March 27, 2000
United States
Securities and Exchange Commission
Washington, D.C. 20549
RE: Century Properties Growth Fund XXII
Form 10-KSB
File No. 0-13438
To Whom it May Concern:
The accompanying Form 10-KSB for the year ended December 31, 1999 describes a
change in the method of accounting to capitalize exterior painting and major
landscaping, which would have been expensed under the old policy. The
Partnership believes that this accounting principle change is preferable because
it provides a better matching of expenses with the related benefit of the
expenditures and it is consistent with industry practice and the policies of the
Managing General Partner.
Please do not hesitate to contact the undersigned with any questions or comments
that you might have.
Very truly yours,
Stephen Waters
Real Estate Controller
<PAGE>
FORM 10-KSB--ANNUAL OR TRANSITIONAL REPORT UNDER
SECTION 13 OR 15(d)
Form 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
[No Fee Required]
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
[No Fee Required]
For the transition period from _________to _________
Commission file number 0-13418
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, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
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 the registrant's knowledge in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year. $22,545,000
State the aggregate market value of the voting partnership interests held by
non-affiliates computed by reference to the price at which the partnership
interests were sold, or the average bid and asked prices of such partnership
interests as of December 31, 1999. No market exists for the limited partnership
interests of the Registrant, and, therefore, no aggregate market value can be
determined.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE>
PART I
Item 1. Description of Business
General
Century Properties Growth Fund XXII (the "Partnership" or "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"). The 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 estate 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 principal 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 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 own and/or control a significant number of apartment units in the
United States, such units represent an insignificant percentage of total
apartment units in the United States and competition for the apartments is
local.
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 properties owned by the
Partnership are subject to factors outside of the Partnership's control, such as
changes in the supply and demand for similar properties resulting from various
market conditions, increases/decreases in unemployment or population shifts,
changes in the availability of permanent mortgage financing, changes in zoning
laws, or changes in patterns or needs of users. In addition, there are risks
inherent in owning and operating residential properties because such properties
are susceptible to the impact of economic and other conditions outside of the
control of the Partnership.
A further description of the Partnership's business is included in "Management's
Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form
10-KSB.
Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group and Insignia Properties Trust merged
into AIMCO, a publicly traded real estate investment trust, with AIMCO being the
surviving corporation (the "Insignia Merger"). As a result, AIMCO ultimately
acquired 100% ownership interest in the Managing General Partner and NPI Equity.
The Managing General Partner does not believe that this transaction has had or
will have a material effect on the affairs and operations of the Partnership.
<PAGE>
Item 2. Description of Properties
The following table sets forth the Partnership's investments in properties:
<TABLE>
<CAPTION>
Date of
Property Purchase Type of Ownership Use
<S> <C> <C> <C>
Wood Creek Apartments 5/84 Fee ownership subject to Apartment
Mesa, Arizona first mortgage (1) 432 units
Plantation Creek Apartments 6/84 Fee ownership subject to Apartment
Atlanta, Georgia first mortgage (1) 484 units
Stoney Creek Apartments 6/85 Fee ownership subject to Apartment
Dallas, Texas first mortgage (1) 364 units
Four Winds Apartments 9/85 Fee ownership subject to Apartment
Overland, Kansas first mortgage (1) 350 units
Promontory Point Apartments 10/85 Fee ownership subject to Apartment
Austin, Texas first mortgage (1) 252 units
Cooper's Pointe Apartments 11/85 Fee ownership subject to Apartment
Charleston, South Carolina first mortgage (1) 192 units
Hampton Greens Apartments 12/85 Fee ownership subject to Apartment
Dallas, Texas first mortgage (1) 309 units
Autumn Run Apartments 6/86 Fee ownership subject to Apartment
Naperville, Illinois first mortgage (1) 320 units
Copper Mill Apartments 9/86 Fee ownership subject to Apartment
Richmond, Virginia first mortgage (1) 192 units
</TABLE>
(1) Property is held by a limited partnership in which the Partnership owns a
100% interest.
<PAGE>
Schedule of Properties
Set forth below for each of the Registrant's properties is the gross carrying
value, accumulated depreciation, depreciable life, method of depreciation and
Federal tax basis.
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Wood Creek $ 16,803 $ 7,740 5-30 yrs S/L $ 4,021
Plantation Creek 27,285 12,698 5-30 yrs S/L 6,500
Stoney Creek 14,422 6,732 5-30 yrs S/L 4,461
Four Winds 17,080 7,139 5-30 yrs S/L 5,438
Promontory Point 12,236 5,365 5-30 yrs S/L 4,315
Cooper's Pointe 7,697 3,673 5-30 yrs S/L 2,041
Hampton Greens 12,460 5,376 5-30 yrs S/L 4,481
Autumn Run 18,046 7,802 5-30 yrs S/L 5,873
Copper Mill 9,776 4,054 5-30 yrs S/L 5,130
$135,805 $ 60,579 $42,260
</TABLE>
See "Note A" to the consolidated financial statements included in "Item 7.
Financial Statements" for a description of the Partnership's depreciation policy
and "Note J - Change in Accounting Principle".
Schedule of Property Indebtedness
The following table sets forth certain information relating to the loans
encumbering the Registrant's properties.
