U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-14248
ANGELES PARTNERS XIV
California 95-3959771
(State or other jurisdiction of
incorporation or organization) (I.R.S. Employer Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item 405
of Regulation S-B contained in this form, and no disclosure will be contained,
to the best of Registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $8,022,914
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specific date within the past 60 days. Market value
information for Registrant's Partnership Interests is not available. Should a
trading market develop for these Units, it is the Managing General Partner's
belief that such trading would not exceed $25,000,000.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Description of Business
Angeles Partners XIV (the "Partnership") is a publicly-held limited
partnership organized under the California Uniform Limited Partnership Act
pursuant to a Certificate and Agreement of Limited Partnership dated June 29,
1984, as amended (the "Agreement"). The Partnership's Managing General Partner
is Angeles Realty Corporation II (the "Managing General Partner"), a California
corporation. The Partnership's Non-Managing General Partner is ARCII/AREMCO
Partners, Ltd. ARC II and ARCII/AREMCO Partners, Ltd. are herein collectively
referred to as the "General Partners".
The Partnership, through its public offering of Limited Partnership Units,
sold 44,390 units aggregating $44,390,000. The Managing General Partner
contributed capital in the amount of $1,000 for a 1% interest in the
Partnership. The Partnership was formed for the purpose of acquiring fee
interests in various types of real property. The Managing General Partner
intends to maximize the operating results and, ultimately, the net realizable
value of each of the Partnership's properties in order to achieve the best
possible return for the investors. Such results may best be achieved through
property sales, refinancings, debt restructurings or relinquishment of the
assets. The Partnership intends to evaluate each of its holdings periodically
to determine the most appropriate strategy for each of the assets.
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. Limited Partners have no right to
participate in the management or conduct of such business and affairs. Insignia
Management Group, L.P. provides property management services to each of the
Partnership's investment properties, with the exception of Dayton Industrial
Complex, which is property managed by a third party.
The business in which the Partnership is engaged is highly competitive, and
the Partnership is not a significant factor in its industry. Each of its
apartment and commercial properties is located in or near a major urban area
and, accordingly, competes for rentals not only with similar apartment and
commercial properties in its immediate area but with hundreds of similar
apartment and commercial properties throughout the urban area. Such competition
is primarily on the basis of location, rents, services and amenities. In
addition, the Partnership competes with significant numbers of individuals and
organizations (including similar partnerships, real estate investment trusts and
financial institutions) with respect to the sale of improved real properties,
primarily on the basis of the prices and terms of such transactions.
Item 2. Description of Properties
The following table sets forth the Registrant's investments in
properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Waterford Square 05/31/85 Fee ownership subject to a Residential Rental
Apartments first mortgage 487 units
Fox Crest 06/30/85 Fee ownership subject to a Residential Rental
Apartments first and second mortgage 244 units
Dayton Industrial 12/20/85 Fee ownership subject to Commercial Rental
Complex (1) first, second and third 586,395 sq. ft.
mortgages
<FN>
(1) During 1995 and 1994, the Partnership disposed of the following buildings
of the Dayton Industrial Complex; Building 47 was sold on August 31, 1995,
Building 54 was sold on December 28, 1994, Building 57 was lost through
foreclosure on June 18, 1994, and Buildings 64 and 66 were sold on February
18, 1994.
</TABLE>
Schedule of Properties:
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C> <C>
Waterford Square Apartments $16,784,878 $ 8,695,396 5-20 yrs (1) $ 7,382,841
Fox Crest Apartments 9,253,301 4,905,789 5-20 yrs (1) 3,785,474
Dayton Industrial
Complex 26,869,780 13,342,954 5-20 yrs S/L 14,448,434
$52,907,959 $26,944,139 $25,616,749
<FN>
(1) S/L and accelerated
</TABLE>
See "Note B" of the financial statements included in "Item 7" for a description
of the Partnership's depreciation policy.
Schedule of Mortgages:
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1995 Rate Amortized Date Maturity
<S> <C> <C> <C> <C> <C>
Waterford Square
Apartments
1st mortgage $11,830,899 9.50% 35 yrs 08/2024 $ 99,518
Fox Crest
Apartments
1st mortgage,
in default 6,558,026 10.25% 5 yrs 08/1994 6,558,026
Dayton Industrial
Complex
Note payable (8) 306,904 10.00% (3) 03/2002 306,904
3rd mortgage 1,364,037 10.00% (3) 03/2002 1,364,037
Building 41
1st mortgage 1,253,064 10.50% 30 yrs 09/2007 15,381
2nd mortgage 2,214,419 10.00% (2) 12/1997 2,214,419
Building 45
1st mortgage,
in default 1,045,104 9.375% 28 yrs 12/1995 1,045,104
2nd mortgage 2,377,515 10.00% (2) 12/1997 2,377,515
Building 52
1st mortgage, 1,041,575 11.25% 32 yrs 12/1995 1,041,575
2nd mortgage 855,869 10.00% (2) 12/1997 855,869
Building 53
1st mortgage,
in default 1,083,978 10.00% 27 yrs 03/2007 11,609
2nd mortgage 1,369,355 10.00% (2) 12/1997 1,369,355
Building 55
Mortgage 2,081,425 10.00% (2) 12/1997 2,081,425
Building 59/63
1st mortgage 4,543,680 10.00% (4) 05/1998 4,543,680
2nd mortgage 563,606 10.00% (2) 12/1997 563,606
Angeles Partners XIV
Working capital
loan (7) 1,281,131 (5) (1) 11/1997 1,281,131
Working capital
loan (7) 3,295,362 (5) (1) 11/1997 3,295,362
Note payable,
in default (6) 1,175,000 12.50% (1) 03/1996 1,175,000
Note payable,
in default (6) 325,000 12.00% (1) 12/1995 325,000
Note payable,
in default (6) 3,000,000 12.50% (1) 12/1995 3,000,000
47,565,949
Less unamortized
discount (124,446)
Total $47,441,503 $33,524,516
<FN>
(1) Interest only payments until maturity.
(2) Second mortgage interest payments are subject to sufficient operating cash
flows. In the event operating cash flows are not sufficient for payments,
accrued interest is added to principal.
(3) Principal and interest payments, which are secured by all of the buildings,
are deferred until all necessary repairs, expenses and other arrearages
have been fully funded and anticipated income from the properties appears
sufficient so that all operating expenses, real estate taxes and debt
service can continue to be paid timely.
(4) Monthly payments of interest at the stated rate plus excess cash flow as
defined. Fifty percent of the additional payment is applied to the
principal balance and 50% is additional interest.
(5) Interest accrues at prime plus 2%; payments are made based on excess cash
flow as defined.
(6) Payable to Angeles Mortgage Investment Trust.
(7) Payable to Angeles Acceptance Pool, L.P.
(8) The note is subordinate to all other mortgage debt on Dayton Industrial
Complex.
</TABLE>
Average annual rental rates and occupancy for 1995 and 1994 for each property:
<TABLE>
<CAPTION>
Average Annual Average Annual
Rental Rates Occupancy
Property 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Waterford Square Apartments (1) $5,772/unit $5,895/unit 87% 84%
Fox Crest Apartments 7,229/unit 7,132/unit 96% 95%
Dayton Industrial Complex (2) 5.74/sq.ft. 6.21/sq.ft. 86% 90%
<FN>
(1) This investment property has been adversely affected by lay-offs in the
aerospace and defense industries, which are both major employers in the
area.
