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 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 0-11935
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, except unit data)
September 30, 1996
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents $ 3,206
Other assets and deferred costs 2,274
Investment properties:
Land $ 11,635
Buildings and related personal property 83,155
94,790
Less accumulated depreciation (36,432) 58,358
$ 63,838
Liabilities and Partners' Capital (Deficit)
Liabilities
Accrued expenses and other liabilities $ 2,166
Mortgage notes payable 61,742
Partners' Capital (Deficit):
General partners $ (9,079)
Limited partners (89,292 units issued
and outstanding) 9,009 (70)
$ 63,838
<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 Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 3,769 $ 3,618 $ 11,226 $ 10,740
Other income 203 180 584 475
Total revenues 3,972 $ 3,798 11,810 $ 11,215
Expenses:
Operating 2,319 2,077 6,261 5,623
Interest 1,285 1,377 3,866 4,534
Depreciation 687 684 2,076 2,053
General and administrative 121 90 340 209
Total expenses 4,412 4,228 12,543 12,419
Net loss before extraordinary
loss (440) (430) (733) (1,204)
Extraordinary loss on
extinguishment of debt -- -- -- (730)
Net loss $ (440) $ (430) $ (733) $ (1,934)
Net loss allocated to general
partners $ (53) $ (51) $ (87) $ (228)
Net loss allocated to limited
partners (387) (379) (646) (1,706)
Net loss $ (440) $ (430) $ (733) $ (1,934)
Net loss per limited
partnership unit:
Net loss before
extraordinary loss $ (4.34) $ (4.24) $ (7.23) $ (11.90)
Extraordinary loss -- -- -- (7.21)
Net loss per limited
partnership unit $ (4.34) $ (4.24) $ (7.23) $ (19.11)
<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 nine months
ended September 30, 1996 -- (87) (646) (733)
Partners' (deficit) capital
at September 30, 1996 89,292 $ (9,079) $ 9,009 $ (70)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (733) $ (1,934)
Adjustments to reconcile net loss to cash
provided by operating activities:
Depreciation 2,076 2,053
Amortization 92 256
Extraordinary loss on early extinguishment of debt -- 730
Change in accounts:
Other assets and deferred costs (358) (508)
Accrued expenses and other liabilities 874 553
Net cash provided by operating activities 1,951 1,150
Cash flows from investing activities:
Property improvements and replacements (911) (208)
Decrease in restricted cash -- 86
Net cash used in investing activities (911) (122)
Cash flows from financing activities:
Mortgage principal payments (600) (17,501)
Loan costs (102) (255)
Notes payable principal payments -- (246)
Costs paid to extinguish debt -- (730)
Note payable proceeds -- 18,810
Net cash (used in) provided by financing
activities (702) 78
Net increase in cash and cash equivalents 338 1,106
Cash and cash equivalents at beginning of period 2,868 218
Cash and cash equivalents at end of period $ 3,206 $ 1,324
Supplemental information:
Interest paid $ 3,698 $ 4,869
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e)
CENTURY PROPERTIES XIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
(Unaudited)
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, a
California corporation ("FCMC" or the "Managing General Partner"), all
adjustments (consisting of normal recurring accruals) considered necessary for a
fair presentation have been included. Operating results for the three and nine
month periods ended September 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 for reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
Fox Partners II, a California general partnership, is the general partner of
the Partnership. The general partners of Fox Partners II are FCMC, 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 Financial Group, Inc. ("Insignia") acquired (i)
control of NPI Equity Investments II, Inc.("NPI Equity"), the managing general
partner of FRI, and (ii) all of the issued and outstanding shares of stock of
FCMC. NPI Equity is a wholly-owned subsidiary of National Property Investors,
Inc. ("NPI"). In connection with these transactions, affiliates of Insignia
appointed new officers and directors of NPI Equity and FCMC.
The following transactions with affiliates of Insignia, NPI, and affiliates
of NPI were charged to expense in 1996 and 1995:
<TABLE>
<CAPTION>
For the Nine Months Ended
September 30,
1996 1995
<S> <C> <C>
Property management fees (included in operating
expenses) $ 552,000 $ 551,000
Reimbursement for services of affiliates (included
in general and administrative expenses) $ 157,000 108,000
</TABLE>
For the period from January 19, 1996, to September 30, 1996, the Partnership
insured 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 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 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.
