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 June 30, 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)
June 30, 1998
(in thousands, except unit data)
Assets
Cash and cash equivalents $ 2,138
Receivables and deposits 424
Restricted escrows 122
Other assets 212
Investment properties:
Land $ 2,288
Buildings and related personal property 24,656
26,944
Less accumulated depreciation (14,514) 12,430
$ 15,326
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 59
Tenant security deposit liabilities 146
Accrued property taxes 51
Other liabilities 219
Mortgage notes payable 16,004
Partners' Deficit
General partners' $ (23)
Limited partners' (64,806 units issued and
outstanding) (1,130) (1,153)
$ 15,326
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 Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues:
Rental income $1,379 $1,436 $2,734 $2,889
Other income 92 91 194 182
Total revenues 1,471 1,527 2,928 3,071
Expenses:
Operating 591 633 1,164 1,152
General and administrative 63 74 157 126
Depreciation 222 232 440 460
Interest 412 447 824 895
Property taxes 76 84 155 168
Total expenses 1,364 1,470 2,740 2,801
Net income $ 107 $ 57 $ 188 $ 270
Net income allocated
to general partners (2%) $ 2 $ 1 $ 4 $ 5
Net income allocated
to limited partners (98%) 105 56 184 265
$ 107 $ 57 $ 188 $ 270
Net income per limited
partnership unit $ 1.62 $ .86 $ 2.84 $ 4.09
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 six months
ended June 30, 1998 -- 4 184 188
Partners' deficit at
June 30, 1998 64,806 $ (23) $(1,130) $(1,153)
See Accompanying Notes to Consolidated Financial Statements
d)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1998 1997
Cash flows from operating activities:
Net income $ 188 $ 270
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 440 460
Amortization of loan costs and lease commissions 31 39
Change in accounts:
Receivables and deposits (102) 98
Other assets 85 4
Accounts payable (70) (114)
Tenant security deposit liabilities 7 (1)
Accrued property taxes 2 2
Other liabilities 4 (20)
Net cash provided by operating activities 585 738
Cash flows from investing activities:
Property improvements and replacements (285) (192)
Net receipts from restricted escrows 115 56
Net cash used in investing activities (170) (136)
Cash flows from financing activities:
Payments on mortgage notes payable (63) (68)
Distributions to partners (1,738) --
Net cash used in financing activities (1,801) (68)
Net (decrease) increase in cash and cash equivalents (1,386) 534
Cash and cash equivalents at beginning of period 3,524 1,985
Cash and cash equivalents at end of period $ 2,138 $ 2,519
Supplemental disclosure of cash flow information:
Cash paid for interest $ 792 $ 862
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 and six month periods ended June
30, 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 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
six month periods ended June 30, 1998 and 1997 (in thousands):
1998 1997
Property management fees (included in operating
expenses) $146 $145
Reimbursement for services of affiliates (included
in general and administrative expenses) 69 68
In addition, the Partnership paid approximately $2,000 during the six month
period ended June 30, 1997, to an affiliate of the Managing General Partner for
construction oversight reimbursements related to major repair projects. These
costs are included in operating expense. No construction oversight
reimbursements were paid during the six months ended June 30, 1998.
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 six month period ended June 30, 1998.
These costs are included in general and administrative expenses.
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 six months 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 was
also 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 six months ended June 30, 1998 and 1997:
Average
Occupancy
Property 1998 1997
St. Charleston Village Apartments 93% 94%
Las Vegas, Nevada
Sun River Apartments 96% 96%
Tempe, Arizona
Torrey Pines Village Apartments 91% 93%
Las Vegas, Nevada
The Partnership's net income for the six months ended June 30, 1998 was
approximately $188,000 versus net income of approximately $270,000 for the six
months ended June 30, 1997. The net income for the three months ended June 30,
1998 was approximately $107,000 versus net income of approximately $57,000 for
the three months ended June 30, 1997. The decrease in net income for the six
month period is primarily attributable to decreased rental income and increased
general and administrative expenses. Rental income decreased primarily due to
the sale of Gateway Business Park in August 1997. For the six month period ended
June 30, 1997, Gateway's rental revenue totaled approximately $180,000. General
and administrative expenses increased due to a partnership management fee of
approximately $26,000 being paid during the first quarter of 1998 related to the
portion of the 1998 distribution which represented cash from operations.
Depreciation, interest and property tax expenses decreased during the three and
six month periods ended June 30, 1998. These decreases are primarily
attributable to the sale of Gateway Business Park. Included in operating
expense for the six months ended June 30, 1998, is approximately $36,000 of
major repairs and maintenance items, comprised primarily of landscaping.
Included in operating expense for the six months ended June 30, 1997, is
approximately $39,000 of major repairs and maintenance items, comprised
primarily of parking lot repairs and 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 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 June 30, 1998, the Partnership had cash and cash equivalents of approximately
$2,138,000 compared to approximately $2,519,000 at June 30, 1997. The net
decrease in cash and cash equivalents for the period ended June 30, 1998 was
$1,386,000 compared to a net increase of $534,000 for the period ended June 30,
1997. Net cash provided by operating activities decreased due to the decrease
in rental revenue and the increase in general and administrative costs, as
discussed above, in addition to decreased cash provided by receivables and
deposits due to the timing of payments. Net cash used in investing activities
increased due to increased property improvements in 1998. Net cash used in
financing activities increased due to the distribution 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 $16,004,000 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
six month period ended June 30, 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
believes the action to be without merit, and intends to vigorously defend it.
On June 24, 1998, the Managing General Partner filed a motion seeking dismissal
of 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 quarter ended June 30, 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: July 31, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Century Properties Fund XIV 1998 Second 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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,138
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 26,944
<DEPRECIATION> 14,514
<TOTAL-ASSETS> 15,326
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 16,004
0
0
<COMMON> 0
<OTHER-SE> (1,153)
<TOTAL-LIABILITY-AND-EQUITY> 15,326
<SALES> 0
<TOTAL-REVENUES> 2,928
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,740
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 824
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 188
<EPS-PRIMARY> 2.84<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
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