FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _________to _________
Commission file number 0-9242
CENTURY PROPERTIES FUND XIV
(Exact name of small business issuer as specified in its charter)
California 94-2535195
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO 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 preceding 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___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 645
Receivables and deposits 273
Restricted escrows 183
Other assets 364
Investment properties:
Land $ 2,288
Buildings and related personal property 26,484
28,772
Less accumulated depreciation (16,698) 12,074
$ 13,539
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 93
Tenant security deposit liabilities 155
Accrued property taxes 103
Other liabilities 261
Mortgage notes payable 18,110
Partners' Deficit
General partners $ (105)
Limited partners (64,806 units issued and
outstanding) (5,078) (5,183)
$ 13,539
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,461 $ 1,328 $ 4,263 $ 4,103
Other income 111 90 292 259
Total revenues 1,572 1,418 4,555 4,362
Expenses:
Operating 614 610 1,723 1,593
General and administrative 93 54 278 177
Depreciation 281 229 804 684
Interest 407 408 1,220 1,225
Property taxes 91 92 289 253
Total expenses 1,486 1,393 4,314 3,932
Income before extraordinary item 86 25 241 430
Extraordinary loss on early
extinguishment of debt (Note E) -- -- (335) --
Net income (loss) $ 86 $ 25 $ (94) $ 430
Net income (loss) allocated to
general partners (2%) $ 2 $ -- $ (2) $ 9
Net income (loss) allocated to
limited partners (98%) 84 25 (92) 421
$ 86 $ 25 $ (94) $ 430
Per limited partnership unit:
Income before extraordinary item $ 1.30 $ 0.39 $ 3.64 $ 6.50
Extraordinary loss on early
extinguishment of debt -- -- (5.06) --
Net income (loss) $ 1.30 $ 0.39 $ (1.42) $ 6.50
Distributions per limited
partnership unit $ -- $ -- $ 35.91 $ --
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 64,806 $ -- $64,806 $64,806
Partners' deficit at
December 31, 1999 64,806 $ (55) $(2,659) $(2,714)
Distribution to partners -- (48) (2,327) (2,375)
Net loss for the nine months
ended September 30, 2000 -- (2) (92) (94)
Partners' deficit at
September 30, 2000 64,806 $ (105) $(5,078) $(5,183)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net (loss) income $ (94) $ 430
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation 804 684
Amortization of loan costs 33 47
Extraordinary loss on early extinguishment of debt 335 --
Change in accounts:
Receivables and deposits 164 (88)
Other assets (2) (25)
Accounts payable (51) (145)
Tenant security deposit liabilities (8) 11
Accrued property taxes 26 107
Other liabilities (82) (36)
Net cash provided by operating activities 1,125 985
Cash flows from investing activities:
Property improvements and replacements (578) (738)
Net withdrawals from (deposits to) restricted escrows 22 (117)
Net cash used in investing activities (556) (855)
Cash flows from financing activities:
Payments on mortgage notes payable (174) (106)
Repayment of mortgage notes payable (9,660) --
Proceeds from mortgage notes payable 12,150 --
Prepayment penalties paid (282) --
Loan costs paid (232) --
Distributions to partners (2,555) --
Net cash used in financing activities (753) (106)
Net (decrease) increase in cash and cash equivalents (184) 24
Cash and cash equivalents at beginning of period 829 716
Cash and cash equivalents at end of period $ 645 $ 740
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,184 $ 1,178
Approximately $180,000 of distributions were declared at December 31, 1999, and
paid in January 2000.
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
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" or the "Registrant") 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, a
California corporation ("FCMC" or the "Managing General Partner"), all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and nine
month periods ended September 30, 2000 are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 2000. 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 fiscal year ended December 31, 1999.
