FORM 10-QSB--QUARTERLY OR TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] 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.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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___
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 691
Receivables and deposits 1,220
Restricted escrows 236
Other assets 606
Investment properties:
Land $ 11,635
Buildings and related personal property 87,996
99,631
Less accumulated depreciation (47,641) 51,990
$ 54,743
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 273
Tenant security deposits payable 316
Accrued property taxes 658
Due to former affiliate 270
Other liabilities 574
Mortgage notes payable 59,409
Partners' (Deficit) Capital:
General partner $ (9,541)
Limited partners (89,292 units issued and
outstanding) 2,784 (6,757)
$ 54,743
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
b)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 4,193 $ 4,021 $ 8,340 $ 8,089
Other income 256 179 421 362
Total revenues 4,449 4,200 8,761 8,451
Expenses:
Operating 1,283 1,329 2,723 2,598
General and administrative 85 (117) 164 189
Depreciation 825 749 1,626 1,488
Interest 1,214 1,230 2,431 2,463
Property tax 325 301 714 599
Total expenses 3,732 3,492 7,658 7,337
Net income $ 717 $ 708 $ 1,103 $ 1,114
Net income allocated to
general partner $ 85 $ 84 $ 130 $ 131
Net income allocated to
limited partners 632 624 973 983
$ 717 $ 708 $ 1,103 $ 1,114
Net income per limited
partnership unit $ 7.08 $ 6.99 $ 10.90 $ 11.01
Distributions per limited
partnership unit $ 34.82 $ -- $ 34.82 $ 39.23
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
c)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENT OF PARTNERS' (DEFICIT) CAPITAL
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 89,292 $ -- $89,292 $89,292
Partners' (deficit) capital
at December 31, 1999 89,292 $(9,255) $ 4,920 $(4,335)
Distributions paid to partners -- (416) (3,109) (3,525)
Net income for the six months
ended June 30, 2000 -- 130 973 1,103
Partners' (deficit) capital
at June 30, 2000 89,292 $(9,541) $ 2,784 $(6,757)
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
d)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,103 $ 1,114
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,626 1,488
Amortization of loan costs and discount 50 57
Change in accounts:
Receivables and deposits (266) (150)
Other assets (30) (77)
Accounts payable 93 (8)
Tenant security deposits payable 6 --
Accrued property taxes 95 56
Other liabilities (63) 38
Net cash provided by operating activities 2,614 2,518
Cash flows from investing activities:
Property improvements and replacements (1,041) (569)
Net withdrawals from (deposits to) restricted escrows 84 (57)
Net cash used in investing activities (957) (626)
Cash flows from financing activities:
Payment on mortgage notes payable (341) (315)
Distributions to partners (3,525) (3,802)
Net cash used in financing activities (3,866) (4,117)
Net decrease in cash and cash equivalents (2,209) (2,225)
Cash and cash equivalents at beginning of period 2,900 5,138
Cash and cash equivalents at end of period $ 691 $ 2,913
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,381 $ 2,407
</TABLE>
At December 31, 1999 there were approximately $165,000 of property improvements
and replacements in accounts payable.
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
e)
CENTURY PROPERTIES FUND XIX
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Century
Properties Fund XIX (the "Partnership" or "Registrant") 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 six
month periods ended June 30, 2000 are not necessarily indicative of the results
that may be expected for the fiscal year ending December 31, 2000. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1999.
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 inter-entity transactions have been
eliminated.
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 Apartment Investment and Management Company ("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.
Note C - Transactions with Affiliated Parties
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 reimbursement of certain expenses incurred by
affiliates on behalf of the Partnership.
The following payments to the Managing General Partner and its affiliates were
incurred during the six months ended June 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $444 $429
Reimbursement for services of affiliates (included in
general and administrative and operating expenses
and investment properties) 88 85
Partnership management fee (included in general partner
distributions) 353 228
<PAGE>
During the six months ended June 30, 2000 and 1999, 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 $444,000 and
$429,000 for the six months ended June 30, 2000 and 1999, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $88,000 and
$85,000 for the six month periods ended June 30, 2000 and 1999, 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 $353,000 and $228,000 in Partnership management fees
were paid along with the distributions from operations made during the six
months ended June 30, 2000 and 1999, respectively.