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1999 Rate Amortized Date Maturity (2)
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Wood Creek $12,430 7.93% 30 yrs 2/2006 $11,319
Plantation Creek 15,321 7.93% 30 yrs 2/2006 13,952
Stoney Creek 6,784 7.88% 30 yrs 1/2006 6,180
Four Winds 9,322 7.93% 30 yrs 2/2006 8,489
Promontory Point 3,942 7.04% 30 yrs 5/2008 3,442
Cooper's Pointe 4,090 7.88% 30 yrs 1/2006 3,725
Hampton Greens 5,581 7.88% 30 yrs 1/2006 5,084
Autumn Run 9,100 7.33% (1) 11/2003 9,100
Copper Mill 5,870 7.88% 30 yrs 1/2006 5,347
Total $72,440 $66,638
</TABLE>
(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 rates and occupancy for 1999 and 1998 for each property:
<TABLE>
<CAPTION>
Average Annual Average
Rental Rates Occupancy
(per unit)
<S> <C> <C> <C> <C>
Property 1999 1998 1999 1998
Wood Creek $7,460 $7,393 94% 94%
Plantation Creek 9,119 8,889 95% 95%
Stoney Creek (1) 6,692 6,378 97% 94%
Four Winds 8,219 7,699 96% 97%
Promontory Point 7,670 7,383 96% 94%
Cooper's Pointe 7,436 6,963 95% 97%
Hampton Greens (1) 6,426 6,137 97% 93%
Autumn Run 9,546 9,244 95% 95%
Copper Mill (2) 8,472 8,675 96% 89%
</TABLE>
(1) Occupancy increased due to increased marketing efforts.
(2) Occupancy increased due to adjustment of the property's rental rates to
better reflect the market condition.
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 terms of one year or less. No
residential tenant leases 10% or more of the available rental space. All of the
properties are in good physical condition, subject to normal depreciation and
deterioration as is typical for assets of this type and age.
Real Estate Taxes and Rates
Real estate taxes and rates in 1999 for each property were:
1999 1999
Billing Rate
(in thousands)
Wood Creek $193 1.17%
Plantation Creek 313 3.95%
Stoney Creek 263 2.58%
Four Winds 175 1.05%
Promontory Point 242 2.74%
Cooper's Pointe 99 1.70%
Hampton Greens 201 2.58%
Autumn Run 319 6.44%
Copper Mill 92 0.95%
Capital Expenditures
Wood Creek
The Partnership completed approximately $493,000 in capital expenditures at Wood
Creek Apartments as of December 31, 1999, consisting primarily of floor covering
replacements, parking lot improvements, major landscaping, plumbing
improvements, and structural improvements. These improvements were funded from
operating cash flow. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $300 per unit or $129,600. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
Plantation Creek
The Partnership completed approximately $761,000 in capital expenditures at
Plantation Creek Apartments as of December 31, 1999, consisting primarily of
floor covering replacements, major landscaping, cable equipment, plumbing
replacements, exterior painting, and structural improvements. These improvements
were funded from replacement reserves and operating cash flow. The Partnership
is currently evaluating the capital improvement needs of the property for the
upcoming year. The minimum amount to be budgeted is expected to be $300 per unit
or $145,200. Additional improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and
anticipated cash flow generated by the property.
Stoney Creek
The Partnership completed approximately $169,000 in capital expenditures at
Stoney Creek Apartments as of December 31, 1999, consisting primarily of floor
covering replacements, major landscaping, exterior painting, pool enhancements,
and building improvements. These improvements were funded from replacement
reserves and operating cash flow. The Partnership is currently evaluating the
capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $300 per unit or $109,200. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
Four Winds
The Partnership completed approximately $330,000 in capital expenditures at Four
Winds Apartments as of December 31, 1999, consisting primarily of parking lot
improvements, lighting fixture upgrades, roof replacements, structural
improvements, and floor covering replacements. These improvements were funded
from replacement reserves and operating cash flow. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $300 per unit or $105,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Promontory Point
The Partnership completed approximately $363,000 in capital expenditures at
Promontory Point Apartments as of December 31, 1999, consisting primarily of
structural improvements, roof replacements, interior decorating, and floor
covering replacements. These improvements were funded from replacement reserves
and operating cash flow. The Partnership is currently evaluating the capital
improvement needs of the property for the upcoming year. The minimum amount to
be budgeted is expected to be $300 per unit or $75,600. Additional improvements
may be considered and will depend on the physical condition of the property as
well as replacement reserves and anticipated cash flow generated by the
property.
Cooper's Pointe
The Partnership completed approximately $176,000 in capital expenditures at
Cooper's Pointe Apartments as of December 31, 1999, consisting primarily of
parking lot improvements, plumbing replacements, major landscaping, roof
replacements, light fixture upgrades, and floor covering replacements. These
improvements were funded from replacement reserves and operating cash flow. The
Partnership is currently evaluating the capital improvement needs of the
property for the upcoming year. The minimum amount to be budgeted is expected to
be $300 per unit or $57,600. Additional improvements may be considered and will
depend on the physical condition of the property as well as replacement reserves
and anticipated cash flow generated by the property.
Hampton Greens
The Partnership completed approximately $142,000 in capital expenditures at
Hampton Greens Apartments as of December 31, 1999, consisting primarily of floor
covering replacements, fencing, and appliance replacements. These improvements
were funded from replacement reserves. The Partnership is currently evaluating
the capital improvement needs of the property for the upcoming year. The minimum
amount to be budgeted is expected to be $300 per unit or $92,700. Additional
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and anticipated cash flow generated by
the property.
Autumn Run
The Partnership completed approximately $267,000 in capital expenditures at
Autumn Run Apartments as of December 31, 1999, consisting primarily of floor
covering replacements, exterior painting, structural improvements, appliance
replacements, and HVAC replacements. These improvements were funded from
replacement reserves and operating cash flow. The Partnership is currently
evaluating the capital improvement needs of the property for the upcoming year.
The minimum amount to be budgeted is expected to be $300 per unit or $96,000.
Additional improvements may be considered and will depend on the physical
condition of the property as well as replacement reserves and anticipated cash
flow generated by the property.
Copper Mill
The Partnership completed approximately $284,000 in capital expenditures at
Cooper Mill Apartments as of December 31, 1999, consisting primarily of floor
covering replacements, major landscaping, pool enhancements, structural
improvements, roof replacements, appliance replacements, and grounds lighting.
These improvements were funded from replacement reserves and operating cash
flow. The Partnership is currently evaluating the capital improvement needs of
the property for the upcoming year. The minimum amount to be budgeted is
expected to be $300 per unit or $57,600. Additional improvements may be
considered and will depend on the physical condition of the property as well as
replacement reserves and anticipated cash flow generated by the property.
