FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended in Rel. No. 312905, eff. 4/26/93.)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 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 0-11935
CENTURY PROPERTIES FUND XIX
(Exact name of small business issuer as specified in its charter)
California 94-2887133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
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 (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 .
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CENTURY PROPERTIES FUND XIX
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands)
June 30, 1996
<TABLE>
<CAPTION>
<S> <C>
Assets
Cash and cash equivalents $ 3,234
Other assets and deferred costs 2,046
Investment properties:
Land $ 11,635
Buildings and related personal property 82,948
94,583
Less accumulated depreciation (35,746) 58,837
$ 64,117
Liabilities and Partners' Capital (Deficit)
Liabilities
Accrued expenses and other liabilities $ 1,794
Mortgage notes payable 61,953
Partners' Capital (Deficit):
General partners $ (9,026)
Limited partners 9,396 370
$ 64,117
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b) CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 3,704 $ 3,599 $ 7,457 $ 7,122
Other income 224 152 381 295
Total revenues $ 3,928 $ 3,751 $ 7,838 $ 7,417
Expenses:
Operating 2,107 1,815 3,942 3,546
Interest 1,290 1,580 2,581 3,157
Depreciation 700 685 1,389 1,369
General and administration 86 59 219 119
Total expenses 4,183 4,139 8,131 8,191
Net loss before extraordinary
loss (255) (388) (293) (774)
Extraordinary loss on
extinguishment of debt -- (730) -- (730)
Net loss $ (255) $ (1,118) $ (293) $ (1,504)
Net loss allocated to general
partners $ (30) $ (131) $ (34) $ (177)
Net loss allocated to limited
partners (225) (987) (259) (1,327)
Net loss $ (255) $ (1,118) $ (293) $ (1,504)
Net loss per limited
partnership unit:
Net loss before
extraordinary loss $ (2.52) $ (3.84) $ (2.90) $ (7.65)
Extraordinary loss -- (7.21) -- (7.21)
Net loss per partnership unit $ (2.52) $ (11.05) $ (2.90) $ (14.86)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partners Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 89,292 $ -- $ 89,292 $ 89,292
Partners' (deficit) capital
at December 31, 1995 89,292 $(8,992) $ 9,655 $ 663
Net loss for the six
months ended June 30, 1996 -- (34) (259) (293)
Partners' (deficit) capital
at June 30, 1996 89,292 $(9,026) $ 9,396 $ 370
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (293) $ (1,504)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation 1,389 1,369
Amortization 62 205
Extraordinary loss on early extinguishment of debt -- 730
Change in accounts:
Other assets and deferred costs (108) (171)
Accrued expenses and other liabilities 480 369
Net cash provided by operating activities 1,530 998
Cash flows from investing activities
Property improvements and replacements (703) (152)
Decrease in restricted cash -- 280
Net cash (used in) provided by
investing activities (703) 128
Cash flows from financing activities
Mortgage principal payments (389) (17,648)
Loan costs (72) (203)
Costs paid to extinguish debt -- (730)
Note payable proceeds -- 18,810
Net cash (used in) provided by financing
activities (461) 229
Net increase in cash and cash equivalents 366 1,355
Cash and cash equivalents at beginning of period 2,868 218
Cash and cash equivalents at end of period $ 3,234 $ 1,573
Supplemental information:
Interest paid $ 2,450 $ 3,589
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CENTURY PROPERTIES FUND XIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of Fox Capital Management Corporation
("FCMC" or the "Managing General Partner"), all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 1996, are not necessarily indicative of the results that may be expected for
the fiscal year ending December 31, 1996. For further information, refer to the
financial statements and footnotes thereto included in the Partnership's annual
report on Form 10-K for the year ended December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform
to the 1996 presentation.
Note B - Transactions with Affiliated Parties
Century Properties Fund XIX (the "Partnership") has no employees and is
dependent on FCMC and its affiliates for the management and administration of
all partnership activities. The Partnership Agreement provides for payments to
affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following transactions with Insignia Financial Group, Inc. ("Insignia"),
National Property Investors, Inc. ("NPI"), and affiliates were charged to
expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $ 363,000 $ 368,000
Reimbursement for services of affiliates (included
in general and administrative expenses) 142,000 77,000
</TABLE>
For the period from January 19, 1996, to June 30, 1996, the Partnership
insured its property 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 was 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
received payments on these obligations from the agent. The amount
Note B - Transactions with Affiliated Parties - continued
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.
Fox Partners II, a California general partnership, is the general partner of
the Partnership. The general partners of Fox Partners II are FCMC, a California
corporation, Fox Realty Investors ("FRI"), a California general partnership, and
Fox Partners 83, a California general partnership.
Pursuant to a series of transactions which closed during the first half of
1996, affiliates of Insignia acquired (i) control of NPI Equity Investments II,
Inc., the managing general partner of FRI, and (ii) all of the issued and
outstanding shares of stock of FCMC. In connection with these transaction,
affiliates of Insignia appointed new officers and directors of NPI Equity
Investments II, Inc. and FCMC.
Note C - Mortgage Notes Payable
On June 29, 1995, the Partnership replaced its maturing mortgage encumbering
Greenspoint Apartments with a new first mortgage in the amount of $9,000,000, of
which $8,810,000 was released at June 30, 1995, and the remaining $190,000
released in the second half of 1995. The loan requires monthly payments of
approximately $68,000 at 8.33% interest and is being amortized over 30 years.