AIMCO and its affiliates currently own 46,656.66 limited partnership units in
the Partnership representing 52.252% of the outstanding units. A number of these
units were acquired pursuant to tender offers made by AIMCO or its affiliates.
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. Under
the Partnership Agreement, unitholders holding a majority of the Units are
entitled to take action with respect to a variety of matters. As a result of its
ownership of 52.252% of the outstanding units, AIMCO is in a position to
influence all voting decisions with respect to the Registrant. 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.
Note D - Distribution
During the six months ended June 30, 2000, the Partnership distributed
approximately $3,525,000 (approximately $3,109,000 to the limited partners or
$34.82 per limited partnership unit) from operations.
During the six months ended June 30, 1999, the Partnership distributed
approximately $3,802,000 (approximately $3,503,000 to the limited partners or
$39.23 per limited partnership unit). Approximately $2,280,000 (approximately
$2,009,000 to the limited partners or $22.50 per limited partnership unit) of
the distribution was from operations and approximately $1,522,000 (approximately
$1,494,000 to the limited partners or $16.73 per limited partnership unit) was
from the remaining proceeds of the sale of Parkside Village Apartments in May
1993.
<PAGE>
Note E - 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
Partnership's residential property consists of eight apartment complexes located
in Georgia (3), Arizona (2), Florida (1), Texas (1), and North Carolina (1). 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 segment are the same as
those of the Partnership as described in the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1999.
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.
Segment information for the three and six month periods ended June 30, 2000 and
1999 is shown in the tables below (in thousands). The "Other" column includes
Partnership administration related items and income and expense not allocated to
the reportable segment.
Three months ended June 30, 2000 Residential Other Totals
Rental income $ 4,193 $ -- $ 4,193
Other income 255 1 256
Interest expense 1,214 -- 1,214
Depreciation 825 -- 825
General and administrative expense -- 85 85
Segment profit (loss) 801 (84) 717
Three months ended June 30, 1999 Residential Other Totals
Rental income $ 4,021 $ -- $ 4,021
Other income 170 9 179
Interest expense 1,230 -- 1,230
Depreciation 749 -- 749
General and administrative expense -- (117) (117)
Segment profit (loss) 582 126 708
Six months ended June 30, 2000 Residential Other Totals
Rental income $ 8,340 $ -- $ 8,340
Other income 418 3 421
Interest expense 2,431 -- 2,431
Depreciation 1,626 -- 1,626
General and administrative expense -- 164 164
Segment profit (loss) 1,264 (161) 1,103
Total assets 54,510 233 54,743
Capital expenditures for investment
properties 876 -- 876
Six months ended June 30, 1999 Residential Other Totals
Rental income $ 8,089 $ -- $ 8,089
Other income 327 35 362
Interest expense 2,463 -- 2,463
Depreciation 1,488 -- 1,488
General and administrative expense -- 189 189
Segment profit (loss) 1,268 (154) 1,114
Total assets 57,296 921 58,217
Capital expenditures for investment
properties 569 -- 569
Note F - 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, its 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited partnership units; the management of partnerships by the Insignia
affiliates; and the Insignia Merger. 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 owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, 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 prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. 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.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The matters discussed in this Form 10-QSB 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-QSB 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 matters, does not take into
account the effects of any changes to the Registrant's business and results of
operations. 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.
The Partnership's investment properties consist of eight apartment complexes.
The following table sets forth the average occupancy of the properties for the
six months ended June 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Sunrunner Apartments 97% 95%
St. Petersburg, Florida
Misty Woods Apartments 93% 94%
Charlotte, North Carolina
McMillan Place Apartments 96% 97%
Dallas, Texas
Vinings Peak Apartments 96% 95%
Atlanta, Georgia
Wood Lake Apartments 95% 95%
Atlanta, Georgia
Plantation Crossing 95% 95%
Atlanta, Georgia
Greenspoint Apartments 94% 95%
Phoenix, Arizona
Sandspoint Apartments 94% 93%
Phoenix, Arizona
Results of Operations
The Partnership realized net income of approximately $1,103,000 and $1,114,000
for the six month periods ended June 30, 2000 and 1999, respectively. For the
three month periods ended June 30, 2000 and 1999, the Partnership realized net
income of approximately $717,000 and $708,000, respectively. The decrease in net
income for the six month period ended June 30, 2000 is attributable to an
increase in total expenses largely offset by an increase in total revenues. The
increase in net income for the three months ended June 30, 2000 is due to an
increase in total revenues partially offset by an increase in total expenses.
