10KSB 1 cpf19.txt CPF19 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, 2001 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the transition period from _________to _________ Commission file number 0-11935 CENTURY PROPERTIES FUND XIX (Name of small business issuer in its charter) California 94-2887133 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, PO Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) Issuer's telephone number (864) 239-1000 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Units of Limited Partnership Interests (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No___ Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of the registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [X] State issuer's revenues for its most recent fiscal year. $17,989,000 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, 2001. 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 Fund XIX (the "Partnership" or "Registrant") was organized in August 1982, as a California limited partnership under the Uniform Limited Partnership Act of the California Corporations Code. Fox Partners II, a California general partnership, is the general partner of the Partnership. The general partners of Fox Partners II are Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners 83, a California general partnership. The Managing General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The Partnership Agreement provides that the Partnership is to terminate on December 31, 2007, unless terminated prior to such date. The Partnership's Registration Statement, filed pursuant to the Securities Act of 1933 (No. 2-79007), was declared effective by the Securities and Exchange Commission on September 20, 1983. Beginning in September 1983 through October 1984, the Partnership offered 90,000 Limited Partnership Units and sold 89,292 units having an initial cost of $89,292,000. The net proceeds of this offering were used to acquire thirteen income-producing real estate properties. Since its initial offering, the Registrant has not received, nor have limited partners been required to make, additional capital contributions. The Partnership's original property portfolio was geographically diversified with properties acquired in seven states. The Partnership's acquisition activities were completed in June 1985 and since then the principal activity of the Partnership has been managing its portfolio. One property was sold in each of the years 1988, 1992, 1993, and 1994. In addition, one property was foreclosed on in 1993. See "Item 2. Description of Properties" for a description of the Partnership's remaining eight properties. The Registrant is engaged in the business of operating and holding real estate properties. The Partnership is a "closed" limited partnership real estate syndicate formed to acquire multi-family residential properties. The Registrant has no employees. Management and administrative services are provided by the Managing General Partner and by agents retained by the Managing General Partner. An affiliate of the Managing General Partner has been providing such property management services for the years ended December 31, 2001 and 2000. The real estate business in which the Partnership is engaged is highly competitive. There are other residential properties within the market area of the Partnership's properties. The number and quality of competitive properties, including those which may be managed by an affiliate of the Managing General Partner in such market area, could have a material effect on the rental market for the apartments at the Registrant's properties and the rents that may be charged for such apartments. While the General Partner and its affiliates own and/or control a significant number of apartment units in the United States, such units represent an insignificant percentage of total apartment units in the United States and competition for the apartments is local. Both the income and expenses of operating the properties owned by the Partnership are subject to factors outside of the Partnership's control, such as changes in the supply and demand for similar properties resulting from various market conditions, increases/decreases in unemployment or population shifts, changes in the availability of permanent mortgage financing, changes in zoning laws, or changes in patterns or needs of users. In addition, there are risks inherent in owning and operating residential properties because such properties are susceptible to the impact of economic and other conditions outside of the control of the Partnership. There have been, and it is possible there may be other, Federal, state and local legislation and regulations enacted relating to the protection of the environment. The Partnership is unable to predict the extent, if any, to which such new legislation or regulations might occur and the degree to which such existing or new legislation or regulations might adversely affect the properties owned by the Partnership. The Partnership monitors its properties for evidence of pollutants, toxins and other dangerous substances, including the presence of asbestos. In certain cases environmental testing has been performed which resulted in no material adverse conditions or liabilities. In no case has the Partnership received notice that it is a potentially responsible party with respect to an environmental clean up site. A further description of the Partnership's business is included in "Management's Discussion and Analysis or Plan of Operation" included in "Item 6" of this Form 10-KSB. 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 Lake Apartments 12/83 Fee ownership subject to Apartment Atlanta, Georgia first mortgage 220 units Greenspoint Apartments 02/84 Fee ownership subject to Apartment Phoenix, Arizona first mortgage 336 units Sandspoint Apartments 02/84 Fee ownership subject to Apartment Phoenix, Arizona first mortgage 432 units Vinings Peak Apartments 04/84 Fee ownership subject to Apartment Atlanta, Georgia first mortgage 280 units Plantation Crossing Apartments 06/84 Fee ownership subject to Apartment Atlanta, Georgia first mortgage 180 units Sunrunner Apartments 07/84 Fee ownership subject to Apartment St. Petersburg, Florida first mortgage 200 units McMillan Place Apartments 06/85 Fee ownership, subject to Apartment Dallas, Texas first and second mortgages 402 units Misty Woods Apartments (1) 06/85 Fee ownership subject to Apartment Charlotte, North Carolina first mortgage 228 units
(1) Property is held by a limited liability company, in which the Partnership owns a 100% membership 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 Lake Apartments $ 13,547 $ 7,501 5-30 yrs S/L $ 2,060 Greenspoint Apartments 14,696 7,233 5-30 yrs S/L 2,529 Sandspoint Apartments 16,990 8,535 5-30 yrs S/L 2,656 Vinings Peak Apartments 16,155 8,328 5-30 yrs S/L 3,092 Plantation Crossing Apartments 9,922 5,192 5-30 yrs S/L 1,866 Sunrunner Apartments 7,913 4,420 5-30 yrs S/L 1,422 McMillan Place 14,775 7,028 5-30 yrs S/L 4,142 Apartments Misty Woods Apartments 8,503 4,498 5-30 yrs S/L 1,746 $102,501 $52,735 $19,513
