SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
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 0-11935
Century Properties Fund XIX
(Exact name of Registrant as specified in its charter)
California 94-2887133
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (404) 916-9090
N/A
Former name, former address and fiscal year, if changed since last report.
Indicate by check mark whether 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 (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_____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934
subsequent to the distribution of securities under a plan confirmed by a court.
Yes No _____
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date __________________.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
<TABLE>
<CAPTION>
Consolidated Balance Sheets
June 30, December 31,
1994 1993
(Unaudited) (Audited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 406,000 $ 119,000
Restricted cash 860,000 1,516,000
Other assets 1,338,000 659,000
Real Estate:
Real estate 94,027,000 97,436,000
Accumulated depreciation (30,262,000) (29,874,000)
_____________ _____________
Real estate, net 63,765,000 67,562,000
Deferred costs, net 749,000 943,000
_____________ _____________
Total assets $ 67,118,000 $ 70,799,000
_____________ _____________
_____________ _____________
Liabilities and Partners' Equity
Accrued expenses and other liabilities $ 3,743,000 $ 3,109,000
Notes payable to affiliate of the general partner - 370,000
Notes payable 57,077,000 59,869,000
_____________ _____________
Total liabilities 60,820,000 63,348,000
_____________ _____________
Partners' equity (deficit):
General partner (8,328,000) (8,192,000)
Limited partners (89,292 units outstanding at
June 30, 1994 and December 31, 1993) 14,626,000 15,643,000
_____________ _____________
Total partners' equity 6,298,000 7,451,000
_____________ _____________
Total liabilities and partners' equity $ 67,118,000 $ 70,799,000
_____________ _____________
_____________ _____________
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited)
For the Six Months Ended
June 30, 1994 June 30, 1993
Revenues:
<S> <C> <C>
Rental $ 6,783,000 $ 7,250,000
Interest and other income 27,000 29,000
Gain on sale of property - 578,000
_____________ _____________
Total revenues 6,810,000 7,857,000
_____________ _____________
Expenses:
Operating 3,236,000 3,960,000
Interest 2,947,000 3,757,000
Depreciation 1,379,000 1,391,000
General and administrative 252,000 386,000
Loss on sale of property 149,000 -
_____________ _____________
Total expenses 7,963,000 9,494,000
_____________ _____________
Net loss $ (1,153,000) $ (1,637,000)
_____________ _____________
_____________ _____________
Net loss per limited partnership unit $ (11) $ (16)
_____________ _____________
_____________ _____________
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
<TABLE>
<CAPTION>
Consolidated Statements of Operations (Unaudited)
For the Three Months Ended
June 30, 1994 June 30, 1993
Revenues:
<S> <C> <C>
Rental $ 3,366,000 $ 3,496,000
Interest and other income 14,000 19,000
Gain on sale of property - 578,000
_____________ _____________
Total revenues 3,380,000 4,093,000
_____________ _____________
Expenses:
Operating 1,673,000 2,057,000
Interest 1,566,000 1,955,000
Depreciation 694,000 695,000
General and administrative 115,000 176,000
_____________ _____________
Total expenses 4,048,000 4,883,000
_____________ _____________
Net loss $ (668,000) $ (790,000)
_____________ _____________
_____________ _____________
Net loss per limited partnership unit $ (7) $ (8)
_____________ _____________
_____________ _____________
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
<TABLE>
<CAPTION>
Consolidated Statements of Cash Flows (Unaudited)
For the Six Months Ended
June 30, 1994 June 30, 1993
Operating Activities:
<S> <C> <C>
Net (loss) $ (1,153,000) $ (1,637,000)
Adjustments to reconcile net (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 1,566,000 1,553,000
Loss (gain) on sale of property 149,000 (578,000)
Costs expensed on attempted property refinancing - 64,000
Financing costs paid - (497,000)
Financing costs refunded - 523,000
Changes in operating assets and liabilities:
Other assets (679,000) (15,000)
Accrued expenses and other liabilities 634,000 (1,796,000)
_____________ _____________
Net cash provided by (used in) operating activities 517,000 (2,383,000)
_____________ _____________
Investing Activities:
Additions to real estate (171,000) (320,000)
Decrease (increase) in restricted cash 656,000 (704,000)
Proceeds from sale of rental property 2,450,000 11,259,000
Costs of sale of rental property (3,000) (770,000)
_____________ _____________
Net cash provided by investing activities 2,932,000 9,465,000
_____________ _____________
Financing Activities:
Repayment of note payable on sale of
rental property (1,965,000) -
Proceeds from notes payable to affiliate of the
general partner - 291,000
Repayment of notes payable to affiliate of the
general partner (370,000) (1,309,000)
Notes payable proceeds - 20,375,000
Partial repayment of notes payable (594,000) -
Notes payable principal payments (233,000) (26,160,000)
_____________ _____________
Net cash (used in) financing activities (3,162,000) (6,803,000)
_____________ _____________
Increase in Cash and Cash Equivalents 287,000 279,000
Cash and Cash Equivalents at Beginning of Period 119,000 147,000
_____________ _____________
Cash and Cash Equivalents at End of Period $ 406,000 $ 426,000
_____________ _____________
_____________ _____________
Supplemental Disclosure of Cash Flow Information:
Interest paid in cash during the period $ 2,689,000 $ 5,282,000
_____________ _____________
_____________ _____________
</TABLE>
See notes to consolidated financial statements.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The accompanying consolidated financial statements, footnotes and discussions
should be read in conjunction with the consolidated financial statements,
related footnotes and discussions contained in the Partnership's Annual Report
for the year ended December 31, 1993. Certain balance sheet accounts have been
reclassified in order to conform to the current period.