(2) This investment property has been adversely affected by the build-up of
commercial space in the area.
</TABLE>
As noted under "Item 1. Description of Business," the real estate industry
is highly competitive. All of the properties of the Partnership are subject to
competition from other residential apartment complexes and commercial buildings
in the area. The Managing General Partner believes that all of the properties
are adequately insured. The multi-family residential properties' lease terms
are for one year or less. No residential tenant leases 10% or more of the
available rental space.
Real estate taxes and rates in 1995 for each property were:
1995 1995
Billing Rate
Waterford Square Apartments $ 137,748 5.80%
Fox Crest Apartments 160,272 7.97%
Dayton Industrial Complex 218,977 5.46%
The following schedule reflects information on tenants occupying 10% or more of
the leasable square footage for the Dayton Industrial Complex:
Square Footage Annual Rent
Nature of Business Leased Per Square Foot Lease Expiration
Woodwork equipment
manufacturer 115,000 $ 3.34 08/31/99
Computer software 113,897 14.68 07/31/96
The following schedule shows lease expirations for the commercial property,
Dayton Industrial Complex, for 1996 and thereafter:
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
1996 13 181,527 $2,005,484 54.32%
1997 4 39,652 171,922 4.66%
1998 4 68,254 331,867 8.99%
1999 2 116,444 402,872 10.91%
2000 2 3,168 38,938 1.05%
The Managing General Partner is currently in negotiations to renew leases that
are expiring and to attract new tenants to the property. However, the outcome
of such negotiations can not be presently determined.
Item 3. Legal Proceedings
On December 11, 1995, Angeles Mortgage Investement Trust ("AMIT"), filed a
breach of contract action with respect to a $1,300,000 (original face amount)
promissory note issued by it on April 1,1991, to the Partnership. The
Partnership defaulted on its repayment obligations in June 1993, whereupon the
property which secured the note was foreclosed upon. A default judgement in
the amount of $1,774,558 has been sought as a result of this action.
Subsequently, however, negociations have resulted in a tentative agreement to
resolve this matter. Such agreement is expected to be executed during the first
six months of 1996.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1.2% of the distributions of net cash distributed by AMIT. These Class
B Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1.2% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
its shares at the 1995 annual meeting in connection with the election of
trustees and other matters. MAE GP has not exerted, and continues to decline to
exert, any management control over or participate in the management of AMIT.
MAE GP may choose to vote these shares as it deems appropriate in the future.
In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing
General Partner and an affiliate of Insignia Financial Group, Inc., which
provides property management and partnership administration services to the
Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle
LAC to vote approximately 1.5% of the total shares.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT
an option to acquire the Class B shares owned by it. This option can be
exercised at the end of 10 years or when all loans made by AMIT to partnerships
affiliated with MAE GP as of November 9, 1994, (which is the date of execution
of a definitive Settlement Agreement), have been paid in full, but in no event
prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000
at closing, which occurred on April 14, 1995, as payment for the option. Upon
exercise of the option, AMIT will remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to
vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted to
the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to
the Class B Shares instructing such trustees to vote said Class B shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in section 6.13 of the Declaration of Trust of AMIT.
Item 4. Submission of Matters to a Vote of Security Holders
The Unit holders of the Registrant did not vote on any matter during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for the Partnership's Common Equity and Related Security Holder
Matters
The Partnership, a publicly-held limited partnership, sold 44,390 Limited
Partnership Units during its offering period through February 18, 1986, and
currently has 44,139 Limited Partnership Units outstanding and 4,452 Limited
Partners of record. There is no intention to sell additional Limited Partnership
Units nor is there an established market for these Units. The Partnership
presently does not generate positive cash flow and is unable to make
distributions.
During 1994, the number of Limited Partnership Units decreased by 251 due to
Limited Partners abandoning their Limited Partnership Units. In abandoning his
or her Limited Partnership Units a Limited Partner relinquishes all right, title
and interest in the Partnership as of the date of abandonment. There were no
abandonments during 1995.
Item 6. Management's Discussion and Analysis or Plan of Operation
This item should be read in conjunction with the financial statements and
other items contained elsewhere in this report.
Results of Operations
The Partnership realized a net loss of $3,293,340 for the year ended December
31, 1995, versus a net loss of $1,331,933 for the year ended December 31, 1994.
The increased net loss can be primarily attributed to significant gains
recognized in 1994 on the sale of investment properties and extinguishment of
debt upon the foreclosure and sale of investment properties (see discussion
below).
The Partnership sold Building 47 of the Dayton Industrial Complex on August
31, 1995, Buildings 64 and 66 of the Dayton Industrial Complex on February 18,
1994, and Building 54 of the Dayton Industrial Complex on December 28, 1994.
Also, on June 18, 1994, the Partnership lost Building 57 of the Dayton
Industrial Complex through foreclosure (See discussion below). As a result of
these transactions, the Partnership realized decreases in rental income, other
income, tenant reimbursements and the following expenses: operating, property
management fees, depreciation and interest.
The decrease in other income was also offset by increases in lease
cancellation fees and late charges at Fox Crest Apartments. Property tax
expense decreased at Fox Crest Apartments and Waterford Square Apartments due to
a decrease in the assessed valuations. General and administrative expense
decreased primarily due to a decrease in cost reimbursements for partnership
accounting, investor relations and asset management services. Bad debt expense
relates to past-due rents from tenants of the Dayton Industrial Complex which
have been deemed uncollectible.
As mentioned previously, the Partnership sold Building 47 of the Dayton
Industrial Complex on August 31, 1995. Proceeds from the sale of Building 47
were $4,095,964 which were used to payoff the first mortgage and paydown the
second mortgage. The Partnership recognized a $78,078 gain on the sale. The
remaining balance of the second mortgage was forgiven, resulting in an
extraordinary gain on debt forgiveness of $895,203.
At December 31, 1994, the gain on sale of investment properties of $1,788,147
represents the sale of Buildings 64, 66 and 54 of the Dayton Industrial Complex.
The loss of $570,258 on transfer of property in foreclosure represents the
difference between the fair value of Building 57 of the Dayton Industrial
Complex and the net book value of the property. The extraordinary gain on early
extinguishment of debt is also attributable to the disposition of these
buildings. Of the total $2,243,516 gain on early extinguishment of debt,
$935,667 relates to the sale of Buildings 64 and 66 and $1,307,849 relates to
the foreclosure of Building 57.
Finally in 1994, several roofs at the Fox Crest Apartments investment
property were replaced. The Partnership realized a $33,204 loss on the disposal
of property as a result of the write-off of the roofs that were not fully
depreciated.
The Managing General Partner continues to monitor the rental market
environment at its investment properties to assess the feasibility of increasing
rents, to maintain or increase the occupancy level and to protect the
Partnership from increases in expense. The Managing General Partner expects to
be able, at a minimum, to continue protecting the Partnership from inflation-
related increases in expenses by increasing rents and maintaining a high overall
occupancy level. However, rental concessions and rental reductions needed to
offset softening market conditions could affect the ability to sustain this
plan.
Liquidity and Capital Resources
At December 31, 1995, the Partnership had cash and cash equivalents of
$223,061 as compared to cash and cash equivalents of $182,815 as of December 31,
1994. Cash flows from operating activities decreased due to increases in escrows
for taxes and insurance and a decrease in other liabilities. Decreased proceeds
from sales in 1995, as compared to 1994, resulted in decreased cash flow from
investing activities. Decreased proceeds from sales lead to decreased repayment
of loans resulting in lesser cash used in financing activities in 1995 versus
1994.