Item 3. Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Item 7. Financial Statements, Note B - Transfer of Control"). The plaintiffs
seek monetary damages and equitable relief, including judicial dissolution of
the Partnership. On June 25, 1998, the Managing General Partner filed a motion
seeking dismissal of the action. In lieu of responding to the motion, the
plaintiffs have filed an amended complaint. The Managing General Partner filed
demurrers to the amended complaint which were heard February 1999. Pending the
ruling on such demurrers, settlement negotiations commenced. On November 2,
1999, the parties executed and filed a Stipulation of Settlement, settling
claims, subject to final court approval, on behalf of the Partnership and all
limited partners who own units as of November 3, 1999. Preliminary approval of
the settlement was obtained on November 3, 1999 from the Superior Court of the
State of California, County of San Mateo, at which time the Court set a final
approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing
the Court received various objections to the settlement, including a challenge
to the Court's preliminary approval based upon the alleged lack of authority of
class plaintiffs' counsel to enter the settlement. On December 14, 1999, the
Managing General Partner and its affiliates terminated the proposed settlement.
Certain plaintiffs have filed a motion to disqualify some of the plaintiffs'
counsel in the action. The Managing General Partner does not anticipate that
costs associated with this case will be material to the Partnership's overall
operations.
The Partnership is unaware of any 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, 1999.
<PAGE>
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
3,702 holders of record owning an aggregate of 82,848 Units. Affiliates of the
Managing General Partner owned 40,538.50 units or 48.931% at December 31, 1999.
No public trading market has developed for the Units, and it is not anticipated
that such a market will develop in the future.
The following table sets forth the distributions made by the Partnership for the
years ended December 31, 1998 and 1999.
Distributions
Per Limited
Aggregate Partnership Unit
(in thousands)
01/01/98 - 12/31/98 $2,500 (1) $27.79
01/01/99 - 12/31/99 $7,685 (2) $81.81
(1) Consists of $1,507,000 of cash from operations and $993,000 of cash from
refinance proceeds (see "Item 6" for further details).
(2) Distribution was made from cash from operations (see "Item 6" for further
details).
Future cash distributions will depend on the levels of cash generated from
operations, the availability of cash reserves, and the timing of debt
maturities, property sales, and/or refinancings. The Partnership's distribution
policy is reviewed on a quarterly basis. There can be no assurance, however,
that the Partnership will generate sufficient funds from operations after
required capital improvements to permit distributions to its partners in 2000 or
subsequent periods.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these and prior tender offers, AIMCO and its affiliates
currently own 40,538.50 limited partnership units in the Partnership
representing 48.931% of the outstanding units. It is possible that AIMCO or its
affiliates will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
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.
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, 1999, and December
31, 1998 was approximately $3,042,000 and $1,814,000, respectively. The increase
in net income is due to increases in total revenues and the cumulative effect of
a change in accounting principle (see discussion below) which was partially
offset by an increase in total expenses. Income before extraordinary item and
cumulative effect of a change in accounting principle was approximately
$2,410,000 for December 31, 1999 compared to approximately $1,842,000 for
December 31, 1998.
The increase in total revenues for the year ended December 31, 1999, is due to
increased rental income which was partially offset by a decrease in other
income. The increase in rental income is primarily due to an increase in rental
rates at all of the Partnership's rental properties, except Copper Mill, as well
as increased occupancy at Copper Mill, Stoney Creek, and Hampton Greens
Apartments. Other income decreased primarily due to decreased interest income
resulting from lower cash balances held in interest bearing accounts as a result
of distributions made during 1999.
Total expenses for the year ended December 31, 1999, increased primarily due to
increases in property tax expense, general and administrative expense, and
depreciation expense partially offset by a decrease in operating expenses.
Property tax expense increased primarily as a result of an increase in the
assessment value of Plantation Creek Apartments and Promontory Point Apartments.
Depreciation expense increased as a result of depreciable assets being placed
into service at the Partnership's investment properties during the last twelve
months and the change in accounting principle discussed below. Operating
expenses decreased primarily as a result of a decrease in maintenance expenses
at all of the properties. Maintenance expenses decreased primarily due to
decreases in exterior beautification at Wood Creek, Plantation Creek, Stoney
Creek, Promontory Point, and Four Winds.
The increase in general and administrative expense is primarily due to a
litigation settlement previously discussed in the Partnership's Annual Report on
Form 10-KSB as of December 31, 1998, and an increase in professional fees
associated with managing the Partnership. Included in general and administrative
expenses at both December 31, 1999 and 1998 are reimbursements to the Managing
General Partner allowed under the Partnership Agreement associated with its
management of the Partnership. In addition, costs associated with the quarterly
and annual communications with investors and regulatory agencies and the annual
audit required by the Partnership Agreement are also included.
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase income before the change by approximately $75,000 ($0.80 per limited
partnership unit). The cumulative effect adjustment of approximately $632,000 is
the result of applying the aforementioned change in accounting principle
retroactively and is included in income for 1999. The accounting principle
change will not have an effect on cash flow, funds available for distribution or
fees payable to the Managing General Partner and affiliates.
As part of the ongoing business plan of the Partnership, the Managing General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expenses. As part of this plan, the Managing General Partner attempts to protect
the Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due to
changing market conditions, which can result in the use of rental concessions
and rental reductions to offset softening market conditions, there is no
guarantee that the Managing General Partner will be able to sustain such a plan.
Capital Resources and Liquidity
At December 31, 1999, the Partnership had cash and cash equivalents of
approximately $3,653,000 as compared to approximately $6,684,000 at December 31,
1998. For the year ended December 31, 1999, cash and cash equivalents decreased
approximately $3,031,000 from the Partnership's year ended December 31, 1998.
The decrease in cash and cash equivalents is due to approximately $3,039,000 of
cash used in investing activities and approximately $8,380,000 of cash used in
financing activities, which was partially offset by approximately $8,388,000 of
cash provided by operating activities. Cash used in investing activities
consists of property improvements and replacements and, to a lesser extent, net
deposits to restricted escrows maintained by the mortgage lenders. Cash used in
financing activities consists of principal payments made on the mortgages
encumbering the Partnership's investment properties and distributions made to
the partners. The Partnership invests its 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 Partnership is currently
evaluating the capital improvement needs of all the properties for the upcoming
year. The minimum amount to be budgeted is expected to be $300 per unit or
$868,500. Additional improvements may be considered and will depend on the
physical condition of each property as well as replacement reserves and
anticipated cash flow generated by each property. 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 $72,440,000 has maturity dates 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 dates. If the properties cannot be
refinanced or sold for a sufficient amount, the Registrant will risk losing such
properties through foreclosure.
During the year ended December 31, 1999, the Partnership distributed
approximately $7,685,000 (approximately $6,778,000 to the limited partners,
$81.81 per limited partnership unit) from operations. During the year ended
December 31, 1998, distributions from operations of approximately $1,507,000
(approximately $1,329,000 to the limited partners, $16.04 per limited
partnership unit) and refinancing proceeds of approximately $993,000
(approximately $973,000 to the limited partners, $11.75 per limited partnership
unit) was paid to the partners. Future cash distributions will depend on the
levels of cash generated from operations, and the availability of cash reserves,
and the timing of debt maturities, property sales, and/or refinancings. The
Partnership's distribution policy is reviewed on a quarterly basis. There can be
no assurance, however, that the Partnership will generate sufficient funds from
operations after required capital improvements to permit distributions to its
partners in 2000 or subsequent periods.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these and prior tender offers, AIMCO and its affiliates
currently own 40,538.50 limited partnership units in the Partnership
representing 48.931% of the outstanding units. It is possible that AIMCO or its
affiliates will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
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.
Year 2000 Compliance
General Description
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership is
dependent upon the Managing General Partner and its affiliates for management
and administrative services ("Managing Agent"). Any of the Managing Agent's
computer programs or hardware that had date-sensitive software or embedded chips
might have recognized a date using "00" as the year 1900 rather than the year
2000. This could have resulted in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities.
Computer Hardware, Software and Operating Equipment
In 1999, the Managing Agent completed all phases of its Year 2000 program by
completing the replacement and repair of any hardware or software system or
operating equipment that was not yet Year 2000 compliant. The Managing Agent's
hardware and software systems and its operating equipment are now Year 2000
compliant. No material failure or erroneous results have occurred in the
Managing Agent's computer applications related to the failure to reference the
Year 2000 to date.
Third Parties
To date, the Managing Agent is not aware of any significant supplier or
subcontractor (external agent) or financial institution of the Partnership that
has a Year 2000 issue that would have a material impact on the Partnership's
results of operations, liquidity or capital resources. However, the Managing
Agent has no means of ensuring or determining the Year 2000 compliance of
external agents. At this time, the Managing Agent does not believe that a Year
2000 issue of any non-compliant external agent will have a material impact on
the Partnership's financial position or results of operations.
Costs
The total cost of the Managing Agent's Year 2000 project was approximately $3.2
million and was funded from operating cash flows.
Risks Associated with the Year 2000
The Managing Agent completed all necessary phases of its Year 2000 program in
1999, and did not experience system or equipment malfunctions related to a
failure to reference the Year 2000. The Managing Agent or Partnership has not
been materially adversely effected by disruptions in the economy generally
resulting from the Year 2000 issue.
At this time, the Managing Agent does not believe that the Partnership's
businesses, results of operations or financial condition will be materially
adversely effected by the Year 2000 issue.
Contingency Plans Associated with the Year 2000
The Managing Agent has not had to implement contingency plans such as manual
workarounds or selecting new relationships for its banking or elevator operation
activities in order to avoid the Year 2000 issue.
<PAGE>
Item 7. Financial Statements
CENTURY PROPERTIES GROWTH FUND XXII
LIST OF FINANCIAL STATEMENTS
Report of Ernst & Young LLP, Independent Auditors
Consolidated Balance Sheet - December 31, 1999
Consolidated Statements of Operations - Years ended December 31, 1999 and
1998
Consolidated Statements of Changes in Partners' (Deficit) Capital - Years
ended December 31, 1999 and 1998
Consolidated Statements of Cash Flows - Years ended December 31, 1999 and
1998
Notes to Consolidated Financial Statements
<PAGE>
Report of Ernst & Young LLP, Independent Auditors
The Partners
Century Properties Growth Fund XXII
We have audited the accompanying consolidated balance sheet of Century
Properties Growth Fund XXII as of December 31, 1999, and the related
consolidated statements of operations, changes in partners' (deficit) capital
and cash flows for each of the two years in the period ended December 31, 1999.
These financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by the Partnership's management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Century Properties
Growth Fund XXII at December 31, 1999, and the consolidated results of its
operations and its cash flows for each of the two years in the period ended
December 31, 1999, in conformity with accounting principles generally accepted
in the United States.
As discussed in Note J to the consolidated financial statements, the Partnership
changed its method of accounting to capitalize the cost of exterior painting and
major landscaping effective January 1, 1999.
