-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AEWkw5Re5bkdZrH8mwyAWaYDszAgrMTBiZF04k9ByosF0/7WLaUWlO7Dg1ozxEBB wHNJmS8vw02SZuQnJvZzHw== 0000702657-96-000008.txt : 19961118 0000702657-96-000008.hdr.sgml : 19961118 ACCESSION NUMBER: 0000702657-96-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MCNEIL REAL ESTATE FUND XIV LTD CENTRAL INDEX KEY: 0000702657 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942822299 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12915 FILM NUMBER: 96663967 BUSINESS ADDRESS: STREET 1: 13760 NOEL RD STE 700 LB70 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2144485800 MAIL ADDRESS: STREET 1: 13760 NOEL ROAD SUITE 700 LB 70 CITY: DALLAS STATE: TX ZIP: 75240 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 30, 1996 ------------------------------------------------------ OR [ ] 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 0-12915 -------- McNEIL REAL ESTATE FUND XIV, LTD. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2822299 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (972) 448-5800 ----------------------------- Indicate by check mark whether the registrant, (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- McNEIL REAL ESTATE FUND XIV, LTD. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ------- --------------------
BALANCE SHEETS (Unaudited) September 30, December 31, 1996 1995 --------------- --------------- ASSETS - ------ Real estate investments: Land..................................................... $ 4,663,828 $ 6,833,471 Buildings and improvements............................... 35,661,726 45,953,575 -------------- -------------- 40,325,554 52,787,046 Less: Accumulated depreciation.......................... (18,490,971) (21,836,162) -------------- -------------- 21,834,583 30,950,884 Assets held for sale, net 7,880,294 - Cash and cash equivalents................................... 1,799,278 1,417,948 Cash segregated for security deposits....................... 409,189 370,097 Accounts receivable......................................... 447,539 350,823 Prepaid expenses and other assets........................... 182,656 200,574 Escrow deposits............................................. 755,114 844,622 Deferred borrowing costs, net of accumulated amorti- zation of $322,340 and $250,597 at September 30, 1996, and December 31, 1995, respectively................ 1,068,652 1,140,395 -------------- -------------- $ 34,377,305 $ 35,275,343 ============== ============== LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - ------------------------------------------ Mortgage notes payable, net................................. $ 27,540,506 $ 27,871,969 Accounts payable............................................ 82,154 166,434 Accrued interest............................................ 198,149 201,267 Accrued property taxes...................................... 348,433 100,877 Other accrued expenses...................................... 77,564 79,725 Payable to affiliates - General Partner..................... 1,199,567 1,255,290 Security deposits and deferred rental revenue............... 399,233 380,367 -------------- -------------- 29,845,606 30,055,929 -------------- -------------- Partners' equity (deficit): Limited partners - 100,000 limited partnership units authorized; 86,534 limited partnership units outstanding...................................... 7,533,331 7,766,250 General Partner.......................................... (3,001,632) (2,546,836) -------------- -------------- 4,531,699 5,219,414 -------------- -------------- $ 34,377,305 $ 35,275,343 ============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XIV, LTD. STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30, --------------------------------- --------------------------------- 1996 1995 1996 1995 -------------- --------------- -------------- -------------- Revenue: Rental revenue................ $ 2,394,794 $ 2,305,697 $ 7,015,762 $ 6,886,211 Interest...................... 26,676 25,850 83,826 80,005 Gain on legal settlement...... - - - 39,841 ------------- ------------- ------------- ------------- Total revenue............... 2,421,470 2,331,547 7,099,588 7,006,057 ------------- ------------- ------------- ------------- Expenses: Interest...................... 668,854 680,161 2,016,545 2,019,180 Depreciation and amortization................ 578,013 521,427 1,724,329 1,583,608 Property taxes................ 203,574 193,390 589,515 559,998 Personnel expenses............ 243,055 251,719 716,281 765,204 Utilities..................... 130,435 124,667 376,826 350,929 Repair and maintenance........ 226,062 257,856 871,051 733,479 Property management fees - affiliates........... 