See "Note A" of 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 2001 Rate Amortized Date Maturity (3) (in thousands) (in thousands) Wood Lake Apartments $ 6,963 7.50% 25 yrs 01/01/03 $ 6,792 Greenspoint Apartments 8,431 8.33% 30 yrs 05/15/05 7,988 Sandspoint Apartments 9,364 8.33% 30 yrs 05/15/05 8,874 Vinings Peak Apartments 8,087 7.50% 25 yrs 01/01/03 7,888 Plantation Crossing Apartments 4,718 7.50% 25 yrs 01/01/03 4,602 Sunrunner Apartments 4,623 7.06% 20 yrs 09/01/21 -- McMillan Place Apartments 1st Mortgage 10,002 9.15% (1) 10/31/02 10,002 2nd Mortgage 2,119 9.15% (2) 10/31/02 2,101 Misty Woods Apartments 5,113 7.88% 30 yrs 01/01/06 4,777 $59,420 $53,024
(1) Interest only. (2) Interest only, principal balance due at maturity is net of mortgage premium of approximately $18,000. (3) See "Item 7. Financial Statements - Note B" for information with respect to the Registrant's ability to prepay these loans and other specific details about the loans. On August 31, 2001 the Partnership refinanced the mortgage note payable for Sunrunner Apartments. The refinancing of Sunrunner Apartments replaced mortgage indebtedness of approximately $3,250,000 with a new mortgage of $4,650,000. The mortgage was refinanced at a rate of 7.06% compared to the prior rate of 7.33%. Payments of approximately $36,000 are due on the first day of each month until the note matures in September 2021. At the closing, a repair escrow of $125,000 was established and is held by the lender. Capitalized loan costs incurred on the refinancing were approximately $185,000. The Partnership wrote off unamortized loan costs resulting in an extraordinary loss on early extinguishment of debt of approximately $39,000. Rental Rate and Occupancy Average annual rental rates and occupancy for 2001 and 2000 for each property:
Average Annual Average Rental Rates Occupancy (per unit) Property 2001 2000 2001 2000 Wood Lake Apartments (1) $10,329 $9,915 92% 95% Greenspoint Apartments 8,316 8,272 94% 94% Sandspoint Apartments 7,374 7,281 95% 93% Vinings Peak Apartments (2) 9,696 9,318 91% 95% Plantation Crossing Apartments (3) 9,307 9,100 89% 95% Sunrunner Apartments 7,377 7,144 96% 97% McMillan Place Apartments 6,940 6,820 96% 96% Misty Woods Apartments 7,332 7,120 92% 93%
(1) The Managing General Partner attributes the decrease in occupancy at Wood Lake Apartments to a softening market in the area. (2) The Managing General Partner attributes the decrease in occupancy at Vinings Peak Apartments to 10 units being damaged due to a fire on May 18, 2001. These units were not ready for occupancy until January 2002. (3) The Managing General Partner attributes the decrease in occupancy at Plantation Crossing Apartments to numerous evictions during the current year. Management is evicting tenants who are not complying with the collection policy in an effort to improve the tenant base. 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 2001 for each property were: 2001 2001 Billing Rate (in thousands) Wood Lake Apartments $150 3.00% Greenspoint Apartments 147 1.23% Sandspoint Apartments 191 1.29% Vinings Peak Apartments 187 3.00% Plantation Crossing Apartments 82 2.70% Sunrunner Apartments 143 2.37% McMillan Place Apartments 363 2.73% Misty Woods Apartments 92 1.32% Capital Improvements Sunrunner Apartments During the year ended December 31, 2001, the Partnership completed approximately $151,000 of capital improvements consisting primarily of roof replacements, exterior painting, floor covering and appliance replacements and structural enhancements. These improvements were funded from Partnership 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 $60,000. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. Misty Woods Apartments During the year ended December 31, 2001, the Partnership completed approximately $148,000 of capital improvements consisting primarily of floor covering and appliance replacement, lighting and parking lot improvements, wall coverings, and interior decoration. These improvements were funded from Partnership reserves and operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year. The minimum amount to be budgeted is expected to be $300 per unit or $68,400. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. McMillian Place Apartments During the year ended December 31, 2001, the Partnership completed approximately $213,000 of capital improvements consisting primarily of swimming pool improvements, wall coverings, floor covering and appliance replacements, interior decoration, building improvements, and water heater replacements. These improvements were funded from Partnership reserves, operating cash flow and insurance proceeds. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year. The minimum amount to be budgeted is expected to be $300 per unit or $120,600. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. Vinings Peak Apartments During the year ended December 31, 2001, the Partnership completed approximately $798,000 of capital improvements consisting primarily of land improvements, structural improvements, other building improvements, floor covering and appliance replacements, signage, interior design, air conditioning upgrades, office computers, water heaters, and recreational facilities 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 $84,000. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. Wood Lake Apartments During the year ended December 31, 2001, the Partnership completed approximately $193,000 of capital improvements consisting primarily of signage, interior design, other building improvements, floor covering and appliance replacements, water heaters, roof replacement, and plumbing improvements. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year. The minimum amount to be budgeted is expected to be $300 per unit or $66,000. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. Plantation Crossing Apartments During the year ended December 31, 2001, the Partnership completed approximately $191,000 of capital improvements consisting primarily of other building improvements, plumbing and structural improvements, wall coverings, and floor covering and appliance replacements. These improvements were funded from Partnership 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 $54,000. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. Greenspoint Apartments During the year ended December 31, 2001, the Partnership completed approximately $238,000 of capital improvements consisting primarily of plumbing improvements, air conditioning, floor covering and appliance replacements, major landscaping, and parking lot enhancements. These improvements were funded from Partnership 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 $100,800. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership reserves and anticipated cash flow generated by the property. Sandspoint Apartments During the year ended December 31, 2001, the Partnership completed approximately $190,000 of capital improvements consisting primarily of structural improvements, air conditioning units, plumbing enhancements, ground lighting enhancements, roof replacements, and floor covering and appliance replacements. These improvements were funded from Partnership 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 $129,600. Additional improvements may be considered and will depend on the physical condition of the property as well as Partnership 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. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. 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 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 court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the Managing General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the Managing General Partner and its affiliates filed a demurrer to the third amended complaint. On May 14, 2001, the Court heard the demurrer to the third amended complaint. On July 10, 2001, the Court issued an order sustaining defendants' demurrer on certain grounds. On July 20, 2001, Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed a fourth amended class and derivative action complaint. On September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the Managing General Partner and affiliated defendants filed a demurrer to the fourth amended complaint, which was heard on December 11, 2001. On February 2, 2002, the Court served its order granting in part the demurrer. The Court has dismissed without leave to amend certain of the plaintiffs' claims. On February 11, 2002, plaintiffs filed a motion seeking to certify a putative class comprised of all non-affiliated persons who own or have owned units in the partnerships. The Managing General Partner and affiliated defendants intend to oppose the motion and are scheduled to file their opposition brief on March 26, 2002. A hearing on the motion has been scheduled for April 29, 2002. The Court has set the matter for trial in January 2003. During the third quarter of 2001, a complaint (the "Heller action") was filed against the same defendants that are named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed a first amended complaint. The first amended complaint in the Heller action is brought as a purported derivative action, and asserts claims for among other things breach of fiduciary duty; unfair competition; conversion, unjust enrichment; and judicial dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the Heller action with the Nuanes action and stated that the Heller action was filed in order to preserve the derivative claims that were dismissed without leave to amend in the Nuanes action by the Court order dated July 10, 2001. On October 5, 2001, the Managing General Partner and affiliated defendants moved to strike the first amended complaint in its entirety for violating the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer in the Nuanes action, or alternatively, to strike certain portions of the complaint based on the statute of limitations. Other defendants in the action demurred to the fourth amended complaint, and, alternatively, moved to strike the complaint. On December 11, 2001, the court heard argument on the motions and took the matters under submission. On February 4, 2002, the Court served notice of its order granting defendants' motion to strike the Heller complaint as a violation of its July 10, 2001 order in the Nuanes action. The Managing General Partner does not anticipate that any costs, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. Item 4. Submission of Matters to a Vote of Security Holders During the quarter ended December 31, 2001, no matter was submitted to a vote of unit holders through the solicitation of proxies or otherwise. PART II Item 5. Market for the Partnership's Common Equity and Related Security Holder Matters The Partnership, a publicly-held limited partnership, offered and sold 89,292 limited partnership units aggregating $89,292,000. The Partnership had 89,292 units outstanding held by 4,104 limited partners of record at December 31, 2001. Affiliates of the Managing General Partner owned 50,206.66 units or 56.23% at December 31, 2001. 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, 2000 and 2001 (see "Item 6. Management's Discussion and Analysis or Plan of Operation" for further details): Distributions Per Limited Aggregate Partnership Unit (in thousands) 01/01/00 - 12/31/00 $ 3,971 (1) $39.22 01/01/01 - 12/31/01 3,864 (2) 39.37 (1) Consists entirely of cash from operations. (2) Consists of $2,769,000 of cash from operations and $1,095,000 from the refinancing of Sunrunner Apartments. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves and the timing of debt maturities, refinancings, and/or property sales. The Partnership's cash available for distribution is reviewed on a monthly basis. The Partnership is restricted from distributing cash from operations of McMillan Place Apartments as a condition of the modification of the property's mortgage in 1998. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit further distributions to its partners in 2002 or subsequent periods. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 50,206.66 limited partnership units in the Partnership representing 56.23% of the outstanding units at December 31, 2001. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 56.23% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, IPLP, an affiliate of the Managing General Partner, is required to vote 24,811.66 of its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering unit holders. Except for the foregoing, no other limitations are imposed on IPLP's or AIMCO's right to vote its Units. Item 6. Management's Discussion and Analysis or Plan of Operation The matters discussed in this Form 10-KSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-KSB and the other filings with the Securities and Exchange Commission made by the Registrant from time to time. The discussion of the Registrant's business and results of operations, including forward-looking statements pertaining to such 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 realized net income of approximately $1,376,000 and $1,631,000 for the years ended December 31, 2001 and 2000, respectively. The decrease in net income is attributed to an increase in total expenses and an extraordinary loss on early extinguishment of debt, offset by an increase in total revenues. Excluding the extraordinary loss on early extinguishment of debt, income for the years ended December 31, 2001 and 2000 was approximately $1,415,000 and $1,631,000, respectively. The increase in total expenses is primarily attributable to an increase in operating, depreciation, and general and administrative expenses, partially offset by a decrease in interest expense. The increase in operating expenses is the result of an increase in insurance premiums and property expenses at several of the investment properties. Property expense increased at several properties due to