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, 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)
June 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 454
Receivables and deposits 273
Restricted escrows 164
Other assets 362
Investment properties:
Land $ 2,288
Buildings and related personal property 26,289
28,577
Less accumulated depreciation (16,417) 12,160
$ 13,413
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 37
Tenant security deposit liabilities 163
Accrued property taxes 65
Other liabilities 231
Mortgage notes payable 18,186
Partners' Deficit
General partners $ (107)
Limited partners (64,806 units issued and
outstanding) (5,162) (5,269)
$ 13,413
</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 Six Months Ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 1,456 $ 1,380 $ 2,802 $ 2,775
Other income 100 95 181 169
Total revenues 1,556 1,475 2,983 2,944
Expenses:
Operating 491 481 1,109 983
General and administrative 81 60 185 123
Depreciation 267 236 523 455
Interest 419 408 813 817
Property taxes 87 78 198 161
Total expenses 1,345 1,263 2,828 2,539
Income before extraordinary item 211 212 155 405
Extraordinary loss on early
extinguishment of debt (Note E) -- -- (335) --
Net income (loss) $ 211 $ 212 $ (180) $ 405
Net income (loss) allocated to
general partners (2%) $ 4 $ 4 $ (4) $ 8
Net income (loss) allocated to
limited partners (98%) 207 208 (176) 397
$ 211 $ 212 $ (180) $ 405
Per limited partnership unit:
Income before extraordinary item 3.19 3.21 2.34 6.13
Extraordinary loss on early
extinguishment of debt -- -- (5.06) --
Net income (loss) $ 3.19 $ 3.21 $ (2.72) $ 6.13
Distributions per limited
partnership unit $ 1.73 $ -- $ 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 six months
ended June 30, 2000 -- (4) (176) (180)
Partners' deficit at
June 30, 2000 64,806 $ (107) $(5,162) $(5,269)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
CENTURY PROPERTIES FUND XIV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net (loss) income $ (180) $ 405
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation 523 455
Amortization of loan costs 23 31
Extraordinary loss on early extinguishment of debt 335 --
Change in accounts:
Receivables and deposits 164 (24)
Other assets 10 (19)
Accounts payable (107) (138)
Tenant security deposit liabilities -- 5
Accrued property taxes (12) 41
Other liabilities (112) (48)
Net cash provided by operating activities 644 708
Cash flows from investing activities:
Property improvements and replacements (383) (339)
Net withdrawals from (deposits to) restricted escrows 41 (79)
Net cash used in investing activities (342) (418)
Cash flows from financing activities:
Payments on mortgage notes payable (98) (69)
Distributions to partners (2,555) --
Repayment of mortgage notes payable (9,660) --
Prepayment penalties paid (282) --
Loan costs paid (232) --
Proceeds from mortgage notes payable 12,150 --
Net cash used in financing activities (677) (69)
Net (decrease) increase in cash and cash equivalents (375) 221
Cash and cash equivalents at beginning of period 829 716
Cash and cash equivalents at end of period $ 454 $ 937
Supplemental disclosure of cash flow information:
Cash paid for interest $ 782 $ 786
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 six
month periods ended June 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.
<PAGE>
The following transactions with affiliates of the Managing General Partner were
incurred during the six months ended June 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $142 $150
Reimbursement for services of affiliates (included in
general and administrative expenses) 67 59
Partnership management fee (included in general and
administrative expenses) 52 --
During the six months ended June 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 $142,000 and
$150,000 for the six months ended June 30, 2000 and 1999, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $67,000 and
$59,000 for the six months ended June 30, 2000 and 1999, respectively.
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 six months ended June 30,
2000. There were no fees incurred during the six months ended June 30, 1999.
In connection with the refinancing of Torrey Pines Village Apartments and St.
Charleston Village Apartments, the Partnership paid an approximately $85,000 fee
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.
AIMCO and its affiliates currently own 39,976.84 limited partnership units in
the Partnership representing approximately 61.69% 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. As a
result of its ownership of 61.69% 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 Riverside's right to vote each Unit acquired.
Note D - Distributions
During the six months ended June 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 six months ended June 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. There
were no distributions paid or declared during the six months ended June 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.