In March 1992, the Partnership entered into an incentive management agreement
with Miller-Valentine Realty("MV"), an Ohio corporation. An affiliate of MV was
the original seller of the Dayton Industrial Complex to the Partnership.
Pursuant to the agreement, MV was appointed exclusive leasing agent, property
manager and sales agent for these properties. As part of the agreement, MV
secured the agreement of its affiliate which holds the second mortgages on these
properties to change their terms to reflect that interest on such debt will be
paid only to the extent of the properties cash flow, after payment of operating
expenses and senior financing costs. Interest on the second mortgages that is
not paid on a current basis will continue to accrue and will be due upon sale or
refinancing of the properties. Additionally, MV has agreed to lend the
Partnership up to $1,000,000 for working capital requirements of which $306,904
is outstanding at December 31, 1995. Such loan proceeds will be used for
capital improvements at the properties, as and when deemed appropriate and
necessary by MV; payment of tenant improvements necessary for leasing space; and
to cover any shortfalls in operating expenses or debt service payments. It is
questionable whether MV will fund the remainder. The loan will bear interest at
10% per annum with principal and interest payments deferred until all necessary
repairs, expenses and other arrearages have been fully funded and anticipated
income from the properties appears sufficient so that all operating expenses,
real estate taxes, and debt service can continue to be paid timely. This loan
is secured by the properties and is nonrecourse to any other assets of the
Partnership. MV will also attempt to refinance the properties and has secured
the agreement of the holder of the second mortgages on the properties to
subordinate its debt to any such refinancing.
The Partnership has agreed to pay MV property management fees, leasing
commissions, and financing fees and sales commissions upon the refinancing or
sale of the properties. The Partnership will receive the first $3,000,000 of
excess cash from operations, refinancing or sales of the properties less
unrefunded arrearages. Thereafter, the agreement provides that MV shall receive
as incentive for providing property management, leasing and asset management
services to the Partnership, two-thirds of the next $12,000,000 of excess cash
proceeds generated by the properties. Cash in excess of $15,000,000 shall be
shared equally by MV and the Partnership.
The agreement contemplates that the properties will be sold at an opportune
time but no later than 10 years after commencement of the agreements (March 2,
1992). In addition, the agreement contains an option for MV to buy the
properties five years after the commencement date of the agreement. Should the
Partnership elect not to sell, it would be obligated to purchase MV's incentive
interest based on the offered purchase price. The Partnership intends to
maintain ownership of the Dayton properties only as long as they are under the
management of MV. There is no certainty as to the future of the Dayton
properties otherwise.
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. The Partnership continues to
suffer from inadequate liquidity and is in default on certain of its debt
obligations due principally to the inability to make interest payments as due
and due to non-payment upon maturity. Limited sources of additional financing
have been identified by the Partnership. The total amount of debt in default at
December 31, 1995 is $14,228,683.
Fox Crest Apartment is in default on its non-recourse first mortgage in the
amount of $6,558,026 due to its maturity in August 1994. The lender has offered
to refinance the debt and the Partnership is negotiating with the lender and
others for terms with a lower interest rate and reduced fees.
The Dayton Industrial Complex contains seven buildings. The Partnership is
in default on Dayton Building 53's non-recourse first mortgage in the amount of
$1,083,978 due to delinquent taxes of approximately $20,000. The Partnership is
in default on Dayton Building 45's non-recourse first mortgage in the amount of
$1,045,104 due to maturity and delinquent taxes of approximately $26,000.
Subsequent to December 31, 1995, the Partnership entered into contracts to sell
Buildings 45 and 52 of the Dayton Industrial Complex for $2,668,900 and
$1,625,000, respectively. Dayton Building 52's non-recourse first mortgage in
the amount of $1,041,575 which matured December 1995 has been extended through
May 1996 due to the pending sale. Due to significant debt secured by these
properties, there will be no proceeds available to the Partnership. The
Partnership is investigating the possibility of selling additional buildings at
Dayton Industrial Complex.
The unsecured indebtedness to AMIT in the amount of $4,500,000 is in default
due to non-payment of interest, as well as maturity, for the $3,000,000 and
$325,000 notes. In 1995 AMIT brought suit against the Partnership to protect
its interest in this indebtedness, and the Partnership is currently in
negotiations with AMIT to amend these notes to require interest only payments
based on available cash flow, as defined. The mortgage secured by Waterford
Square Apartments and guaranteed by HUD is current and is not in default. The
Managing General Partner anticipates sufficient cash flow to be generated by the
properties over the next twelve months to meet all non-debt related operating
expenses.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts and classifications of liabilities that may
result from these uncertainties.
Item 7. Financial Statements
ANGELES PARTNERS XIV
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet - December 31, 1995
Statements of Operations - Years ended December 31, 1995 and 1994
Statements of Changes in Partners' Deficit - Years ended December 31,
1995 and 1994
Statements of Cash Flows - Years ended December 31, 1995 and 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Partners XIV
We have audited the accompanying balance sheet of Angeles Partners XIV as of
December 31, 1995, and the related statements of operations, changes in
partners' deficit and cash flows for each of the two years in the period ended
December 31, 1995. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Angeles Partners XIV as of
December 31, 1995, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Angeles
Partners XIV will continue as a going concern. As more fully described in Note
A, the Partnership is in default on certain loans and does not generate
sufficient cash flows to meet current operating requirements. These conditions
raise substantial doubt about the Partnership's ability to continue as a going
concern. Management's plans in regard to these matters are also described in
Note A. The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the outcome
of this uncertainty.