increased utility costs. Property expense also increased due to an increase in employee salaries and related benefits at several of the Partnership's investment properties. Depreciation expense increased due to the addition of property improvements and replacements that were placed in service during the past twelve months and are now being depreciated. Interest expense decreased due to the scheduled principal payments made on the mortgages encumbering the investment properties. The increase in general and administrative expense is primarily due to an increase in professional fees partially offset by a decrease in legal expenses. Also included in general and administrative expense at both December 31, 2001 and 2000 are costs associated with the quarterly and annual communications with investors and regulatory agencies. Total revenues increased slightly for the year ended December 31, 2001 primarily due to a casualty gain as discussed below and an increase in other income which were partially offset by a decrease in rental income. Other income increased due to the collection of utility reimbursements and late charges being enforced at several of the investment properties. Rental income decreased due to a decrease in occupancy and increased concessions at several properties which were partially offset by an increase in average rental rates at all investment properties. In February 2000, one of the Partnership's investment properties, McMillan Place Apartments, incurred damages to its buildings as a result of a hail storm. As a result of the damage, approximately $142,000 of fixed assets and approximately $75,000 of accumulated depreciation were written off resulting in a net write off of approximately $67,000. The property received approximately $223,000 in proceeds from the insurance company to repair the damaged units. For financial statement purposes, a casualty gain of approximately $156,000 was recognized as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. In May 2001, one of the Partnership's investment properties, Vinings Peak Apartments, incurred damage to approximately 10 units as a result of a fire. The estimated damages to the property are approximately $465,000. Although the repairs are not yet complete, the Partnership does not expect to incur a loss. As part of the ongoing business plan of the Partnership, the Managing General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the Managing General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Liquidity and Capital Resources At December 31, 2001, the Registrant had cash and cash equivalents of approximately $1,645,000 as compared to approximately $2,172,000 at December 31, 2000. For the year ended December 31, 2001, cash and cash equivalents decreased approximately $527,000 from the Registrant's year ended December 31, 2000. The decrease in cash and cash equivalents is due to approximately $3,644,000 of cash used in financing activities and approximately $1,749,000 of cash used in investing activities which was largely offset by approximately $4,866,000 of cash provided by operating activities. Net cash used in financing activities consisted primarily of distributions to the partners, payoff of the mortgage encumbering Sunrunner Apartments, new loan costs associated with the refinancing of Sunrunner Apartments and payments of principal made on the mortgages encumbering the Registrant's properties partially offset by the proceeds of the new mortgage note on Sunrunner Apartments. Net cash used in investing activities consisted of capital improvements and replacements and net deposits to restricted escrows maintained by the mortgage lenders partially offset by insurance proceeds received for hail storm damages at McMillan Place Apartments. The Partnership invests its working capital reserves in interest bearing accounts. An affiliate of the Managing General Partner has made available to the Partnership a credit line of up to $150,000 per property owned by the Partnership. The Partnership has no outstanding amounts due under this line of credit. Based on present plans, the Managing General Partner does not anticipate the need to borrow in the near future. Other than cash and cash equivalents, the line of credit is the Partnership's only unused source of liquidity. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Registrant and to comply with Federal, state, and local legal and regulatory requirements. The Partnership is currently evaluating the capital improvement needs of the properties for the upcoming year. The minimum amount to be budgeted is expected to be $300 per unit or $683,400. Additional improvements may be considered and will depend on the physical condition of the properties as well as replacement reserves and anticipated cash flow generated by the properties. The capital expenditures will be incurred only if cash is available from operations or from Partnership reserves. To the extent that such budgeted capital improvements are completed, the Registrant's distributable cash flow, if any, may be adversely affected at least in the short term. In connection with the January 29, 1998 modification of the terms of the mortgages encumbering McMillan Place Apartments, the first mortgage requires additional interest to be paid upon maturity at October 31, 2002 equal to 50% of the increase in the appreciated fair market value of the property, which was stipulated as $12,860,000 at the time of the restructuring. At December 31, 2001 the Managing General Partner estimated that there had been an increase in the fair market value of McMillan Place Apartments to approximately $13,900,000 at December 31, 2001. Accordingly, the financial statements reflect a liability of $500,000 at December 31, 2001 included in other liabilities to account for this estimated additional interest. This liability consists of $250,000 that was recorded during each year ended December 31, 2001 and 2000 and is included in interest expense. On August 31, 2001 the Partnership refinanced the mortgage note payable for Sunrunner Apartments. The refinancing of Sunrunner Apartments replaced mortgage indebtedness of approximately $3,250,000 with a new mortgage of $4,650,000. The mortgage was refinanced at a rate of 7.06% compared to the prior rate of 7.33%. Payments of approximately $36,000 are due on the first day of each month until the note matures in September 2021. At the closing, a repair escrow of $125,000 was established and is held by the lender. Capitalized loan costs incurred on the refinancing were approximately $185,000. The Partnership wrote off unamortized loan costs resulting in an extraordinary loss on early extinguishment of debt of approximately $39,000. The Registrant's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Registrant. The mortgage indebtedness of approximately $59,420,000 is amortized over varying periods with required balloon payments ranging from October 2002 to September 2021. The Managing General Partner will attempt to refinance such indebtedness and/or sell the properties