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 ultimately owns 100% of these partnerships and has the ability to
control the major operating and financial policies of these partnerships. All
interpartnership transactions have been eliminated.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into Apartment Investment and Management Company ("AIMCO"), a publicly
traded real estate investment trust, with AIMCO being the surviving corporation
(the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in
the Managing General Partner. The Managing General Partner does not believe that
this transaction has had or will have a material effect on the affairs and
operations of the Partnership.
Note C - 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 and a wholly owned subsidiary of AIMCO, 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 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 the Managing General Partner were
incurred during the nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $221 $223
Reimbursement for services of affiliates (included in
general and administrative expenses) 133 101
Partnership management fee (included in general and
administrative expenses) 52 --
During the nine months ended September 30, 2000 and 1999, affiliates of the
Managing General Partner were entitled to receive 5% of gross receipts from all
the Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $221,000 and
$223,000 for the nine months ended September 30, 2000 and 1999, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $133,000 and
$101,000 for the nine months ended September 30, 2000 and 1999, respectively. At
September 30, 2000, approximately $32,000 was accrued and included in other
liabilities.
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. Approximately $52,000 in Partnership management fees are
included in general and administrative expense for the nine months ended
September 30, 2000. There were no fees incurred during the nine months ended
September 30, 1999.
In connection with the refinancing of Torrey Pines Village Apartments and St.
Charleston Village Apartments, the Partnership paid a fee of approximately
$85,000 to an affiliate of the Managing General Partner as allowed under the
Partnership Agreement.
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.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 41,325.34 limited
partnership units in the Partnership representing 63.768% of the outstanding
units. A number of these units were acquired pursuant to tender offers made by
AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Under the Partnership Agreement, unitholders holding a
majority of the Units are entitled to take action with respect to a variety of
matters, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the Managing General Partner. As
a result of its ownership of 63.768% of the outstanding units, AIMCO is in a
position to influence all voting decisions with respect to the Registrant. When
voting on matters, AIMCO would in all likelihood vote the Units it acquired in a
manner favorable to the interest of the Managing General Partner because of
their affiliation with the Managing General Partner. However, Riverside Drive
LLC, an affiliate of the Managing General Partner, which owns 26,610.05 of the
limited partnership units, is required to 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 unit holders. Except for the foregoing, no
other limitations are imposed on AIMCO's or its affiliates' right to vote their
units.
Note D - Distributions
During the nine months ended September 30, 2000, the Partnership paid a cash
distribution from operations of approximately $180,000 which was declared and
accrued at December 31, 1999 of which approximately $176,000 ($2.72 per limited
partnership unit) was paid to the limited partners. In addition, the Partnership
declared and paid distributions of approximately $2,375,000 (approximately
$2,327,000 to the limited partners or $35.91 per limited partnership unit)
during the nine months ended September 30, 2000, consisting of approximately
$1,903,000 (approximately $1,865,000 to the limited partners or $28.78 per
limited partnership unit) of refinance proceeds from Torrey Pines Village and
St. Charleston Village and approximately $472,000 (approximately $462,000 to the
limited partners or $7.13 per limited partnership unit) from operations.
Subsequent to September 30, 2000, a cash distribution was approved and paid from
operations of approximately $199,000 of which approximately $195,000 was paid to
the limited partners ($3.01 per limited partnership unit). In association with
this distribution, the Managing General Partner was paid a Partnership
management fee of approximately $22,000. There were no distributions paid or
declared during the nine months ended September 30, 1999.
Note E - Extraordinary Loss on Early Extinguishment of Debt
On February 4, 2000, the Partnership refinanced the mortgages encumbering Torrey
Pines Village Apartments and St. Charleston Village Apartments. The refinancing
replaced indebtedness of approximately $3,604,000 and $6,056,000, respectively,
with new mortgages of $4,825,000 and $7,325,000, respectively. The mortgages
were refinanced at a rate of 8.34% compared to the prior rate of 9.88%, and
mature on March 1, 2020. Capitalized loan costs incurred for the refinancing
were approximately $114,000 and $118,000, respectively. The Partnership paid
approximately $105,000 and $177,000 in prepayment penalties and wrote off
approximately $21,000 and $32,000, respectively, in unamortized loan costs,
resulting in an extraordinary loss on the early extinguishment of debt in the
amount of approximately $335,000.