/s/ERNST & YOUNG LLP
Greenville, South Carolina
February 25, 2000
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
December 31, 1999
<TABLE>
<CAPTION>
Assets
<S> <C>
Cash and cash equivalents $ 3,653
Receivables and deposits 713
Restricted escrows 981
Other assets 1,488
Investment properties (Notes D & E):
Land $ 14,396
Buildings and related personal property 121,409
135,805
Less accumulated depreciation (60,579) 75,226
$ 82,061
Liabilities and Partners' (Deficit) Capital
Liabilities
Accounts payable $ 316
Tenant security deposit payable 357
Accrued property taxes 1,319
Other liabilities 935
Mortgage notes payable (Note D) 72,440
Partners' (Deficit) Capital
General partner $ (7,893)
Limited partners (82,848 units issued and
outstanding) 14,587 6,694
$ 82,061
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except unit data)
<TABLE>
<CAPTION>
Years Ended December 31,
1999 1998
Revenues:
<S> <C> <C>
Rental income $21,474 $20,476
Other income 1,071 1,187
Total revenues 22,545 21,663
Expenses:
Operating 7,422 7,715
General and administrative 422 344
Depreciation 4,431 4,089
Interest 5,880 5,934
Property taxes 1,980 1,739
Total expenses 20,135 19,821
Income before extraordinary item and cumulative effect
of a change in accounting principle 2,410 1,842
Extraordinary loss on early extinguishment of debt -- (28)
Income before cumulative effect on prior years of a change
in accounting for the cost of exterior painting and
major landscaping 2,410 1,814
Cumulative effect on prior years of a change in
accounting for the cost of exterior painting and
major landscaping (Note J) 632 --
Net income $ 3,042 $ 1,814
Net income allocated to general partner $ 359 $ 214
Net income allocated to limited partners 2,683 1,600
$ 3,042 $ 1,814
Per limited partnership unit:
Income before extraordinary item and cumulative effect
of a change in accounting principle $ 25.65 $ 19.61
Extraordinary loss on early extinguishment of debt -- (.30)
Cumulative effect on prior years of a change in
accounting for the cost of exterior painting and
major landscaping 6.73 --
Net income $ 32.38 $ 19.31
Distributions per limited partnership unit $ 81.81 $ 27.79
Proforma amounts assuming the new accounting
principle was applied retroactively:
Net income $ 2,410 $ 1,793
Net income per limited partnership unit $ 25.65 $ 19.10
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 82,848 $ -- $82,848 $82,848
Partners' (deficit) capital at
December 31, 1997 82,848 $(7,361) $19,384 $12,023
Distribution paid 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
Distributions paid to partners -- (907) (6,778) (7,685)
Net income for the year ended
December 31, 1999 -- 359 2,683 3,042
Partners (deficit) capital at
December 31, 1999 82,848 $(7,893) $14,587 $ 6,694
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
CONSOLDIATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
1999 1998
Cash flows from operating activities:
<S> <C> <C>
Net income $ 3,042 $ 1,814
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 4,431 4,089
Amortization of loan costs 213 209
Extraordinary loss on early extinguishment of debt -- 28
Gain on disposal of property -- (70)
Cumulative effect on prior years of change in
accounting principle (632) --
Change in accounts:
Receivables and deposits 1,035 (329)
Other assets (89) 23
Accounts payable 111 11
Tenant security deposit payable 15 (20)
Accrued property taxes 83 308
Other liabilities 179 57
Net cash provided by operating activities 8,388 6,120
Cash flows from investing activities:
Net (deposits to) withdrawals from restricted escrows (54) 523
Insurance proceeds from casualty -- 112
Property improvements and replacements (2,985) (1,281)
Net cash used in investing activities (3,039) (646)
Cash flows from financing activities
Mortgage principal payments (695) (628)
Repayment of mortgage note payable -- (2,840)
Proceeds from mortgage note payable -- 4,000
Loan costs paid -- (167)
Distribution paid to partners (7,685) (2,500)
Net cash used in financing activities (8,380) (2,135)
Net (decrease) increase in cash and cash
equivalents (3,031) 3,339
Cash and cash equivalents at beginning of year 6,684 3,345
Cash and cash equivalents at end of year $ 3,653 $ 6,684
Supplemental disclosure of cash flow information:
Cash paid for interest $ 5,677 $ 5,725
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
CENTURY PROPERTIES GROWTH FUND XXII
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
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 Managing 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 seven 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 Creed CPGF 22, L.P.,
Four Winds CPGF 22, L.P., Cooper's Point CPGF 22, L.P., Hampton Greens CPGF 22,
L.P., Century Stoney Greens, L.P. and Copper Mill CPGF 22, L.P. 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 interpartnership 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 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 and money market accounts. 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. For Federal income tax
purposes, the accelerated cost recovery method is used (1) for real property
over 15 years for additions prior to March 16, 1984, 18 years for additions
after March 15, 1984 and before May 9, 1985, and 19 years for additions after
May 8, 1985, and before January 1, 1987, and (2) for personal property over 5
years for additions prior to January 1, 1987. As a result of the Tax Reform Act
of 1986, for additions after December 31, 1986, the modified accelerated cost
recovery method is used for depreciation of (1) real property over 27 1/2 years
and (2) personal property additions over 5 years.
Effective January 1, 1999 the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping (Note J).
Replacement Reserve Escrow: The Partnership maintains replacement reserve
escrows at each of its properties to fund replacement, refurbishment or repairs
of improvements to the property pursuant to the mortgage note documents. As of
December 31, 1999, the balance in these accounts is approximately $981,000,
which includes interest.
Loan Costs:
Loan costs of approximately $2,059,000, less accumulated amortization of
approximately $783,000, 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 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 properties
that have been permanently impaired have been written down to appraised value.
No adjustments for impairment of value were recorded in the years ended December
31, 1999, or 1998.
Segment Reporting:
SFAS No. 131, Disclosure about Segments of an Enterprise and Related Information
established standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports. It also establishes standards for related disclosures
about products and services, geographic areas, and major customers. See "Note H"
for required disclosure.
Advertising:
The Partnership expenses the costs of advertising as incurred. Advertising costs
of approximately $372,000 and $345,000 for the years ended December 31, 1999 and
1998, respectively, were charged to operating expense as incurred.
Note B - Transfer of Control
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust
merged into AIMCO, a publicly traded real estate investment trust, with AIMCO
being the surviving corporation (the "Insignia Merger"). As a result, AIMCO
acquired 100% ownership interest in the Managing General Partner. The Managing
General Partner does not believe that this transaction has had or will have a
material effect on the affairs and operations of the Partnership.
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 expense incurred by
affiliates on behalf of the Partnership. The following payments were made to the
Managing General Partner and affiliates during the years ended December 31, 1999
and 1998:
1999 1998
(in thousands)
Property management fees (included in
operating expense) $1,135 $1,085
Reimbursement for services of affiliates
(included in operating, general and
administrative expenses and investment
Properties) 183 178
Partnership management incentive allocation
(included in general partner deficit) 769 151
As part of the refinancing of Promontory Point Apartments (see "Note D"), 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, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $1,135,000 and
$1,085,000 for the years ended December 31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $183,000 and
$178,000 for the years ended December 31, 1999 and 1998, respectively.