The loan matures on May 15, 2005, with a balloon payment of approximately
$7,974,000. The Partnership incurred closing costs of $138,000 in connection
with this refinancing, of which $97,000 was paid during the six months ended
June 30, 1995. In connection with the satisfaction of its maturing debt, the
Partnership paid a $337,000 exit fee at date of closing, which is included as an
extraordinary loss on early extinguishment of debt.
On June 29, 1995, the Partnership replaced its maturing mortgage encumbering
Sandspoint Apartment with a new first mortgage in the amount of $10,000,000.
The loan requires monthly payments of approximately $76,000 at 8.33% interest
and is being amortized over 30 years. The loan matures on May 15, 2005, with a
balloon payment of approximately $8,859,000. A premium is to be calculated
under the terms of the mortgage if the loan is prepaid. The Partnership
incurred closing costs of $150,000 in connection with this refinancing, of which
$106,000 was paid during the six months ended June 30, 1995. In connection with
the satisfaction of its maturing debt, the Partnership paid a $393,000 exit fee
at date of closing, which is included as an extraordinary loss on early
extinguishment of debt.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of eight apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Sunrunner Apartments
St. Petersburg, Florida 94% 96%
Misty Woods Apartments
Charlotte, North Carolina 95% 97%
McMillan Place Apartments
Dallas, Texas 95% 97%
Vinings Peak Apartments
(formerly Wood Ridge Apartments)
Atlanta, Georgia 96% 94%
Plantation Crossing
Atlanta, Georgia 96% 96%
Wood Lake Apartments
Atlanta, Georgia 93% 96%
Greenspoint Apartments
Phoenix, Arizona 93% 96%
Sandspoint Apartments
Phoenix, Arizona 95% 95%
The Partnership's net loss for the three and six month periods ended June 30,
1996, was approximately $255,000 and $293,000 versus net losses of
approximately $1,118,000 and $1,504,000 for the corresponding periods of 1995.
The decrease in the net loss is primarily attributable to an increase in
revenues in 1996 and the recognition in 1995 of an extraordinary loss on early
extinguishment of debt. The increase in revenues is mostly due to increases in
rental rates at the properties. The Partnership also had a decrease in interest
expense due to several of the properties being refinanced in the latter part of
1995 at lower interest rates. The decrease in interest expense is offset by
increases in both operating expense and general and administrative expenses.
The increase in operating expense was caused by increases in expenses intended
to raise occupancy levels at some of the properties, as well as expenses to
enhance the appearance and appeal of the properties. General and administrative
expenses increased due to the Partnership incurring costs related to the
transition of the Managing General Partner in 1996. Finally, on May 10, 1996,
there was a fire at Greenspoint Apartments which damaged twelve units. These
units are expected to be out of service until the first of October 1996. The
damage, less a $10,000 deductible, and rent loss are covered by insurance. As
of July 8, 1996, the Partnership had received approximately $73,000 in proceeds
related to the repair work. The rent loss proceeds should be paid once the
amount can be accurately determined.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expense. As part of
this plan, the Managing General Partner attempts to protect the Partnership from
the burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that the
Managing General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership had unrestricted cash of approximately
$3,234,000 as compared to approximately $1,573,000 at June 30, 1995. Net cash
provided by operations increased due to an increase in accrued expenses and a
decrease in other assets and deferred costs. Cash used in investing activities
increased due to an increase in spending on property improvements and
replacements. Net cash used in financing activities increased due to the
refinancing proceeds received in 1995. In 1995, the payoffs of the previous
mortgages on the refinanced properties were less than the proceeds from the
refinancing of the properties.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership has no outstanding amounts due under this line of
credit. Based on present plans, the Managing General Partner does not
anticipate the need to borrow in the near future. Other than cash and cash
equivalents, the line of credit is the Partnership's only unused source of
liquidity.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of approximately $61,953,000 is amortized over varying
periods with required balloon payments ranging from January 1997 to January
2006, at which time the properties will either be refinanced or sold. The
Managing General Partner expects to be able to refinance the mortgage
indebtedness that matures in January 1997, with no financial statement gain or
loss. The Partnership is prohibited from making distributions from operations
until the mortgages encumbering McMillan Place Apartments are satisfied. Future
cash distributions will depend on the levels of cash generated from operations,
a property sale, and the availability of cash reserves. No cash distributions
were paid in 1995 or during the six months ended June 30, 1996. At this time,
it appears that the original investment objective of capital growth will not be
attained and that investors will not receive a return of all their invested
capital.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K: None filed during the quarter ended June 30,
1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned thereunto, duly
authorized.
CENTURY PROPERTIES FUND XIX
By: FOX PARTNERS II
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Managing General Partner
By: /s/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President and Director
By: /s/Ronald Uretta
Ronald Uretta
Principal Financial Officer and
Principal Accounting Officer
Date: August 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted frm Century
Properties Fund XIX 1996 Second Quarter 10-QSB and is qualified in its entirety
by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000705752
<NAME> CENTURY PROPERTIES FUND XIX
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,234
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 94,583
<DEPRECIATION> 35,746
<TOTAL-ASSETS> 64,117
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 61,953
0
0
<COMMON> 0
<OTHER-SE> 370
<TOTAL-LIABILITY-AND-EQUITY> 64,117
<SALES> 0
<TOTAL-REVENUES> 7,838
<CGS> 0
<TOTAL-COSTS> 8,131
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,581
<INCOME-PRETAX> (293)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (293)
<EPS-PRIMARY> (2.90)<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