The increase in total revenues for the three and six month periods ended June
30, 2000 is due to an increase in rental and other income. The increase in
rental income is the result of increased rental rates at all of the
Partnership's investment properties. The increase in other income is primarily
due to an increase in tenant charges at Sunrunner, McMillan, Sandspoint, and
Wood Lake Apartments. The increase in total expenses for the six month period
ended June 30, 2000 is primarily attributable to an increase in operating,
depreciation, and property tax expenses. The increase in operating expenses for
the six month period ended June 30, 2000 is the result of increased insurance
expense and increased property expense. For the three months ended June 30, 2000
operating expenses decreased as a result of decreased maintenance expense at
Misty Woods, Wood Ridge, Plantation Crossing, and Greenspoint Apartments.
Insurance expense increased as a result of the timing of the receipt of
insurance premium invoices in 1999 which affected the recording of prepaid
insurance and related expenses. Property expense increased as a result of
increased salary expense and utility costs. The increase in depreciation expense
is the result of the addition of capital assets during the past twelve months.
The increase in property tax expense is primarily due to higher assessed values
at several properties.
The decrease in general and administrative expense during the three months ended
June 30, 1999, is primarily due to the Partnership management fee paid during
the first quarter being correctly accounted for as a distribution to the general
partner. Included in general and administrative expense at both June 30, 2000
and 1999 are reimbursements to the Managing General Partner allowed under the
Partnership Agreement. 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.
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 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 June 30, 2000, the Registrant had cash and cash equivalents of approximately
$691,000 as compared to approximately $2,913,000 at June 30, 1999. For the six
months ended June 30, 2000, cash and cash equivalents decreased approximately
$2,209,000 from the Registrant's year ended December 31, 1999. The decrease in
cash and cash equivalents is due to approximately $3,866,000 of cash used in
financing activities and approximately $957,000 of cash used in investing
activities partially offset by approximately $2,614,000 of cash provided by
operating activities. Net cash used in financing activities consisted of
distributions to partners and, to a lesser extent, payments of principal made on
the mortgages encumbering the Registrant's investment properties. Net cash used
in investing activities consisted of capital improvements and replacements
partially offset by net withdrawals from 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. Capital improvements planned
for each of the Registrant's properties are detailed below.
Sunrunner Apartments
Approximately $131,000 has been budgeted for 2000 for capital improvements at
Sunrunner consisting primarily of carpet and vinyl replacements, plumbing
improvements, and major landscaping. During the six months ended June 30, 2000,
the Partnership completed approximately $64,000 of capital improvements
consisting primarily of carpet and vinyl replacement, major landscaping, and
pool improvements. These improvements were funded from replacement reserves.
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
Approximately $68,000 has been budgeted for 2000 for capital improvements at
Misty Woods consisting primarily of carpet and vinyl replacements, appliance
replacements, wall coverings, counter tops, and lighting upgrades. During the
six months ended June 30, 2000, the Partnership completed approximately $101,000
of budgeted and unbudgeted capital improvements consisting primarily of building
improvements, carpet and vinyl replacement, office equipment, wall coverings,
and land improvements. These improvements were funded from operating cash flow
and replacement reserves. 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.
McMillian Place Apartments
Approximately $277,000 has been budgeted for 2000 for capital improvements at
McMillian Place consisting primarily of appliance replacement, carpet and vinyl
replacements, interior decorating, and exterior painting. During the six months
ended June 30, 2000, the Partnership completed approximately $110,000 of capital
improvements consisting primarily of appliances, floor covering replacements,
and air conditioning replacements. These improvements were funded from operating
cash flow. 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
Approximately $245,000 has been budgeted for 2000 for capital improvements at
Vinings Peak consisting primarily of carpet and vinyl replacements, appliance
replacements, wall coverings, and HVAC replacements. During the six months ended
June 30, 2000, the Partnership completed approximately $124,000 of capital
improvements consisting primarily of carpet and vinyl replacement, wall
coverings, and a submetering project. These improvements were funded from
operating cash flow. 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.
