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 September 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___
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
September 30, 2000
<TABLE>
<CAPTION>
Assets
<S> <C> <C>
Cash and cash equivalents $ 1,412
Receivables and deposits 1,471
Restricted escrows 137
Other assets 630
Investment properties:
Land $ 11,635
Buildings and related personal property 88,432
100,067
Less accumulated depreciation (48,478) 51,589
$ 55,239
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 218
Tenant security deposit liabilities 309
Accrued property taxes 990
Due to former affiliate 270
Other liabilities 571
Mortgage notes payable 59,221
Partners' (Deficit) Capital:
General partner $ (9,491)
Limited partners (89,292 units issued and
outstanding) 3,151 (6,340)
$ 55,239
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
2000 1999 2000 1999
Revenues:
<S> <C> <C> <C> <C>
Rental income $ 4,150 $ 4,030 $12,490 $12,119
Other income 245 203 666 565
Total revenues 4,395 4,233 13,156 12,684
Expenses:
Operating 1,457 1,429 4,180 4,027
General and administrative 97 68 261 257
Depreciation 837 788 2,463 2,276
Interest 1,198 1,227 3,629 3,690
Property tax 323 300 1,037 899
Total expenses 3,912 3,812 11,570 11,149
Net income $ 483 $ 421 $ 1,586 $ 1,535
Net income allocated to
general partner $ 58 $ 51 $ 188 $ 182
Net income allocated to
limited partners 425 370 1,398 1,353
$ 483 $ 421 $ 1,586 $ 1,535
Net income per limited
partnership unit $ 4.76 $ 4.14 $ 15.66 $ 15.15
Distributions per limited
partnership unit $ .65 $ 13.26 $ 35.47 $ 52.49
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
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 -- (424) (3,167) (3,591)
Net income for the nine months
ended September 30, 2000 -- 188 1,398 1,586
Partners' (deficit) capital
at September 30, 2000 89,292 $(9,491) $ 3,151 $(6,340)
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d)
CENTURY PROPERTIES FUND XIX
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 1,586 $ 1,535
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2,463 2,276
Amortization of loan costs and discount 74 87
Change in accounts:
Receivables and deposits (517) (453)
Other assets (83) (93)
Accounts payable 38 123
Tenant security deposit liabilities (1) 8
Accrued property taxes 427 356
Other liabilities (66) (29)
Net cash provided by operating activities 3,921 3,810
Cash flows from investing activities:
Property improvements and replacements (1,477) (1,099)
Net withdrawals from (deposits to) restricted escrows 183 (52)
Net cash used in investing activities (1,294) (1,151)
Cash flows from financing activities:
Payment on mortgage notes payable (524) (478)
Distributions to partners (3,591) (5,145)
Net cash used in financing activities (4,115) (5,623)
Net decrease in cash and cash equivalents (1,488) (2,964)
Cash and cash equivalents at beginning of period 2,900 5,138
Cash and cash equivalents at end of period $ 1,412 $ 2,174
Supplemental disclosure of cash flow information:
Cash paid for interest $ 3,558 $ 3,605
At December 31, 1999 there were approximately $165,000 of property improvements
and replacements in accounts payable.
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
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 nine
month periods ended September 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 (i) certain payments to
affiliates for services and (ii) 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 nine months ended September 30, 2000 and 1999:
2000 1999
(in thousands)
Property management fees (included in operating expenses) $666 $645
Reimbursement for services of affiliates (included in
general and administrative and operating expenses
and investment properties) 134 114
Partnership management fee (included in general partner
distributions) 359 362
During the nine months ended September 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 $666,000 and
$645,000 for the nine months ended September 30, 2000 and 1999, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $134,000 and
$114,000 for the nine month periods ended September 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 $359,000 and $362,000 in Partnership management fees
were paid along with the distributions from operations made during the nine
months ended September 30, 2000 and 1999, respectively.
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates currently own 48,628.66 limited
partnership units in the Partnership representing 54.46% 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, which would include without limitation, voting on certain amendments to
the Partnership Agreement and voting to remove the Managing General Partner. As
a result of its ownership of 54.46% 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, an affiliate
of the Managing General Partner, 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 nine months ended September 30, 2000, the Partnership distributed
approximately $3,591,000 (approximately $3,167,000 to the limited partners or
$35.47 per limited partnership unit) from operations. Subsequent to September
30, 2000 the Partnership declared and paid an operating distribution or
approximately $380,000 (approximately $335,000 to the limited partners or $3.75
per limited partnership unit).