prior to such maturity dates. If any property cannot be refinanced or sold for a sufficient amount, the Registrant will risk losing such property through foreclosure. Pursuant to the Partnership Agreement, the term of the Partnership is scheduled to expire on December 31, 2007. Accordingly, prior to such date the Partnership will need to either sell its investment properties or extend the term of the Partnership. If the Partnership is unable to extend its term, the ultimate sale price of the investment properties may be adversely affected. While the Registrant is prohibited from making distributions from operations of McMillan Place, the Registrant is permitted to make distributions from the operations of the Registrant's other investment properties. During the year ended December 31, 2001, the Partnership distributed approximately $2,769,000 (approximately $2,442,000 to the limited partners or $27.35 per limited partnership unit) from operations and approximately $1,095,000 (approximately $1,073,000 to the limited partners or $12.02 per limited partnership unit) from the proceeds of refinancing Sunrunner Apartments. During the year ended December 31, 2000 the Partnership distributed approximately $3,971,000 (approximately $3,502,000 to the limited partners or $39.22 per limited partnership unit) from operations. The Partnership's cash available for distribution is reviewed on a monthly basis. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves and the timing of debt maturities, refinancings, and/or property sales. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 50,206.66 limited partnership units in the Partnership representing 56.23% of the outstanding units at December 31, 2001. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 56.23% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, IPLP, an affiliate of the Managing General Partner, is required to vote 24,811.66 of its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering unit holders. Except for the foregoing, no other limitations are imposed on IPLP's or AIMCO's right to vote its Units. Recent Accounting Pronouncements In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 provides accounting guidance for financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. The Managing General Partner does not anticipate that its adoption will have a material effect on the financial position or results of operations of the Partnership. Item 7. Financial Statements CENTURY PROPERTIES FUND XIX LIST OF FINANCIAL STATEMENTS Report of Ernst & Young LLP, Independent Auditors Consolidated Balance Sheet - December 31, 2001 Consolidated Statements of Operations - Years ended December 31, 2001 and 2000 Consolidated Statement of Changes in Partners' (Deficit) Capital - Years ended December 31, 2001 and 2000 Consolidated Statements of Cash Flows - Years ended December 31, 2001 and 2000 Notes to Consolidated Financial Statements Report of Ernst & Young LLP, Independent Auditors The Partners Century Properties Fund XIX We have audited the accompanying consolidated balance sheet of Century Properties Fund XIX as of December 31, 2001, 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, 2001. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Century Properties Fund XIX at December 31, 2001, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States. /s/ERNST & YOUNG LLP Greenville, South Carolina February 15, 2002 CENTURY PROPERTIES FUND XIX CONSOLIDATED BALANCE SHEET (in thousands, except unit data) December 31, 2001
Assets Cash and cash equivalents $ 1,645 Receivables and deposits 1,014 Restricted escrows 169 Other assets 563 Investment properties (Notes B and F): Land $ 11,635 Buildings and related personal property 90,866 102,501 Less accumulated depreciation (52,735) 49,766 $ 53,157 Liabilities and Partners' (Deficit) Capital Liabilities Accounts payable $ 595 Tenant security deposit payable 300 Accrued property taxes 628 Due to former affiliate 270 Other liabilities 1,107 Mortgage notes payable (Note B) 59,420 Partners' (Deficit) Capital General partner $ (9,718) Limited partners (89,292 units issued and and outstanding) 555 (9,163) $ 53,157 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except unit data)
Years Ended December 31, 2001 2000 Revenues: Rental income $16,503 $16,545 Other income 1,330 930 Casualty gain (Note G) 156 -- Total revenues 17,989 17,475 Expenses: Operating 6,197 5,707 General and administrative 510 360 Depreciation 3,476 3,319 Interest 5,013 5,087 Property taxes 1,378 1,371 Total expenses 16,574 15,844 Income before extraordinary loss on early extinguishment of debt 1,415 1,631 Extraordinary loss on early extinguishment of debt (Note B) (39) -- Net income $ 1,376 $ 1,631 Net income allocated to general partner $ 163 $ 192 Net income allocated to limited partners 1,213 1,439 $ 1,376 $ 1,631 Net income per limited partnership unit: Income before extraordinary item $ 13.97 $ 16.12 Extraordinary loss on early extinguishment of debt (0.39) -- Net income $ 13.58 $ 16.12 Distribution per limited partnership unit $ 39.37 $ 39.22 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIT) CAPITAL (in thousands, except unit data)
Limited Partnership General Limited Units Partner's Partners' Total Original capital contributions 89,292 $ -- $89,292 $89,292 Partners' (deficit) capital at December 31, 1999 89,292 $(9,255) $ 4,920 $(4,335) Distribution paid to partners -- (469) (3,502) (3,971) Net income for the year ended December 31, 2000 -- 192 1,439 1,631 Partners' (deficit) capital at December 31, 2000 89,292 (9,532) 2,857 (6,675) Distribution paid to partners -- (349) (3,515) (3,864) Net income for the year ended December 31, 2001 -- 163 1,213 1,376 Partners' (deficit) capital at December 31, 2001 89,292 $(9,718) $ 555 $(9,163) See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 2001 2000 Cash flows from operating activities: Net income $ 1,376 $ 1,631 Adjustments to reconcile net income to net cash provided by operating activities: Casualty gain (156) -- Extraordinary loss on early extinguishment of debt 39 -- Depreciation 3,476 3,319 Amortization of loan costs and discount 95 98 Change in accounts: Receivables and deposits (118) 58 Other assets 22 (41) Accounts payable 32 58 Tenant security deposit payable (18) 8 Accrued property taxes 113 (48) Other liabilities 5 465 Net cash provided by operating activities 4,866 5,548 Cash flows from investing activities: Property improvements and replacements (1,929) (1,799) Net insurance proceeds received 223 -- Net (deposits to) withdrawals from restricted escrows (43) 194 Net cash used in investing activities (1,749) (1,605) Cash flows from financing activities: Proceeds from long term borrowing 4,650 -- Repayment of mortgage note payable (3,250) -- Loan cost paid (185) -- Payments on mortgage notes payable (995) (700) Distribution to partners (3,864) (3,971) Net cash used in financing activities (3,644) (4,671) Net decrease in cash and cash equivalents (527) (728) Cash and cash equivalents at beginning of the