<PAGE>
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 six month periods ended June 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 June 30, 2000 Residential Other Totals
(in thousands)
Rental income $ 1,456 $ -- $ 1,456
Other income 91 9 100
Interest expense 419 -- 419
Depreciation 267 -- 267
General and administrative expense -- 81 81
Segment profit (loss) 283 (72) 211
Six Months Ended June 30, 2000 Residential Other Totals
(in thousands)
Rental income $ 2,802 $ -- $ 2,802
Other income 169 12 181
Interest expense 813 -- 813
Depreciation 523 -- 523
General and administrative expense -- 185 185
Extraordinary loss on early
extinguishment of debt (335) -- (335)
Segment loss (7) (173) (180)
Total assets 13,318 95 13,413
Capital expenditures for
investment properties 383 -- 383
<PAGE>
Three Months Ended June 30, 1999 Residential Other Totals
(in thousands)
Rental income $ 1,380 $ -- $ 1,380
Other income 95 -- 95
Interest expense 408 -- 408
Depreciation 236 -- 236
General and administrative expense -- 60 60
Segment profit (loss) 272 (60) 212
Six Months Ended June 30, 1999 Residential Other Totals
(in thousands)
Rental income $ 2,775 $ -- $ 2,775
Other income 168 1 169
Interest expense 817 -- 817
Depreciation 455 -- 455
General and administrative expense -- 123 123
Segment profit (loss) 527 (122) 405
Total assets 13,710 145 13,855
Capital expenditures for
investment properties 339 -- 339
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. 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 will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. 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 six months ended June 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
St. Charleston Village Apartments 94% 94%
Las Vegas, Nevada
Sun River Apartments 88% 92%
Tempe, Arizona
Torrey Pines Village Apartments 94% 95%
Las Vegas, Nevada
The Managing General Partner attributes the decrease in occupancy at Sun River
Apartments to a change in demographics in the area. The Managing General Partner
has increased its marketing efforts and has increased concessions to tenants in
an attempt to increase occupancy.
Results of Operations
The Partnership's net loss for the six months ended June 30, 2000 was
approximately $180,000 compared to net income of approximately $405,000 for the
corresponding period in 1999. The Partnership's net income was approximately
$211,000 and $212,000 for the three months ended June 30, 2000 and 1999,
respectively. The net loss for the six month period ended June 30, 2000 was due
to an increase in total revenues which was more than offset by an increase in
total expenses and the recognition of an extraordinary loss on early
extinguishment of debt incurred on the refinancing of Torrey Pines Village
Apartments and St. Charleston Village Apartments during the first quarter of
2000 as discussed below. The Partnership recorded income before the
extraordinary loss on early extinguishment of debt of approximately $155,000 and
$405,000 for the six months ended June 30, 2000 and 1999, respectively. For the
three month periods ended June 30, 2000 and 1999, income before extraordinary
loss on early extinguishment of debt was constant. The increase in total
expenses was offset by an increase in total revenues.
The increase in total expenses for the three and six month periods ended June
30, 2000 is primarily attributable to an increase in operating, depreciation,
property tax and general and administrative expenses. Operating expenses
increased due to increases in utility expenses at all the Partnership's
properties, increased maintenance expenses primarily at Sun River Apartments and
increased payroll costs at St. Charleston Village Apartments and Sun River
Apartments. Depreciation expense increased due to property improvements and
replacements completed at all the Partnership's properties during the previous
twelve months. 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 six months ended June 30, 2000.
There were no distributions from operations during the six months ended June 30,
1999. In addition, reimbursements to the Managing General Partner increased.
Included in general and administrative expenses at both June 30, 2000 and 1999
are 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.
The increase in total revenues for the three and six month periods ended June
30, 2000 is primarly due to an increase in rental income. Rental income
increased due to an increase in average rental rates at all the Partnership's
properties, partially offset by a decrease in occupancy at Sun River and Torrey
Pines Village Apartments and increased concession costs at all 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 June 30, 2000, the Partnership had cash and cash equivalents of approximately
$454,000 compared to approximately $937,000 at June 30, 1999. The decrease in
cash and cash equivalents for the six months ended June 30, 2000 from the
Partnership's year ended December 31, 1999 was approximately $375,000. This
decrease is due to approximately $677,000 of cash used in financing activities
and approximately $342,000 of cash used in investing activities partially offset
by approximately $644,000 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 six months ended June 30, 2000, the Partnership
completed approximately $174,000 of capital improvements at St. Charleston
Village, consisting primarily of water meter upgrades, carpet and vinyl
replacement, lighting upgrades, and interior building improvements. These
improvements were funded from the Partnership's reserves.
Sun River
The Partnership budgeted approximately $121,000 of capital improvements for the
year 2000 at Sun River Apartments consisting primarily of carpet replacement,
plumbing upgrades, air conditioning unit replacement, and appliance replacement.
During the six months ended June 30, 2000, the Partnership completed
approximately $95,000 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 Apartments consisting primarily of carpet and
vinyl replacement, light fixture upgrades, appliance replacement, and other
building improvements. During the six months ended June 30, 2000, the
Partnership completed approximately $114,000 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 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
remaining mortgage indebtedness of approximately $6,096,000 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 mortgage
indebtedness of approximately $12,090,000 at St. Charleston Village Apartments
and Torrey Pines Village Apartments, which bears interest at 8.34% per annum,
matures in March 2020. 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 six months ended June 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 six months ended June 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. There
were no distributions paid or declared during the six months ended June 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 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. 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 will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. 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 June 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:
