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, 1998
[ ] 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 0-13418
CENTURY PROPERTIES GROWTH FUND XXII
(Name of small business issuer in its charter)
California 94-2939418
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
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:
Limited Partnership Units
(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 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. X
State issuer's revenues for its most recent fiscal year. $21,663,000
State the aggregate market value of the voting partnership interest 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, 1998. 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
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Century Properties Growth Fund XXII (the "Partnership" or the "Registrant") was
organized in August 1984, as a California limited partnership under the Uniform
Limited Partnership Act of the California Corporations Code. Fox Partners IV, a
California general partnership, is the general partner of the Partnership. The
general partners of Fox Partners IV 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 84, a
California general partnership. The Managing General Partner of FRI is NPI
Equity Investments III, Inc., a Florida Corporation ("NPI Equity"). The Managing
General Partner and NPI Equity are subsidiaries of Apartment Investment and
Management Company ("AIMCO"), (see "Transfer of Control"). The Partnership
Agreement provides that the Partnership is to terminate on December 31, 2010
unless terminated prior to such date.
The Partnership's Registration Statement, filed pursuant to the Securities Act
of 1933 (No. 2-89285), was declared effective by the Securities and Exchange
Commission on September 25, 1984. The Partnership marketed its securities
pursuant to its Prospectus dated September 25, 1984, and thereafter supplemented
(hereinafter the "Prospectus"). This Prospectus was filed with the Securities
and Exchange Commission pursuant to Rule 424 (b) of the Securities Act of 1933.
The principal business of the Partnership is and has been to hold for investment
and ultimately sell income-producing multi-family residential properties.
Beginning in September 1984 through June 1986, the Partnership offered
$120,000,000 in Limited Partnership units and sold units having an initial cost
of $82,848,000. The net proceeds of this offering were used to acquire eleven
income-producing real properties. The Partnership's original property portfolio
was geographically diversified with properties acquired in eight states. The
Partnership's acquisition activities were completed in September 1986 and since
then the principle activity of the Partnership has been managing its portfolio.
The Partnership continues to operate nine residential properties. One property
was acquired by the lender through foreclosure in 1992 and one property was sold
in 1995. Since its initial offering, the Partnership has not received, nor are
the limited partners required to make, additional capital contributions.
The Managing General Partner of the Partnership intends to maximize the
operating results and, ultimately, the net realizable value of each of the
Partnership's properties in order to achieve the best possible return for the
investors. Such results may best be achieved by continuing to hold and operate
the properties or through property sales or exchanges, refinancings, debt
restructurings or relinquishment of the assets. The Partnership intends to
evaluate each of its holdings periodically to determine the most appropriate
strategy for each of the assets.
The Partnership has no full time employees. The Managing General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. The non-managing general partners and
the limited partners have no right to participate in the management or conduct
of such business and affairs. An affiliate of the Managing General Partner,
provided day-to-day management services for the Partnership's investment
properties.
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 Partnership's properties and the rents that may be
charged for such apartments. While the Managing General Partner and its
affiliates are a significant factor in the United States in the apartment
industry, competition for the apartments is local. In addition, various limited
partnerships have been formed by the Managing General Partner and/or affiliates
to engage in business which may be competitive with 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.
Both the income and expenses of operating the remaining properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
an oversupply of similar properties resulting from overbuilding, increases in
unemployment or population shifts, reduced 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.
Transfer of Control
Pursuant to a series of transactions which closed during the first half of 1996,
affiliates of Insignia Financial Group, Inc. ("Insignia") acquired all of the
issued and outstanding shares of stock of FCMC, NPI Equity Investment II, Inc.
("NPI Equity"), the Managing General Partner of FRI, the sole shareholder of NPI
Equity. On December 31, 1996, the stock of NPI Equity was acquired by Insignia
Properties Trust, an affiliate of the Managing General Partner.
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia and Insignia Properties Trust ("IPT") 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 ultimately acquired a 100% ownership
interest in IPT, the entity which controls the Managing General Partner. The
Managing General Partner does not believe that this transaction will have a
material effect on the affairs and operations of the Partnership.
Tender Offers
Affiliates of the Managing General Partner, currently hold 22,845.5 Units
representing approximately 27.575% of the total outstanding Units. These Units
were acquired through private transactions and an August 28, 1997 tender offer.
17,023.5 Units were acquired on January 19, 1996 from DeForest Ventures I, L.P.
("DeForest"), the entity which tendered for Units in the Partnership in 1994 and
1995, and certain of its affiliates. An additional 5,504 Units were acquired on
October 6, 1997 at a price of $275 per Unit pursuant to the August 1997 tender
offer. The remaining Units were acquired through private transactions. As a
result of its ownership of approximately 27.575% of the Units, these affiliates
could be in a position to significantly influence all voting decisions with
respect to the Partnership. 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, these affiliates 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, DeForest from whom one of the affiliates acquired its
Units, had agreed for the benefit of non-tendering unitholders, that it would
vote the 17,023.5 Units it had acquired: (i) against any increase in
compensation payable to the Managing General partner or to affiliates; and (ii)
on all other matters submitted by it or its affiliates, in proportion to the
votes cast by non-tendering unitholders. Except for the foregoing, no other
limitations are imposed on the affiliates' ability to influence voting decisions
with respect to the Partnership.
ITEM 2. DESCRIPTION OF PROPERTIES:
The following table sets forth the Partnership's investment in properties:
Date of
Property Purchase Type of Ownership Use
Wood Creek Apartments 5/84 Fee ownership subject Apartment-
Mesa, Arizona to first mortgage (1) 432 units
Plantation Creek Apartments 6/84 Fee ownership subject Apartment-
Atlanta, Georgia to first mortgage (1) 484 units
Stoney Creek Apartments 6/85 Fee ownership subject Apartment-
Dallas, Texas to first mortgage (1) 364 units
Four Winds Apartments 9/85 Fee ownership subject Apartment-
Overland, Kansas to first mortgage (1) 350 units
Promontory Point Apartments 10/85 Fee ownership subject Apartment-
Austin, Texas to first mortgage (1) 252 units
Cooper's Pointe Apartments 11/85 Fee ownership subject Apartment-
Charleston, South Carolina to first mortgage (1) 192 units
Hampton Greens Apartments 12/85 Fee ownership subject Apartment-
Dallas, Texas to first mortgage (1) 309 units
Autumn Run Apartments 6/86 Fee ownership subject Apartment-
Naperville, Illinois to first mortgage (1) 320 units
Copper Mill Apartments 9/86 Fee ownership subject Apartment-
Richmond, Virginia to first mortgage (1) 192 units
(1) Property is held by a limited partnership in which the Partnership owns a
100% interest
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.