Note F - Segment Reporting
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of three apartment
complexes, two of which are located in Nevada and the other in Arizona. The
Partnership rents apartment units to tenants for terms that are typically twelve
months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
Factors management used to identify the enterprise's reportable segments:
The Partnership's reportable segment consists of investment properties that
offer similar products and services. Although each of the investment properties
is managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the three and nine month periods ended September 30,
2000 and 1999, is shown in the tables below. The "Other" column represents
partnership administration related items and income and expense not allocated to
the reportable segments.
Three Months Ended September 30, 2000 Residential Other Totals
(in thousands)
Rental income $ 1,461 $ -- $ 1,461
Other income 111 -- 111
Interest expense 407 -- 407
Depreciation 281 -- 281
General and administrative expense -- 93 93
Segment profit (loss) 179 (93) 86
Nine Months Ended September 30, 2000 Residential Other Totals
(in thousands)
Rental income $ 4,263 $ -- $ 4,263
Other income 280 12 292
Interest expense 1,220 -- 1,220
Depreciation 804 -- 804
General and administrative expense -- 278 278
Extraordinary loss on early
extinguishment of debt (335) -- (335)
Segment profit (loss) 172 (266) (94)
Total assets 13,397 142 13,539
Capital expenditures for
investment properties 578 -- 578
Three Months Ended September 30, 1999 Residential Other Totals
(in thousands)
Rental income $ 1,328 $ -- $ 1,328
Other income 90 -- 90
Interest expense 408 -- 408
Depreciation 229 -- 229
General and administrative expense -- 54 54
Segment profit (loss) 79 (54) 25
Nine Months Ended September 30, 1999 Residential Other Totals
(in thousands)
Rental income $ 4,103 $ -- $ 4,103
Other income 258 1 259
Interest expense 1,225 -- 1,225
Depreciation 684 -- 684
General and administrative expense -- 177 177
Segment profit (loss) 606 (176) 430
Total assets 13,820 100 13,920
Capital expenditures for
investment properties 738 -- 738
Note G - 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, its Managing General Partner and several of their affiliated
partnerships and corporate entities. The action 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to final court approval, on behalf of the Partnership
and all limited partners who owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. The Managing General Partner does not anticipate that costs associated
with this case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-QSB and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operations. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's investment properties consist of three residential apartment
complexes. The following table sets forth the average occupancy of the
properties for the nine months ended September 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
St. Charleston Village Apartments 93% 94%
Las Vegas, Nevada
Sun River Apartments 91% 90%
Tempe, Arizona
Torrey Pines Village Apartments 94% 94%
Las Vegas, Nevada
Results of Operations
The Partnership's net loss for the nine months ended September 30, 2000 was
approximately $94,000 compared to net income of approximately $430,000 for the
corresponding period in 1999. The Partnership's net income was approximately
$86,000 and $25,000 for the three months ended September 30, 2000 and 1999,
respectively. During the first quarter of 2000, the Partnership incurred an
extraordinary loss on early extinguishment of debt on the refinancing of Torrey
Pines Village Apartments and St. Charleston Village Apartments as discussed
below. The Partnership recorded income before the extraordinary loss on early
extinguishment of debt of approximately $241,000 and $430,000 for the nine
months ended September 30, 2000 and 1999, respectively. For the nine months
ended September 30, 2000, income before the extraordinary loss on early
extinguishments of debt decreased due to an increase in total expenses partially
offset by an increase in total revenues. For the three month periods ended
September 30, 2000 and 1999, income before extraordinary loss on early
extinguishment of debt increased primarily due to an increase in total revenues
partially offset by an increase in total expenses.