year 2,172 2,900 Cash and cash equivalents at end of year $ 1,645 $ 2,172 Supplemental disclosure of cash flow information: Cash paid for interest $ 4,417 $ 4,991 Supplemental information of non-cash activity: Property improvements and replacements in accounts payable $ 325 $ 132 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 Note A - Organization and Significant Accounting Policies Organization Century Properties Fund XIX (the "Partnership" or "Registrant"), is a California Limited Partnership organized in August 1982, to acquire, operate and ultimately sell residential apartment complexes. As of December 31, 2001, the Partnership operated eight residential apartment complexes located throughout the United States. The general partner of the Partnership is Fox Partner II, a California general partnership. The general partners of Fox Partners II are Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), a California corporation, Fox Realty Investors ("FRI"), a California general partnership, and Fox Partners 83, a California general partnership. The Managing General Partner is a subsidiary of Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The capital contributions of $89,292,000 ($1,000 per unit) were made by the limited partners, including 100 Limited Partnership Units purchased by FCMC. The Partnership Agreement provides that the Partnership is to terminate on December 31, 2007 unless terminated prior to such date. Principles of Consolidation The Registrant's financial statements include the accounts of Misty Woods CPF 19, LLC, a limited liability company in which the Registrant ultimately owns a 100% interest. All significant inter-entity transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Allocation of Income, Loss and Distribution Net income, net loss and distributions of cash of the Partnership are allocated between general and limited partners in accordance with the provisions of the Partnership Agreement. Fair Value of Financial Instruments Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures about Fair Value of Financial Instruments", as amended by SFAS No. 119, "Disclosures about Derivative Financial Instruments and Fair Value of Financial Instruments", requires disclosure of fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practicable to estimate fair value. Fair value is defined in the SFAS as the amount at which the instruments could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Partnership believes that the carrying amount of its financial instruments (except for long term debt) approximates their fair value due to the short term maturity of these instruments. The fair value of the Partnership's long term debt, after discounting the scheduled loan payments to maturity, approximates its carrying amount. Cash and Cash Equivalents Includes cash on hand and in banks. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Cash balances include approximately $1,516,000 at December 31, 2001 that are maintained by the affiliated management company on behalf of affiliated entities in cash concentration accounts. Reserve Account As a condition of refinancing the debt of Sunrunner and Misty Woods, the Registrant was required to establish reserve accounts. The reserve accounts were established to cover necessary repairs and replacements of existing improvements, debt service, out of pocket expenses incurred for ordinary and necessary administrative tasks, and payment of real property taxes and insurance premiums. The Partnership is required to deposit net operating income (as defined in the mortgage note) from each refinanced property. The balance at December 31, 2001, is approximately $169,000, which includes interest. Tenant Security Deposits The Partnership requires security deposits from lessees for the duration of the lease and such deposits are included in receivables and deposits. Deposits are refunded when the tenant vacates, provided the tenant has not damaged his or her space and is current on rental payments. Investment Properties Investment properties consist of eight apartment complexes and are stated at cost. Acquisition fees are capitalized as a cost of real estate. In accordance with Financial Accounting Statements 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, 2001 or 2000. See "Recent Accounting Pronouncements" below. 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 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. 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. Leases The Registrant generally leases apartment units for twelve-month terms or less. The Partnership recognizes income as earned on its leases. In addition, the Managing General Partner's policy is to offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Concessions are charged against rental income as incurred. Advertising Costs The Registrant expenses the costs of advertising as incurred. Advertising costs of approximately $311,000 and $274,000 for the years ended December 31, 2001 and 2000, respectively, were charged to operating expense as incurred. Loan Costs Loan costs of approximately $1,120,000 are included in other assets in the accompanying consolidated balance sheet and are being amortized on a straight-line basis over the life of the loans. At December 31, 2001, accumulated amortization is approximately $712,000. Amortization of loan costs is included in interest expense. Segment Reporting Statement of Financial Accounting Standards ("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 established standards for related disclosures about products and services, geographic areas, and major customers. As defined in SFAS No. 131, the Partnership has only one reportable segment. Moreover, due to the very nature of the Partnership's operations, the Managing General Partner believes that segment-based disclosures will not result in a more meaningful presentation than the consolidated financial statements as presently presented. Recent Accounting Pronouncements In August 2001, the Financial Accounting Standards Board issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets". SFAS No. 144 provides accounting guidance for financial accounting and reporting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. The Managing General Partner does not anticipate that its adoption will have a material effect on the financial position or results of operations of the Partnership. Note B - Mortgage Notes Payable
Principal Monthly Principal Balance At Payment Stated Balance December 31, Including Interest Maturity Due At Property 2001 Interest Rate Date Maturity (in thousands) (in thousands) Wood Lake Apartments $ 6,963 $ 57 7.50% 01/01/03 $ 6,792 Greenspoint Apartments 8,431 68 8.33% 05/15/05 7,988 Sandspoint Apartments 9,364 76 8.33% 05/15/05 8,874 Vinings Peak Apartments 8,087 67 7.50% 01/01/03 7,888 Plantation Crossing Apartments 4,718 39 7.50% 01/01/03 4,602 Sunrunner Apartments 4,623 36 7.06% 09/01/21 -- McMillan Place Apartments 1st Mortgage 10,002 78 (1) 9.15% 10/31/02 10,002 2nd Mortgage 2,119 -- (2) 9.15% 10/31/02 2,101 Misty Woods Apartments 5,113 40 7.88% 01/01/06 4,777 $59,420 $461 $53,024
(1) Payments are interest only. (2) Payments are interest only, principal balance due at maturity is net of mortgage premium of approximately $18,000. On August 31, 2001 the Partnership refinanced the mortgage note payable for Sunrunner Apartments. The refinancing of Sunrunner Apartments replaced mortgage indebtedness of approximately $3,250,000 with a new mortgage of $4,650,000. The mortgage was refinanced at a rate of 7.06% compared to the prior rate of 7.33%. Payments of approximately $36,000 are due on the first day of each month until the note matures in September 2021. At the closing, a repair escrow of $125,000 was established and is held by the lender. Capitalized loan costs incurred on the refinancing were approximately $185,000. The Partnership wrote off unamortized loan costs resulting in an extraordinary loss on early extinguishment of debt of approximately $39,000. On January 29, 1998, the Managing General Partner successfully negotiated a modification of the terms of the mortgages encumbering McMillan Place, which had been in default since January 20, 1997. The first mortgage requires interest only payments through October 31, 2001, at a rate of 9.15% and for the final year, at a fixed rate of 325 basis points plus the annualized yield on United States Treasury non-callable bonds having a one year maturity, as determined at November 1, 2001. In addition, any excess cash as defined in the modified loan agreement is required to be remitted to the mortgage holder by January 20 of each year to be applied to outstanding principal and interest. Additional interest is required to be paid upon maturity of the note equal to 50% of the increase in the appreciated fair market value of McMillan Place, which was stipulated as $12,860,000 at the time of restructuring, as defined in the note agreement. At December 31, 2001 the Managing General Partner estimated that there had been an increase in the fair market value of McMillan Place and accordingly a liability for $500,000 was recorded at December 31, 2001. The second mortgage balance of approximately $2,119,000 consists of a non-interest bearing portion of $800,000, which is due at the maturity date of October 31, 2002, and an interest bearing portion of $1,319,000. The interest bearing portion has a stated interest rate of 9.15%. Interest on the modified debt is being recorded at an effective rate of 9.15% for the first mortgage and 4.47% for the second mortgage which are the rates required to equate the present value of the total future cash payments under the new terms with the carrying amount of the loans at the date of modification. In connection with the modification, a former affiliate advanced $270,000 to the Partnership. This amount was used as part of the payment of accrued interest on the second mortgage. This advance is due upon sale and/or refinancing of the property. The mortgage notes payable are non-recourse and are secured by pledge of the respective apartment properties and by pledge of revenues from the respective apartment properties. The notes impose prepayment penalties if repaid prior to maturity. Further, the properties may not be sold subject to existing indebtedness. Scheduled principal payments of the mortgage notes payable subsequent to December 31, 2001, are as follows (in thousands): 2002 $13,045 2003 19,758 2004 514 2005 17,200 2006 4,926 Thereafter 3,977 $59,420 Note C - Distributions During the year ended December 31, 2001, the Partnership distributed approximately $2,769,000 (approximately $2,442,000 to the limited partners or $27.35 per limited partnership unit) from operations and approximately $1,095,000 (approximately $1,073,000 to the limited partners or $12.02 per limited partnership unit) from the proceeds of refinancing Sunrunner Apartments. During the year ended December 31, 2000, the Partnership distributed approximately $3,971,000 (approximately $3,502,000 to the limited partners, $39.22 per limited partnership unit) from operations. Note D - Income Taxes The Registrant has received a ruling from the Internal Revenue Service that it is classified as a partnership for Federal income tax purposes. Accordingly, no provision for income taxes is made in the consolidated financial statements of the Partnership. Taxable income or loss of the Registrant is reported in the income tax returns of its partners. The following is a reconciliation of reported net income and Federal taxable income (in thousands, except per unit data): 2001 2000 Net income as reported $ 1,376 $ 1,631 Add (deduct): Depreciation differences 167 (152) Other 195 305 Unearned income (71) 56 Federal taxable income $ 1,667 $ 1,840 Federal taxable income per limited partnership unit $ 16.46 $ 18.18 The following is a reconciliation between the Registrant's reported amounts and Federal tax basis of net assets and liabilities (in thousands): 2001 Net liabilities as reported $ (9,163) Land and buildings (4,940) Accumulated depreciation (25,313) Syndication and distribution costs 4,451 Unearned income 306 Other 743 Deferred Sales Commission 7,947 Net liabilities - Federal tax basis $(25,969) Note E - 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 (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments to the Managing General Partner and its affiliates were incurred during the years ended December 31, 2001 and 2000: 2001 2000 (in thousands) Property management fees (included in operating expense) $969 $889 Reimbursement for services of affiliates, (included in investment properties and operating, general and administrative expenses) 166 213 Partnership management fee (included in general partner distributions) 277 397 Loan costs (included in other assets) 47 -- During the years ended December 31, 2001 and 2000, 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 $969,000 and $889,000 for the years ended December 31, 2001 and 2000, respectively. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $166,000 and $213,000 for the years ended December 31, 2001 and 2000, respectively. Pursuant to the Partnership Agreement, for managing the affairs of the Partnership, the general partner is entitled to receive a Partnership management fee equal to 10% of the Partnership's adjusted cash from operations as distributed. Approximately $277,000 and $397,000 in Partnership management fees were paid along with the distributions from operations made during the years ended December 31, 2001 and 2000, respectively. During the year ended December 31, 2001, the Partnership paid an affiliate of the Managing General Partner approximately $47,000 for loan costs associated with the refinancing of Sunrunner Apartments. 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. Beginning in 2001, the Partnership began insuring its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the year ended December 31, 2001, the Partnership paid AIMCO and its affiliates approximately $136,000 for insurance coverage and fees associated with policy claims administration. During the year ended December 31, 2001, an affiliate of the Managing General Partner paid approximately $284,000 in costs associated with repairs on Vinings Peak Apartments. This amount is included in accounts payable on the consolidated balance sheet. Vinings Peak Apartments will reimburse the affiliate for these costs. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 50,206.66 limited partnership units in the Partnership representing 56.23% of the outstanding units at December 31, 2001. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 56.23% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, IPLP, an affiliate of the Managing General Partner, is required to vote 24,811.66 of its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering unit holders. Except for the foregoing, no other limitations are imposed on IPLP's right to vote its Units. Note F - Real Estate and Accumulated Depreciation