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
Wood Creek $ 16,310 $ 7,254 5-30 yrs. SL $ 4,047
Plantation Creek 25,892 11,637 5-30 yrs. SL 6,802
Stoney Creek 14,253 6,301 5-30 yrs. SL 4,851
Four Winds 16,751 6,554 5-30 yrs. SL 5,764
Promontory Point 11,874 4,997 5-30 yrs. SL 4,427
Cooper's Pointe 7,520 3,429 5-30 yrs. SL 2,170
Hampton Greens 12,318 5,037 5-30 yrs. SL 4,759
Autumn Run 17,778 7,193 5-30 yrs. SL 6,351
Copper Mill 9,492 3,746 5-30 yrs. SL 5,193
Total $132,188 $ 56,148 $ 44,364
See "Note A" to the consolidated financial statements included in "Item 7.
Financial Statements" for a description of the Partnership's depreciation
policy.
SCHEDULE OF PROPERTY INDEBTEDNESS:
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1998 Rate Amortized Date Maturity (2)
Wood Creek $12,566 7.93% 30 yrs 2/2006 $11,319
Plantation Creek 15,489 7.93% 30 yrs 2/2006 13,952
Stoney Creek 6,860 7.88% 30 yrs 1/2006 6,180
Four Winds 9,425 7.93% 30 yrs 2/2006 8,489
Promontory Point 3,980 7.04% 30 yrs 5/2008 3,442
Cooper's Pointe 4,135 7.88% 30 yrs 1/2006 3,725
Hampton Greens 5,644 7.88% 30 yrs 1/2006 5,084
Autumn Run 9,100 7.33% (1) 11/2003 9,100
Copper Mill 5,936 7.88% 30 yrs 1/2006 5,347
Total $73,135
(1) Interest only payments.
(2) See "Item 7. Financial Statements - Note D" for information with respect to
the Partnership's ability to prepay these loans and other specific details
about the loans.
SCHEDULE OF RENTAL RATES AND OCCUPANCY:
Average annual rental rate and occupancy for 1998 and 1997 for each property:
Average Annual Average
Rental Rates Occupancy
Property 1998 1997 1998 1997
Wood Creek $7,393/unit $7,149/unit 94% 93%
Plantation Creek 8,889/unit 8,731/unit 95% 93%
Stoney Creek 6,378/unit 6,069/unit 94% 93%
Four Winds 7,699/unit 7,251/unit 97% 95%
Promontory Point (1) 7,383/unit 7,174/unit 94% 90%
Cooper's Pointe 6,963/unit 6,540/unit 97% 97%
Hampton Greens 6,137/unit 5,862/unit 93% 91%
Autumn Run 9,244/unit 8,998/unit 95% 94%
Copper Mill (2) 8,675/unit 8,624/unit 89% 94%
(1) Occupancy increased due to increased marketing efforts.
(2) Occupancy decreased due to the decrease in corporate unit rental and the
market being overbuilt.
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 1998 for each property were:
1998 1998
Billing Rate
(in thousands)
Wood Creek $185 1.17%
Plantation Creek 213 3.95%
Stoney Creek 245 2.54%
Four Winds 162 1.07%
Promontory Point 198 2.62%
Cooper's Pointe 93 1.60%
Hampton Greens 197 2.54%
Autumn Run 323 6.63%
Copper Mill 90 0.94%
CAPITAL EXPENDITURES:
Wood Creek
During the year ended December 31, 1998 the Partnership completed approximately
$144,000 of capital improvement projects at Wood Creek, consisting primarily of
floor covering replacements and repairs to the property's clubhouse. These
improvements were funded from operating cash flow. Based on a report received
from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the Managing General Partner on interior
improvements, it is estimated that the property requires approximately $360,000
of capital improvements over the near term. Capital improvement projects
planned for 1999 include, but are not limited to, parking lot repairs, plumbing
repairs, pool repairs, landscaping and roof repairs. These improvements are
expected to cost approximately $434,000.
Plantation Creek
During the year ended December 31, 1998, the Partnership completed approximately
$228,000 of capital improvement projects at Plantation Creek, consisting
primarily of floor covering replacements, roof replacements, HVAC units and
major sewer repair. These improvements were funded from replacement reserves and
operating cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
Managing General Partner on interior improvements, it is estimated that the
property requires approximately $862,000 of capital improvements over the near
term. Capital improvements planned for 1999 include, but are not limited to,
landscaping, painting, floor covering replacements, parking lot repairs and roof
replacements. These improvements are expected to cost approximately $978,000.
Stoney Creek
During the year ended December 31, 1998, the Partnership completed approximately
$82,000 of capital improvement projects at Stoney Creek, consisting primarily of
perimeter fencing and floor covering replacements. These improvements were
funded from replacement reserves. Based on a report received from an
independent third party consultant analyzing necessary exterior improvements and
estimates made by the Managing General Partner on interior improvements, it is
estimated that the property requires approximately $473,000 of capital
improvements over the near term. Capital improvement projects planned for 1999
include, but are not limited to, painting, floor covering replacements, and
landscaping. These improvements are expected to cost approximately $267,000.
Four Winds
During the year ended December 31, 1998, the Partnership completed approximately
$295,000 of capital improvement projects at Four Winds, consisting primarily of
balcony repairs, floor covering replacements and appliances. These improvements
were funded from replacement reserves and operating cash flow. Based on a
report received from an independent third party consultant analyzing necessary
exterior improvements and estimates made by the Managing General Partner on
interior improvements, it is estimated that the property requires approximately
$262,000 of capital improvements over the near term. Capital improvement
projects planned for 1999 include, but are not limited to, lighting upgrades,
parking lot repairs, floor covering replacement, structural improvements, roof
and building repairs. These improvements are expected to cost approximately
$302,000.
Promontory Point
During the year ended December 31, 1998, the Partnership completed approximately
$119,000 of capital improvement projects at Promontory Point Apartments,
consisting primarily of roof repairs, appliances, swimming pool repair, and
floor covering replacements. These improvements were funded from operating cash
flow. Based on a report received from an independent third party consultant
analyzing necessary exterior improvements and estimates made by the Managing
General Partner on interior improvements, it is estimated that the property
requires approximately $320,000 of capital improvements over the near term.
Capital improvement projects planned for 1999 include, but are not limited to,
building improvements, perimeter fencing, roof repairs, floor covering
replacements and landscaping. These improvements are expected to cost
approximately $371,000.
Cooper's Pointe
During the year ended December 31, 1998, the Partnership completed approximately
$70,000 of capital improvement projects at Cooper's Point, consisting primarily
of floor covering replacements and parking lot repairs. These improvements were
funded from operating cash flow. Based on a report received from an independent
third party consultant analyzing necessary exterior improvements and estimates
made by the Managing General Partner on interior improvements, it is estimated
that the property requires approximately $160,000 of capital improvements over
the near term. Capital improvement projects planned for 1999 include, but are
not limited to, parking lot repairs, floor covering replacements, and
landscaping. These improvements are expected to cost approximately $197,000.
Hampton Greens
During the year ended December 31, 1998, the Partnership completed approximately
$190,000 of capital improvement projects at Hampton Greens, consisting primarily
of roof repairs, building improvements, office equipment, and floor covering
replacements. These improvements were funded from operating cash flow. Based on
a report received from an independent third party consultant analyzing necessary
exterior improvements and estimates made by the Managing General Partner on
interior improvements, it is estimated that the property requires approximately
$155,000 of capital improvements over the near term. Capital improvement
projects planned for 1999 include, but are not limited to, floor covering
replacements, painting, fencing repairs and landscaping. These improvements are
expected to cost approximately $189,000.
Autumn Run
During the year ended December 31, 1998, the Partnership completed approximately
$88,000 of capital improvement projects at Autumn Run, consisting primarily of
floor covering replacements, water heaters and HVAC units. These improvements
were funded from replacement reserves. Based on a report received from an
independent third party consultant analyzing necessary exterior improvements and
estimates made by the Managing General Partner on interior improvements, it is
estimated that the property requires approximately $189,000 of capital
improvements over the near term. Capital improvement projects planned for 1999
include, but are not limited to, building improvements, floor covering
replacements, air conditioning upgrades, pool repairs, structural upgrades,
painting and floor covering replacements. These improvements are expected to
cost approximately $254,000.
Copper Mill
During the year ended December 31, 1998, the Partnership completed approximately
$65,000 of capital improvement projects at Copper Mill, consisting primarily of
floor covering replacements and clubhouse repairs. These improvements were
funded from replacement reserves. Based on a report received from an
independent third party consultant analyzing necessary exterior improvements and
estimates made by the Managing General Partner on interior improvements, it is
estimated that the property requires approximately $219,000 of capital
improvements over the near term. Capital improvement projects planned for 1999
include, but are not limited to, water heater and air conditioning upgrades,
painting and parking lot repairs. These improvements are expected to cost
approximately $248,000.
The capital improvements planned for 1999 at the Partnership's properties will
be made only to the extent of cash available from operations and Partnership
reserves.
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 complaint 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 and entities which were, at
the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain
general partner entities, past tender offers by Insignia Affiliates as well as a
recently announced agreement between Insignia and AIMCO. The complaint seeks
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 has
filed demurrers to the amended complaint which were heard during February 1999.
No ruling on such demurrers has been received. The Managing General Partner
does not anticipate that costs associated with this case, if any, to be material
to the Partnership's overall operations.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC, et.
al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the
State of California, County of Los Angeles. The action involves 44 real estate
limited partnerships (including the Partnership) in which the plaintiffs
allegedly own interests and which Insignia Affiliates allegedly manage or
control (the "Subject Partnerships"). This case was settled on March 3, 1999.
The Partnership is responsible for a portion of the settlement costs. The
expense will not have a material effect on 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
The unit holders of the Partnership did not vote on any matter during the
quarter ended December 31, 1998.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP EQUITY AND RELATED PARTNER MATTERS
The Partnership, a publicly-held limited partnership, offered and sold 82,848
limited partnership units aggregating $82,848,000. The Partnership currently
has 4,956 holders of record owning an aggregate of 82,848 Units. Affiliates of
the Managing General Partner owned 22,845.5 units or 27.575% at December 31,
1998. No public trading market has developed for the Units, and it is not
anticipated that such a market will develop in the future.
During the year ended December 31, 1998, a distribution from operations of
approximately $1,507,000 ($16.04 per limited partnership unit) and refinancing
proceeds of approximately $993,000 ($11.75 per limited partnership unit) was
paid to the partners. There were no distributions made to the partners during
the years ended December 31, 1997. Future cash distributions will depend on the
levels of net cash generated from operations, refinancings, property sales and
the availability of cash reserves. The Partnership's distribution policy will be
reviewed on a quarterly basis. There can be no assurance, however, that the
Partnership will generate sufficient funds from operations after required
capital expenditures to permit any additional distributions to its partners in
1999 or subsequent periods.
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 disclosure
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 matters, 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's net income for the year ended December 31, 1998 was
approximately $1,814,000 as compared to net income of approximately $391,000 for
the year ended December 31, 1997. (See "Note H" of the financial statements for
a reconciliation of these amounts to the Partnership's federal taxable income
(loss)). The increase in net income is primarily attributable to the increase
in the Partnership's rental revenue as a result of an increase in average rental
rates and occupancy at all of the Partnership's investment properties with the
exception of Copper Mill which experienced a decrease in occupancy.
Operating expenses decreased for the year ended December 31, 1998 as compared to
the corresponding period in 1997 as a result of various rehabilitation projects
completed in 1997 at Four Winds, Autumn Run, Stoney Creek and Hampton Greens
Apartments. At Four Winds, Autumn Run and Stoney Creek Apartments, the decrease
was primarily due to the completion of exterior painting projects in 1997.
Contributing to the decrease in maintenance expense was the completion of an
exterior enhancement project at Hampton Greens Apartments in 1997. General and
administrative expenses decreased in 1998 as a result of a reduction in fees and
licenses, legal and general administrative expenses. Depreciation expenses
increased as a result of the addition of depreciable assets. The increase in
property taxes is primarily due to increases in tax rates at Plantation Creek,
Cooper's Point and Autumn Run and an increase in accessed property value at Wood
Creek, Copper Mill, and Stoney Creek Apartments. The Partnership recognized a
loss on early extinguishment of debt of approximately $28,000 as a result of
refinancing the mortgage encumbering Promontory Point in April 1998. The loss
is attributable to the write-off of unamortized loan costs associated with the
previous debt.
Included in general and administrative expenses at both December 31, 1998 and
1997 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.
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.
Capital Resources and Liquidity
At December 31, 1998, the Partnership had unrestricted cash and cash equivalents
of approximately $6,684,000 as compared to approximately $3,345,000 at December
31, 1997. The increase in unrestricted cash and cash equivalents is due to
approximately $6,120,000 of cash provided by operating activities which was
partially offset by approximately $646,000 of cash used in investing
activities and approximately $2,135,000 of cash used in financing activities.
Cash used in investing activities consists of property improvements, which
were partially offset by withdrawals from restricted escrows held by mortgage
lenders and insurance proceeds from a casualty event. Cash used in financing
activities consists of mortgage principal payments, repayment of the
previous mortgage encumbering Promontory Point, offset by proceeds
of the new mortgage, loan costs paid on the aforementioned mortgage
and a distribution paid to the partners. The Partnership invests
in working capital reserves in money market accounts.
On April 3, 1998, the Partnership refinanced the mortgage encumbering Promontory
Point. The refinancing replaced indebtedness of $2,840,000 with a new mortgage
in the amount of $4,000,000. The new mortgage carries a stated interest rate of
7.04%, which replaced a rate equal to LIBOR plus 3.75% (approximately 9.46% at
the time of the refinancing). The new mortgage matures May 1, 2008. For
financial statement purposes, the Partnership recognized an extraordinary loss
on the early extinguishment of debt of approximately $28,000 during the second
quarter of 1998. This loss is attributable to the write-off of unamortized loan
costs associated with the previous mortgage.
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 Registrant has budgeted
approximately $3.2 million in capital improvements for all of the Registrant's
properties in 1999. Budgeted capital improvements include roof replacements,
landscaping, floor covering replacements, parking lot improvements, water
heaters, structural improvements and HVAC units. 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.
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 $73,135,000 matures ranging from November, 1, 2003
to May 1, 2008, with balloon payments due at maturity. The Managing General
Partner will attempt to refinance such indebtedness and/or sell the properties
prior to such maturity date. If the 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, 1998, a distribution from operations of
approximately $1,507,000 and refinancing proceeds of approximately $993,000 was
paid to the partners. The Registrant's distribution policy is reviewed on a
quarterly basis. There can be no assurance, however, that the Registrant will
generate sufficient funds from operations after required capital expenditures to
permit further distributions to its partners in 1999 or subsequent periods.
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
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 computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
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.
Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.
The Managing Agent's plan to resolve Year 2000 issues involves four Phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.
Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase
Computer Hardware:
During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the mainframe system used by the Managing Agent became fully
functional. In addition to the mainframe, PC-based network servers and routers
and desktop PCs were analyzed for compliance. The Managing Agent has begun to
replace each of the non-compliant network connections and desktop PCs and, as of
December 31, 1998, had completed approximately 75% of this effort.
The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by March
31, 1999.
Computer software:
The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.
During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at
all properties, is $200,000, and the implementation and the testing process is
expected to be completed by March 31, 1999.
The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 80% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
March 31, 1999.
Operating Equipment:
The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).
The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally. The Managing Agent intends to have a third-party conduct an
audit of these systems and report their findings by March 31, 1999.
Any of the above operating equipment that has been found to be non-compliant to
date has been replaced or repaired. To date, these have consisted only of
security systems and phone systems. As of December 31, 1998 the Managing Agent
has evaluated approximately 86% of the operating equipment for the Year 2000
compliance.
The total cost incurred for all properties managed by the Managing Agent as of
December 31, 1998 to replace or repair the operating equipment was approximately
$400,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $325,000, which is expected to be
completed by April 30, 1999.
The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within our enterprise.
Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000
The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before May 1999.
The Managing Agent has updated data transmission standards with two of the three
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by June 1, 1999.
The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.
The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.8 million ($0.6 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.
Risks Associated with the Year 2000
The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.
In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
Contingency Plans Associated with the Year 2000
The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.
ITEM 7. FINANCIAL STATEMENTS
CENTURY PROPERTIES GROWTH FUND XXII
LIST OF FINANCIAL STATEMENTS
Independent Auditors' Reports
Consolidated Balance Sheet - December 31, 1998
Consolidated Statements of Operations - Years ended December 31, 1998 and 1997
Consolidated Statements of Changes in Partners' Capital (Deficit) - Years ended
December 31, 1998 and 1997
Consolidated Statements of Cash Flows - Years ended December 31, 1998 and 1997
Notes to Consolidated Financial Statements
Report of Ernst & Young LLP, Independent Auditors
To The Partners
Century Properties Growth Fund XXII
We have audited the accompanying consolidated balance sheet of Century
Properties Growth Fund XXII as of December 31, 1998, and the related
consolidated statements of operations, changes in partners' capital (deficit)
and cash flows for year then ended. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards.
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 audit provides 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
Growth Fund XXII at December 31, 1998, and the consolidated results of its
operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Greenville, South Carolina
March 3, 1999
Independent Auditors' Report
To the Partners
Century Properties Growth Fund XXII
Greenville, South Carolina
We have audited the accompanying consolidated statements of operations, changes
in partners' capital and cash flows of Century Properties Growth Fund XXII (a
limited partnership)(the "Partnership") and its subsidiaries for the year ended
December 31, 1997. These consolidated financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Century Properties Growth Fund XXII and its subsidiaries for the year ended
December 31, 1997, in conformity with generally accepted accounting principles.
/S/ IMOWITZ KOENIG & CO., LLP
Certified Public Accountants
New York, NY
January 17, 1998
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED BALANCE SHEET
(in thousands, except unit data)
December 31, 1998
Assets
Unrestricted cash and cash equivalents $ 6,684
Receivables and deposits 1,748
Restricted escrows 927
Other assets 1,612
Investment properties (Notes D and F):
Land $ 14,396
Buildings and related personal property 117,792
132,188
Less accumulated depreciation (56,148) 76,040
$ 87,011
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 205
Tenant security deposits payable 342
Accrued property taxes 1,236
Other liabilities 756
Mortgage notes payable (Note D) 73,135
Partners' Capital (Deficit)
General partner's $ (7,345)
Limited partners' (82,848 units issued
and outstanding) 18,682 11,337
$ 87,011
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
Years ended December 31,
1998 1997
Revenues:
Rental income $ 20,476 $ 19,387
Other income 1,187 1,211
Total revenues 21,663 20,598
Expenses:
Operating 7,715 8,324
General and administrative 344 441
Depreciation 4,089 3,959
Interest 5,934 5,906
Property taxes 1,739 1,577
Total expenses 19,821 20,207
Income (loss) before extraordinary item 1,842 391
Extraordinary loss on early extinguishment
of debt (28) --
Net income $ 1,814 $ 391
Net income allocated to general partner $ 214 $ 46
Net income allocated to limited partners 1,600 345
$ 1,814 $ 391
Net income per limited partnership unit:
Income before extraordinary item $ 19.61 $ 4.16
Extraordinary loss on early extinguishment
of debt (.30) --
Net income per limited partnership unit $ 19.31 $ 4.16
Distribution per limited partnership unit $ 27.79 $ --
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(in thousands, except unit data)
Limited
Partnership General Limited
Units Partner Partners Total
Original capital contributions 82,848 $ -- $82,848 $82,848
Partners' (deficit) capital at
December 31, 1996 82,848 $(7,407) $19,039 $11,632
Net income for the year ended
December 31, 1997 -- 46 345 391
Partners' (deficit) capital at
December 31, 1997 82,848 (7,361) 19,384 12,023
Distribution to partners -- (198) (2,302) (2,500)
Net income for the year ended
December 31, 1998 -- 214 1,600 1,814
Partners' (deficit) capital at
December 31, 1998 82,848 $(7,345) $18,682 $11,337
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended December 31,
1998 1997
Cash flows from operating activities:
Net income $ 1,814 $ 391
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 4,089 3,959
Amortization of loan costs 209 209
Extraordinary loss on early extinguishment
of debt 28 --
(Gain) loss on disposal of property (70) 89
Change in accounts:
Receivables and deposits (329) 285
Other assets 23 (61)
Accounts payable 11 (118)
Tenant security deposits payable (20) (7)
Accrued property taxes 308 (263)
Other liabilities 57 (1)
Net cash provided by operating activities 6,120 4,483
Cash flows from investing activities:
Net withdrawals from (deposits to) restricted
escrows 523 (280)
Insurance proceeds from casualty 112 --
Property improvements and replacements (1,281) (1,391)
Net cash used in investing activities (646) (1,671)
Cash flows from financing activities:
Mortgage principal payments (628) (561)
Repayment of mortgage note payable (2,840) --
Proceeds from mortgage note payable 4,000 --
Loan costs paid (167) (17)
Distribution paid to partners (2,500) --
Net cash used in financing activities (2,135) (578)
Net increase (decrease) in unrestricted cash and
cash equivalents 3,339 2,234
Unrestricted cash and cash equivalents at
beginning of period 3,345 1,111
Unrestricted cash and cash equivalents at
end of period $ 6,684 $ 3,345
Supplemental disclosure of cash flow information:
Cash paid for interest $ 5,725 $ 5,701
See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
Notes to Consolidated Financial Statements
December 31, 1998
NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization:
Century Properties Growth Fund XXII (the "Partnership" or "Registrant") is a
California limited partnership organized in August 1984, to acquire and operate
residential apartment complexes. The Partnership's general partner is Fox
Partners IV, a California general partnership. The general partners of Fox
Partners IV are Fox Capital Management Corporation (the "Managing General
Partner" or "FCMC"), a California corporation, Fox Realty Investors ("FRI"), a
California general partnership, and Fox Associates 84, a California general
partnership. The capital contributions of $82,848,000 ($1,000 per unit) were
made by the limited partners. The General Partner is a subsidiary of Apartment
Investment and Management Company ("AIMCO"), (see "Note B _ Transfer of
Control"). The directors and officers of the Managing General Partner also
serve as executive officers of AIMCO. The Partnership Agreement provides that
the Partnership is to terminate on December 31, 2010 unless terminated prior to
such date. The Partnership commenced operations on September 25, 1984. The
Partnership operates nine apartment properties in the United States.
Principles of Consolidation:
The Partnership's consolidated financial statements include the accounts of Wood
Creek CPGF 22, L.P., Plantation Creek CPGF 22, L.P., Stoney Creek CPGF 22, L.P.,
Four Winds CPGF 22, L.P., Coopers Point CPGF 22, L.P., Hampton Greens CPGF 22,
L.P., Century Stoney Greens, L.P. and Copper Mill CPGF 22, L.P. of which the
partnership owns a 100% interest in each of these partnerships. The Partnership
has the ability to control the major operating and financial policies of these
partnerships. All intercompany transactions have been eliminated.
Uses 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 Profits, Gains, Losses and Distributions:
Profits, gains, losses and distributions of the Partnership are allocated
between the 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
balance.
Cash and Cash Equivalents:
Includes cash on hand and in banks, money market accounts and certificates of
deposit with original maturities less than 90 days. At certain times, the
amount of cash deposited at a bank may exceed the limit on insured deposits.
Depreciation:
Depreciation is provided by the straight-line method over the estimated lives of
the apartment properties and related personal property ranging from 5-30 years.
Loan Costs:
Loan costs of approximately $2,059,000, less accumulated amortization of
approximately $570,000, are included in other assets and are being amortized on
a straight-line basis over the life of the loans.
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 its rental payments.
Leases:
The Partnership 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.
Investment Properties:
Investment properties consist of nine apartment complexes and are stated at
cost. Acquisition fees are capitalized as a cost of real estate. In accordance
with Financial Accounting Standards Board Statement 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 apartment
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, 1998 or 1997.
Segment Reporting:
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Standards No. 131, "Disclosure about Segments of an Enterprise and
Related Information" ("Statement 131"), which is effective for years beginning
after December 15, 1997. Statement 131 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, (see "Note I"
for required disclosure).
Advertising:
The Partnership expenses the costs of advertising as incurred. Advertising costs
of approximately $345,000 and $367,000 for the years ended December 31, 1998 and
1997, respectively, were charged to expense as incurred.
Income Taxes:
Taxable income or loss of the Partnership is reported in the income tax returns
of its partners. Accordingly, no provision for income taxes is made in the
consolidated financial statements of the Partnership.
Reclassification:
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
NOTE B - TRANSFER OF CONTROL
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia and Insignia Properties Trust ("IPT") 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 ultimately acquired a 100% ownership
interest in IPT, the entity which controls the Managing General Partner. The
Managing General Partner does not believe that this transaction will have a
material effect on the affairs and operations of the Partnership.
NOTE C - 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. The following payments were made to the
Managing General Partner and affiliates during the year ended December 31, 1998
and 1997:
1998 1997
(in thousands)
Property management fees (included in
operating expenses) $1,085 $1,044
Reimbursement for services of affiliates
(included in operating, general and
administrative expenses, and investment
properties) (1) 178 239
(1) Included in "reimbursements for services of affiliates" for the years ended
December 31, 1998 and 1997, is approximately $24,000 and $76,000,
respectively, for reimbursements for construction oversight costs.
As part of the refinancing of Promontory Point Apartments (see "Note E"), the
Partnership paid an affiliate of the Managing General Partner a broker's fee of
$20,000 during the year ended December 31, 1998.
During the years ended December 31, 1998 and 1997, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates $1,085,000 and $1,044,000 for
the years ended December 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $178,000 and
$239,000 for the years ended December 31, 1998 and 1997, respectively.
On August 28, 1997, an affiliate of the Managing General Partner (the
"Purchaser") commenced tender offers for limited partnership interests in six
real estate limited partnerships (including the Partnership) in which various
Insignia affiliates act as general partner. The Purchaser offered to purchase
up to 25,000 of the outstanding units of limited partnership interest in the
Partnership, at $275.00 per Unit, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated August 28,
1997 (the "Offer to Purchase"). As a result of the tender offer, such affiliate
purchased 5,459 of the outstanding limited partnership units of the Partnership.
AIMCO currently owns, through its affiliates, a total of 22,845.5 limited
partnership units or 27.575%. Consequently, AIMCO could be in a position to
significantly 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, with respect to
17,023.5 Units, such affiliates are required to vote such Units: (i) against any
increase in compensation payable to the Managing General Partner or to
affiliates; and (ii) on all other matters submitted by it or its affiliates, in
proportion to the votes cast by non-tendering unitholders. Except for the
foregoing, no other limitations are imposed on such affiliates' ability to
influence voting decisions with respect to the Partnership.
For the period January 1, 1997 to August 31, 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the Managing
General Partner with an insurer unaffiliated with the Managing General Partner.
An affiliate of the Managing General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was later
acquired by the agent who placed the master policy. The agent assumed the
financial obligations to the affiliate of the Managing General Partner which
receives payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations was not
significant.
In accordance with the Partnership Agreement, the managing general partner
received a Partnership management incentive allocation equal to ten percent of
net and taxable income and losses and cash distributions. The managing general
partner was also allocated its two percent continuing interest in the
Partnership's net and taxable income and losses and cash distributions after the
above allocation of the Partnership management incentive. The Partnership
management incentive associated with the distribution paid during the year ended
December 31, 1998, was approximately $151,000 and is included in distributions
paid to the general partner.
NOTE D - MORTGAGE NOTES PAYABLE
The principle terms of mortgage notes payable are as follows:
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1998 Interest Rate Date Maturity
(in thousands) (in thousands)
Wood Creek $12,566 $ 94 7.93% 2/2006 $11,319
Plantation Creek 15,489 116 7.93% 2/2006 13,952
Stoney Creek 6,860 51 7.88% 1/2006 6,180
Four Winds 9,425 71 7.93% 2/2006 8,489
Promontory Point 3,980 27 7.04% 5/2008 3,442
Cooper's Pointe 4,135 31 7.88% 1/2006 3,725
Hampton Greens 5,644 42 7.88% 1/2006 5,084
Autumn Run 9,100 56(1) 7.33% 11/2003 9,100
Copper Mill 5,936 44 7.88% 1/2006 5,347
$73,135 $ 532
(1) Interest only monthly payments.
The mortgage notes payable are nonrecourse and are secured by pledge of the
Partnership's rental properties and by pledge of revenues from the respective
rental properties. Certain of the notes include 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, 1998, are as follows (in thousands):
1999 $ 699
2000 756
2001 818
2002 884
2003 10,056
Thereafter 59,922
$73,135
NOTE E - REFINANCINGS AND EXTRAORDINARY LOSS
On April 3, 1998, the Partnership refinanced the mortgage encumbering Promontory
Point. The refinancing replaced indebtedness of $2,840,000 with a new mortgage
in the amount of $4,000,000. The new mortgage carries a stated interest rate of
7.04%, which replaced a rate equal to LIBOR plus 3.75% (approximately 9.46% at
the time of the refinancing). The new mortgage matures May 1, 2008. For
financial statement purposes, the Partnership recognized an extraordinary loss
on the early extinguishment of debt of approximately $28,000 during the second
quarter of 1998. This loss is attributable to the write-off of unamortized loan
costs associated with the previous mortgage.
NOTE F - REAL ESTATE AND ACCUMULATED DEPRECIATION
Initial Cost
To Partnership
(in thousands)
Net Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Wood Creek $ 12,566 $ 2,130 $ 13,440 $ 740
Plantation Creek 15,489 2,653 20,827 2,412
Stoney Creek 6,860 1,803 12,509 (59)
Four Winds 9,425 1,363 14,288 1,100
Promontory Point 3,980 1,690 10,129 55
Cooper's Pointe 4,135 513 6,696 311
Hampton Greens 5,644 2,086 9,474 758
Autumn Run 9,100 1,462 14,957 1,359
Copper Mill 5,936 933 8,061 498
Total $ 73,135 $ 14,633 $110,381 $ 7,174
NOTE F - REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
<TABLE>
<CAPTION>
Gross Amount at Which Carried
At December 31, 1998
(in thousands)
Buildings
and
Related
Personal Accumulated Year of Depreciable
Description Land Property Total Depreciation Construction Life-Years
<S> <C> <C> <C> <C> <C> <C>
Wood Creek $ 2,117 $ 14,193 $ 16,310 $ 7,254 1985 5-30
Plantation Creek 2,655 23,237 25,892 11,637 1978 5-30
Stoney Creek 1,689 12,564 14,253 6,301 1983 5-30
Four Winds 1,357 15,394 16,751 6,554 1987 5-30
Promontory Point 1,595 10,279 11,874 4,997 1984 5-30
Cooper's Pointe 510 7,010 7,520 3,429 1986 5-30
Hampton Greens 2,086 10,232 12,318 5,037 1986 5-30
Autumn Run 1,458 16,320 17,778 7,193 1987 5-30
Copper Mill 929 8,563 9,492 3,746 1987 5-30
Total $ 14,396 $117,792 $132,188 $ 56,148
</TABLE>
Reconciliation of Real Estate and Accumulated Depreciation:
December 31,
1998 1997
(in thousands)
Investment Properties
Balance at beginning of year $130,980 $129,725
Disposal of property (73) (136)
Property improvements 1,281 1,391
Balance at end of year $132,188 $130,980
Accumulated Depreciation
Balance at beginning of year $ 52,090 $ 48,178
Disposal of property (31) (47)
Additions charged to expense 4,089 3,959
Balance at end of year $ 56,148 $ 52,090
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1998 and 1997, is approximately $131,557,000 and $130,266,000,
respectively. The accumulated depreciation taken for Federal income tax
purposes at December 31, 1998 and 1997, is $87,193,000 and approximately
$82,247,000, respectively.
NOTE G - DISTRIBUTIONS
During the year ended December 31, 1998, a distribution from operations of
approximately $1,507,000 and refinancing proceeds of approximately $993,000 was
paid to the partners.
NOTE H - INCOME TAXES
The Partnership has received a ruling from the Internal Revenue Service that it
will be 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 Partnership is
reported in the income tax returns of its partners.
The following is a reconciliation of reported net income and Federal taxable
income (loss) (in thousands, except per unit data):
1998 1997
Net income as reported $ 1,814 $ 391
Add (deduct):
Depreciation differences (858) (789)
Construction period interest -- 30
Change in prepaid rental 289 (9)
Other 167 16
Federal tax income (loss) $ 1,412 $ (361)
Federal taxable income (loss) per
limited partnership unit $ 15 $ (4)
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
1998
Net assets as reported $ 11,337
Land and buildings (631)
Accumulated depreciation (31,045)
Syndication 12,427
Other 406
Net liabilities - Federal tax basis $ (7,506)
NOTE I - 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:
As defined by SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information", the Partnership has one reportable segment: residential
properties. The Partnership's residential property segment consists of nine
apartment complexes in seven states in the United States. The Partnership rent
apartment units to people for terms that are typically less than twelve months.
Measurement of segment profit or loss:
The Partnership evaluates performance based on net income. The accounting
policies of the reportable segment is 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
are managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the years 1998 and 1997 is shown in the tables below.
The "Other" column includes partnership administration related items and income
and expense not allocated to the reportable segment.
1998 Residential Other Totals
(in thousands)
Rental income $20,476 $ -- $20,476
Other income 1,102 85 1,187
Interest expense 5,934 -- 5,934
Depreciation 4,089 -- 4,089
General and administrative expense -- 344 344
Extraordinary loss on early
extinguishment of debt 28 -- 28
Segment profit (loss) 2,073 (259) 1,814
Total assets 85,873 1,138 87,011
Capital expenditures for investment
properties 1,281 -- 1,281
1997 Residential Other Totals
(in thousands)
Rental income $19,387 $ -- $19,387
Other income 1,383 13 1,211
Interest expense 5,906 -- 5,906
Depreciation 3,959 -- 3,959
General and administrative expense 441 441
Segment profit (loss) 819 (428) 391
Total assets 86,277 532 86,809
Capital expenditures for investment
Properties 1,391 -- 1,391
NOTE J - 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 complaint 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 and entities which were, at
the time, affiliates of Insignia ("Insignia Affiliates") of interests in certain
general partner entities, past tender offers by Insignia Affiliates as well as a
recently announced agreement between Insignia and AIMCO. The complaint seeks
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 has
filed demurrers to the amended complaint which were heard during February 1999.
No ruling on such demurrers has been received. The Managing General Partner
does not anticipate that costs associated with this case, if any, to be material
to the Partnership's overall operations.
On July 30, 1998, certain entities claiming to own limited partnership interests
in certain limited partnerships whose general partners were, at the time,
affiliates of Insignia filed a complaint entitled Everest Properties, LLC, et.
al. v. Insignia Financial Group, Inc., et. al. in the Superior Court of the
State of California, County of Los Angeles. The action involves 44 real estate
limited partnerships (including the Partnership) in which the plaintiffs
allegedly own interests and which Insignia Affiliates allegedly manage or
control (the "Subject Partnerships"). This case was settled on March 3, 1999.
The Partnership is responsible for a portion of the settlement costs. The
expense will not have a material effect on 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 8.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Effective November 10, 1998, the Registrant dismissed its prior Independent
Auditors, Imowitz Koenig and Company LLP ("Imowitz"). Imowitz' Independent
Auditor's Report on the Registrant's financial statements for the calendar year
ended December 31, 1997 did not contain an adverse opinion or a disclaimer of
opinion, and was not qualified or modified as to uncertainty, audit scope or
accounting principles. The decision to change Independent Auditors was approved
by the Managing General Partner's directors. During the calendar year ended
1997 and through November 10, 1998, there were no disagreements between the
Registrant and Imowitz on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope of procedure which
disagreements if not resolved to the satisfaction of Imowitz, would have caused
it to make references to the subject matter of the disagreements in connection
with its reports.
Effective November 24, 1998, the Registrant engaged Ernst & Young LLP as its
Independent Auditors. During the last two calendar years and through November
10, 1998, the Registrant did not consult Ernst and Young LLP regarding any of
the matters or events set forth in Item 304(a)(2)(i) and (ii) of Regulation S-B.
PART III
ITEM 9.DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT
Century Properties Growth Fund XXII (the "Partnership" or "the Registrant") has
no officers or directors. The General Partner of the Partnership is Fox
partners IV, a California General Partnership. The Managing General Partner of
Fox partners IV is Fox Capital Management Corporation, ("FCMC" or the "Managing
General Partner").
The names and ages of, as well as the positions and offices held by, the present
executive officers and director of Fox Capital Management Corporation, the
managing general partner of the general partner ("FCMC" or "Managing General
Partner") are set forth below. The Managing General Partner manages and
controls substantially all of the Partnership's affairs and has general
responsibility and ultimate authority in all matters affecting its business.
There are no family relationships between or among any officers or directors.
Name Age Position
Patrick J. Foye 41 Executive Vice President and Director
Timothy R. Garrick 42 Vice President - Accounting and Director
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.
Timothy R. Garrick has served as Vice President-Accounting of AIMCO and Vice
President-Accounting and Director of the Managing General Partner since October
1, 1998. Prior to that date, Mr. Garrick served as Vice President-Accounting
Services of Insignia Financial Group since June of 1997. From 1992 until June
of 1997, Mr. Garrick served as Vice President of Partnership Accounting and from
1990 to 1992 as an Asset Manager for Insignia Financial Group. From 1984 to
1990, Mr. Garrick served in various capacities with U.S. Shelter Corporation.
From 1979 to 1984, Mr. Garrick worked on the audit staff of Ernst & Whinney.
Mr. Garrick received his B.S. Degree from the University of South Carolina and
is a Certified Public Accountant.
ITEM 10. EXECUTIVE COMPENSATION
Neither directors nor officers of the Managing General Partner received any
remuneration from the Registrant. However, reimbursements and other payments
have been made to the Partnership's Managing General Partner and its affiliates,
as described in "Item 12. Certain Relationships and Related Transactions" below.
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 Limited Partnership Units of the
Registrant as of December 31, 1998.
Entity Number of Units Percentage
Insignia Properties LP 17,341.50 20.932%
(an Affiliate of AIMCO)
IPLP Acquisition I LLC 5,459.00 6.589%
(an Affiliate of AIMCO)
Market Ventures LLC
(an Affiliate of AIMCO) 45.00 .054%
Insignia Properties LP, IPLP Acquisition I LLC and Market Ventures LLC are
indirectly ultimately owned by AIMCO. Their business address is 55 Beattie
Place, Greenville, SC 29602.
No director or officer of the Managing General Partner owns any Units.
As a result of its ownership of approximately 27.575% of the Units, these
affiliates could be in a position to significantly influence all voting
decisions with respect to the Partnership. 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, these affiliates 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, with respect to 17,023.5 Units, such
affiliates are required to vote such Units: (i) against any increase in
compensation payable to the Managing General Partner or to affiliates; and (ii)
on all other matters submitted by it or its affiliates, in proportion to the
votes cast by non-tendering unitholders. Except for the foregoing, no other
limitations are imposed on such affiliates' ability to influence voting
decisions with respect to the Partnership.
On October 1, 1998, Insignia Financial Group, Inc. merged into AIMCO, a real
estate investment trust, whose Class A Common Shares are listed on the New York
Stock Exchange. As a result of such merger, AIMCO and AIMCO Properties, L.P., a
Delaware limited partnership and the operating partnership of AIMCO ("AIMCO OP")
acquired indirect control of the Managing General Partner. AIMCO and its
affiliates currently own 27.575% of the limited partnership interests in the
Partnership. AIMCO is presently considering whether it will engage in an
exchange offer for additional limited partnership interests in the Partnership.
There is a substantial likelihood that, within a short period of time, AIMCO OP
will offer to acquire limited partnership interests in the Partnership for cash
or preferred units or common units of limited partnerships interests in AIMCO
OP. While such an exchange offer is possible, no definite plans exist as to when
or whether to commence such an exchange offer, or as to the terms of any such
exchange offer, and it is possible that none will occur.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet become effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This Form 10-KSB shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such state.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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. The following payments were made to the
Managing General Partner and affiliates during the year ended December 31, 1998
and 1997:
1998 1997
(in thousands)
Property management fees (included in
operating expenses) $1,085 $1,044
Reimbursement for services of affiliates
(included in operating, general and
administrative expenses, and investment
properties) (1) 178 239
(1) Included in "reimbursements for services of affiliates" for the years ended
December 31, 1998 and 1997, is approximately $24,000 and $76,000,
respectively, for reimbursements for construction oversight costs.