/S/ ERNST & YOUNG LLP
Greenville, South Carolina
February 26, 1996
ANGELES PARTNERS XIV
BALANCE SHEET
<TABLE>
<CAPTION>
December 31, 1995
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted $ 223,061
Restricted--tenant security deposits 95,947
Accounts receivable, net of allowance of $50,067 34,769
Escrow for taxes and insurance 516,110
Restricted escrows 285,106
Other assets 748,694
Investment properties (Notes C, D and G):
Land $ 4,164,166
Buildings and related personal property 48,743,793
52,907,959
Less accumulated depreciation (26,944,139) 25,963,820
$ 27,867,507
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 96,229
Tenant security deposits 133,054
Accrued taxes 484,362
Accrued interest 3,811,244
Due to affiliates (Note F) 757,664
Other liabilities 134,696
Notes payable, including $13,187,108 in
default (Notes D, F and G) 47,441,503
Partners' Deficit
General partner $ (633,270)
Limited partners (44,139 units
issued and outstanding) (24,357,975) (24,991,245)
$ 27,867,507
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
ANGELES PARTNERS XIV
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Revenues:
Rental income $ 7,793,571 $ 8,735,139
Other income 229,343 294,690
Total revenues 8,022,914 9,029,829
Expenses:
Operating 1,785,849 1,830,062
General and administrative 265,670 371,879
Property management fees (Note F) 363,047 401,005
Maintenance 744,801 805,333
Depreciation 2,782,493 3,240,421
Amortization 136,638 109,441
Interest 5,859,181 6,485,688
Property taxes 352,225 585,174
Bad debt expense 28,395 21,672
Tenant reimbursements (28,764) (60,712)
Total expenses 12,289,535 13,789,963
Loss before gain on sale of investment
property, loss on transfer of property in
foreclosure, loss on disposal of property and
extraordinary item (4,266,621) (4,760,134)
Gain on sale of investment properties (Note C) 78,078 1,788,147
Loss on transfer of property in foreclosure (Note C) -- (570,258)
Loss on disposal of property -- (33,204)
Loss before extraordinary items (4,188,543) (3,575,449)
Extraordinary gain on extinguishment of
debt (Note C) 895,203 2,243,516
Net loss $(3,293,340) $(1,331,933)
Net loss allocated to general partner (1%) $ (32,933) $ (13,319)
Net loss allocated to limited partners (99%) (3,260,407) (1,318,614)
Net loss $(3,293,340) $(1,331,933)
Per limited partnership unit:
Loss before extraordinary item $ (93.95) $ (79.74)
Extraordinary item 20.08 50.04
Net loss $ (73.87) $ (29.70)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
ANGELES PARTNERS XIV
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 44,390 $ 1,000 $ 44,390,000 $ 44,391,000
Partners' deficit at
December 31, 1993 44,390 $(587,018) $(19,778,954) $(20,365,972)
Abandoned Limited Partnership
Units (Note J) (251) -- -- --
Net loss for the year
ended December 31, 1994 -- (13,319) (1,318,614) (1,331,933)
Partners' deficit at
December 31, 1994 44,139 (600,337) (21,097,568) (21,697,905)
Net loss for the year ended
December 31, 1995 -- (32,933) (3,260,407) (3,293,340)
Partners' deficit at
December 31, 1995 44,139 $(633,270) $(24,357,975) $(24,991,245)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
ANGELES PARTNERS XIV
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,293,340) $ (1,331,933)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 2,782,493 3,240,421
Amortization of discounts, loan costs,
and leasing commissions 258,785 303,620
Extraordinary gain on extinguishment of debt (895,203) (2,243,516)
Loss on transfer of property in foreclosure -- 570,258
Gain on sale of investment properties (78,078) (1,788,147)
Bad debt expense 28,395 21,672
Loss on disposal of asset -- 33,204
Change in accounts:
Restricted cash 3,966 (9,233)
Accounts receivable (17,317) (654)
Escrows for taxes and insurance (137,559) (65,988)
Other assets (92,112) (243,738)
Accounts payable 6,606 22,636
Tenant security deposit liabilities (78,309) (15,307)
Accrued taxes (74,529) (112,153)
Other escrows -- 102,424
Accrued interest 2,652,528 2,884,431
Due to affiliates 173,249 252,185
Other liabilities (50,793) (157,100)
Net cash provided by operating activities 1,188,782 1,463,082
Cash flows from investing activities:
Property improvements and replacements (281,488) (899,663)
Proceeds from sale of investment property 4,095,964 9,376,917
Deposits to restricted escrows (120,787) --
Withdrawals from restricted escrows 108,298 --
Net cash provided by investing activities 3,801,987 8,477,254
Cash flows from financing activities:
Principal payments on notes payable (931,120) (1,003,250)
Repayment of loans (4,089,544) (10,885,749)
Additions to notes payable 70,141 1,617,832
Net cash used in financing activities (4,950,523) (10,271,167)
Net increase (decrease) in cash and cash equivalents 40,246 (330,831)
Cash and cash equivalents at beginning of year 182,815 513,646
Cash and cash equivalents at end of year $ 223,061 $ 182,815
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,983,683 $ 3,559,179
Interest on notes transferred to notes payable $ 1,279,092 $ 1,087,437
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
ANGELES PARTNERS XIV
(A Limited Partnership)
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Foreclosures
During the year ended December 31, 1994, Building 57 of the Dayton Industrial
Complex was foreclosed upon by the respective lender. In connection with these
non-cash transactions, the following accounts were adjusted:
1994
Other Assets $ (13,544)
Investment Properties (1,928,358)
Accounts Payable 9,066
Property Tax Payable 26,894
Interest Payable 563,994
Notes Payable 2,079,539
See Accompanying Notes to Financial Statements
ANGELES PARTNERS XIV
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995
Note A - Going Concern
The accompanying financial statements have been prepared assuming the
Partnership will continue as a going concern. The Partnership continues to
suffer from inadequate liquidity and is in default on certain of its debt
obligations due principally to the inability to make interest payments as due
and due to non-payment upon maturity. Limited sources of additional financing
have been identified by the Partnership. The total amount of debt in default at
December 31, 1995 is $14,228,683.
Fox Crest Apartment is in default on its non-recourse first mortgage in the
amount of $6,558,026 due to its maturity in August 1994. The lender has offered
to refinance the debt and the Partnership is negotiating with the lender and
others for terms with a lower interest rate and reduced fees.
The Dayton Industrial Complex contains seven buildings. The Partnership is in
default on Dayton Building 53's non-recourse first mortgage in the amount of
$1,083,978 due to delinquent taxes of approximately $20,000. The Partnership
expects to cure this default in 1996. The Partnership is in default on Dayton
Building 45's non-recourse first mortgage in the amount of $1,045,104 due to
maturity and delinquent taxes of approximately $26,000. In addition, Dayton
Building 52's non-recourse first mortgage in the amount of $1,041,575 which
matured December 1995 has been extended through May 1996 due to the pending
sale. Subsequent to December 31, 1995, the Partnership entered into contracts
to sell Buildings 45 and 52 of the Dayton Industrial Complex for $2,668,900 and
$1,625,000, respectively. Due to significant debt secured by this property,
there will be no proceeds available to the Partnership. The Partnership is
investigating the possibility of selling some or all of the buildings at Dayton
Industrial Complex.
The unsecured indebtedness to AMIT in an amount of $4,500,000 is in default due
to non-payment of interest and maturity of two of the notes with principal
balances of $3,000,000 and $325,000. In 1995 AMIT brought suit against the
Partnership to protect its interest in this indebtedness, and the Partnership is
currently in negotiations with AMIT to amend these notes to require interest
only payments based on available cash flow, as defined. The mortgage secured by
Waterford Square Apartments and guaranteed by HUD is current and is not in
default. The Managing General Partner anticipates sufficient cash flow to be
generated by the properties over the next twelve months to meet all non-debt
related operating expenses.
As a result of the above, there is substantial doubt about the Partnership's
ability to continue as a going concern. The financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets or amounts and classifications of liabilities that may
result from these uncertainties.
Note B - Organization and Significant Accounting Policies
Organization: Angeles Partners XIV (the "Partnership or "Registrant") is a
California limited partnership organized in June 1984, to acquire and operate
residential and commercial real estate properties. The Partnership's Managing
General Partner is Angeles Realty Corporation II ("ARC II"), an affiliate of
Insignia Financial Group, Inc. As of December 31, 1995, the Partnership
operates two residential properties and one commercial property located in or
near major urban areas in the United States.
Principles of Consolidation: The financial statements include all of the
accounts of the Partnership and its 99% owned partnership, Waterford Square
Apartments, Ltd. All significant interpartnership balances have been
eliminated. Minority interest is immaterial and not shown separately in the
financial statements.
Allocations and Distributions to Partners: In accordance with the Agreement,
any gain from the sale or other disposition of Partnership assets will be
allocated first to the General Partner to the extent of the amount of any
Incentive Interest (as defined below) to which the General Partner is entitled.
Any gain remaining after said allocation will be allocated to the Limited
Partners in proportion to their interests in the Partnership; provided that the
gain shall first be allocated to Partners with negative account balances, in
proportion to such balances, in an amount equal to the sum of such negative
capital account balances. The Partnership will allocate other profits and
losses 1% to the General Partner and 99% to the Limited Partners.
