March 29, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Century Properties Growth Fund XIX
Form 10-KSB
File No. 0-11935
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
Managing General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
<PAGE>
FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [No Fee Required]
For the transition period from _________to _________
Commission file number 0-11935
CENTURY PROPERTIES FUND XIX
(Name of small business issuer in its charter)
California 94-2887133
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Units of Limited Partnership Interests
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No___
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $17,023,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
Item 1. Description of Business
Century Properties Fund XIX (the "Partnership" or "Registrant") was organized in
August 1982, as a California limited partnership under the Uniform Limited
Partnership Act of the California Corporations Code. Fox Partners II, a
California general partnership, is the general partner of the Partnership. The
general partners of Fox Partners II are Fox Capital Management Corporation
("FCMC" or the "Managing General Partner"), a California corporation, Fox Realty
Investors ("FRI"), a California general partnership, and Fox Partners 83, a
California general partnership. The Managing General Partner is a subsidiary of
Apartment Investment and Management Company ("AIMCO") (see "Transfer of Control"
below). The Partnership Agreement provides that the Partnership is to terminate
on December 31, 2007, unless terminated prior to such date.
The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-79007), was declared effective by the Securities and Exchange
Commission on September 20, 1983. The Partnership marketed its securities
pursuant to its Prospectus dated September 20, 1983, which was amended on June
13, 1984, and thereafter supplemented (hereinafter the "Prospectus"). The
Prospectus was filed with the Securities and Exchange Commission pursuant to
Rule 424(b) of the Securities Act of 1933.
The Registrant is engaged in the business of operating and holding real estate
properties. The Partnership is a "closed" limited partnership real estate
syndicate formed to acquire multi-family residential properties.
Beginning in September 1983 through October 1984, the Partnership offered 90,000
Limited Partnership Units and sold 89,292 units having an initial cost of
$89,292,000. The net proceeds of this offering were used to acquire thirteen
income-producing real estate properties. Since its initial offering, the
Registrant has not received, nor have limited partners been required to make,
additional capital contributions. The Partnership's original property portfolio
was geographically diversified with properties acquired in seven states. The
Partnership's acquisition activities were completed in June 1985 and since then
the principal activity of the Partnership has been managing its portfolio. One
property was sold in each of the years 1988, 1992, 1993, and 1994. In addition,
one property was foreclosed on in 1993. See "Item 2. Description of Properties"
for a description of the Partnership's remaining eight properties.
The Registrant has no employees. Management and administrative services are
provided by the Managing General Partner and by agents retained by the Managing
General Partner. An affiliate of the Managing General Partner has been providing
such property management services for the years ended December 31, 1999 and
1998.
The real estate business in which the Partnership is engaged is highly
competitive. There are other residential properties within the market area of
the Partnership's properties. The number and quality of competitive properties,
including those which may be managed by an affiliate of the Managing General
Partner in such market area, could have a material effect on the rental market
for the apartments at the Registrant's properties and the rents that may be
charged for such apartments. While the General Partner and its affiliates own
and/or control a significant number of apartment units in the United States,
such units represent an insignificant percentage of total apartment units in the
United States and competition for the apartments is local.
<PAGE>
Both the income and expenses of operating the properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential properties because such properties
are susceptible to the impact of economic and other conditions outside of the
control of the Partnership.
There have been, and it is possible there may be other, Federal, state and local
legislation and regulations enacted relating to the protection of the
environment. The Partnership is unable to predict the extent, if any, to which
such new legislation or regulations might occur and the degree to which such
existing or new legislation or regulations might adversely affect the properties
owned by the Partnership.
The Partnership monitors its properties for evidence of pollutants, toxins and
other dangerous substances, including the presence of asbestos. In certain cases
environmental testing has been performed which resulted in no material adverse
conditions or liabilities. In no case has the Partnership received notice that
it is a potentially responsible party with respect to an environmental clean up
site.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.
Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the Managing General Partner. The Managing
General Partner does not believe that this transaction has had or will have a
material effect on the affairs and operations of the Partnership.
<PAGE>
Item 2. Description of Properties
The following table sets forth the Partnership's investment in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C>
Wood Lake Apartments 12/83 Fee ownership subject to Apartment
Atlanta, Georgia first mortgage 220 units
Greenspoint Apartments 02/84 Fee ownership subject to Apartment
Phoenix, Arizona first mortgage 336 units
Sandspoint Apartments 02/84 Fee ownership subject to Apartment
Phoenix, Arizona first mortgage 432 units
Vinings Peak Apartments 04/84 Fee ownership subject to Apartment
Atlanta, Georgia first mortgage 280 units
Plantation Crossing Apartments 06/84 Fee ownership subject to Apartment
Atlanta, Georgia first mortgage 180 units
Sunrunner Apartments 07/84 Fee ownership subject to Apartment
St. Petersburg, Florida first mortgage 200 units
McMillan Place Apartments 06/85 Fee ownership, subject to Apartment
Dallas, Texas first and second mortgages 402 units
Misty Woods Apartments (1) 06/85 Fee ownership subject to Apartment
Charlotte, North Carolina first mortgage 228 units
</TABLE>
(1) Property is held by a limited liability company, in which the Partnership
owns 100% of the membership interest.
<PAGE>
Schedule of Properties
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Wood Lake $13,145 $ 6,566 5-30 yrs S/L $ 2,719
Greenspoint 14,270 6,279 5-30 yrs S/L 2,518
Sandspoint 16,592 7,477 5-30 yrs S/L 2,905
Vinings Peak 15,111 7,290 5-30 yrs S/L 3,269
Plantation Crossing 9,493 4,481 5-30 yrs S/L 2,241
Sunrunner 7,616 3,869 5-30 yrs S/L 1,813
McMillan Place 14,381 6,218 5-30 yrs S/L 4,910
Misty Woods 8,147 3,835 5-30 yrs S/L 2,174
$98,755 $46,015 $22,549
</TABLE>
See "Note A" of the consolidated financial statements included in "Item 7.
Financial Statements" for a description of the Partnership's depreciation policy
and "Note J - Change in Accounting Principle".
Schedule of Property Indebtedness
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1999 Rate Amortized Date Maturity (3)
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Wood Lake $ 7,269 7.50% 25 yrs 01/01/03 $ 6,792
Greenspoint 8,642 8.33% 30 yrs 05/15/05 7,988
Sandspoint 9,600 8.33% 30 yrs 05/15/05 8,874
Vinings Peak 8,441 7.50% 25 yrs 01/01/03 7,888
Plantation Crossing 4,925 7.50% 25 yrs 01/01/03 4,602
Sunrunner 3,250 7.33% (1) 11/01/03 3,250
McMillan Place (2)
1st Mortgage 10,219 9.15% (1) 10/31/02 10,219
2nd Mortgage 2,165 9.15% (1) 10/31/02 2,101
Misty Woods 5,250 7.88% 30 yrs 01/01/06 4,777
$59,761 $56,491
</TABLE>
(1) Interest only.