The financial information contained herein is unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of such
financial information have been included. All adjustments are of a normal
recurring nature, except as disclosed in note 5 below.
The results of operations for the six and three months ended June 30, 1994 and
1993 are not necessarily indicative of the results to be expected for the full
year.
2. Transactions with Related Parties
(a) An affiliate of the Managing General Partner ("MGP") received
reimbursements of administrative expenses amounting to $57,000 during
the six months ended June 30, 1994. These reimbursements are primarily
included in general and administrative expenses.
(b) NPI Property Management Corporation ("NPI Management"), an affiliate of
MGP, is entitled to receive a management fee equal to 5% of the annual
gross receipts from certain properties it manages. For the six months
ended June 30, 1994, NPI Management received $223,000. These fees are
included in operating expenses.
(c) Included in operating expenses for the six months ended June 30, 1994
is $146,000 of insurance premiums, which were paid to NPI Management
under a master insurance policy arranged for by MGP.
3. Restricted Cash
Restricted cash at June 30, 1994 represents $160,000 in restricted tenant
security deposits and $700,000 required to be maintained in accordance with
the financing agreement on Wood Lake, Wood Ridge and Plantation Crossing
Apartments.
4. Mortgage Payable
The Partnership has a balloon payment of $10,800,000 on McMillan Place
Apartments which is due in December 1994. The Partnership has received terms
from the existing lender to modify and extend the terms of the loan. It is
anticipated that this loan modification will be executed in the third quarter
of 1994. If the Partnership is unable to extend or refinance the loan, or
sell the property, the property could be lost through foreclosure.
As of June 1, 1994 the lender was permitted to draw on the two letters of
credit, in the amounts of $300,000 each, which were held in connection with
the note payable encumbering the Misty Woods property. In accordance with the
loan agreement, the Partnership applied the net proceeds of the draw, in the
amount of $594,000, to the note, reducing the note payable balance to
$5,183,000. Commencing July 1, 1994, the monthly debt service payment was
reduced to $45,953.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. Mortgage Payable (Continued)
The Partnership has balloon payments which are due between 1995 and 1998 on
all other remaining properties. The ability to hold and operate these
properties is dependent on the Partnership's ability to obtain refinancing or
debt modifications as required.
5. Disposition of Rental Property
Plantation Forest Apartments located in Atlanta, Georgia, was sold on February
8, 1994 for $2,450,000. After payment of the existing loan of $1,965,000 and
expenses of the sale, the proceeds to the Partnership were approximately
$482,000. The loss on sale was $149,000.
Net proceeds realized from the sale were partially used to fully repay
$370,000 of the demand notes, including accrued interest, held by an affiliate
of the general partner.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
This item should be read in conjunction with the Consolidated Financial
Statements and other Items contained elsewhere in this Report.
Fund Liquidity and Capital Resources
The Fund holds investments in and operates eight apartment complexes. The Fund
receives rental income from its properties and is responsible for operating
expenses, administrative expenses, capital improvements and debt service
payments. As of August 1, 1994, five of the thirteen properties originally
purchased by the Fund were sold or otherwise disposed. Five of the Fund's eight
properties generated positive cash flow during the six months ended June 30,
1994. McMillan Place, Misty Woods and Sunrunner Apartments experienced negative
cash flow for the six months ended June 30, 1994.
The Fund uses working capital reserves provided from any undistributed cash flow
from operations, sales and refinancing proceeds as its primary sources of
liquidity. There have been no distributions since 1987. It is not currently
anticipated that the Fund will make any distributions from operations in the
near future.