Wood Lake Apartments
Approximately $214,000 has been budgeted for 2000 for capital improvements at
Wood Lake consisting primarily of carpet and vinyl replacements, wall coverings,
appliance replacement, and HVAC replacements. During the six months ended June
30, 2000, the Partnership completed approximately $142,000 of capital
improvements consisting primarily of plumbing and carpet and vinyl replacement,
wall coverings, and plumbing enhancements. These improvements were funded from
operating cash flow. 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
Approximately $143,000 has been budgeted for 2000 for capital improvements at
Plantation Crossing consisting primarily of carpet and vinyl replacements, wall
coverings, and appliance replacements. During the six months ended June 30,
2000, the Partnership completed approximately $136,000 of capital improvements
consisting primarily of major landscaping, submetering equipment, carpet and
vinyl replacement, and appliance replacement. These improvements were funded
from operating cash flow. 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
Approximately $121,000 has been budgeted for 2000 for capital improvements at
Greenspoint consisting primarily of carpet and vinyl replacements, major
landscaping, lighting upgrades, HVAC replacements, and plumbing improvements.
During the six months ended June 30, 2000, the Partnership completed
approximately $102,000 of capital improvements consisting primarily of major
landscaping, floor covering replacements, and appliances. These improvements
were funded from operating cash flow. 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
Approximately $154,000 has been budgeted for 2000 for capital improvements at
Sands Point consisting primarily of carpet and vinyl replacements, major
landscaping, roof replacements, exterior painting, plumbing improvements, and
parking lot resurfacing. During the six months ended June 30, 2000, the
Partnership completed approximately $97,000 of capital improvements consisting
primarily of plumbing enhancements, appliances, roof replacements, and carpet
and vinyl replacement. These improvements were funded from operating cash flow.
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.
The additional 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.
The Partnership's current assets are thought to be sufficient for any near-term
needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $59,409,000, net of discount, 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 the
properties cannot be refinanced or sold for a sufficient amount, the Registrant
will risk losing such properties through foreclosure.
The Registrant was prohibited from making distributions from the operations of
the Registrant until the mortgages encumbering McMillan Place were satisfied.
However, under the terms of the debt restructuring obtained on McMillan Place on
January 29, 1998, the Registrant is now permitted to make distributions from the
operations of the Registrant's other investment properties. During the six
months ended June 30, 2000, the Partnership distributed approximately $3,525,000
(approximately $3,109,000 to the limited partners or $34.82 per limited
partnership unit) from operations. During the six months ended June 30, 1999,
the Partnership distributed approximately $3,802,000 (approximately $3,503,000
to the limited partners or $39.23 per limited partnership unit). Approximately
$2,280,000 (approximately $2,009,000 to the limited partners or $22.50 per
limited partnership unit) of the distribution was from operations and
approximately $1,522,000 (approximately $1,494,000 to the limited partner or
$16.73 per limited partnership unit) was from the remaining proceeds of the sale
of Parkside Village Apartments in May 1993. The Partnership's distribution
policy is reviewed on a semi-annual basis. 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.
There can be no assurance, however, that the Partnership will generate
sufficient funds from operations after required capital expenditures to permit
any further distributions to its partners in 2000 or subsequent periods.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. 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, its 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 of interests in certain general partner
entities by Insignia Financial Group, Inc. and entities which were, at one time,
affiliates of Insignia; past tender offers by the Insignia affiliates to acquire
limited partnership units; the management of partnerships by the Insignia
affiliates; and the Insignia Merger. 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 owned units as of November 3, 1999. Preliminary
approval of the settlement was obtained on November 3, 1999 from the Court, 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 prior lead counsel to enter the settlement. On
December 14, 1999, the Managing General Partner and its affiliates terminated
the proposed settlement. In February 2000, counsel for some of the named
plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who
negotiated the settlement. On June 27, 2000, the Court entered an order
disqualifying them from the case. The Court will entertain applications for lead
counsel which must be filed by August 4, 2000. The Court has scheduled a hearing
on August 21, 2000 to address the issue of appointing lead counsel. The Managing
General Partner does not anticipate that costs associated with this case will be
material to the Partnership's overall operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
Exhibit 27, Financial Data Schedule, is filed as an exhibit to
this report.
b) Reports on Form 8-K:
None filed during the quarter ended June 30, 2000.
<PAGE>
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
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:
