited partnership interest in the Partnership, at $150.00 per Unit,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated December 17, 1997. As a result of the
tender offer, the Purchaser acquired 2,926 of the outstanding limited
partnership units of the Partnership as of January 30, 1998.
During 1996, an affiliate of Insignia acquired approximately 41% of the limited
partnership units of the Partnership, as discussed in "Item 11. Security
Ownership of Certain Beneficial Owners and Management" above.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits: See Exhibit Index contained herein.
(b) Reports of Form 8-K filed during the fourth quarter of 1997: None.
SIGNATURES
In accordance with Section 13 or 15(d) 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
Date: March 12, 1998
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf by the registrant and in the capacities and on the
date indicated.
Signature/Name Title Date
/s/ William H. Jarrard, Jr. President and Director March 12, 1998
William H. Jarrard, Jr.
/s/Ronald Uretta Vice President and Treasurer March 12, 1998
Ronald Uretta
CENTURY PROPERTIES FUND XIV
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of
August 17, 1995, incorporated by reference to the
Partnership's Current Report on Form 8-K dated August
17, 1995.
2.2 Partnership Units Purchase Agreement dated as of
August 17, 1995, incorporated by reference to Exhibit
2.1 to Form 8-K filed by Insignia Financial Group,
Inc. ("Insignia") with the Securities and Exchange
Commission on September 1, 1995.
2.3 Management Purchase Agreement dated as of August 17,
1995, incorporated by reference to Exhibit 2.2 to
Form 8-K filed by Insignia with the Securities and
Exchange Commission on September 1, 1995.
2.4 Limited Liability Company Agreement of Riverside
Drive L.L.C., dated as of August 17, 1995
incorporated by reference to Exhibit 2.4 to Form 8-K
filed by Insignia with the Securities and Exchange
Commission on September 1, 1995.
2.5 Master Indemnity Agreement dated as of August 17,
1995, incorporated by reference to Exhibit 2.5 to
Form 8-K filed by Insignia with the Securities and
Exchange Commission on September 1, 1995.
3.4 Agreement of Limited Partnership, incorporated by
reference to Exhibit A to the Prospectus of the
Partnership dated September 11, 1978, and thereafter
supplemented, included in the Partnership's
Registration Statement on Form S-11 (Reg. No. 2-
61526).
10.1 Purchase and Sale Agreement between Registrant and
St. Michael Investments dated August 13, 1997,
incorporated by reference to Exhibit 10.1 to Form 8-K
filed with the Securities and Exchange Commission on
August 27, 1997.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Fund XIV 1997 Year-End 10-KSB and is qualified in its entirety by
reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000278128
<NAME> CENTURY PROPERTIES FUND XIV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 3,524
<SECURITIES> 0
<RECEIVABLES> 322
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,659
<DEPRECIATION> 14,074
<TOTAL-ASSETS> 16,996
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 16,067
0
0
<COMMON> 0
<OTHER-SE> 397
<TOTAL-LIABILITY-AND-EQUITY> 16,996
<SALES> 0
<TOTAL-REVENUES> 8,927
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 4,292
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,739
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 19
<CHANGES> 0
<NET-INCOME> 2,877
<EPS-PRIMARY> 43.73<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