The level of liquidity based upon cash and cash equivalents experienced a
$287,000 increase at June 30, 1994, as compared to December 31, 1993.
The Fund's $517,000 of cash provided by operating activities and $2,932,000 of
cash provided by investing activities were partially offset by $3,162,000
used in financing activities. Cash provided by investing activities resulted
from $2,447,000 of net proceeds from the sale of Plantation Forest Apartments
and the release of $656,000 of restricted cash relating to the partial repayment
of the mortgage encumbering the Fund's Misty Woods property, which were only
partially offset by $171,000 in additions to real estate. The cash used in
financing activities consisted of $233,000 in notes payable principal payments,
the $1,965,000 repayment of the note encumbering Plantation Forest, the $370,000
repayment of notes payable to an affiliate of the General Partner and the
$594,000 partial repayment of the notes payable encumbering the Fund's Misty
Woods property. The increase in other assets is primarily due to an increase
in required real estate tax escrow deposits. All other increases (decreases) in
certain assets and liabilities are the result of the timing of receipt and
payment of various operating activities.
Working capital reserves are invested in a money market account or repurchase
agreements secured by United States Treasury obligations. The Managing General
Partner believes that, if market conditions remain relatively stable, cash flow
from operations, when combined with working capital reserves, will be sufficient
to fund required capital improvements and regular debt service payments in 1994
and the foreseeable future. In December 1994, and in 1995 through 1998, the
Fund will have to arrange for the refinancings or debt modifications discussed
in Item 1, Note 4. If necessary, the Fund could dispose of the properties with
significant balloon payments, in order to reduce future cash requirements.
If the mortgage, with a December 1994 balloon payment, due with respect to
McMillan Place, is not refinanced or extended, or the property is not sold, the
property could be lost through foreclosure. The Partnership has received terms
from the existing lender to modify and extend the terms of the loan. It is
anticipated that this loan modification will be executed in the third quarter of
1994. If the property is lost through foreclosure, the Fund would not record a
loss, since the outstanding non-recourse mortgage liability exceeds the Fund's
depreciated basis in the assets.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Fund Liquidity and Capital Resources (Continued)
At this time, it appears that the investment objective of capital growth will
not be attained and that investors will not receive a return of all of their
invested capital. The extent to which invested capital is returned to
investors is dependent upon the performance of the Fund's properties and the
markets in which such properties are located and on the sales price of the
remaining properties. In this regard, it is anticipated at this time that the
remaining properties will be held longer than originally expected. The ability
to hold and operate these properties is dependent on the Fund's ability to
obtain refinancing or debt modification as required.
Real Estate Market
The national real estate market has suffered from the effects of the real estate
recession including, but not limited to, a downward trend in market values of
existing residential properties. In addition, the bailout of the savings and
loan associations and sales of foreclosed properties by auction reduced market
values and caused a further restriction on the ability to obtain credit. As a
result, the Fund's ability to refinance or sell its properties may be
restricted. These factors caused a decline in market property values and serve
to reduce market rental rates and/or sales prices. Compounding these
difficulties are relatively low interest rates, which encourage existing and
potential tenants to purchase homes. In addition, there has been a significant
decline nationally in new household formation. Despite the above, the rental
market appears to be experiencing a gradual strengthening and management
anticipates that increases in revenue will generally exceed increases in
expenses during 1994. Furthermore, management believes that the emergence of
new institutional purchasers, including real estate investment trusts and
insurance companies, should create a more favorable market value for the Fund's
properties in the future.
Results of Operations
Six Months Ended June 30, 1994 vs. June 30, 1993
Operating results improved by $484,000 for the six months ended June 30, 1994,
as compared to 1993, due to the disposition of Parkside Village Apartment in May
1993 and Plantation Forest Apartments in February 1994. With respect to the
remaining properties, operating results improved by $1,061,000 due to an
increase in revenues of $429,000 and a decrease in expenses of $632,000.
With respect to the remaining properties, revenues increased by $429,000 due to
an increase in rental revenues of $431,000 and a $2,000 decrease in interest and
other income. Rental revenues increased primarily due to increased rates at the
Greenspoint, Sunrunner, Wood Ridge and Wood Lake properties, and increased
occupancy at all of the Fund's properties, except for Greenspoint, where
occupancy remained constant. Interest and other income remained relatively
constant.