Except as discussed below, the Partnership will allocate distributions 1% to the
General Partner and 99% to the Limited Partners.
Upon the sale or other disposition, or refinancing of any asset of the
Partnership, the Distributable Net Proceeds shall be distributed as follows: (i)
First, to the Partners in proportion to their interests until the Limited
Partners have received proceeds equal to their Original Capital Investment; (ii)
Second, to the Partners until Limited Partners have received distributions from
all sources equal to their 6% Cumulative Distribution, (iii) Third, to the
General Partner until it has received its cumulative distributions equal to 3%
of the aggregate Disposition Prices of all properties, mortgages or other
investments sold ("Initial Incentive Interest") and (iv) Thereafter, 85% to the
Partners in proportion to their interests and 15% to the General Partner ("Final
Incentive Interest").
Cash and Cash Equivalents: The Partnership considers all highly liquid
investments with a maturity when purchased of three months or less to be cash
equivalents. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits. The carrying amount reported in the
balance sheet approximates fair value.
Tenant Security Deposits: The Partnership requires security deposits from all
tenants for the duration of the lease. Deposits are refunded when the tenant
vacates the apartment or commercial space if there has been no damage to it.
Investment Properties: Prior to the fourth quarter of 1995, investment
properties were carried at the lower of cost or estimated fair value, which was
determined using the higher of the property's non-recourse debt amount, when
applicable, or the net operating income of the investment property capitalized
at a rate deemed reasonable for the type of property. During the fourth quarter
of 1995 the Partnership adopted FASB Statement No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of",
which requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. The impairment loss is measured by comparing the fair value of
the asset to its carrying amount. The effect of adoption was not material.
Note B - Organization and Significant Accounting Policies (continued)
Depreciation: Depreciation is computed utilizing straight-line and accelerated
methods over the estimated useful lives of the investment properties and related
personal property. For Federal income tax purposes, depreciation is computed
utilizing the straight-line method over an estimated life of 5 to 20 years for
personal property and 15 to 40 years for real property.
Loan Costs: Loan costs of $897,903, which are included in "Other assets," are
being amortized on a straight-line basis over the lives of the loans. At
December 31, 1995, accumulated amortization is $345,075.
Lease Commissions: Lease commissions of $186,427, which are included in "Other
assets," are being amortized on a straight-line basis over the term of the
respective leases. At December 31, 1995, accumulated amortization is $126,884.
Leases: The Partnership generally leases apartment units for twelve-month terms
or less. Commercial property lease terms are generally from one month to ten
years.
Present Value Discounts: Periodically, the Partnership incurs debt at below
market rates for similar debt. Present value discounts are recorded on the basis
of prevailing market rates and are amortized on an interest method over the life
of the related debt.
Fair Value: In 1995, the Partnership implemented Statement of Financial
Accounting Standards No. 107, "Disclosure about Fair Value of Financial
Instruments," which requires disclosure of fair value information about
financial instruments for which it is practicable to estimate that value. The
carrying amount of the Partnership's cash and cash equivalents approximates fair
value due to short-term maturities. The Partnership estimates the fair value of
its fixed rate mortgages by discounted cash flow analysis, based on estimated
borrowing rates currently available to the Partnership ("Note D").
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Reclassification: Certain reclassifications have been made to the 1994 balances
to conform to the 1995 presentation.
Note C - Foreclosure and Sale of Properties
The Partnership sold Building 47 of the Dayton Industrial Complex on August 31,
1995. Proceeds from the sale of Building 47 were $4,095,964 which were used to
pay off the first mortgage and pay down the second mortgage. The Partnership
recognized a gain on the sale of $78,078 and an extraordinary gain on
extinguishment of debt of $895,203.
On June 18, 1994, the Partnership lost Building 57 of the Dayton Industrial
Complex through foreclosure by the holder of the first mortgage note. This
property was not generating sufficient cash flow to pay monthly operating
expenses, meet debt service requirements or make the necessary capital
improvements. The total outstanding debt on the mortgage payable at the time of
the foreclosure was $2,079,539. The net fair value and the recorded net book
value less related net operating liabilities as of the date of foreclosure
totalled $1,369,949 and $1,940,207, respectively. The net gain on foreclosure
amounted to $737,591, of which $570,258 represented a loss on transfer of
property in foreclosure and $1,307,849 represented a gain on extinguishment of
related debt. The loss on transfer of assets represents the difference between
fair value and the net book value of the properties surrendered. The
extraordinary gain represents the difference between the settlement amount of
the debt and the recorded amount of the debts extinguished pursuant to
foreclosure.
The Partnership sold Buildings 64 and 66 of the Dayton Industrial Complex on
February 18, 1994, and sold Building 54 on December 28, 1994. Proceeds from the
sales were $9,376,917, which were used to reduce the indebtedness of these
buildings. The Partnership recognized a gain on the sales of $1,788,147 and an
extraordinary gain on extinguishment of debt of $935,667.
Note D - Notes Payable
The principle terms of notes payable are as follows:
<TABLE>
<CAPTION>
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1995
<S> <C> <C> <C> <C> <C>
Waterford Square
Apartments
1st mortgage $100,319 9.50% 8/2024 $ 99,518 $11,830,899
Fox Crest
Apartments
1st mortgage,
in default 61,562 10.25% 8/1994 6,558,026 6,558,026
Dayton Industrial
Complex
Note payable (8) (3) 10.00% 3/2002 306,904 306,904
3rd mortgage (3) 10.00% 3/2002 1,364,037 1,364,037
Building 41
1st mortgage 15,503 10.50% 9/2007 15,381 1,253,064
2nd mortgage (2) 10.00% 12/1997 2,214,419 2,214,419
Building 45
1st mortgage,
in default 12,650 9.375% 12/1995 1,045,104 1,045,104
2nd mortgage (2) 10.00% 12/1997 2,377,515 2,377,515
</TABLE>
Note D - Notes Payable (continued)
<TABLE>
<CAPTION>
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1995
<S> <C> <C> <C> <C> <C>
Building 52
1st mortgage, 10,245 11.25% 12/1995 1,041,575 1,041,575
2nd mortgage (2) 10.00% 12/1997 855,869 855,869
Building 53
1st mortgage,
in default 13,413 10.00% 3/2007 11,609 1,083,978
2nd mortgage (2) 10.00% 12/1997 1,369,355 1,369,355
Building 55
Mortgage (2) 10.00% 12/1997 2,081,425 2,081,425
Building 59/63
1st mortgage (4) 10.00% 5/1998 4,543,680 4,543,680
2nd mortgage (2) 10.00% 12/1997 563,606 563,606
Angeles Partners XIV
Working capital
loan (7) (5) (5) 11/1997 1,281,131 1,281,131
Working capital
loan (7) (5) (5) 11/1997 3,295,362 3,295,362
Note payable,
in default (6) 12,240 12.50% 3/1996 1,175,000 1,175,000
Note payable,
in default (6) 3,250 12.00% 12/1995 325,000 325,000
Note payable,
in default (6) 31,250 12.50% 12/1995 3,000,000 3,000,000
47,565,949
Less unamortized
discounts (124,446)
Totals $260,432 $33,524,516 $47,441,503
<FN>
(1) Interest only payments until maturity.
(2) Second mortgage interest payments are subject to sufficient operating cash
flows. In the event operating cash flows are not sufficient for payments,
accrued interest is added to principal.