116,222 115,579 343,407 343,552 Other property operating expenses.................... 112,884 142,144 384,713 428,287 General and administrative.... 47,079 139,667 87,161 173,418 General and administrative - affiliates.................. 63,269 90,517 225,032 278,728 ------------- ------------- ------------- ------------- Total expenses.............. 2,389,447 2,517,127 7,334,860 7,236,383 ------------- ------------- ------------- ------------- Net income (loss)................ $ 32,023 $ (185,580) $ (235,272) $ (230,326) ============= ============= ============= ============= Net income (loss) allocated to limited partners.............. $ 31,703 $ (183,724) $ (232,919) $ (228,023) Net income (loss) allocated to General Partner............... 320 (1,856) (2,353) (2,303) ------------- ------------- ------------- ------------- Net income (loss)................ $ 32,023 $ (185,580) $ (235,272) $ (230,326) ============= ============= ============= ============= Net income (loss) per limited partnership unit.............. $ .37 $ (2.12) $ (2.69) $ (2.64) ============ ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XIV, LTD. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (Unaudited) For the Nine Months Ended September 30, 1996 and 1995
Total Partners' General Limited Equity Partner Partners (Deficit) --------------- --------------- --------------- Balance at December 31, 1994.............. $ (1,941,941) $ 8,094,114 $ 6,152,173 Net loss.................................. (2,303) (228,023) (230,326) Management Incentive Distribution......... (454,147) - (454,147) ------------- ------------- ------------- Balance at September 30, 1995............. $ (2,398,391) $ 7,866,091 $ 5,467,700 ============= ============= ============= Balance at December 31, 1995.............. $ (2,546,836) $ 7,766,250 $ 5,219,414 Net loss.................................. (2,353) (232,919) (235,272) Management Incentive Distribution......... (452,443) - (452,443) ------------- ------------- ------------- Balance at September 30, 1996............. $ (3,001,632) $ 7,533,331 $ 4,531,699 ============= ============= =============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XIV, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Increase in Cash and Cash Equivalents
Nine Months Ended September 30, ------------------------------------ 1996 1995 ---------------- ---------------- Cash flows from operating activities: Cash received from tenants............................... $ 6,899,382 $ 6,863,411 Cash received from legal settlement...................... - 39,841 Cash paid to suppliers................................... (2,352,159) (2,508,996) Cash paid to affiliates.................................. (576,605) (966,167) Interest received........................................ 83,826 80,005 Interest paid............................................ (1,842,529) (1,861,383) Property taxes paid and escrowed......................... (405,409) (355,935) -------------- -------------- Net cash provided by operating activities................... 1,806,506 1,290,776 -------------- -------------- Cash flows from investing activities: Additions to real estate investments..................... (488,322) (1,015,400) -------------- -------------- Cash flows from financing activities: Principal payments on mortgage notes payable................................................ (436,854) (397,430) Deferred borrowing costs paid............................ - (107,525) Proceeds from refinancing of mortgage note payable........................................... - 1,115,767 Management incentive distribution paid................... (500,000) - --------------- -------------- Net cash provided by (used in) financing activities............................................... (936,854) 610,812 -------------- -------------- Net increase in cash and cash equivalents................... 381,330 886,188 Cash and cash equivalents at beginning of period................................................... 1,417,948 1,045,158 -------------- -------------- Cash and cash equivalents at end of period.................. $ 1,799,278 $ 1,931,346 ============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XIV, LTD. STATEMENTS OF CASH FLOWS (Unaudited) Reconciliation of Net Loss to Net Cash Provided by Operating Activities