(2) See discussion of McMillan Place debt modification in "Item 6. Management's
Discussion and Analysis or Plan of Operations."
(3) See "Item 7. Financial Statements - Note C" for information with respect to
the Registrant's ability to prepay these loans and other specific details
about the loans.
Rental Rate and Occupancy
Average annual rental rates and occupancy for 1999 and 1998 for each property:
<TABLE>
<CAPTION>
Average Annual Average
Rental Rates Occupancy
(per unit)
Property 1999 1998 1999 1998
<S> <C> <C> <C> <C>
Wood Lake $9,637 $9,384 95% 95%
Greenspoint 8,183 7,986 95% 91%
Sandspoint 7,130 6,927 94% 94%
Vinings Peak 9,024 8,747 95% 95%
Plantation Crossing 8,731 8,321 94% 93%
Sunrunner 6,839 6,557 94% 95%
McMillan Place 6,524 6,250 98% 96%
Misty Woods 6,960 6,885 94% 92%
</TABLE>
The Managing General Partner attributes the increase in occupancy at Greenspoint
Apartments to improved marketing efforts at the property.
As noted under "Item 1. Description of Business", the real estate industry is
highly competitive. All of the properties are subject to competition from other
residential apartment complexes in the area. The Managing General Partner
believes that all of the properties are adequately insured. Each property is an
apartment complex which leases units for lease terms of one year or less. No
residential tenant leases 10% or more of the available rental space. All of the
properties are in good physical condition, subject to normal depreciation and
deterioration as is typical for assets of this type and age.
Real Estate Taxes and Rates
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing Rate
(in thousands)
Wood Lake $146 2.93%
Greenspoint 146 1.15%
Sandspoint 165 1.31%
Vinings Peak 197 2.93%
Plantation Crossing 90 2.72%
Sunrunner 134 2.54%
McMillan Place 303 2.58%
Misty Woods 91 1.30%
<PAGE>
Capital Improvements
Wood Lake Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$127,000 of capital improvements consisting primarily of carpet and vinyl
replacements, roof replacements, wall coverings, structural improvements, major
landscaping, and parking lot improvements. These improvements were funded from
operating cash flow. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $300 per unit or $66,000. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
Greenspoint Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$279,000 of capital improvements consisting primarily of roof replacements,
parking lot improvements, carpet and vinyl replacements, interior decoration,
structural improvements, and major landscaping. These improvements were funded
from operating cash flow. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $300 per unit or $100,800. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
Sandspoint Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$315,000 of capital improvements consisting primarily of carpet and vinyl
replacement, structural improvements, exterior painting, and parking lot
improvments. These improvements were funded from operating cash flow. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $129,600. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Vinings Peak Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$143,000 of capital improvements consisting primarily of carpet and vinyl
replacements, parking lot improvements, appliances, and wall coverings. These
improvements were funded from operating cash flow. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $300 per unit or $84,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Plantation Crossing Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$238,000 of capital improvements consisting primarily of roof replacements,
carpet and vinyl replacement, major landscaping, appliances, and swimming pool
repairs. These improvements were funded from operating cash flow. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $54,000. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Sunrunner Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$179,000 of capital improvements consisting primarily of structural
improvements, major landscaping, carpet and vinyl replacement, appliances, and
recreation facility improvements. These improvements were funded from operating
cash flow. The Partnership is currently evaluating the capital improvement needs
of the property for the upcoming year. The minimum amount to be budgeted is
expected to be $300 per unit or $60,000. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
McMillan Place Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$217,000 of capital improvements consisting primarily of swimming pool
enhancements, carpet and vinyl replacements, exterior painting, fencing, and
roof replacements. These improvements were funded from operating cash flow. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $120,600. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Misty Woods Apartments
During the year ended December 31, 1999, the Partnership completed approximately
$348,000 of capital improvements consisting primarily of major landscaping, roof
replacements, carpet and vinyl replacements, patio railing replacements,
swimming pool enhancements, and parking lot improvements. These improvements
were funded from replacement reserves and operating cash flow. The Partnership
is currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $68,400. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Item 3. Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Item 7. Financial Statements, Note B - Transfer of Control"). The plaintiffs
seek monetary damages and equitable relief, including judicial dissolution of
the Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999. Pending the
ruling on such demurrers, settlement negotiations commenced. On November 2,
1999, the parties executed and filed a Stipulation of Settlement, settling
claims, subject to final court approval, on behalf of the Partnership and all
limited partners who own units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Superior Court of the
State of California, County of San Mateo, at which time the Court set a final
approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing
the Court received various objections to the settlement, including a challenge
to the Court's preliminary approval based upon the alleged lack of authority of
class plaintiffs' counsel to enter the settlement. On December 14, 1999, the
Managing General Partner and its affiliates terminated the proposed settlement.
Certain plaintiffs have filed a motion to disqualify some of the plaintiffs'
counsel in the action. The Managing General Partner does not anticipate that
costs associated with this case will be material to the Partnership's overall
operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Item 4. Submission of Matters to a Vote of Security Holders
During the quarter ended December 31, 1999, no matter was submitted to a vote of
unit holders through the solicitation of proxies or otherwise.
<PAGE>
PART II
Item 5. Market for the Partnership's Common Equity and Related Security Holder
Matters
The Partnership, a publicly-held limited partnership, offered and sold 89,292
limited partnership units aggregating $89,292,000. The Partnership currently has
89,292 units outstanding held by 4,534 limited partners of record. Affiliates of
the Managing General Partner owned 46,348.66 units or 51.907% at December 31,
1999. No public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999 (see "Item 6. Management's Discussion and
Analysis or Plan of Operation" for further details):
Distributions
Per Limited
Aggregate Partnership Unit
(in thousands)
01/01/98 - 12/31/98 $ 1,824 (1) $20.01
01/01/99 - 12/31/99 5,145 (2) 52.49
(1) Consists of sale proceeds from Parkside Village Apartments which was sold
in May 1993.
(2) Consists of $3,623,000 of cash from operations and $1,522,000 from the
remaining sale proceeds for Parkside Village Apartments.
Future cash distributions will depend on the levels of net cash generated from
operations, the availability of cash reserves and the timing of debt maturities,
refinancings, and/or property sales. The Partnership's distribution policy is
reviewed on a semi-annual basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations after required
capital expenditures to permit any distributions to its partners in 2000 or
subsequent periods.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these and prior tender offers, AIMCO and its affiliates currently
own 46,348.66 limited partnership units in the Partnership representing 51.907%
of the outstanding units. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Consequently, AIMCO is in a position to influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner.
Item 6. Management's Discussion and Analysis or Plan of Operation
The matters discussed in this Form 10-KSB contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-KSB and the other filings with the
Securities and Exchange Commission made by the Registrant from time to time. The
discussion of the Registrant's business and results of operations, including
forward-looking statements pertaining to such matter, does not take into account
the effects of any changes to the Registrant's business and results of
operation. Accordingly, actual results could differ materially from those
projected in the forward-looking statements as a result of a number of factors,
including those identified herein.
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
Results of Operations
The Partnership realized net income of approximately $2,007,000 and $841,000 for
the years ended December 31, 1999 and 1998, respectively. The increase in net
income is attributable to an increase in total revenues and a decrease in total
expenses. The increase in total revenues is due to an increase in rental income
partially offset by a decrease in other income. The increase in rental income is
the result of increased rental rates at all of the Partnership's properties and
increased occupancy at Misty Woods Apartments, McMillan Place Apartments,
Plantation Crossing Apartments, and Greenspoint Apartments. The decrease in
other income is primarily due to a decrease in average cash balances held in
interest-bearing accounts due to an increase in cash distributed to the
partners. The decrease in total expenses is primarily attributable to a decrease
in operating expense which more than offset the increases in general and
administrative and depreciation expense. The decrease in operating expenses is
the result of decreased maintenance expense and decreased insurance expense. The
decrease in maintenance expense is primarily due to the completion of interior
and exterior beautification projects at all of the Partnership's properties in
1998. The decrease in insurance expense is the result of decreased premiums at
all the Partnership's properties after selecting a new carrier late in 1998.
General and administrative expense increased due to an increase in professional
fees associated with the management of the Partnership. The increase in
depreciation expense is the result of the addition of capital assets during the
past twelve months.
Included in general and administrative expenses at both December 31, 1999 and
1998 are reimbursements to the Managing General Partner allowed under the
Partnership Agreement associated with its management of the Partnership. In
addition, costs associated with the quarterly and annual communications with
investors and regulatory agencies and the annual audit required by the
Partnership Agreement are also included.
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase net income by approximately $220,000 ($2.17 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods, is
not material. The accounting principle change will not have an effect on cash
flow, funds available for distribution or fees payable to the Managing General
Partner and affiliates.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expenses. 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.
Liquidity and Capital Resources
At December 31, 1999, the Registrant had cash and cash equivalents of
approximately $2,900,000 as compared to approximately $5,138,000 at December 31,
1998. For the year ended December 31, 1999, cash and cash equivalents decreased
approximately $2,238,000 from the Registrant's year ended December 31, 1998. The
decrease in cash and cash equivalents is due to approximately $5,782,000 of cash
used in financing activities and approximately $1,749,000 of cash used in
investing activities which more than offset approximately $5,293,000 of cash
provided by operating activities. Net cash used in financing activities
consisted primarily of distributions to the partners and, to a lesser extent,
payments of principal made on the mortgages encumbering the Registrant's
properties. Net cash used in investing activities consisted of capital
improvements and replacements and net deposits to restricted escrows maintained
by the mortgage lenders. The Partnership invests its working capital reserves in
money market accounts.
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 Registrant and to comply with Federal,
state, and local legal and regulatory requirements. The Partnership is currently
evaluating the capital improvement needs of the properties for the upcoming
year. The minimum amount to be budgeted is expected to be $300 per unit or
$683,400. Additional improvements may be considered and will depend on the
physical condition and will depend on the physical condition of the properties
as well as replacement reserves and anticipated cash flow generated by the
properties. The capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Registrant's distributable cash flow, if
any may be adversely affected at least in the short term.
On January 29, 1998, the Managing General Partner successfully negotiated a
modification of the terms of the mortgages encumbering McMillan Place, which had
been in default since January 20, 1997. Accrued interest and late charges to the
effective date were paid on the first mortgage and approximately $86,000 was
transferred from the second mortgage balance to the first mortgage balance,
increasing the first mortgage to approximately $10,219,000. The first mortgage
requires interest only payments through October 31, 2001, at a rate of 9.15% and
for the final year, at a fixed rate of 325 basis points plus the annualized
yield on United States Treasury non-callable bonds having a one year maturity,
as determined at November 1, 2001. In addition, any excess cash as defined in
the modified loan agreement is required to be remitted to the mortgage holder by
January 20 of each year to be applied to outstanding principal and interest.
Additional interest is required to be paid upon maturity of the note equal to
50% of the increase in the appreciated fair market value of McMillan, which was
stipulated as $12,860,000 at the time of restructuring, as defined in the note
agreement. The Partnership was required to pay $270,000 of accrued interest on
the second mortgage. In addition, a former affiliate of the Managing General
Partner advanced the Partnership an additional $270,000, which was applied to
accrued interest on the second mortgage. This advance is due upon sale and/or
refinancing of the property. The remaining accrued interest on the second
mortgage was added to principal in the amount of approximately $154,000. The
second mortgage balance of approximately $2,187,000 consists of a non-interest
bearing portion of $800,000, which is due at the maturity date of October 31,
2002, and an interest bearing portion of $1,387,000. The interest bearing
portion has a stated interest rate of 9.15%. The total future cash payments of
the modified loans exceed the carrying value of the loans as of the date of
modification. Consequently, interest on the modified debt is being recorded at
an effective rate of 9.15% for the first mortgage and 4.47% for the second
mortgage which are the rates required to equate the present value of the total
future cash payments under the new terms with the carrying amount of the loans
at the date of modification. Under the terms of the modified mortgages, the
Partnership is no longer restricted from making distributions to its partners
from cash from operations generated by the Partnership's properties other than
McMillan Place. The Partnership is still prohibited, however, from making
distributions from cash from operations derived from McMillan Place.
The Registrant's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Registrant. The mortgage
indebtedness of approximately $59,761,000 is amortized over varying periods with
required balloon payments ranging from October 2002 to January 2006. The
Managing General Partner will attempt to refinance such indebtedness and/or sell
the properties prior to such maturity dates. If any property cannot be
refinanced or sold for a sufficient amount, the Registrant will risk losing such
property through foreclosure.