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, 1999 and 1998 was approximately $769,000 and $151,000,
respectively, and is included in distributions paid to the general partner.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership has no outstanding amounts due under this line of
credit. Based on present plans, the Managing General Partner does not anticipate
the need to borrow in the near future. Other than cash and cash equivalents, the
line of credit is the Partnership's only unused source of liquidity.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these and prior tender offers, AIMCO and its affiliates
currently own 40,538.50 limited partnership units in the Partnership
representing 48.931% of the outstanding units. It is possible that AIMCO or its
affiliates will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
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.
<PAGE>
Note D - Mortgage Notes Payable
The principle terms of mortgage notes payable are as follows:
<TABLE>
<CAPTION>
Principal Monthly Principal
Balance At Payment Stated Balance
December 31, Including Interest Maturity Due At
Property 1999 Interest Rate Date Maturity
(in thousands) (in thousands)
<S> <C> <C> <C> <C> <C>
Wood Creek $12,430 $ 94 7.93% 2/2006 $11,319
Plantation Creek 15,321 116 7.93% 2/2006 13,952
Stoney Creek 6,784 51 7.88% 1/2006 6,180
Four Winds 9,322 71 7.93% 2/2006 8,489
Promontory Point 3,942 27 7.04% 5/2008 3,442
Cooper's Pointe 4,090 31 7.88% 1/2006 3,725
Hampton Greens 5,581 42 7.88% 1/2006 5,084
Autumn Run 9,100 56 (1) 7.33% 11/2003 9,100
Copper Mill 5,870 44 7.88% 1/2006 5,347
Total $72,440 $532 $66,638
</TABLE>
(1) Interest only monthly payments
The mortgage notes payable are non-recourse 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.
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.
Scheduled principal payments of the mortgage notes payable subsequent to
December 31, 1999, are as follows (in thousands):
2000 $ 756
2001 818
2002 884
2003 10,056
2004 1,034
Thereafter 58,892
$72,440
<PAGE>
Note E - Real Estate and Accumulated Depreciation
<TABLE>
<CAPTION>
Initial Cost
To Partnership
(in thousands)
Buildings Net Cost
and Related Capitalized
Personal Subsequent to
Description Encumbrances Land Property Acquisition
(in thousands) (in thousands)
<S> <C> <C> <C> <C>
Wood Creek $12,430 $ 2,130 $ 13,440 $ 1,233
Plantation Creek 15,321 2,653 20,827 3,805
Stoney Creek 6,784 1,803 12,509 110
Four Winds 9,322 1,363 14,288 1,429
Promontory Point 3,942 1,690 10,129 417
Cooper's Pointe 4,090 513 6,696 488
Hampton Greens 5,581 2,086 9,474 900
Autumn Run 9,100 1,462 14,957 1,627
Copper Mill 5,870 933 8,061 782
Total $72,440 $14,633 $110,381 $10,791
</TABLE>
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1999
(in thousands)
Buildings
And Related
Personal Accumulated Year of Depreciable
Description Land Property Total Depreciation Construction Life-Years
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Wood Creek $ 2,117 $ 14,686 $ 16,803 $ 7,740 1985 5-30
Plantation Creek 2,655 24,630 27,285 12,698 1978 5-30
Stoney Creek 1,689 12,733 14,422 6,732 1983 5-30
Four Winds 1,357 15,723 17,080 7,139 1987 5-30
Promontory Point 1,595 10,641 12,236 5,365 1984 5-30
Cooper's Pointe 510 7,187 7,697 3,673 1986 5-30
Hampton Greens 2,086 10,374 12,460 5,376 1986 5-30
Autumn Run 1,458 16,588 18,046 7,802 1987 5-30
Copper Mill 929 8,847 9,776 4,054 1987 5-30
Total $14,396 $121,409 $135,805 $60,579
</TABLE>
<PAGE>
Reconciliation of "Real Estate and Accumulated Depreciation":
Years Ended December 31,
1999 1998
(in thousands)
Investment Properties
Balance at beginning of year $132,188 $130,980
Disposal of property -- (73)
Property improvements 2,985 1,281
Cumulative effect on prior years of
change in accounting principle 632 --
Balance at end of year $135,805 $132,188
Accumulated Depreciation
Balance at beginning of year $ 56,148 $ 52,090
Disposal of property -- (31)
Additions charged to expense 4,431 4,089
Balance at end of year $ 60,579 $ 56,148
The aggregate cost of the real estate for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $134,542,000 and $131,557,000,
respectively. The accumulated depreciation for Federal income tax purposes at
December 31, 1999 and 1998, is approximately $92,282,000 and $87,193,000,
respectively.
Note F - Distribution
During the year ended December 31, 1999, the Partnership distributed
approximately $7,685,000 (approximately $6,778,000 to the limited partners,
$81.81 per limited partnership unit) from operations. During the year ended
December 31, 1998 the Partnership distributed approximately $2,500,000
(approximately $2,302,000 to the limited partners, $27.79 per limited
partnership unit) of which approximately $1,507,000 (approximately $1,329,000 to
the limited partners, $16.04 per limited partnership unit) from operations and
approximately $785,000 (approximately $973,000 to the limited partners, $11.75
per limited partnership unit) from refinancing the mortgage encumbering
Promontory Point.
Note G - 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.