Nine Months Ended September 30, ------------------------------------ 1996 1995 ---------------- ---------------- Net loss.................................................... $ (235,272) $ (230,326) -------------- -------------- Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization............................ 1,724,329 1,583,608 Amortization of deferred borrowing costs................. 71,743 60,125 Amortization of discounts on mortgage notes payable.......................................... 105,391 98,691 Changes in assets and liabilities: Cash segregated for security deposits.................. (39,092) (22,009) Accounts receivable.................................... (96,716) 10,190 Prepaid expenses and other assets...................... 17,918 16,152 Escrow deposits........................................ 89,508 (157,767) Accounts payable....................................... (84,280) 94,194 Accrued interest....................................... (3,118) (1,019) Accrued property taxes................................. 247,556 191,205 Other accrued expenses................................. (2,161) (9,152) Payable to affiliates - General Partner................ (8,166) (343,887) Security deposits and deferred rental revenue.............................................. 18,866 771 -------------- -------------- Total adjustments.................................... 2,041,778 1,521,102 -------------- -------------- Net cash provided by operating activities................... $ 1,806,506 $ 1,290,776 ============== ==============
The financial information included herein has been prepared by management without audit by independent public accountants. See accompanying notes to financial statements. McNEIL REAL ESTATE FUND XIV, LTD. Notes to Financial Statements (Unaudited) September 30, 1996 NOTE 1. - ------- McNeil Real Estate Fund XIV, Ltd. (the "Partnership") is a limited partnership organized under the laws of the State of California to invest in real property. The general partner of the Partnership is McNeil Partners, L.P. (the "General Partner"), a Delaware limited partnership affiliated with Robert A. McNeil. The Partnership is governed by an agreement of limited partnership ("Amended Partnership Agreement") that was adopted September 20, 1991. The principal place of business for the Partnership and the General Partner is 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. In the opinion of management, the financial statements reflect all adjustments necessary for a fair presentation of the Partnership's financial position and results of operations. All adjustments were of a normal recurring nature. However, the results of operations for the nine months ended September 30, 1996 are not necessarily indicative of the results to be expected for the year ending December 31, 1996. NOTE 2. - ------- The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995, and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to McNeil Real Estate Fund XIV, Ltd., c/o McNeil Real Estate Management, Inc., Investor Services, 13760 Noel Road, Suite 700, LB70, Dallas, Texas 75240. NOTE 3. - ------- Certain prior period amounts within the accompanying financial statements have been reclassified to conform with current year presentation. NOTE 4. - ------- The Partnership pays property management fees equal to 5% of the gross rental receipts of the Partnership's properties to McNeil Real Estate Management, Inc. ("McREMI"), an affiliate of the General Partner, for providing property management services for the Partnership's residential and commercial properties and leasing services for its residential properties. McREMI may also choose to provide leasing services for the Partnership's commercial properties, in which case McREMI will receive property management fees from such commercial properties equal to 3% of the property's gross rental receipts plus leasing commissions based on the prevailing market rate for such services where the property is located. The Partnership reimburses McREMI for its costs, including overhead, of administering the Partnership's affairs. Under terms of the Amended Partnership Agreement, the Partnership is paying a Management Incentive Distribution ("MID") to the General Partner. The maximum MID is calculated as 1% of the tangible asset value of the Partnership. The maximum MID percentage decreases subsequent to 1999. Tangible asset value is determined by using the greater of (i) an amount calculated by applying a capitalization rate of 9% to the annualized net operating income of each property or (ii) a value of $10,000 per apartment unit for residential property and $50 per gross square foot for commercial property to arrive at the property tangible asset value. The property tangible asset value is then added to the book value of all other assets excluding intangible items. MID will be paid to the extent of the lesser of the Partnership's excess cash flow, as defined, or net operating income, as defined (the "Entitlement Amount"), and may