During the year ended December 31, 1999, the Partnership distributed
approximately $5,145,000 (approximately $4,687,000 to the limited partners,
$52.49 per limited partnership unit). Approximately $3,623,000 (approximately
$3,195,000 to the limited partners, $35.78 per limited partnership unit) of the
distribution was from operations and approximately $1,522,000 (approximately
$1,492,000 to the limited partners, $16.71 per limited partnership unit) was
from the remaining proceeds of the sale of Parkside Village Apartments in May
1993. During the year ended December 31, 1998, the Partnership distributed
approximately $1,824,000 (approximately $1,787,000 to limited partners, $20.01
per limited partnership unit) from the sale proceeds of Parkside Village
Apartments in May 1993. Future cash distributions will depend on the levels of
net cash generated from operations, the availability of cash reserves and the
timing of debt maturities, refinancings, and/or property sales. The
Partnership's distribution policy is reviewed on a semi-annual basis. There can
be no assurance, however, that the Partnership will generate sufficient funds
from operations after required capital expenditures to permit any distributions
to its partners in 2000 or subsequent periods.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these and prior tender offers, AIMCO and its affiliates currently
own 46,348.66 limited partnership units in the Partnership representing 51.907%
of the outstanding units. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Consequently, AIMCO is in a position to influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership has not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
<PAGE>
Item 8. Financial Statements and Supplementary Data
CENTURY PROPERTIES FUND XIX
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheet - December 31, 1999
Consolidated Statements of Operations - Years ended December 31, 1999 and 1998
Consolidated Statement of Changes in Partners' (Deficit) Capital - Years ended
December 31, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended December 31, 1999 and 1998
Notes to Consolidated Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Century Properties Fund XIX
We have audited the accompanying consolidated balance sheet of Century
Properties Fund XIX as of December 31, 1999, and the related consolidated
statements of operations, changes in partners' (deficit) capital and cash flows
for each of the two years in the period ended December 31, 1999. These financial
statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Century Properties
Fund XIX at December 31, 1999, and the consolidated results of its operations
and its cash flows for each of the two years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.
As discussed in Note J to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
February 25, 2000
<PAGE>
CENTURY PROPERTIES FUND XIX
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1999
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 2,900
Receivables and deposits 954
Restricted escrows 320
Other assets 637
Investment properties (Notes A, C, G):
Land $ 11,635
Buildings and related personal property 87,120
98,755
Less accumulated depreciation (46,015) 52,740
$ 57,551
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 345
Tenant security deposit payable 310
Accrued property taxes 563
Due to former affiliate 270
Other liabilities 637
Mortgage notes payable (Notes C) 59,761
Partners' (Deficit) Capital
General partner $ (9,255)
Limited partners (89,292 units issued
and outstanding) 4,920 (4,335)
$ 57,551
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
Revenues:
<S> <C> <C>
Rental income $16,273 $15,512
Other income 750 838
Total revenues 17,023 16,350
Expenses:
Operating 5,423 6,110
General and administrative 375 306
Depreciation 3,046 2,953
Interest 4,973 4,966
Property taxes 1,199 1,174
Total expenses 15,016 15,509
Net income $ 2,007 $ 841
Net income allocated to general partner $ 237 $ 99
Net income allocated to limited partners 1,770 742
$ 2,007 $ 841
Net income per limited partnership unit $ 19.82 $ 8.31
Distribution per limited partnership unit $ 52.49 $ 20.01
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner's Partners' Total
<S> <C> <C> <C> <C>
Original capital contributions 89,292 $ -- $89,292 $89,292
Partners' (deficit) capital
at December 31, 1997 89,292 $(9,096) $ 8,882 $ (214)
Distribution paid to partners -- (37) (1,787) (1,824)
Net income for the year ended
December 31, 1998 -- 99 742 841
Partners' (deficit) capital at
December 31, 1998 89,292 (9,034) 7,837 (1,197)
Distribution paid to partners -- (458) (4,687) (5,145)
Net income for the year
ended December 31, 1999 -- 237 1,770 2,007
Partners' (deficit) capital
at December 31, 1999 89,292 $(9,255) $ 4,920 $(4,335)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XIX
CONSOLDIATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net income $ 2,007 $ 841
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,046 2,953
Amortization of loan costs and discount 112 118
Change in accounts:
Receivables and deposits 161 (270)
Other assets (72) 60
Accounts payable (33) 40
Tenant security deposit payable (2) 34
Accrued property taxes 2 140
Other liabilities 72 (461)
Net cash provided by operating activities 5,293 3,455
Cash flows from investing activities:
Property improvements and replacements (1,681) (1,068)
Net (deposits to) withdrawals from restricted escrows (68) 154
Net cash used in investing activities (1,749) (914)
Cash flows from financing activities:
Payments on mortgage notes payable (637) (615)
Proceeds from long-term borrowings -- 270
Loan costs paid -- (21)
Distribution to partners (5,145) (1,824)
Net cash used in financing activities (5,782) (2,190)
Net (decrease) increase in cash and cash equivalents (2,238) 351
Cash and cash equivalents at beginning of the year 5,138 4,787
Cash and cash equivalents at end of year $ 2,900 $ 5,138
Supplemental disclosure of cash flow information:
Cash paid for interest $ 4,806 $ 5,352
Supplemental information of non-cash activity:
Transfer of accrued interest to principal $ -- $ 154
Property improvements and replacements in accounts
payable $ 165 $ --
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES FUND XIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note A - Organization and Significant Accounting Policies
Organization
Century Properties Fund XIX (the "Partnership" or "Registrant"), is a California
Limited Partnership organized in August 1982, to operate and ultimately sell
residential apartment complexes. As of December 31, 1999, the Partnership
operated eight residential apartment complexes located throughout the United
States. The general partner of the Partnership is Fox Partner II, a California
general partnership. The general partners of Fox Partners II are Fox Capital
Management Corporation ("FCMC" or the "Managing General Partner"), a California
corporation, Fox Realty Investors ("FRI"), a California general partnership, and
Fox Partners 83, a California general partnership. The Managing General Partner
is a subsidiary of Apartment Investment and Management Company ("AIMCO") (see
"Note B - Transfer of Control"). The capital contributions of $89,292,000
($1,000 per unit) were made by the limited partners, including 100 Limited
Partnership Units purchased by FCMC. The Partnership Agreement provides that the
Partnership is to terminate on December 31, 2007 unless terminated prior to such
date.
Principles of Consolidation
The Registrant's financial statements include the accounts of Misty Woods CPF
19, LLC, a limited liability company in which the Registrant ultimately owns a
100% economic interest. All significant interentity transactions have been
eliminated.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
Allocation of Income, Loss and Distribution
Net income, net loss and distributions of cash of the Partnership are allocated
between general and limited partners in accordance with the provisions of the
Partnership Agreement.