<PAGE>
The following is a reconciliation of reported net income and Federal taxable
income (in thousands, except per unit data):
1999 1998
Net income as reported $3,042 $1,814
Add (deduct):
Depreciation differences (658) (858)
Cumulative effect of a change in
accounting principle (632) --
Change in prepaid rental 152 289
Other 28 167
Federal taxable income $1,932 $1,412
Federal taxable income per
limited partnership unit $20.57 $ 15.03
The following is a reconciliation between the Partnership's reported amounts and
Federal tax basis of net assets and liabilities (in thousands):
1999
Net assets as reported $ 6,694
Land and buildings (1,263)
Accumulated depreciation (31,703)
Syndication 12,427
Other 587
Net liabilities - Federal tax basis $(13,258)
Note H - Disclosures about Segments of an Enterprise and Related Information
Description of the types of products and services from which the reportable
segment derives its revenues:
The Partnership has one reportable segment: residential properties. The
Partnership's residential property segment consists of nine apartment complexes
in the Southeast, Midwest, and Southwest United States. The Partnership rents
apartment units to tenants for terms that are typically twelve months or less.
Measurement of segment profit or loss:
The Partnership evaluates performance based on segment profit (loss) before
depreciation. The accounting policies of the reportable segment 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
is managed separately, they have been aggregated into one segment as they
provide services with similar types of products and customers.
Segment information for the years ended December 31, 1999 and 1998 is shown in
the tables below. The "Other" Column includes partnership administration related
items and income and expense not allocated to the reportable segment.
<TABLE>
<CAPTION>
1999 Residential Other Totals
<S> <C> <C> <C>
Rental income $21,474 $ -- $21,474
Other income 1,048 23 1,071
Interest expense 5,880 -- 5,880
Depreciation 4,431 -- 4,431
General and administrative expense -- 422 422
Cumulative effect on prior years of
change in accounting principle 632 -- 632
Segment profit (loss) 3,441 (399) 3,042
Total assets 81,745 316 82,061
Capital expenditures for investment
properties 2,985 -- 2,985
</TABLE>
<TABLE>
<CAPTION>
1998 Residential Other Totals
<S> <C> <C> <C>
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
</TABLE>
Note I - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the Managing General Partner and several of their affiliated
partnerships and corporate entities. The action purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc.
("Insignia") and entities which were, at one time, affiliates of Insignia
("Insignia Affiliates") of interests in certain general partner entities, past
tender offers by Insignia Affiliates to acquire limited partnership units, the
management of partnerships by Insignia Affiliates and the Insignia Merger (see
"Note B - Transfer of Control"). The plaintiffs seek monetary damages and
equitable relief, including judicial dissolution of the Partnership. On June 25,
1998, the Managing General Partner filed a motion seeking dismissal of the
action. In lieu of responding to the motion, the plaintiffs have filed an
amended complaint. The Managing General Partner filed demurrers to the amended
complaint which were heard February 1999. Pending the ruling on such demurrers,
settlement negotiations commenced. On November 2, 1999, the parties executed and
filed a Stipulation of Settlement, settling claims, subject to final court
approval, on behalf of the Partnership and all limited partners who own units as
of November 3, 1999. Preliminary approval of the settlement was obtained on
November 3, 1999 from the Superior Court of the State of California, County of
San Mateo, at which time the Court set a final approval hearing for December 10,
1999. Prior to the December 10, 1999 hearing the Court received various
objections to the settlement, including a challenge to the Court's preliminary
approval based upon the alleged lack of authority of class plaintiffs' counsel
to enter the settlement. On December 14, 1999, the Managing General Partner and
its affiliates terminated the proposed settlement. Certain plaintiffs have filed
a motion to disqualify some of the plaintiffs' counsel in the action. The
Managing General Partner does not anticipate that costs associated with this
case will be material to the Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
Note J - Change in Accounting Principle
Effective January 1, 1999, the Partnership changed its method of accounting to
capitalize the cost of exterior painting and major landscaping on a prospective
basis. The Partnership believes that this accounting principle change is
preferable because it provides a better matching of expenses with the related
benefit of the expenditures and it is consistent with industry practice and the
policies of the Managing General Partner. The effect of the change in 1999 was
to increase income before the change by approximately $75,000 ($0.80 per limited
partnership unit). The cumulative effect adjustment of approximately $632,000 is
the result of applying the aforementioned change in accounting principle
retroactively and is included in income for 1999. The accounting principle
change will not have an effect on cash flow, funds available for distribution or
fees payable to the Managing General Partner and affiliates.
The effect of the new method for each quarter of 1999 on net income and net
income per limited partnership unit before the cumulative effect is as follows:
Increase/(Decrease) in Per limited
Net income partnership unit
First Quarter $(49,000) $ (.52)
Second Quarter 33,000 .35
Third Quarter 12,000 .13
Fourth Quarter 79,000 .84
<PAGE>
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
<PAGE>
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 FCMC 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 42 Executive Vice President and Director
Martha L. Long 40 Senior Vice President and Controller
Patrick J. Foye has been Executive Vice President and Director of the Managing
General Partner since October 1, 1998. Mr. Foye has served as Executive Vice
President of AIMCO since May 1998. Prior to joining AIMCO, Mr. Foye was a
partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP from 1989 to
1998 and was Managing Partner of the firm's Brussels, Budapest and Moscow
offices from 1992 through 1994. Mr. Foye is also Deputy Chairman of the Long
Island Power Authority and serves as a member of the New York State
Privatization Council. He received a B.A. from Fordham College and a J.D. from
Fordham University Law School.
Martha L. Long has been Senior Vice President and Controller of the Managing
General Partner and AIMCO since October 1998, as a result of the acquisition of
Insignia Financial Group, Inc. From June 1994 until January 1997, she was the
Controller for Insignia, and was promoted to Senior Vice President - Finance and
Controller in January 1997, retaining that title until October 1998. From 1988
to June 1994, Ms. Long was Senior Vice President and Controller for The First
Savings Bank, FSB in Greenville, South Carolina.
Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to
the Registrant under Rule 16a-3(e) during the Registrant's most recent fiscal
year and Form 5 and amendments thereto furnished to the Registrant with respect
to its most recent fiscal year, the Registrant is not aware of any director,
officer, beneficial owner of more than ten percent of the units of limited
partnership interest in the Registrant that failed to file on a timely basis, as
disclosed in the above Forms, reports required by section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years except as follows:
AIMCO and its joint filers failed to timely file a Form 4 with respect to its
acquisition of Units.