The increase in total expenses for the three and nine month periods ended
September 30, 2000 is primarily attributable to an increase in depreciation,
operating, and general and administrative expenses. Depreciation expense
increased due to property improvements and replacements completed at all the
Partnership's properties during the previous twelve months. Operating expenses
increased primarily due to increases in salary related benefits at all of the
Partnership's investment properties, increased utility expense at St. Charleston
Village Apartments, and increased contract yard and ground expense at Sun River
Apartments. For the nine months ended September 30, 2000, property tax expense
increased at Sun River Apartments due to an increase in the assessed value of
the property. General and administrative expenses increased due to the payment
of Partnership management fees associated with distributions from operations
during the nine months ended September 30, 2000. There were no distributions
from operations during the nine months ended September 30, 1999. Also
contributing to the increase was an increase in the cost of services included in
the management reimbursements to the Managing General Partner allowed under the
Partnership Agreement. In addition, costs associated with the quarterly and
annual communications with investors and regulatory agencies and the annual
audit required by the Partnership Agreement are also included in general and
administrative expense.
The increase in total revenues for the three and nine month periods ended
September 30, 2000 is primarily due to an increase in rental and other income.
Rental income increased due to an increase in average rental rates at all the
Partnership's properties and a reduction in bad debt expense at Sun River
Apartments partially offset by increased concession costs at all the
Partnership's properties. Other income increased primarily due to an increase in
interest income as a result of higher average balances in interest bearing
accounts and utility reimbursements at all of the Partnership's properties.
On February 4, 2000, the Partnership refinanced the mortgages encumbering Torrey
Pines Village Apartments and St. Charleston Village Apartments. The refinancing
replaced indebtedness of approximately $3,604,000 and $6,056,000, respectively,
with new mortgages of $4,825,000 and $7,325,000, respectively. The mortgages
were refinanced at a rate of 8.34% compared to the prior rate of 9.88%, and
mature on March 1, 2020. Capitalized loan costs incurred for the refinancing
were approximately $114,000 and $118,000, respectively. The Partnership paid
approximately $105,000 and $177,000 in prepayment penalties and wrote off
approximately $21,000 and $32,000, respectively, in unamortized loan costs,
resulting in an extraordinary loss on the early extinguishment of debt in the
amount of approximately $335,000.
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 September 30, 2000, the Partnership had cash and cash equivalents of
approximately $645,000 compared to approximately $740,000 at September 30, 1999.
The decrease in cash and cash equivalents for the nine months ended September
30, 2000 from the Partnership's year ended December 31, 1999 was approximately
$184,000. This decrease is due to approximately $753,000 of cash used in
financing activities and approximately $556,000 of cash used in investing
activities partially offset by approximately $1,125,000 of cash provided by
operating activities. Cash used in financing activities consisted of
distributions paid to partners, prepayment penalties paid, loan costs paid,
principal payments made on mortgages encumbering the Partnership's investment
properties, and the payoff of mortgages encumbering St. Charleston Village and
Torrey Pines Village Apartments, partially offset by proceeds from the
refinancing of St. Charleston Village and Torrey Pines Village Apartments. Cash
used in investing activities consisted of property improvements and replacements
partially offset by net withdrawals from restricted escrows maintained by the
mortgage lender. The Partnership invests its working capital reserves in money
market accounts.
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 and to comply with Federal,
state, and local legal and regulatory requirements. Capital improvements planned
for the Partnership's properties are detailed below.
St. Charleston Village
The Partnership budgeted approximately $234,000 of capital improvements for the
year 2000 at St. Charleston Village consisting primarily of carpet and vinyl
replacement, water meter upgrades, light fixture upgrades, and appliance
replacements. During the nine months ended September 30, 2000, the Partnership
completed approximately $264,000 of budgeted and unbudgeted capital improvements
at St. Charleston Village, consisting primarily of water meter upgrades,
appliance replacements, carpet and vinyl replacement, lighting upgrades, and
interior building improvements. These improvements were funded from operating
cash flow and the Partnership's reserves.