(3) Principal and interest payments, which are secured by all of the
buildings, are deferred until all necessary repairs, expenses and other
arrearages have been fully funded and anticipated income from the
properties appears sufficient so that all operating expenses, real estate
taxes and debt service can continue to be paid timely.
(4) Monthly payments of interest at the stated rate plus excess cash flow, as
defined. Fifty percent of the additional payment is applied to the
principal balance and 50% is additional interest.
(5) Interest accrues at prime plus 2%; payments are based on excess cash flow
as defined.
(6) Payable to AMIT
(7) Payable to Angeles Acceptance Pool, L.P.
(8) The note is subordinate to all other mortgage debt on Dayton Industrial
Complex.
</TABLE>
The estimated fair value of the Partnership's aggregate mortgage notes payable
is approximately $19,000,000, excluding debt in default, as compared to the
carrying value of $17,627,643. This estimate is not necessarily indicative of
the amount the Partnership may pay in actual market transactions.
The Managing General Partner believes that it is not appropriate to use the
Partnership's incremental borrowing rate for the second and third mortgages and
debt to affiliates (see "Note F") as there is no market in which the Partnership
could obtain similar financing.
The Dayton Industrial Complex's investment properties were acquired subject to
notes with interest rates lower than the market rate of interest prevailing at
the respective dates of acquisition. The initial value of the investment
properties used in the financial statements was based upon the present value of
the future note payments discounted at 10.5% - 12.0%, which were the prevailing
market rates on the respective dates of acquisition. The related present value
discounts are being amortized over the life of the loan.
At December 31, 1995, the first mortgage secured by Foxcrest Apartments, the
first mortgages secured by Dayton Buildings 45, 52 and 53, and the Partnership
debt to AMIT are in default. The first mortgage secured by Foxcrest Apartments
is in default due to non-payment upon maturity. The Partnership is currently
pursuing an extension of the debt with the mortgage holder or alternate
financing opportunities. The first mortgage secured by Dayton Building 45 is in
default due to non-payment upon maturity in December 1995 and due to delinquent
taxes. The first mortgage secured by Dayton Building 52 which matured December
1995 has been extended through May 1996 due to the pending sale. The first
mortgage secured by Dayton Building 53 is in default due to delinquent taxes.
The Partnership's $325,000 and $3,000,000 debt to AMIT are in default due to
non-payment upon maturity in December 1995. The $1,175,000 debt to AMIT is in
default due to non-payment of interest. The Managing General Partner is
investigating the possibility of selling some or all of the buildings at the
Dayton Complex to pay off some of the debt. Also, Miller Valentine Realty,
exclusive leasing agent, property manager and sales agent for the Dayton
Industrial Complex, has agreed to lend the Partnership up to $1,000,000 for
working capital requirements, of which $306,904 is outstanding at December 31,
1995. The loan bears interest at 10% per annum with principal and interest
payments deferred until all necessary repairs, expenses and other arrearages
have been fully funded and anticipated income from the properties appears
sufficient so that all operating expenses, real estate taxes and debt service
can continue to be paid timely. The Waterford Square Apartments mortgage is
guaranteed by HUD.
Note D - Notes Payable (continued)
Mortgage notes payable totalling $38,489,456 are nonrecourse and are secured by
pledge of certain of the Partnership s investment properties and by pledge of
revenues from the respective investment properties. Certain of the notes
include prepayment penalties if repaid prior to maturity.
Scheduled principal payments of notes payable subsequent to December 31, 1995,
are as follows:
1996 $14,369,308
1997 14,193,889
1998 4,714,987
1999 189,080
2000 208,704
Thereafter 13,889,981
$47,565,949
Note E - Income Taxes
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
financial statements of the Partnership.
Differences between the net loss as reported and Federal taxable income (loss)
result primarily from (1) amortization of loan discounts, (2) depreciation over
different methods and lives and on differing cost bases of the properties, (3)
change in rental income received in advance. The following is a reconciliation
of reported net loss and Federal taxable income (loss):
1995 1994
Net loss as reported $(3,293,340) $(1,331,933)
Add (deduct):
Depreciation differences 863,414 1,101,510
Unearned income (47,670) 88,110
Discounts on notes payable 59,729 88,483
Book-tax difference on
sale/foreclosures (221,156) 652,848
Book-tax difference on investments -- (445,854)
Other 67,037 64,472
Federal taxable (loss) income $(2,571,986) $ 217,636
Federal taxable (loss) income per
limited partnership unit $ (57.69) $ 4.88
Note E - Income Taxes (continued)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities:
Net liabilities as reported $(24,991,245)
Land and buildings (23,485)
Accumulated depreciation (323,586)
Syndication and distribution costs 6,046,556
Other (136,352)
Net liabilities - Federal tax basis $(19,428,112)
Note F - Transactions with Affiliated Parties
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 payments were made to the Managing General Partner and affiliates
in 1995 and 1994:
1995 1994
Property management fees $231,168 $226,742
Reimbursement for services of
affiliates, including $757,664
accrued at December 31, 1995 182,534 287,244
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the Managing General Partner. An affiliate of the
Managing General Partner acquired, in the acquisition of a business, certain
financial obligations from an insurance agency which were later acquired by the
agent who placed the current year's master policy. The current agent assumed
the financial obligations to the affiliate of the Managing General Partner, who
receives payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations is not
significant.
In November 1992, Angeles Acceptance Pool, L.P. ("AAP"), a Delaware limited
partnership was organized to acquire and hold the obligations evidencing the
working capital loans previously provided to the Partnership by Angeles Capital
Investments, Inc. ("ACII"). Angeles Corporation is the 99% limited partner of
AAP and Angeles Acceptance Directives, Inc., an affiliate of the Managing
General Partner, was, until April 14, 1995, the 1% general partner of AAP. On
April 14, 1995, as part of a settlement of claims between affiliates of the
Managing General Partner and Angeles AAP resigned as general partner of AAP and
simultaneously received a 1/2% limited partner interest in AAP. An affiliate of
Angeles now serves as the general partner of AAP.
Note F - Transactions with Affiliated Parties (continued)
These working capital loans funded the Partnership's operating deficits in prior
years. Total indebtedness was $4,576,493 at December 31, 1995 with monthly
interest accruing at prime plus two percent. Interest is to be paid based on
excess cash flow, as defined. Principal is to be paid the earlier of i) the
availability of funds, ii) the sale of one or more properties owned by the
Partnership, or iii) November 25, 1997. Total interest expense for this loan
was $493,040 and $428,818 in 1995 and 1994, respectively. Accrued interest
was $1,317,851 at December 31, 1995.
AMIT currently provides notes payable to the Partnership and secondary financing
on one of the Partnership's investment properties. Total indebtedness of
$4,500,000 was in default at December 31, 1995. Total interest expense on this
financing was $916,091 and $773,940 in 1995 and 1994, respectively. Accrued
interest was $2,312,460 at December 31, 1995.
MAE GP Corporation ("MAE GP"), an affiliate of the Managing General Partner,
owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class
A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to
receive 1.2% of the distributions of net cash distributed by AMIT. These Class
B Shares also entitle MAE GP to vote on the same basis as Class A Shares which
allows MAE GP to vote approximately 37% of the total shares (unless and until
converted to Class A Shares at which time the percentage of the vote controlled
represented by the shares held by MAE GP would approximate 1.2% of the vote).