Item 10. Executive Compensation
Neither the directors nor any of the officers of the Managing General Partner
received any remuneration from the Registrant.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
Except as noted below, no person or entity was known by the Registrant to be the
beneficial owner of more than 5% of the Limited Partnership Units of the
Registrant as of December 31, 1999.
Entity Number of Units Percentage
Insignia Properties, L.P. 17,341.50 20.931%
(an affiliate of AIMCO)
IPLP Acquisition I, LLC 5,459.00 6.590%
(an affiliate of AIMCO)
Market Ventures LLC 45.00 .050%
(an affiliate of AIMCO)
AIMCO Properties LP 17,693.00 21.360%
(an affiliate of AIMCO)
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, South Carolina 29602.
AIMCO Properties LP is indirectly ultimately controlled by AIMCO. Its business
address is 2000 South Colorado Boulevard, Denver, Colorado 80222.
No director or officer of the Managing General Partner owns any Units.
As a result of its ownership of approximately 48.931% 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, unit
holders 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 affiliates; and (ii) on all other matters
submitted by it or its affiliates, in proportion to the votes cast by
non-tendering unit holders. Except for the foregoing, no other limitations are
imposed on such affiliates' ability to influence voting decisions with respect
to the Partnership.
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 reimbursements 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 years ended December 31, 1999
and 1998:
<PAGE>
1999 1998
(in thousands)
Property management fees $1,135 $1,085
Reimbursement for services of affiliates 183 178
Partnership management incentive allocation 769 151
As part of the refinancing of Promontory Point Apartments, 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, 1999 and 1998, affiliates of the Managing
General Partner were entitled to receive 5% of gross receipts from all of the
Registrant's properties as compensation for providing property management
services. The Registrant paid to such affiliates approximately $1,135,000 and
$1,085,000 for the years ended December 31, 1999 and 1998, respectively.
An affiliate of the Managing General Partner received reimbursement of
accountable administrative expenses amounting to approximately $183,000 and
$178,000 for the years ended December 31, 1999 and 1998, respectively.
In accordance with the Partnership Agreement, the Managing General Partner is
allocated a Partnership management incentive 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, 1999
and 1998, was approximately $769,000 and $151,000, respectively, and is included
in distributions paid to the general partner.
An affiliate of the Managing General Partner has made available to the
Partnership a credit line of up to $150,000 per property owned by the
Partnership. The Partnership has no outstanding amounts due under this line of
credit. Based on present plans, the Managing General Partner does not anticipate
the need to borrow in the near future. Other than cash and cash equivalents, the
line of credit is the Partnership's only unused source of liquidity.
Several tender offers were made by various parties, including affiliates of the
Managing General Partner, during the fiscal years ended December 31, 1999 and
1998. As a result of these and prior tender offers, AIMCO and its affiliates
currently own 40,538.50 limited partnership units in the Partnership
representing 48.931% of the outstanding units. It is possible that AIMCO or its
affiliates will make one or more additional offers to acquire additional limited
partnership interests in the Partnership for cash or in exchange for units in
the operating partnership of AIMCO. Consequently, AIMCO is in a position to
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.
<PAGE>
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 18, Independent Accountants' Preferability Letter for Change
in Accounting Principle, is filed as an exhibit to this report.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this
report.
(b) Reports on Form 8-K filed in the fourth quarter of calendar year 1999:
None.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CENTURY PROPERTIES GROWTH FUND XXII
By: FOX PARTNERS IV,
Its General Partner
By: FOX CAPITAL MANAGEMENT CORPORATION,
Its Managing General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Martha L. Long
Martha L. Long
Senior Vice President
and Controller
Date:
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:
Patrick J. Foye and Director
/s/Martha L. Long Senior Vice President Date:
Martha L. Long and Controller
<PAGE>
CENTURY PROPERTIES INCOME FUND XIX
EXHIBIT INDEX
Exhibit Number Description of Exhibit
2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 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
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.
<PAGE>
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 4, 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.
18 Independent Accountants' Preferability Letter for Change in Accounting
Principle.
27 Financial Data Schedule.
<PAGE>
Exhibit 18
February 7, 2000
Mr. Patrick J. Foye
Executive Vice President
Fox Capital Management Corporation
Managing General Partner of Century Properties Growth Fund XXII
55 Beattie Place
P.O. Box 1089
Greenville, South Carolina 29602
Dear Mr. Foye:
Note J of Notes to the Consolidated Financial Statements of Century Properties
Growth Fund XXII included in its Form 10-KSB for the year ended December 31,
1999 describes a change in the method of accounting to capitalize exterior
painting and major landscaping, which would have been expensed under the old
policy. You have advised us that you believe that the change is to a preferable
method in your circumstances because it provides a better matching of expenses
with the related benefit of the expenditures and is consistent with policies
currently being used by your industry and conforms to the policies of the
Managing General Partner.
There are no authoritative criteria for determining a preferable method based on
the particular circumstances; however, we conclude that the change in the method
of accounting for exterior painting and major landscaping is to an acceptable
alternative method which, based on your business judgment to make this change
for the reasons cited above, is preferable in your circumstances.
Very truly yours,
/s/Ernst & Young LLP
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Century
Properties Growth Fund XXII 1999 Fourth Quarter 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-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 3,653
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0 <F1>
<PP&E> 135,805
<DEPRECIATION> 60,579
<TOTAL-ASSETS> 82,061
<CURRENT-LIABILITIES> 0 <F1>
<BONDS> 72,440
0
0
<COMMON> 0
<OTHER-SE> 6,694
<TOTAL-LIABILITY-AND-EQUITY> 82,061
<SALES> 0
<TOTAL-REVENUES> 22,545
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 20,135
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,880
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 632
<NET-INCOME> 3,042
<EPS-BASIC> 32.38 <F2>
<EPS-DILUTED> 0
<FN>
<F1> Registrant has an unclassified balance sheet. <F2> Multiplier is 1.
</FN>
</TABLE>