During the nine month period ended September 30, 1995, an affiliate of NPI was
paid a $9,000 fee relating to a successful real estate tax appeal on the
Partnership's Sandspoint Apartments property. This fee is included in operating
expenses.
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 pending satisfaction of certain conditions as set by the lender. These
funds were released in November 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. 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 Apartments 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. 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
nine months ended September 30, 1996 and 1995:
Average
Occupancy
Property 1996 1995
Sunrunner Apartments
St. Petersburg, Florida 94% 95%
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% 95%
Plantation Crossing
Atlanta, Georgia 95% 95%
Wood Lake Apartments
Atlanta, Georgia 93% 97%
Greenspoint Apartments
Phoenix, Arizona 93% 96%
Sandspoint Apartments
Phoenix, Arizona 95% 96%
The Partnership's net loss for the three and nine month periods ended
September 30, 1996, was approximately $440,000 and $733,000 versus net losses of
approximately $430,000 and $1,934,000 for the corresponding periods of 1995.
The decrease in the net loss for the nine month period ended September 30, 1996,
versus the same period in 1995, 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 net loss for the three month period
ended September 30, 1996, versus the same period of 1995, is primarily due to
increases in real estate tax assessments at the Partnership's three Atlanta
properties. These assessments are under appeal. Both revenues and expenses
before extraordinary gain increased during the three months ended September 30,
1996, versus the same periods of 1995. The increase in revenues is mostly due
to increases in rental rates at the properties. Although the Partnership had a
decrease in interest expense due to several of the properties being refinanced
in the latter part of 1995 at lower interest rates, this decrease was more than
offset by increases in both operating and general and administrative expenses.
The increase in operating expense was caused by increases in expenses intended
to enhance the appearance and appeal of the properties such as additional
landscaping, exterior painting and gutter replacements. General and
administrative expenses increased due to the cost reimbursement increases. As
noted in "Item 1, Note B - Transactions with Affiliated Parties," the
Partnership reimburses the Managing General Partner and its affiliates for its
costs involved in the management and administration of all partnership
activities. While overall expense reimbursements have increased during the
three and nine month periods ended September 30, 1996, the recurring expenses
subsequent to the transition efforts to the new administration are expected to
more closely approximate historical levels. The increase in expense
reimbursements during the three and nine month periods ended September 30, 1996,
is directly attributable to the combined transition efforts of the Greenville,
South Carolina, and Atlanta, Georgia, administrative offices during the year-
end close, preparation of the 1995 10-K and tax return (including the limited
partner K-1's), filing of the first two quarterly reports and transition of
asset management responsibilities to the new administration. 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 December 1996. The damage,
net of a $10,000 deductible, and rent loss are covered by insurance. As of
September 30, 1996, the Partnership had received approximately $127,000 in
proceeds which included funds for repair work and rent loss through the end of
September.
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 September 30, 1996, the Partnership had unrestricted cash of approximately
$3,206,000 as compared to approximately $1,324,000 at September 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 property improvements and
replacements. Net cash used in financing activities increased due to the
refinancing proceeds received in 1995 (see "Note C"). 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 $61,742,000 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 encumbering Sunrunner Apartments which matures in January 1997. The
amount of the balloon payment due at maturity is $3,169,000. The Partnership is
prohibited from making distributions from operations until the mortgages
encumbering McMillan Place Apartments (combined balance of $12,543,000 at
September 30, 1996) 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 nine
months ended September 30, 1996.
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
September 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: November 7, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary information extracted from Century Properties
Fund XIX 1996 Third 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,206
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 94,790
<DEPRECIATION> (36,432)
<TOTAL-ASSETS> 63,838
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 61,742
0
0
<COMMON> 0
<OTHER-SE> (70)
<TOTAL-LIABILITY-AND-EQUITY> 63,838
<SALES> 0
<TOTAL-REVENUES> 11,810
<CGS> 0
<TOTAL-COSTS> 12,543
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,866
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (733)
<EPS-PRIMARY> (7.23)<F1>
<EPS-DILUTED> 0
<FN>
<F2>Registrant has an unclassified balance sheet.
<F1>Multiplier is 1.
</FN>
</TABLE>