Sun River
The Partnership budgeted approximately $121,000 of capital improvements for the
year 2000 at Sun River consisting primarily of carpet replacement, plumbing
upgrades, air conditioning unit replacement, and appliance replacement. During
the nine months ended September 30, 2000, the Partnership completed
approximately $154,000 budgeted and unbudgeted of capital improvements at Sun
River, consisting primarily of floor covering replacement, plumbing upgrades,
and appliance replacements. These improvements were funded from operating cash
flow.
Torrey Pines Village
The Partnership budgeted approximately $160,000 of capital improvements for the
year 2000 at Torrey Pines Village consisting primarily of carpet and vinyl
replacement, light fixture upgrades, appliance replacement, and other building
improvements. During the nine months ended September 30, 2000, the Partnership
completed approximately $160,000 of capital improvements at Torrey Pines
Village, consisting primarily of water meter upgrades, light fixture
replacements, interior building improvements, and carpet and vinyl replacement.
These improvements were funded from operating cash flow and the Partnership's
reserves.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are currently thought to be sufficient for any
near-term needs (exclusive of capital improvements) of the Partnership. The
mortgage indebtedness of approximately $12,029,000 at St. Charleston Village
Apartments and Torrey Pines Village Apartments, which bears interest at 8.34%
per annum, matures in March 2020. The remaining mortgage indebtedness of
approximately $6,081,000 at Sun River Apartments, which bears interest at 9.88%
per annum, matures in July 2001, with balloon payments totaling approximately
$6,032,000 due at maturity. The Managing General Partner will attempt to
refinance and/or sell the properties prior to such maturity dates. If the
properties cannot be refinanced or sold for a sufficient amount prior to
maturity, the Partnership will risk losing such properties through foreclosure.
During the nine months ended September 30, 2000, the Partnership paid a cash
distribution from operations of approximately $180,000 which was declared and
accrued at December 31, 1999 of which approximately $176,000 ($2.72 per limited
partnership unit) was paid to the limited partners. In addition, the Partnership
declared and paid distributions of approximately $2,375,000 (approximately
$2,327,000 to the limited partners or $35.91 per limited partnership unit)
during the nine months ended September 30, 2000, consisting of approximately
$1,903,000 (approximately $1,865,000 to the limited partners or $28.78 per
limited partnership unit) of refinance proceeds from Torrey Pines Village and
St. Charleston Village and approximately $472,000 (approximately $462,000 to the
limited partners or $7.13 per limited partnership unit) from operations.
Subsequent to September 30, 2000, a cash distribution was approved and paid from
operations of approximately $199,000 of which approximately $195,000 was paid to
the limited partners ($3.01 per limited partnership unit). There were no
distributions paid or declared during the nine months ended September 30, 1999.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings and/or property sales. The Partnership's distribution policy is
reviewed on a semi-annual basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations, after required
capital expenditures, to permit further distributions to its partners during the
remainder of 2000 or subsequent periods.
<PAGE>
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, its Managing General Partner and several of their affiliated
partnerships and corporate entities. The action 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. ("Insignia") and entities which were,
at one time, affiliates of Insignia; past tender offers by the Insignia
affiliates to acquire limited partnership units; the management of partnerships
by the Insignia affiliates; and the Insignia Merger. The plaintiffs seek
monetary damages and equitable relief, including judicial dissolution of the
Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999.
Pending the ruling on such demurrers, settlement negotiations commenced. On
November 2, 1999, the parties executed and filed a Stipulation of Settlement,
settling claims, subject to final court approval, on behalf of the Partnership
and all limited partners who owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, at
which time the Court set a final approval hearing for December 10, 1999. Prior
to the December 10, 1999 hearing, the Court received various objections to the
settlement, including a challenge to the Court's preliminary approval based upon
the alleged lack of authority of prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. The Managing General Partner does not anticipate that costs associated
with this case will be material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K filed during the quarter ended September
30, 2000:
None.
<PAGE>
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/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