As part of the refinancing of Promontory Point Apartments (see "Note E"), the
Partnership paid an affiliate of the Managing General Partner a broker's fee of
$20,000 during the year ended December 31, 1998.
During the years ended December 31, 1998 and 1997, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates $1,085,000 and $1,044,000 for
the years ended December 31, 1998 and 1997, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $178,000 and
$239,000 for the year ended December 31, 1998 and 1997, respectively.
On August 28, 1997, an affiliate of the Managing General Partner (the
"Purchaser") commenced tender offers for limited partnership interests in six
real estate limited partnerships (including the Partnership) in which various
Insignia affiliates act as general partner. The Purchaser offered to purchase
up to 25,000 of the outstanding units of limited partnership interest in the
Partnership, at $275.00 per Unit, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated August 28,
1997 (the "Offer to Purchase"). As a result of the tender offer, such affiliate
purchased 5,459 of the outstanding limited partnership units of the Partnership.
AIMCO currently owns, through its affiliates, a total of 22,845.5 limited
partnership units or 27.575%. Consequently, AIMCO could be in a position to
significantly 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, with respect to
17,023.5 Units, such affiliates are required to vote such Units: (i) against any
increase in compensation payable to the Managing General Partner or to
affiliates; and (ii) on all other matters submitted by it or its affiliates, in
proportion to the votes cast by non-tendering unitholders. Except for the
foregoing, no other limitations are imposed on such affiliates' ability to
influence voting decisions with respect to the Partnership.
For the period January 1, 1997 to August 31, 1997, the Partnership insured its
properties under a master policy through an agency affiliated with the Managing
General Partner with an insurer unaffiliated with the Managing General Partner.
An affiliate of the Managing General Partner acquired, in the acquisition of a
business, certain financial obligations from an insurance agency which was later
acquired by the agent who placed the master policy. The agent assumed the
financial obligations to the affiliate of the Managing General Partner which
receives payments on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of the
Managing General Partner by virtue of the agent's obligations was not
significant.
In accordance with the Partnership Agreement, the managing general partner
received a Partnership management incentive allocation equal to ten percent of
net and taxable income and losses and cash distributions. The managing general
partner was also allocated its two percent continuing interest in the
Partnership's net and taxable income and losses and cash distributions after the
above allocation of the Partnership management incentive. The Partnership
management incentive associated with the distribution paid during the year ended
December 31, 1998, was approximately $151,000 and is included in distributions
paid to the general partner.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index contained herein.
(b) Reports on Form 8-K filed during the fourth quarter of 1998:
Current Report on Form 8-K filed on October 1, 1998, disclosing
change in control of the Partnership from Insignia Financial
Group, Inc. to AIMCO.
Current Report on Form 8-K filed on November 16, 1998, disclosing
the dismissal of Imowitz Koenig & Co., LLP as the Registrant's
Independent accountant.
Current Report on Form 8-K filed December 9, 1998 disclosing the
engagement of Ernst & Young, LLP as the Registrant's Independent
accountant.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTURY PROPERTIES GROWTH FUND XXII
By: FOX PARTNERS IV,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Managing General Partner
By: /s/ Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/ Timothy R. Garrick
Timothy R. Garrick
Vice President - Accounting
Date: March 30, 1999
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
/s/ Patrick J. Foye Executive Vice President Date: March 30, 1999
Patrick J. Foye and Director
/s/ Timothy R. Garrick Vice President - Accounting Date: March 30, 1999
Timothy R. Garrick and Director
CENTURY PROPERTIES INCOME FUND XXII
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 17, 1995,
incorporated by reference to the Partnership's Current Report on Form
8-K dated August 17, 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 shown as Exhibit 2.1 in Current Report on Form
8-K dated as of October 1, 1998.
2.5 Master Indemnity Agreement dated as of August 17, 1995, incorporated
by reference to Exhibit 2.5 to Form 8-K filed by Insignia with the
Securities and Exchange Commission on September 1, 1995.
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 Partnership's Registration Statement on Form S-11 (Reg. No. 2-
79007).
10.1 Promissory Note dated December 27, 1994, from Century Stoney Greens,
L.P. to USL Capital Corporation ("USL") in the principal amount of
$30,000,000 incorporated by reference to the Registrant's Form 10-K
for the year ended December 31, 1994.
10.2 Form of Deed of Trust, Security Agreement, Assignment of Leases and
Rents, Fixture Filing and Financing Statement by CSG to Howard E.
Schreiber, Trustee for the benefit of USL incorporated by reference to
the Registrant's Form 10-K for the year ended December 31, 1994.
10.3 Form of Promissory Note from the Registrant to Secore Financial
Corporation ("Secore") relating to the refinancing of each of Cooper's
Pointe, Copper Mill, Four Winds, Hampton Greens, Plantation Creek,
Stoney Creek, and Wood Creek incorporated by reference to the
Partnership's Annual Report on Form 10-K for the year ended December
31, 1995.
10.4 Form of Mortgage/Deed of Trust and Security Agreement from the
Registrant to Secore relating to the refinancing of each of Cooper's
Pointe, Copper Mill, Four Winds, Hampton Greens, Plantation Creek,
Stoney Creek and Wood Creek incorporated by reference to the
Partnership's Annual Report on Form 10-K for the year ended December
31, 1995.
10.5 Multifamily Note dated June 14, 1996, by and between the Partnership
and Lehman Brothers Holdings, Inc. for Autumn Run incorporated by
reference to the Partnership's Annual Report on Form 10-KSB for the
year ended December 31, 1996.
10.6 Multifamily Note dated November 1, 1996, by and between the
Partnership and Lehman Brothers Holdings, Inc. for Autumn Run
incorporated by reference to the Partnership's Annual Report on Form
10-KSB for the year ended December 31, 1996.
10.7 Promissory Note dated March 31, 1998, by and between the Partnership
and Lehman Brothers Holding, Inc. for Promontory Point incorporated by
reference to Exhibit 10.3 on the Partnership's quarterly report on
Form 10-QSB for the quarter ended March 31, 1998.
16 Letter dated November 11, 1998, from the Registrant's former
independent accountant regarding its concurrence with the statements
made by the Registrant in Current Report on Form 8-K.
27 Financial Data Schedule.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Growth Fund XXII 1998 Year-End 10-KSB and is qualified in its
entirety by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000740156
<NAME> CENTURY PROPERTIES GROWTH FUND XXII
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 6,684
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 132,188
<DEPRECIATION> 56,148
<TOTAL-ASSETS> 87,011
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 73,135
0
0
<COMMON> 0
<OTHER-SE> 11,337
<TOTAL-LIABILITY-AND-EQUITY> 87,011
<SALES> 0
<TOTAL-REVENUES> 21,663
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 19,821
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,934
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,842
<DISCONTINUED> 0
<EXTRAORDINARY> (28)
<CHANGES> 0
<NET-INCOME> 1,814
<EPS-PRIMARY> 19.31<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