With respect to the remaining properties, expenses decreased by $554,000 due to
decreases in operating expenses of $88,000, interest expense of $434,000 and
general and administrative expenses of $57,000, which were only partially offset
by a increase in depreciation of $25,000. Operating expenses decreased
primarily due to rent-up expenses incurred in 1993 on Wood Ridge and Sandspoint
Apartments. There were no comparable expenses during the first six months of
1994.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Six Months Ended June 30, 1994 vs. June 30, 1993 (Continued)
Interest expense decreased due to prepayment penalties incurred in 1993 and
interest savings in 1994, associated with the June 1993 refinancings of the Wood
Lake, Wood Ridge and Plantation Crossing Apartments debt. General and
administrative expenses decreased primarily due to a decrease in legal and
consulting fees. Depreciation expense increased due to the effect of fixed
asset additions primarily benefiting the tenants at Sandspoint, Sunrunner
and Wood Ridge Apartments.
Three Months Ended June 30, 1994 vs. June 30, 1993
Operating results improved by $122,000 for the three months ended June 30, 1994
as compared to 1993, due to the disposition of Parkside Village Apartment in May
1993 and Plantation Forest Apartments in February 1994. With respect to the
remaining properties, operating results improved by $608,000 due to an increase
in revenues of $189,000 and a decrease in expenses of $419,000.
With respect to the remaining properties, revenues increased by $189,000 due to
an increase in rental revenues of $194,000 and a $5,000 decrease in interest and
other income. Rental revenues increased primarily due to increased rates at the
Fund's Greenspoint, Sunrunner, Wood Ridge and Wood Lake properties, and
increased occupancy at all the Fund's properties except for Greenspoint and
Plantation Crossings properties. Interest and other income decreased due to a
slight decrease in average working capital reserves available for investment.
With respect to the remaining properties expenses decreased by $314,000 due to
decreases in operating expenses of $149,000 and interest expense of $208,000,
which were only partially offset by an increase in depreciation of $16,000.
Operating expenses decreased primarily due to rent-up expenses incurred in 1993
on Wood Ridge and Sandspoint Apartments. Interest expense decreased due to
prepayment penalties incurred in 1993 and interest savings in 1994, both
directly associated with the June 1993 refinancing on Wood Lake, Wood Ridge and
Plantation Crossing Apartments. General and administrative expenses remained
constant. Depreciation expense increased due to the effect of fixed asset
additions primarily benefiting the tenants at Sandspoint, Sunrunner and Wood
Ridge Apartments.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
Properties
A description of the properties in which the Fund has an ownership interest
during the period covered by this Report, along with occupancy data, follows:
<TABLE>
<CAPTION>
CENTURY PROPERTIES FUND XIX
OCCUPANCY SUMMARY
Average
Occupancy Rate (%)
Six Months Three Months
Number Date Ended Ended
of of June 30, June 30,
Name and Location Units Purchase 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Parkside Village
Apartments (1) 383 11/83 - - - -
Aurora, Colorado
Wood Lake Apartments 220 12/83 96 89 96 89
Atlanta, Georgia
Greenspoint Apartments 336 02/84 97 97 96 97
Phoenix, Arizona
Sandspoint Apartments 432 02/84 94 89 91 88
Phoenix, Arizona
Wood Ridge Apartments 280 04/84 96 95 97 96
Atlanta, Georgia
Plantation Crossing
Apartments 180 06/84 97 96 95 96
Atlanta, Georgia
Plantation Forest
Apartments (2) 64 06/84 - 90 - 90
Atlanta, Georgia
Sunrunner Apartments 200 07/84 95 92 98 91
St. Petersburg, Florida
McMillan Place Apartments 402 06/85 95 91 95 92
Dallas, Texas
Misty Woods Apartments 228 06/85 92 91 94 92
Charlotte, North Carolina
The Cove Apartments (3) 689 12/84 - - - -
Tampa, Florida
</TABLE>
(1) Property was sold in May 1993.
(2) Property was sold in February 1994.
(3) Property was placed into receivership in 1992 and acquired by lender through
foreclosure in July 1993.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
On April 29, 1994, a Current Report on Form 8-K was filed with the
Securities and Exchange Commission to provide for the change in the
Fund's accountants from Deloitte and Touche to Imowitz Koenig &
Company. No other Reports on Form 8-K were filed during the period
covered by this Report.
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CENTURY PROPERTIES FUND XIX - FORM 10-Q - JUNE 30, 1994
SIGNATURE
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.
CENTURY PROPERTIES FUND XIX
By: FOX PARTNERS II,
A California General Partnership,
its general partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
A California Corporation,
its general partner
/S/ARTHUR N. QUELER
ARTHUR N. QUELER
Executive Vice President (Principal
Financial and Accounting Officer)
and Director of Fox
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