be paid (i) in cash, unless there is insufficient cash to pay the distribution in which event any unpaid portion not taken in Units will be deferred and is payable, without interest, from the first available cash and/or (ii) in Units. A maximum of 50% of the MID may be paid in Units. The number of Units issued in payment of the MID is based on the greater of $50 per Unit or the net tangible asset value, as defined, per Unit. Any amount of the MID that is paid to the General Partner in Units will be treated as if cash is distributed to the General Partner and is then contributed to the Partnership by the General Partner. The MID represents a return of equity to the General Partner for increasing cash flow, as defined, and accordingly is treated as a distribution. Compensation, reimbursements and distributions paid to or accrued for the benefit of the General Partner and its affiliates are as follows: Nine Months Ended September 30, --------------------------- 1996 1995 ----------- ----------- Property management fees - affiliates....... $ 343,407 $ 343,552 Charged to general and administrative - affiliates: Partnership administration............... 225,032 278,728 ---------- ---------- $ 568,439 $ 622,280 ========== ========== Charged to General Partner's deficit: Management Incentive Distribution........ $ 452,443 $ 454,147 ========== ========== NOTE 5. On March 13, 1995, the Partnership refinanced the Windrock mortgage note. The new mortgage note, in the amount of $3,450,000, bears interest at 9.44% per annum, and requires monthly principal and interest payments of $28,859. The maturity date of the new mortgage note is April 1, 2002. Cash proceeds from the refinancing transaction are as follows: New loan proceeds.................. $ 3,450,000 Existing first lien retired........ (1,894,233) Existing second lien retired....... (440,000) ----------- Cash proceeds from refinancing..... $ 1,115,767 =========== The Partnership incurred $107,525 of deferred borrowing costs related to the refinancing of the Windrock mortgage note. The Partnership was also required to fund $184,172 into various escrows for capital improvements, property taxes and insurance. NOTE 6. - ------- In 1996, the Partnership adopted the Financial Accounting Standards Board's Statement of Financial Accounting Standards no. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement requires the cessation of depreciation charges on assets held for sale. Country Hills Plaza, Midvale Plaza and Redwood Plaza were designated "Assets Held for Sale" on October 1, 1996. Consequently, the three properties are shown as Assets Held for Sale on the Partnership's Balance Sheet dated September 30, 1996. No further depreciation charges will be recorded by the Partnership in connection with the three properties effective October 1, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - ------- --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- The Partnership was formed to acquire, operate and ultimately dispose of a portfolio of income-producing real properties. At September 30, 1996, the Partnership owned four apartment properties and three shopping centers. All of the Partnership's properties are subject to mortgage notes. On October 1, 1996, the Partnership placed its three commercial properties, County Hills Plaza, Midvale Plaza and Redwood Plaza, on the market for sale. Consequently, the Partnership's investment in these three properties is shown as Assets Held for Sale on the accompanying Balance Sheet dated September 30, 1996. Proceeds from the sale of the three properties will be used to first, repay the mortgage note encumbering the property sold; second, pay any deferred payments due to the General Partner or its affiliates; third, ensure that the Partnership maintains an adequate level of cash reserves; and fourth, pay distributions to the Unit holders. On March 13, 1995, the Partnership refinanced Windrock Apartments with a new $3,450,000 mortgage note. Proceeds from the new mortgage were used to payoff the prior first and second mortgage notes encumbering Windrock Apartments, to fund various escrows for the payment of property taxes, insurance, repairs and replacements, and to pay for loan fees and other costs associated with obtaining the new mortgage note. Residual proceeds of approximately $824,000 were added to the Partnership's cash reserves. The Partnership's next maturing mortgage note does not come due until April 1, 2002. RESULTS OF OPERATIONS - --------------------- For the quarter ended September 30, 1996, the Partnership reported net income of $32,023, an increase of $217,603 from the loss of $185,580 reported for the quarter ended September 30, 1995. For the nine months ended September 30, 1996, the Partnership's reported loss increased $4,946 to $235,272 as compared to the same period of 1995. Revenues: Rental revenue for the three month and nine month periods ended September 30, 1996 increased $89,097 and $129,551, or 3.9% and 1.9%, respectively, over rental revenue earned during the same periods of 1995. At Embarcadero Club Apartments, Tanglewood Village Apartments and Thunder Hollow Apartments, steady progress was made increasing base rental rates. At Tanglewood Village Apartments, nearly all of the increase in base rental rates was offset by decreased occupancy. Net rental revenue increased less than 1% at the Nevada property. At Embarcadero Club and Thunder Hollow, increased base rental rates were partially offset by decreased occupancy. Net rental revenue increased 2.7% and 4.9% at Embarcadero Club and Thunder Hollow, respectively. The Partnership's other residential property, Windrock Apartments, continues to report decreasing occupancy rates that led to a 5.6% decrease in rental revenue at the El Paso property. A weak local economy and competition from newer apartment properties continue to drive down net rental rates. The Partnership's commercial properties reported mixed results for the first nine months of 1996. Rental revenue increased at 4.4% and 2.2% at Redwood Plaza and Country Hills Plaza, respectively. Rental rates continue to improve at Redwood Plaza as well as collections of reimbursable expenses from the property's tenants. For the year, Redwood Plaza has maintained 100% occupancy. Country Hills has maintained 100% occupancy for both 1996 and 1995 year-to-date periods. Rental rates increased at a slower rate for the Ogden property as compared to Redwood Plaza. A decrease in percentage rents collected from tenants at Midvale Plaza led to a 4.4% decrease in rental revenue in 1996 as compared to 1995. Although percentage rents decreased, Midvale Plaza remains 100% leased for the year, and base rental rates as well as expense reimbursements from tenants continue to slowly improve. Expenses: Partnership expenses decreased $127,680 or 5.1% and increased $98,477 or 1.4% for the three months and nine months ended September 30, 1996 as compared to the same periods of 1995. Increased expenses, on a percentage basis, were concentrated in depreciation and repair and maintenance. The Partnership also reported decreases in other property operating expenses, general and administrative expenses, and general and administrative expenses paid to affiliates. Depreciation expense increased 10.9% and 8.9% for the three and nine month periods ended September 30, 1996 as compared to the same periods for 1995. Of the approximately $1,216,000 of capital improvements completed at the Partnership's properties during the past twelve months, over half of the improvements were completed at Thunder Hollow Apartments and Windrock Apartments. These two properties recorded 13.9% and 13.4% increases in depreciation expense. The capital improvements placed in service during the past year are generally being depreciated over lives ranging from 5 to 10 years. Repair and maintenance expenses increased 12.3% and 18.8% for the three month and nine months periods ended September 30, 1996 as compared to the same periods of 1995. This increase is attributable to the replacement of carpeting and appliances, which met the Partnership's criteria for capitalization based on the magnitude of replacements in 1995, but were expensed in 1996. Thunder Hollow Apartments also reported a significant increase in snow removal expenses during the first quarter of 1996. General and administrative expenses decreased $86,257 or 50% for the nine month period ended September 30, 1996 as compared to the same period of 1995. The decrease is due to a $91,944 decrease in costs incurred to evaluate and disseminate information regarding an unsolicited tender offer. The Partnership anticipates incurring such costs in the fourth quarter of 1996 in response to an additional unsolicited tender offer, as discussed in Item 5 - Other Information. General and administrative expenses paid to affiliates decreased 30% and 19% for the three month and nine month periods ended September 30, 1996 as compared to the same periods of 1995. Reimbursable costs allocated to the Partnership by affiliates of the General Partner decreased for 1996. LIQUIDITY AND CAPITAL RESOURCES - ------------------------------- Although the Partnership's net loss increased $4,946 to $235,272 for the first nine months of the year, cash flow from operations increased $515,730 to $1,806,506. Decreased payments to suppliers and to affiliates were the principal factors in the improved operating cash flow figure. Also contributing was an increase in cash received from tenants of the Partnership's properties. The improved cash flow from operations was more than sufficient to pay for additions to the Partnership's properties, to fund scheduled repayments of the Partnership's mortgage notes, to make a $500,000 payment of Management Incentive Distribution to the General Partner, and still provide for a $381,330 increase in the cash reserves of the Partnership. Capital improvement expenditures decreased 52% to $488,322 in 1996. The Partnership's capital improvement budget for 1996 totals only $623,000, approximately half of the amount expended by the Partnership for capital improvements in each of the past six years. Cash flows from financing activities for the third quarter of 1996 reflect principal repayments on the Partnership's various mortgage notes and a $500,000 MID payment. The third quarter of 1995, besides mortgage principal repayments, records the effects of the refinancing of the Windrock mortgage note. Short-term liquidity: At September 30, 1996, the Partnership held $1,799,278 of cash and cash equivalents, up $381,330 from the balance at the end of 1995. The General Partner considers this level of cash reserves to be adequate to meet the Partnership's operating needs for the balance of 1996 and 1997. The General Partner anticipates that cash generated from operations for the remainder of 1996 will be sufficient to fund the Partnership's budgeted capital improvements and debt service requirements. Due to continued improvement in property operations, the General Partner will likely continue paying the MID. As noted above, a $500,000 MID payment was made during the third quarter of 1996. Payment of MID has been suspended for two and a half years to restore the Partnership's balance of cash and cash equivalents to an acceptable level. The Partnership has placed its three commercial properties on the market for sale. The Partnership does not intend to use proceeds from sale of the properties to add to its balance of cash and cash equivalents. Rather, proceeds from the sale of these properties, after repayment of mortgage indebtedness, is intended to be distributed to the Unit holders. Long-term liquidity: While the present outlook for the Partnership's liquidity is favorable, market conditions may change and property operations can deteriorate. In that event, the Partnership would require other sources of working capital. No such other sources have been identified, and the Partnership has no established lines of credit. Other possible actions to resolve working capital deficiencies include refinancing or renegotiating terms of existing loans, deferring major capital expenditures on Partnership properties except where improvements are expected to enhance the competitiveness or marketability of the properties, or arranging working capital support from affiliates. No affiliate support has been required in the past, and there is no assurance that support from affiliates would be provided in the future, since neither the General Partner nor any affiliates have any obligation in this regard. The Partnership has determined to begin an orderly liquidation of all the Partnership's assets. Although there can be no assurance as to the timing of any liquidation, it is anticipated that such liquidation would result in distributions to the limited partners of the cash proceeds from the sale of the Partnership's properties, subject to cash reserve requirements, as they are sold with the last property disposition before December 2001, followed by a dissolution of the Partnership. In this regard, the Partnership has placed three of its seven properties on the market for sale. Income Allocations and Distributions: Terms of the Amended Partnership Agreement specify that net losses for financial reporting purposes are allocated 99% to the limited partners and 1% to the General Partner. Net income for financial reporting purposes is allocated to the General Partner in an amount equal to the greater of (a) 1% of net income or (b) the cumulative amount of the MID paid for which no income allocation has previously been made; any remaining net income is allocated to the limited partners. Therefore, for the nine month periods ended September 30, 1996 and 1995, ($2,353) and ($2,303), respectively, were allocated to the General Partner. The limited partners received allocations of net loss of ($232,919) and ($228,023), respectively. With the exception of the MID, distributions to Partners have been suspended since 1986 as a part of the General Partner's policy of maintaining adequate cash reserves. Distributions of cash flow from operations to Unit holders will remain suspended for the foreseeable future. However, the General Partner intends to distribute proceeds from the sale of the Partnership's commercial properties to the Unit holders, after repaying the related mortgage indebtedness. The Partnership recorded MID of $452,443 for the first nine months of 1996. The Partnership resumed MID payments during the third quarter of 1996. MID payments had been suspended since the beginning of 1994. The General Partner will continue to monitor the cash reserves and working capital requirements of the Partnership to ensure that cash flows and balances will support continued MID payments and distributions of net sales proceeds to Unit holders. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - ------- ----------------- McNeil Pacific Investors Fund 1972, Ltd., McNeil Real Estate Fund V, Ltd., McNeil Real Estate Fund IX, Ltd., McNeil Real Estate Fund X, Ltd., McNeil Real Estate Fund XI, Ltd., McNeil Real Estate Fund XIV, Ltd., McNeil Real Estate Fund XV, Ltd., McNeil Real Estate Fund XX, L.P., McNeil Real Estate Fund XXIV, L.P., and McNeil Real Estate Fund XXV, L.P. vs. High River Limited Partnership, Riverdale Investors Corp., Carl C. Icahn, and Unicorn Associates Corporation - United States District Court for the Central District of California, Case No. 96-5680SVW. On August 12, 1996, High River Limited Partnership ("High River"), a partnership controlled by Carl C. Icahn, sent a letter to the partnerships referenced above demanding lists of the names, current residences or business addresses and certain other information concerning the unitholders of such partnerships. On August 19, 1996, these partnership commenced the above action seeking, among other things, to declare that such partnerships are not required to provide High River with a current list of unitholders on the grounds that the defendants commenced a tender offer in violation of the federal securities laws by filing certain Schedule 13D Amendments on August 5, 1996. On October 17, 1996, the presiding judge denied the partnerships' requests for a permanent and preliminary injunction to enjoin High River's tender offers and granted the defendants request for an order directing the partnerships to turn over current lists of unitholders to High River forthwith. On October 24, 1996, the partnerships delivered the unitholder lists to High River. ITEM 5. OTHER INFORMATION - ------- ----------------- On September 20, 1996, High River announced that it had commenced a tender offer for any and all units of the Partnership at $95 per unit. The tender was originally due to expire October 18, 1996, however, this offer has been extended until November 22, 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ------- -------------------------------- (a) Exhibits. Exhibit Number Description -------- ----------- 4. Amended and Restated Limited Partnership Agree- ment dated September 20, 1991. (1) 11. Statement regarding computation of net loss per limited partnership unit: net loss per limited partnership unit is computed by dividing net loss allocated to the limited partners by the number of limited partnership units outstanding. Per unit information has been computed based on 86,534 limited partnership units outstanding in 1996 and 1995. 27. Financial Data Schedule for the quarter ended September 30, 1996. (1) Incorporated by reference to the Annual Report of Registrant, on Form 10-K for the period ended December 31, 1991, as filed on March 30, 1992. (b) Reports on Form 8-K. There were no reports on Form 8-K filed during the quarter ended September 30, 1996. McNEIL REAL ESTATE FUND XIV, LTD. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized: McNEIL REAL ESTATE FUND XIV, Ltd. By: McNeil Partners, L.P., General Partner By: McNeil Investors, Inc., General Partner November 14, 1996 By: /s/ Donald K. Reed - ----------------- ---------------------------------------- Date Donald K. Reed President and Chief Executive Officer November 14, 1996 By: /s/ Ron K. Taylor - ----------------- ---------------------------------------- Date Ron K. Taylor Acting Chief Financial Officer of McNeil Investors, Inc. November 14, 1996 By: /s/ Brandon K. Flaming - ----------------- ---------------------------------------- Date Brandon K. Flaming Chief Accounting Officer of McNeil Real Estate Management, Inc. EX-27 2
5 9-MOS DEC-31-1996 SEP-30-1996 1,799,278 0 447,539 0 0 0 40,325,554 (18,490,971) 34,377,305 0 27,540,506 0 0 0 0 34,377,305 7,015,762 7,099,588 0 0 5,318,315 0 2,016,545 (235,272) 0 0 0 0 0 (235,272) 0 0
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