Between the date of acquisition of these shares (November 24, 1992) and March
31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted
it shares at the 1995 annual meeting in connection with the election of trustees
and other matters. MAE GP has not exerted and continues to decline to exert any
management control over or participate in the management of AMIT. MAE GP may
choose to vote these shares as it deems appropriate in the future. In addition,
Liquidity Assistance, LLC, ("LAC"), an affiliate of the Managing General Partner
and an affiliate of Insignia Financial Group, Inc., which provides property
management and partnership administration services to the Partnership, owns
63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote
approximately 1.5% of the total shares.
As part of a settlement of certain disputes with AMIT, MAE GP granted to AMIT an
option to acquire the Class B shares owned by it. This option can be exercised
at the end of 10 years or when all loans made by AMIT to partnerships affiliated
with MAE GP as of November 9, 1994, (which is the date of execution of a
definitive Settlement Agreement), have been paid in full, but in no event prior
to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at
closing, which occurred April 14, 1995, as payment for the option. Upon
exercise of the option, AMIT will remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an irrevocable
proxy in favor of AMIT the result of which is MAE GP will be able to vote the
Class B Shares on all matters except those involving transactions between AMIT
and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an
officer or trustee of AMIT. On these matters, MAE GP will deliver to the AMIT
trustees, in their capacity as trustees of AMIT, proxies with regard to the
Class B Shares instructing such trustees to vote said Class B Shares in
accordance with the vote of the majority of the Class A Shares voting to be
determined without consideration of the votes of "Excess Class A Shares" as
defined in Section 6.13 of the Declaration of Trust of AMIT.
Note F - Transactions with Affiliated Parties (continued)
The Partnership has agreed to pay Miller Valentine Realty ("MV") property
management fees, leasing commissions, and financing fees and sales commissions
upon the refinancing or sale of the properties. The Partnership will receive
the first $3,000,000 of excess cash from operations, refinancing or sales of the
properties less unrefunded arrearages. Thereafter, the agreement provides that
MV shall receive, as incentive for providing property management, leasing and
asset management services to the Partnership, two-thirds of the next $12,000,000
of excess cash proceeds generated by the properties. Cash in excess of
$15,000,000 shall be shared equally by MV and the Partnership.
The agreement contemplates that the properties will be sold at an opportune time
but no later than 10 years after commencement of the agreements (March 2, 1992).
In addition, the agreement contains an option for MV to buy the properties five
years after the commencement date of the agreement. The Managing General
Partner does not anticipate that there will be any proceeds available to the
Partnership. Should the Partnership elect not to sell, it would be obligated to
purchase MV's incentive interest based on the offered purchase price. The
Partnership intends to maintain ownership of the Dayton properties only as long
as they are under the management of MV. There is no certainty as to the future
of the Dayton properties otherwise.
Note G - Investment Properties and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
<S> <C> <C> <C> <C>
Waterford Square Apartments $11,830,899 $1,382,103 $13,478,897 $ 1,923,878
Fox Crest Apartments 6,558,026 860,579 8,198,421 194,301
Dayton Industrial Complex 20,100,531 3,922,079 53,824,921 (30,877,220)
Angeles Partners XIV 9,076,493 -- -- --
Totals $47,565,949 $6,164,761 $75,502,239 $(28,759,041)
</TABLE>
Note G - Investment Properties and Accumulated Depreciation (continued)
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C>
Waterford Square Apartments $1,382,103 $15,402,775 $16,784,878 $ 8,695,396 05/31/85 5-20 yrs
Fox Crest Apartments 860,579 8,392,722 9,253,301 4,905,789 06/30/85 5-20 yrs
Dayton Industrial Complex 1,921,484 24,948,296 26,869,780 13,342,954 12/20/85 5-20 yrs
Totals $4,164,166 $48,743,793 $52,907,959 $26,944,139
</TABLE>
The depreciable lives included above are for the buildings and components. The
depreciable lives for related personal property are for 3 to 7 years.
Reconciliation of Investment Properties and Accumulated Depreciation :
Year Ended December 31,
1995 1994
Investment Properties
Balance at beginning of year $ 59,635,486 $ 75,960,506
Property improvements 281,488 899,663
Dispositions (7,009,015) (17,224,683)
Balance at end of Year $ 52,907,959 $ 59,635,486
Accumulated Depreciation
Balance at beginning of year $ 27,252,129 $ 31,907,226
Additions charged to expense 2,782,492 3,240,421
Dispositions (3,090,482) (7,895,518)
Balance at End of Year $ 26,944,139 $ 27,252,129
The aggregate cost of the investment properties for Federal income tax purposes
at December 31, 1995 and 1994, is $52,884,474 and $59,525,703. The accumulated
depreciation taken for Federal income tax purposes at December 31, 1995 and
1994, is $27,267,725 and $28,129,328, respectively.
Note H - Major Tenants
Rent from a tenant exceeding 10% of rental income for 1995 was as follows:
1995 1995 1994 1994
Computer Sciences Corporations $1,685,354 21.6% $1,464,739 16.8%
Note I - Leases
The Partnership generally leases apartment units for twelve-month terms or less.
The leases relating to the Partnership's Dayton Industrial Complex investment
property include long-term non-cancelable leases. As of December 31, 1995, the
minimum lease amounts to be received under such non-cancelable leases, were as
follows:
1996 $2,112,299
1997 837,899
1998 564,684
1999 310,475
2000 18,742
Thereafter --
Total $3,844,099
Note J - Abandonment of Limited Partnership Units
In 1994, the number of Limited Partnership Units decreased by 251 due to Limited
Partners abandoning their Limited Partnership Units. In abandoning his or her
Limited Partnership Units a Limited Partner relinquishes all right, title and
interest in the Partnership as a of the date of abandonment. However, the
limited partner is allocated his or her share of income (loss) for that year.
The loss per Limited Partnership Unit in the accompanying statements of opera-
tions is calculated based on the number of units outstanding at the beginning of
the year. There were no abandonments in 1995.
Item 8. Changes in and Disagreements with Accountant on Accounting and
FinancialDisclosures
There were no disagreements with Ernst & Young LLP regarding the 1995 or 1994
audits of the Partnership's financial statements.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The name of the directors and executive officers of Angeles Realty Corpora-
tion II ("ARC II"), the Partnership's Managing General Partner as of December
31, 1995, their age and the nature of all positions with ARC II presently held
by them are as follows:
Name Age Position
Carroll D. Vinson 55 President
William H. Jarrard, Jr. 49 Vice President
John K. Lines 36 Vice President and
Secretary
Kelley M. Buechler 38 Assistant Secretary
Robert D. Long, Jr. 28 Controller and Principal
Accounting Officer
Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P.,
and subsidiaries since August 1994. Prior to that, during 1993 to August 1994,
Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and
engaged in various other investment and consulting activities. Briefly, in
early 1993, Mr. Vinson served as President and Chief Executive Officer of
Angeles Corporation, a real estate investment firm. From 1991 to 1993 Mr.
Vinson was employed by Insignia in various capacities including Managing
Director-President during 1991. From 1986 to 1990, Mr. Vinson was President and
a Director of U.S. Shelter Corporation, a real estate services company, which
sold substantially all of its assets to Insignia in December 1990.
William H. Jarrard, Jr. is Managing Director - Partnership Administration of
Insignia Financial Group, Inc. ("Insignia"). During the five years prior to
joining Insignia in 1991, he served in a similar capacity for U.S. Shelter. He
was previously associated with the accounting firm, Ernst & Whinney, for eleven
years. Mr. Jarrard is a graduate of the University of South Carolina and a
certified public accountant.