During the nine months ended September 30, 1999, the Partnership distributed
approximately $5,145,000 (approximately $4,687,000 to the limited partners or
$52.49 per limited partnership unit). Approximately $3,623,000 (approximately
$3,195,000 to the limited partners or $35.76 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.
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 nine month periods ended September 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 September 30, 2000
Residential Other Totals
Rental income $ 4,150 $ -- $ 4,150
Other income 244 1 245
Interest expense 1,198 -- 1,198
Depreciation 837 -- 837
General and administrative expense -- 97 97
Segment profit (loss) 579 (96) 483
Nine Months ended September 30, 2000
Residential Other Totals
Rental income $12,490 $ -- $12,490
Other income 662 4 666
Interest expense 3,629 -- 3,629
Depreciation 2,463 -- 2,463
General and administrative expense -- 261 261
Segment profit (loss) 1,843 (257) 1,586
Total assets 55,140 99 55,239
Capital expenditures for investment
properties 1,312 -- 1,312
Three Months ended September 30, 1999
Residential Other Totals
Rental income $ 4,030 $ -- $ 4,030
Other income 196 7 203
Interest expense 1,227 -- 1,227
Depreciation 788 -- 788
General and administrative expense -- 68 68
Segment profit (loss) 482 (61) 421
Nine Months ended September 30, 1999
Residential Other Totals
Rental income $12,119 $ -- $12,119
Other income 523 42 565
Interest expense 3,690 -- 3,690
Depreciation 2,276 -- 2,276
General and administrative expense -- 257 257
Segment profit (loss) 1,750 (215) 1,535
Total assets 57,197 301 57,498
Capital expenditures for investment
properties 1,099 -- 1,099
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 Managing 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 is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. 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
nine months ended September 30, 2000 and 1999:
Average Occupancy
Property 2000 1999
Sunrunner Apartments 97% 94%
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% 94%
Atlanta, Georgia
Greenspoint Apartments 94% 95%
Phoenix, Arizona
Sandspoint Apartments 94% 94%
Phoenix, Arizona
The Managing General Partner attributes the increase in occupancy at Sunrunner
to enhanced marketing efforts and an improvement in the local market.
Results of Operations
The Partnership realized net income of approximately $1,586,000 and $1,535,000
for the nine month periods ended September 30, 2000 and 1999, respectively. For
the three month periods ended September 30, 2000 and 1999, the Partnership
realized net income of approximately $483,000 and $421,000, respectively. The
increase in net income for the three and nine month periods ended September 30,
2000 is attributable to an increase in total revenues largely offset by an
increase in total expenses. The increase in total revenues for the three and
nine month periods ended September 30, 2000 is due to an increase in rental and
other income. The increase in rental income is the result of an increase in
rental rates at all of the Partnership's investment properties along with the
increase in occupancy at Sunrunner, Vinings Peak, and Plantation Crossing. The
increase in other income is primarily due to an increase in tenant
reimbursements at all of the Partnership's properties, and an increase in late
charges charged at a majority of the properties.
The increase in total expenses for the three and nine month periods ended
September 30, 2000 is primarily attributable to an increase in operating,
depreciation, and property tax expenses which was partially offset by a decrease
in interest expense. The increase in operating expenses for the three and nine
month periods ended September 30, 2000 is the result of increased insurance
expense at McMillian Apartments and increased property expenses at Sunrunner,
Misty Woods, Plantation Crossing, Greenspoint, and Sands Point Apartments. The
increase in insurance expense at McMillian Apartments is a result of the timing
of the receipt of insurance premium notices at this property along with the
receipt of premium refunds during 1999 as a result of the delays in invoicing.
Property expense increased as a result of increased salary expense and utility
costs. The increase in depreciation expense is the result of the increase in
capital asset additions during the past twelve months. The increase in property
tax expense is primarily due to higher assessed values at several properties.
Interest expense decreased for the three and nine months ended September 30,
2000 and 1999 as a result of scheduled payments of principal on the mortgages
encumbering the investment properties.
The increase in general and administrative expense during the three months ended
September 30, 2000, is primarily due to an increase in reimbursements to the
Managing General Partner allowed under the Partnership Agreement. General and
administrative expenses remained relatively constant for the nine months ended
September 30, 2000. Included in general and administrative expense at both
September 30, 2000 and 1999 are costs associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement.
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 September 30, 2000, the Registrant had cash and cash equivalents of
approximately $1,412,000 as compared to approximately $2,174,000 at September
30, 1999. For the nine months ended September 30, 2000, cash and cash
equivalents decreased approximately $1,488,000 from the Registrant's year ended
December 31, 1999. The decrease in cash and cash equivalents is due to
approximately $4,115,000 of cash used in financing activities and approximately
$1,294,000 of cash used in investing activities partially offset by
approximately $3,921,000 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 floor covering replacements, swimming pool and
structural improvements, plumbing enhancements, and major landscaping. During
the nine months ended September 30, 2000, the Partnership completed
approximately $119,000 of capital improvements consisting primarily of floor
covering replacement, major landscaping, swimming pool improvements, structural
improvements, and plumbing enhancements. These improvements were funded from
operating cash flow.
Misty Woods Apartments
Approximately $68,000 has been budgeted for 2000 for capital improvements at
Misty Woods consisting primarily of floor covering replacements, appliance
replacements, wall coverings, counter tops, and other building improvements.
During the nine months ended September 30, 2000, the Partnership completed
approximately $147,000 of budgeted and non budgeted capital improvements
consisting primarily of structural improvements, floor covering replacements,
perimeter fencing, wall coverings, land improvements, and other building
improvements. These improvements were funded from operating cash flow.
McMillian Place Apartments
Approximately $277,000 has been budgeted for 2000 for capital improvements at
McMillian Place consisting primarily of appliance replacement, floor covering
replacements, interior decorating, and exterior painting. During the nine months
ended September 30, 2000, the Partnership completed approximately $146,000 of
capital improvements consisting primarily of appliances, floor covering
replacements, and air conditioning replacements. These improvements were funded
from operating cash flow.
Vinings Peak Apartments
Approximately $245,000 has been budgeted for 2000 for capital improvements at
Vinings Peak consisting primarily of floor covering replacements, appliance
replacements, wall coverings, and other building improvements. During the nine
months ended September 30, 2000, the Partnership completed approximately
$206,000 of capital improvements consisting primarily of floor covering
replacement, wall coverings, and a submetering project, and other building
improvements. These improvements were funded from operating cash flow.
Wood Lake Apartments
Approximately $245,000 has been budgeted for 2000 for capital improvements at
Wood Lake consisting primarily of floor covering replacements, wall coverings,
appliance replacement, and other building improvements. During the nine months
ended September 30, 2000, the Partnership completed approximately $176,000 of
capital improvements consisting primarily of plumbing and floor covering
replacement, wall coverings, plumbing enhancements and a submetering project.
These improvements were funded from operating cash flow.
Plantation Crossing Apartments
Approximately $201,000 has been budgeted for 2000 for capital improvements at
Plantation Crossing consisting primarily of floor covering replacements,
appliance replacements and other building improvements. During the nine months
ended September 30, 2000, the Partnership completed approximately $212,000 of
budgeted and non budgeted capital improvements consisting primarily of major
landscaping, submetering equipment, floor covering and appliance replacements
and other building improvements. These improvements were funded from operating
cash flow.
Greenspoint Apartments
Approximately $135,000 has been budgeted for 2000 for capital improvements at
Greenspoint consisting primarily of floor covering replacements, major
landscaping, lighting upgrades, HVAC replacements, and plumbing improvements.
During the nine months ended September 30, 2000, the Partnership completed
approximately $149,000 of budgeted and non budgeted capital improvements
consisting primarily of major landscaping, floor covering replacements,
appliances, structural improvements, and air conditioning replacements. These
improvements were funded from operating cash flow.
Sandspoint Apartments
Approximately $166,000 has been budgeted for 2000 for capital improvements at
Sands Point consisting primarily of floor covering replacements, major
landscaping, roof replacements, exterior painting, plumbing improvements, and
parking lot resurfacing. During the nine months ended September 30, 2000, the
Partnership completed approximately $157,000 of capital improvements consisting
primarily of plumbing enhancements, appliances, roof replacements, floor
covering replacement, air conditioning replacements, and exterior painting.
These improvements were funded from operating cash flow.
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 $59,221,000, 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 nine
months ended September 30, 2000, the Partnership distributed approximately
$3,591,000 (approximately $3,167,000 to the limited partners or $35.47 per
limited partnership unit) from operations. During the nine months ended
September 30, 1999, the Partnership distributed approximately $5,145,000
(approximately $4,687,000 to the limited partners or $52.49 per limited
partnership unit). Approximately $3,623,000 (approximately $3,193,000 to the
limited partners or $35.76 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. Subsequent to
September 30, 2000, the Partnership declared and paid an operating distribution
of approximately $380,000 (approximately $335,000 to the limited partners or
$3.75 per limited partnership unit). The Partnership's distribution policy is
reviewed on a quarterly 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.
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 Managing 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 is considering applications for lead
counsel and has currently scheduled a hearing on the matter for November 20,
2000. 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 September 30, 2000.
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: November 13, 2000