Fair Value of Financial Instruments
Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about
Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures
about Derivative Financial Instruments and Fair Value of Financial Instruments",
requires disclosure of fair value information about financial instruments,
whether or not recognized in the balance sheet, for which it is practicable to
estimate fair value. Fair value is defined in the SFAS as the amount at which
the instruments could be exchanged in a current transaction between willing
parties, other than in a forced or liquidation sale. The Partnership believes
that the carrying amount of its financial instruments (except for long term
debt) approximates their fair value due to the short term maturity of these
instruments. The fair value of the Partnership's long term debt, after
discounting the scheduled loan payments to maturity, approximates its carrying
amount.
<PAGE>
Cash and Cash Equivalents
Includes cash on hand and in banks and money market accounts. At certain times,
the amount of cash deposited at a bank may exceed the limit on insured deposits.
Reserve Account
As a condition of refinancing the debt of Sunrunner, Misty Woods and McMillan
Place, the Registrant was required to establish reserve accounts. The reserve
accounts were established to cover necessary repairs and replacements of
existing improvements, debt service, out of pocket expenses incurred for
ordinary and necessary administrative tasks, and payment of real property taxes
and insurance premiums. The Partnership is required to deposit net operating
income (as defined in the mortgage note) from each refinanced property. The
balance at December 31, 1999, is approximately $320,000, which includes
interest.
Tenant Security Deposits
The Partnership requires security deposits from lessees for the duration of the
lease and such deposits are included in receivables and deposits. Deposits are
refunded when the tenant vacates, provided the tenant has not damaged its space
and is current on rental payments.
Investment Properties
Investment properties consist of eight apartment complexes and are stated at
cost. Acquisition fees are capitalized as a cost of real estate. In accordance
with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of", the Partnership records impairment losses
on long-lived assets used in operations when events and circumstances indicate
that the assets might be impaired and the undiscounted cash flows estimated to
be generated by those assets are less than the carrying amounts of those assets.
Costs of properties that have been permanently impaired have been written down
to appraised value. No adjustments for impairment of value were recorded in the
years ended December 31, 1999, or 1998.
Depreciation
Depreciation is provided by the straight-line method over the estimated lives of
the apartment properties and related personal property. For Federal income tax
purposes, the accelerated cost recovery method is used (1) for real property
over 15 years for additions prior to March 16, 1984, 18 years for additions
after March 15, 1984 and before May 9, 1985, and 19 years for additions after
May 8, 1985, and before January 1, 1987, and (2) for personal property over 5
years for additions prior to January 1, 1987. As a result of the Tax Reform Act
of 1986, for additions after December 31, 1986, the modified accelerated cost
recovery method is used for depreciation of (1) real property over 27 1/2 years
and (2) personal property additions over 5 years.
Effective January 1, 1999 the Partnership changed its method of accounting to
capitalize the costs of exterior painting and major landscaping (Note J).
<PAGE>
Leases
The Registrant generally leases apartment units for twelve-month terms or less.
The Partnership recognizes income as earned on its leases. In addition, the
Managing General Partner's policy is to offer rental concessions during
particularly slow months or in response to heavy competition from other similar
complexes in the area. Concessions are charged against rental income as
incurred.
Advertising Costs
The Registrant expenses the costs of advertising as incurred. Advertising costs
of approximately $255,000 and $281,000 for the years ended December 31, 1999 and
1998, respectively, were charged to operating expense as incurred.
Loan Costs
Loan costs of approximately $1,060,000 are included in other assets in the
accompanying consolidated balance sheet and are being amortized on a
straight-line basis over the life of the loans. At December 31, 1999,
accumulated amortization is approximately $600,000. Amortization of loan costs
is included in interest expense.
Segment Reporting
SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information
established standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. See "Note H"
for required disclosure.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the Managing General Partner. The Managing
General Partner does not believe that this transaction has had or will have a
material effect on the affairs and operations of the Partnership.
<PAGE>
Note C - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1999 Interest Rate Date Maturity
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C> <C>
Wood Lake $ 7,269 $ 57 7.50% 01/01/03 $ 6,792
Greenspoint 8,642 68 8.33% 05/15/05 7,988
Sandspoint 9,600 76 8.33% 05/15/05 8,874
Vinings Peak 8,441 67 7.50% 01/01/03 7,888
Plantation Crossing 4,925 39 7.50% 01/01/03 4,602
Sunrunner 3,250 20 (1) 7.33% 11/01/03 3,250
McMillan Place
1st Mortgage 10,219 78 (1) 9.15% 10/31/02 10,219
2nd Mortgage 2,165 -- 9.15% 10/31/02 2,101
Misty Woods 5,250 40 7.88% 01/01/06 4,777
$59,761 $445 $56,491
</TABLE>
(1) Payments are interest only.
On January 29, 1998, the Managing General Partner successfully negotiated a
modification of the terms of the mortgages encumbering McMillan Place, which had
been in default since January 20, 1997. Accrued interest and late charges to the
effective date were paid on the first mortgage and approximately $86,000 was
transferred from the second mortgage balance to the first mortgage balance,
increasing the first mortgage to approximately $10,219,000. The first mortgage
requires interest only payments through October 31, 2001, at a rate of 9.15% and
for the final year, at a fixed rate of 325 basis points plus the annualized
yield on United States Treasury non-callable bonds having a one year maturity,
as determined at November 1, 2001. In addition, any excess cash as defined in
the modified loan agreement is required to be remitted to the mortgage holder by
January 20 of each year to be applied to outstanding principal and interest.
Additional interest is required to be paid upon maturity of the note equal to
50% of the increase in the appreciated fair market value of McMillan, which was
stipulated as $12,860,000 at the time of restructuring, as defined in the note
agreement. The Partnership was required to pay $270,000 of accrued interest on
the second mortgage. In addition, a former affiliate of the Managing General
Partner advanced the Partnership an additional $270,000, which was applied to
accrued interest on the second mortgage. This advance is due upon sale and/or
refinancing of the property. The remaining accrued interest on the second
mortgage was added to principal in the amount of approximately $154,000. The
second mortgage balance of approximately $2,187,000 consists of a non-interest
bearing portion of $800,000, which is due at the maturity date of October 31,
2002, and an interest bearing portion of $1,387,000. The interest bearing
portion has a stated interest rate of 9.15%. The total future cash payments of
the modified loans exceed the carrying value of the loans as of the date of
modification. Consequently, interest on the modified debt is being recorded at
an effective rate of 9.15% for the first mortgage and 4.47% for the second
mortgage which are the rates required to equate the present value of the total
future cash payments under the new terms with the carrying amount of the loans
at the date of modification. Under the terms of the modified mortgages, the
Partnership is no longer restricted from making distributions to its partners
from cash from operations generated by the Partnership's properties other than
McMillan Place. The Partnership is still prohibited, however, from making
distributions from cash from operations derived from McMillan Place.
The mortgage notes payable are non-recourse and are secured by pledge of the
respective apartment properties and by pledge of revenues from the respective
apartment properties. The notes impose prepayment penalties if repaid prior to
maturity. Further, the properties may not be sold subject to existing
indebtedness.
Scheduled principal payments of the mortgage notes payable subsequent to
December 31, 1999, are as follows (in thousands):
2000 $ 718
2001 775
2002 13,150
2003 22,888
2004 386
Thereafter 21,844
$59,761
Note D - Distribution
During the year ended December 31, 1999, the Partnership distributed
approximately $5,145,000 (approximately $4,687,000 to the limited partners,
$52.49 per limited partnership unit). Approximately $3,623,000 (approximately
$3,195,000 to the limited partners, $35.78 per limited partnership unit) of the
distribution was from operations and approximately $1,522,000 (approximately
$1,492,000 to the limited partners, $16.71 per limited partnership unit) was
from the remaining proceeds of the sale of Parkside Village Apartments in May
1993.
During the year ended December 31, 1998, the Partnership distributed
approximately $1,824,000 (approximately $1,787,000 to limited partners, $20.01
per limited partnership unit) from the sale proceeds of Parkside Village
Apartments in May 1993.
<PAGE>
Note E - Income Taxes
The Registrant has received a ruling from the Internal Revenue Service that it
is classified as a partnership for Federal income tax purposes. Accordingly, no
provision for income taxes is made in the consolidated financial statements of
the Partnership. Taxable income or loss of the Registrant is reported in the
income tax returns of its partners.
The following is a reconciliation of reported net income and Federal taxable
income (in thousands, except per unit data):
1999 1998
Net income as reported $ 2,007 $ 841
Add (deduct):
Depreciation differences (397) (534)
Miscellaneous 21 68
Prepaid rent (57) 334
Federal taxable income $ 1,574 $ 709
Federal taxable income per limited partnership unit $ 15.55 $ 7.00
The following is a reconciliation between the Registrant's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
1999
Net liabilities as reported $ (4,335)
Land and buildings (4,938)
Accumulated depreciation (25,253)
Syndication and distribution costs 4,451
Prepaid rent 320
Other 168
Deferred Sales Commission 7,947
Net liabilities - Federal tax basis $(21,640)
Note F - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the Managing General
Partner and its affiliates for the management and administration of all
Partnership activities. The Partnership Agreement provides for certain payments
to affiliates for services and as reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership. 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.
<PAGE>
The following payments were made to the Managing General Partner and affiliates
during the years ended December 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees (included in
operating expense) $865 $825
Reimbursement for services of affiliates,
(included in investment properties and
operating, general and administrative
expenses) 169 163
Partnership management fee (included in
general partner distributions) 362 --
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $865,000 and
$825,000 for the years ended December 31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $169,000 and
$163,000 for the years ended December 31, 1999 and 1998, respectively.
Pursuant to the Partnership Agreement, for managing the affairs of the
Partnership, the general partner is entitled to receive a Partnership management
fee equal to 10% of the Partnership's adjusted cash from operations as
distributed. Approximately $362,000 in Partnership management fees were paid
along with the distributions from operations made during the year ended December
31, 1999. No fees were paid during the year ended December 31, 1998 as the
entire distribution during this period was from sales proceeds.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these and prior tender offers, AIMCO and its affiliates currently
own 46,348.66 limited partnership units in the Partnership representing 51.907%
of the outstanding units. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Consequently, AIMCO is in a position to influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner. However, IPLP is required to vote 24,811.66 of its
Units: (i) against any proposal to increase the fees and other compensation
payable by the Partnership to the Managing General Partner and any of its
affiliates; and (ii) on all other matters submitted by it or its affiliates, in
proportion to the votes cast by non tendering unit holders. Except for the
foregoing, no other limitations are imposed on IPLP's right to vote its Units.
<PAGE>
Note G - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
(in thousands)
Buildings Net Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Wood Lake $ 7,269 $ 1,206 $10,980 $ 959
Greenspoint 8,642 2,165 11,199 906
Sandspoint 9,600 2,124 13,158 1,310
Vinings Peak 8,441 1,632 12,321 1,158
Plantation Crossing 4,925 1,062 7,576 855
Sunrunner 3,250 634 6,485 497
McMillan Place 12,384 2,399 10,826 1,156
Misty Woods 5,250 429 6,846 872
$59,761 $11,651 $79,391 $ 7,713
</TABLE>
<TABLE>
<CAPTION>
Gross Amount At Which
Carried
At December 31, 1999
(in thousands)
Buildings
And Related Year of
Personal Accumulated Construc- Date Depreciable
Description Land Property Total Depreciation tion Acquired Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Wood Lake $ 1,206 $11,939 $13,145 $ 6,566 1983 12/83 5-30 yrs
Greenspoint 2,140 12,130 14,270 6,279 1984 02/84 5-30 yrs
Sandspoint 2,147 14,445 16,592 7,477 1984 02/84 5-30 yrs
Vinings Peak 1,632 13,479 15,111 7,290 1982 04/84 5-30 yrs
Plantation Crossing 1,062 8,431 9,493 4,481 1980 06/84 5-30 yrs
Sunrunner 587 7,029 7,616 3,869 1981 07/84 5-30 yrs
McMillan Place 2,427 11,954 14,381 6,218 1985 06/85 5-30 yrs
Misty Woods 434 7,713 8,147 3,835 1985 06/85 5-30 yrs
$11,635 $87,120 $98,755 $46,015
</TABLE>
<PAGE>
Reconciliation of "Real Estate and Accumulated Depreciation":
Years Ended December 31,
1999 1998
(in thousands)
Investment Properties
Balance at beginning of year $96,909 $95,841
Property improvements 1,846 1,068
Balance at end of year $98,755 $96,909
Accumulated Depreciation
Balance at beginning of year $42,969 $40,016
Additions charged to expense 3,046 2,953
Balance at end of year $46,015 $42,969
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $93,817,000 and $92,049,000,
respectively. The accumulated depreciation for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $71,268,000 and $67,825,000,
respectively.
Note H - Disclosures about Segments of an Enterprise and Related Information
Description of the types of products and services from which the reportable
segment derives its revenues: The Partnership has one reportable segment:
residential properties. The Registrant's residential property segment consists
of eight apartment complexes located in Georgia (3), Arizona (2), Florida,
Texas, and North Carolina. The Partnership rents apartment units to tenants for
terms that are typically twelve months or less.
Measurement of segment profit or loss: The Partnership evaluates performance
based on segment profit (loss) before depreciation. The accounting policies of
the reportable segments are the same as those described in the summary of
significant accounting policies.
Factors management used to identify the enterprise's reportable segment: The
Partnership's reportable segment consists of investment properties that offer
similar products and services. Although each of the investment properties is
managed separately, they have been aggregated into one segment as they provide
services with similar types of products and customers.
<PAGE>
Segment information for the years 1999 and 1998 is shown in the tables below.
The "Other" Column includes partnership administration related items and income
and expense not allocated to the reportable segment.
1999 Residential Other Totals
Rental income $16,273 $ -- $16,273
Other income 706 44 750
Interest expense 4,973 -- 4,973
Depreciation 3,046 -- 3,046
General and administrative expense -- 375 375
Segment profit (loss) 2,338 (331) 2,007
Total assets 57,319 232 57,551
Capital expenditures for investment
properties 1,846 -- 1,846
1998 Residential Other Totals
Rental income $15,512 $ -- $15,512
Other income 682 156 838
Interest expense 4,966 -- 4,966
Depreciation 2,953 -- 2,953
General and administrative expense -- 306 306
Segment profit (loss) 991 (150) 841
Total assets 57,178 3,966 61,144
Capital expenditures for investment
properties 1,068 -- 1,068
Note I - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
"Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Managing General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Note J - Change in Accounting Principle
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase net income by approximately $220,000 ($2.17 per limited partnership
unit). The cumulative effect, had this change been applied to prior periods, is
not material. The accounting principle change will not have an effect on cash
flow, funds available for distribution or fees payable to the Managing General
Partner and affiliates.
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures
None.
<PAGE>
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance
with Section 16(a) of the Exchange Act
Neither Century Properties Fund XIX (the "Partnership" or the "Registrant") nor
Fox Partners II ("Fox"), the general partner of the Partnership, has any
officers or directors. Fox Capital Management Corporation ("FCMC" or the
"Managing General Partner"), the managing general partner of Fox, manages and
controls substantially all of the Partnership's affairs and has general
responsibility and ultimate authority in all matters affecting its business.
The names and ages of, as well as the positions and offices held by, the present
executive officers and director of the Managing General Partner are set forth
below. There are no family relationships between or among any officers or
directors.
Name Age Position
Patrick J. Foye 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Martha L. Long has been Senior Vice President and Controller of the Managing
General Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia Financial Group, Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant under Rule 16a-3(e) during the Registrant's most recent fiscal
year and Form 5 and amendments thereto furnished to the Registrant with respect
to its most recent fiscal year, the Registrant is not aware of any director,
officer, beneficial owner of more than ten percent of the units of limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms, reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years except as follows:
AIMCO Properties, L.P. and its joint filers failed to timely file a Form 3 with
respect to its acquisition of Units and AIMCO and its joint filers failed to
timely file a Form 4 with respect to its acquisition of Units.
Item 10. Executive Compensation
Neither the directors nor any of the officers of the Managing General Partner
received any remuneration from the Registrant.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Units of Limited Partnership Interest of
the Registrant as of December 31, 1999.
Entity Number of Units Percent of Total
Insignia Properties, L.P. 25,228.66 28.254%
(an affiliate of AIMCO)
IPLP Acquisition I, LLC 4,892.00 5.479%
(an affiliate of AIMCO)
AIMCO Properties LP 16,228.00 18.174%
(an affiliate of AIMCO)
Insignia Properties LP and IPLP Acquisition I, LLC are indirectly ultimately
owned by AIMCO. Their business address is 55 Beattie Place, Greenville, South
Carolina 29602.
AIMCO Properties LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.
No director or officer of the Managing General Partner owns any Units.
As a result of its ownership of 46,348.66 limited partnership units, AIMCO,
through its affiliates, could be in a position to significantly influence all
voting decisions with respect to the Partnership. Under the Partnership
Agreement, unit holders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, IPLP would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of its affiliation with the
Managing General Partner. However, IPLP is required to vote 24,811.66 of its
Units: (i) against any proposal to increase the fees and other compensation
payable by the Partnership to the Managing General Partner and any of its
affiliates; and (ii) on all other matters submitted by it or its affiliates, in
proportion to the votes cast by non tendering unit holders. Except for the
foregoing, no other limitations are imposed on IPLP's right to vote its Units.
Item 12. Certain Relationships and Related Transactions
The Registrant has no employees and is dependent on the Managing General Partner
and its affiliates for the management and administration of all partnership
activities. The Partnership Agreement provides for certain payments to
affiliates for services and as reimbursements of certain expenses incurred by
affiliates on behalf of the Partnership.
<PAGE>
The following payments were made to the Managing General Partner and affiliates
during the years ended December 31, 1999 and 1998:
1999 1998
(in thousands)
Property management fees $865 $825
Reimbursement for services of affiliates 169 163
Partnership management fee 362 --
During the years ended December 31, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $865,000 and
$825,000 for the years ended December 31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $169,000 and
$163,000 for the years ended December 31, 1999 and 1998, respectively.
Pursuant to the Partnership Agreement, for managing the affairs of the
Partnership, the general partner is entitled to receive a Partnership management
fee equal to 10% of the Partnership's adjusted cash from operations as
distributed. Approximately $362,000 in Partnership management fees were paid
along with the distributions from operations made during the year ended December
31, 1999. No fees were paid during the year ended December 31, 1998 as the
entire distribution during this period was from sales proceeds.
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.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the years ended December 31, 1999 and 1998. As
a result of these and prior tender offers, AIMCO and its affiliates currently
own 46,348.66 limited partnership units in the Partnership representing 51.907%
of the outstanding units. It is possible that AIMCO or its affiliates will make
one or more additional offers to acquire additional limited partnership
interests in the Partnership for cash or in exchange for units in the operating
partnership of AIMCO. Consequently, AIMCO is in a position to influence all
voting decisions with respect to the Registrant. Under the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters. When voting on matters, AIMCO would
in all likelihood vote the Units it acquired in a manner favorable to the
interest of the Managing General Partner because of their affiliation with the
Managing General Partner. However, IPLP is required to vote 24,811.66 of its
Units: (i) against any proposal to increase the fees and other compensation
payable by the Partnership to the Managing General Partner and any of its
affiliates; and (ii) on all other matters submitted by it or its affiliates, in
proportion to the votes cast by non tendering unit holders. Except for the
foregoing, no other limitations are imposed on IPLP's right to vote its Units.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 18, Independent Accountants' Preferability Letter for Change
in Accounting Principle, is filed as an exhibit to this report.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed in the fourth quarter of calendar year 1999:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CENTURY PROPERTIES FUND XIX
By: FOX PARTNERS II,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
Pursuant to the requirements of the Exchange Act, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities
on the date indicated.
/s/Patrick J. Foye Executive Vice President Date:
Patrick J. Foye and Director
/s/Martha L. Long Senior Vice President Date:
Martha L. Long and Controller
<PAGE>
CENTURY PROPERTIES INCOME FUND XIX
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 7, 1995,
incorporated by reference to the Registrant's Current Report on Form
8-K dated August 7, 1995.
2.2 Partnership Units Purchase Agreement dated as of August 17, 1995,
incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia
Financial Group, Inc. ("Insignia") with the Securities and Exchange
Commission on September 1, 1995.
2.3 Management Purchase Agreement dated as of August 17, 1995,
incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia
with the Securities and Exchange Commission on September 1, 1995.
2.4 Agreement and Plan of Merger, dated as of October 1, 1998, by and
between AIMCO and IPT (incorporated by reference to Exhibit 2.1 of
Registrant's Current Report on Form 8-K dated October 1, 1998).
3.4 Agreement of Limited Partnership, incorporated by reference to Exhibit
A to the Prospectus of the Partnership dated September 20, 1983, as
amended on June 13, 1989, and as thereafter supplemented contained in
the Registrant's Registration Statement on Form S-11 (Reg. No.
2-79007).
10.1 Amended and Restated Note A, made as of September 1, 1994, by the
Registrant in favor of The Travelers Insurance Company ("Travelers")
in the principal amount of $10,800,000, incorporated by reference to
the Registrant's Form 10-Q for the quarter ended September 30, 1994.
10.2 Amended and Restated Note B, made as of September 1, 1994, by the
Registrant in favor of Travelers in the principal amount of
$2,138,673.53, incorporated by reference to the Registrant's Form 10-Q
for the quarter ended September 30, 1994.
10.3 Amended and Restated Deed of Trust, dated as of September 1, 1994,
between the Registrant and Travelers, incorporated by reference to the
Registrant's Form 10-Q for the quarter ended September 30, 1994.
10.4 Amended and Restated Note B, made as of September 1, 1994, between the
Registrant and Travelers, incorporated by reference to the
Registrant's Form 10-Q for the quarter ended September 30, 1994.
<PAGE>
10.5 Promissory Note made December 15, 1995, by the Registrant in favor of
Connecticut General Life Insurance Company ("CIGNA") in the principal
amount of $22,000,000 relating to the refinancing of Wood Lake, Wood
Ridge, and Plantation Crossing incorporated by reference to Exhibit
10.5 to the Partnership's Annual Report on Form 10-K for the year
ended December 31, 1995.
10.6 Form of Deed to Secure Debt and Security Agreement from the Registrant
to CIGNA relating to the refinancing of Wood Lake, Wood Ridge, and
Plantation Crossing incorporated by reference to Exhibit 10.6 to the
Partnership's Annual Report on Form 10-K for the year ended December
31, 1995.
10.7 First Mortgage Note from the Registrant to Secore Financial
Corporation ("Secore") relating to the refinancing of Misty Woods
Apartments incorporated by reference to Exhibit 10.7 to the
Partnership's Annual Report on Form 10-K for the year ended December
31, 1995.
10.8 First Mortgage and Security Agreement dated as of December 29, 1995,
from the Registrant to Secore relating to the refinancing of Misty
Woods Apartments incorporated by reference to Exhibit 10.8 to the
Partnership Annual Report on Form 10-K for the year ended December
31,1995.
10.9 Multifamily Note secured by a Mortgage or Deed of Trust dated November
1, 1996, between Century Properties Fund XIX and Lehman Brothers
Holdings, Inc., d/b/a Lehman Capital, a Division of Lehman Brothers
Holdings Inc., d/b/a Lehman Capital, a Division of Lehman Brothers
Holdings Inc., relating to Sunrunner Apartments incorporated by
reference to Exhibit 10.9 to the Partnership's Annual Report on Form
10-K for the year ended December 31, 1995.
10.10Amendment to Amended and Restated Note A dated January 29, 1998,
between the Partnership and The Travelers Insurance Company relating
to McMillan Place.
10.11Amendment to Amended and Restated Note B dated January 29, 1998,
between the Partnership and The Travelers Insurance Company relating
to McMillan Place.
16.0 Letter from the Registrant's former Independent Auditor dated April
27, 1994, incorporated by reference to the Registrant's Current Report
on Form 8-K dated April 22, 1994.
16.1 Letter from the Registrant's former Independent Auditor dated November
11, 1998, incorporated by reference to the Registrant's Current Report
on Form 8-K dated November 16, 1998.
18 Independent Accountants' Preferability Letter for Change in Accounting
Principle.
27 Financial Data Schedule.
<PAGE>
Exhibit 18
February 7, 2000
Mr. Patrick J. Foye
Executive Vice President
Fox Capital Management Corporation
Managing General Partner of Century Properties Fund XIX
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
Dear Mr. Foye:
Note J of Notes to the Consolidated Financial Statements of Century Properties
Fund XIX included in its Form 10-KSB for the year ended December 31, 1999
describes a change in the method of accounting to capitalize exterior painting
and major landscaping, which would have been expensed under the old policy. You
have advised us that you believe that the change is to a preferable method in
your circumstances because it provides a better matching of expenses with the
related benefit of the expenditures and is consistent with policies currently
being used by your industry and conforms to the policies of the Managing General
Partner.
There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting for exterior painting and major landscaping is to an acceptable
alternative method which, based on your business judgment to make this change
for the reasons cited above, is preferable in your circumstances.
Very truly yours,
/s/Ernst & Young LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from CENTURY
PROPERTIES FUND XIX 1999 Fourth Quarter 10-KSB and is qualified in its entirety
by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000705752
<NAME> CENTURY PROPERTIES FUND XIX
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,900
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 98,755
<DEPRECIATION> 46,015
<TOTAL-ASSETS> 57,551
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 59,761
0
0
<COMMON> 0
<OTHER-SE> (4,335)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 17,023
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 15,016
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,973
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,007
<EPS-BASIC> 19.82 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