John K. Lines has been General Counsel and Secretary of Insignia since June
1994. From May 1993 until June 1994, Mr. Lines was the Assistant General
Counsel and Vice President of Ocwen Financial Corporation in West Palm Beach,
Florida. From October 1991 until April 1993, Mr. Lines was a Senior Attorney
with Banc One Corporation in Columbus, Ohio. From May 1984 until October 1991,
Mr. Lines was employed as an Associate Attorney with Squire Sanders & Dempsey in
Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of Insignia. During the five years
prior to joining Insignia in 1991, she served in a similar capacity for U.S.
Shelter. Ms. Buechler is a graduate of the University of North Carolina.
Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to
joining Metropolitan Asset Enhancement, L.P. and subsidiaries, he was an auditor
for the State of Tennessee and was associated with the accounting firm of
Harshman Lewis and Associates. He is a graduate of the University of Memphis.
Item 10. Executive Compensation
No direct form of compensation or remuneration was paid by the Partnership
to any officer or director of ARC II. The Partnership has no plan, nor does the
Partnership presently propose a plan, which will result in any remuneration
being paid to any officer or director upon termination of employment. However,
fees and other payments have been made to the Partnership's Managing General
Partner and its affiliates, as described in "Note F" of the Financial Statements
included under "Item 7", which is incorporated herein by reference.
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of January 1, 1996, no person owned of record more than 5% of the
Limited Partnership Units of the Partnership nor was any person known by the
Partnership to own of record and beneficially, or beneficially only, more than
5% of such securities.
The Partnership knows of no contractual arrangements, the operation or the
terms of which may at a subsequent date result in a change in control of the
Partnership, except as follows: Article 12.1 of the Agreement, which provides
that upon a vote of the Limited Partners holding more than 50% of the then
outstanding Limited Partnership Units the Managing General Partner may be
expelled from the Partnership upon 90 days written notice. In the event that a
successor general partner has been elected by Limited Partners holding more than
50% of the then outstanding Limited Partnership Units and if said Limited
Partners elect to continue the business of the Partnership, the Partnership is
required to pay in cash to the expelled Managing General Partner an amount equal
to the accrued and unpaid management fee described in Article 10 of the Agree-
ment and to purchase the Managing General Partner's interest in the Partnership
on the effective date of the expulsion, which shall be an amount equal to the
difference between (i) the balance of the Managing General Partner's capital
account and (ii) the fair market value of the share of Distributable Net
Proceeds to which the Managing General Partner would be entitled. Such determi-
nation of the fair market value of the share of Distributable Net Proceeds is
defined in Article 12.2(b) of the Agreement.
Item 12. Certain Relationships and Related Transactions
No transactions have occurred between the Partnership and any officer or
director of ARC II.
During the years ended December 31, 1995, and December 31, 1994, the
transactions that occurred between the Partnership and ARC II and affiliates of
ARC II pursuant to the terms of the Agreement are disclosed under "Note F" of
the Partnership's Financial Statements included under "Item 7", which is hereby
incorporated by reference.
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-B: Refer to
Exhibit Index in this report.
(b) No reports on Form 8-K were filed in the fourth quarter of
1995.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
ANGELES PARTNERS XIV
(A California Limited Partnership)
(Registrant)
By: Angeles Realty Corporation II
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
Date: March 27, 1996
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities on the date
indicated.
/s/Carroll D. Vinson President March 27, 1996
Carroll D. Vinson
/s/Robert D. Long, Jr. Controller and March 27, 1996
Robert D. Long, Jr. Principal Accounting
Officer
EXHIBIT INDEX
Exhibit
3.1 Amended Certificate and Agreement of the Limited
Partnership filed in Form S-11 dated December 24, 1984
incorporated herein by reference.
10.1 Agreement of Purchase and Sale of Real Property with
Exhibits - Waterford Square Apartments filed in Form 8K
dated May 31, 1985 incorporated herein by reference.
10.2 Agreement of Purchase and Sale of Real Property with
Exhibits - Fox Crest Apartments filed in form 8K dated June
30, 1985 incorporated herein by reference.
10.3 Agreement of Purchase and Sale of Real Property with
Exhibits - Dayton Industrial Complex filed in form 8K dated
December 20, 1985 incorporated herein by reference.
10.4 Agreement of Purchase and Sale of Real Property with
Exhibits - Camelot Village Apartments filed in Form 8K
dated March 31, 1987 incorporated herein by reference.
10.5 Agreement of Purchase and Sale of Real Property with
Exhibits - Glenwood Plaza Shopping Center filed in form 8K
dated March 31, 1987 incorporated herein by reference.
10.6 Glenwood Plaza Shopping Center financing disclosed in notes
to financial statements filed in Form 10Q dated June 30,
1988 incorporated herein by reference.
10.7 Promissory note - Waterford Square Apartments financing
disclosed in notes to financial statements filed in Form
10K dated December 31, 1989 incorporated herein by
reference.
10.8 Promissory note - Fox Crest Apartments financing disclosed
in notes to financial statements filed in Form 10K dated
December 31, 1989 incorporated herein by reference.
10.9 Sale agreement - Cascades Apartments filed in Form 8-K,
Exhibit I, dated August 28, 1991 incorporated herein by
reference.
10.10 Stock Purchase Agreement dated November 24, 1992 showing
the purchase of 100% of the outstanding stock of Angeles
Realty Corporation II by IAP GP Corporation, a subsidiary
of MAE GP Corporation, filed in Form 8-K dated December 31,
1992, which is incorporated herein by reference.
10.11 Agreement of Purchase and Sale of Real Property with
Exhibits - Camelot Village Apartments and Glenwood Plaza
Shopping Center filed in Form 8-K dated July 15, 1993
incorporated herein by reference.
10.12 Agreement of Purchase and Sale of Real Property with
Exhibits - Building 54 of the Dayton Industrial Complex
Shopping Center filed in Form 8-K dated December 28, 1994
incorporated herein by reference.
10.13 Agreement of Purchase and Sale of Real Property with
Exhibits - Building 47 of the Dayton Industrial Complex
Shopping Center filed in Form 8-K dated August 31, 1995
incorporated herein by reference.
16.1 Letter from the Registrant's former independent accountant
regarding its concurrence with the statements made by the
Registrant, is incorporated by reference to the exhibit
filed with Form 8-K dated September 1, 1993.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Partners XIV 1995 Year-End 10-KSB and is qualified in its entirety by reference
to such 10-KSB filing
</LEGEND>
<CIK> 0000759859
<NAME> ANGELES PARTNERS XIV
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 223,061
<SECURITIES> 0
<RECEIVABLES> 34,769
<ALLOWANCES> 50,067
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 52,907,959
<DEPRECIATION> 26,944,139
<TOTAL-ASSETS> 27,867,507
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 47,441,503
0
0
<COMMON> 0
<OTHER-SE> (24,991,245)
<TOTAL-LIABILITY-AND-EQUITY> 27,867,507
<SALES> 0
<TOTAL-REVENUES> 8,022,914
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 12,289,535
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,859,181
<INCOME-PRETAX> (4,188,543)
<INCOME-TAX> 0
<INCOME-CONTINUING> (4,188,543)
<DISCONTINUED> 0
<EXTRAORDINARY> 895,203
<CHANGES> 0
<NET-INCOME> (3,293,340)
<EPS-PRIMARY> (73.87)
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