Initial Cost To Partnership (in thousands) Buildings Net Cost and Related Capitalized Personal Subsequent to Description Encumbrances Land Property Acquisition (in thousands) (in thousands) Wood Lake Apartments $ 6,963 $ 1,206 $10,980 $ 1,361 Greenspoint Apartments 8,431 2,165 11,199 1,332 Sandspoint Apartments 9,364 2,124 13,158 1,708 Vinings Peak Apartments 8,087 1,632 12,321 2,202 Plantation Crossing Apartments 4,718 1,062 7,576 1,284 Sunrunner Apartments 4,623 634 6,485 794 McMillan Place Apartments 12,121 2,399 10,826 1,550 Misty Woods Apartments 5,113 429 6,846 1,228 $59,420 $11,651 $79,391 $11,459
Gross Amount At Which Carried At December 31, 2001 (in thousands) Buildings And Related Year of Personal Accumulated Construc- Date Depreciable Description Land Property Total Depreciation tion Acquired Life-Years (in thousands) Wood Lake Apartments $ 1,206 $12,341 $13,547 $ 7,501 1983 12/83 5-30 yrs Greenspoint Apartments 2,140 12,556 14,696 7,233 1984 2/84 5-30 yrs Sandspoint 2,147 14,843 16,990 8,535 1984 2/84 5-30 yrs Apartments Vinings Peak Apartments 1,632 14,523 16,155 8,328 1982 4/84 5-30 yrs Plantation Crossing Apartments 1,062 8,860 9,922 5,192 1980 6/84 5-30 yrs Sunrunner 587 7,326 7,913 4,420 1981 7/84 5-30 yrs Apartments McMillan Place Apartments 2,427 12,348 14,775 7,028 1985 6/85 5-30 yrs Misty Woods Apartments 434 8,069 8,503 4,498 1985 6/85 5-30 yrs $11,635 $90,866 $102,501 $52,735
Reconciliation of "Real Estate and Accumulated Depreciation": Years Ended December 31, 2001 2000 (in thousands) Investment Properties Balance at beginning of year $100,521 $ 98,755 Property improvements 2,122 1,766 Disposal of assets (142) -- Balance at end of year $102,501 $100,521 Accumulated Depreciation Balance at beginning of year $ 49,334 $ 46,015 Additions charged to expense 3,476 3,319 Disposal of assets (75) -- Balance at end of year $ 52,735 $ 49,334 The aggregate cost of the real estate for Federal income tax purposes at December 31, 2001 and 2000, is approximately $97,561,000 and $95,662,000, respectively. The accumulated depreciation for Federal income tax purposes at December 31, 2001 and 2000, is approximately $78,048,000 and $74,739,000, respectively. In February 2000, one of the Partnership's investment properties, McMillan Place Apartments, incurred damages to its buildings as a result of a hail storm. As a result of the damage, approximately $142,000 of fixed assets and approximately $75,000 of accumulated depreciation were written off resulting in a net write off of approximately $67,000. The property received approximately $223,000 in proceeds from the insurance company to repair the damaged units. For financial statement purposes, a casualty gain of approximately $156,000 was recognized as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. In May 2001, one of the Partnership's investment properties, Vinings Peak Apartments, incurred damage to approximately 10 units as a result of a fire. The estimated damages to the property are approximately $465,000. Although the repairs are not yet complete, the Partnership does not expect to incur a loss. Note H - 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. (the "Nuanes action") in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, its Managing General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging, among other things, the acquisition of interests in certain Managing General Partner entities by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia; past tender offers by the Insignia affiliates to acquire limited partnership units; management of the partnerships by the Insignia affiliates; and the series of transactions which closed on October 1, 1998 and February 26, 1999 whereby Insignia and Insignia Properties Trust, respectively, were merged into AIMCO. 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 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 court approval, on behalf of the Partnership and all limited partners who owned units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Court, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing, the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of prior lead counsel to enter the settlement. On December 14, 1999, the Managing General Partner and its affiliates terminated the proposed settlement. In February 2000, counsel for some of the named plaintiffs filed a motion to disqualify plaintiff's lead and liaison counsel who negotiated the settlement. On June 27, 2000, the Court entered an order disqualifying them from the case and an appeal was taken from the order on October 5, 2000. On December 4, 2000, the Court appointed the law firm of Lieff Cabraser Heimann & Bernstein LLP as new lead counsel for plaintiffs and the putative class. Plaintiffs filed a third amended complaint on January 19, 2001. On March 2, 2001, the Managing General Partner and its affiliates filed a demurrer to the third amended complaint. On May 14, 2001, the Court heard the demurrer to the third amended complaint. On July 10, 2001, the Court issued an order sustaining defendants' demurrer on certain grounds. On July 20, 2001, Plaintiffs filed a motion for reconsideration of the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer. On September 7, 2001, Plaintiffs filed a fourth amended class and derivative action complaint. On September 12, 2001, the Court denied Plaintiffs' motion for reconsideration. On October 5, 2001, the Managing General Partner and affiliated defendants filed a demurrer to the fourth amended complaint, which was heard on December 11, 2001. On February 2, 2002, the Court served its order granting in part the demurrer. The Court has dismissed without leave to amend certain of the plaintiffs' claims. On February 11, 2002, plaintiffs filed a motion seeking to certify a putative class comprised of all non-affiliated persons who own or have owned units in the partnerships. The Managing General Partner and affiliated defendants intend to oppose the motion and are scheduled to file their opposition brief on March 26, 2002. A hearing on the motion has been scheduled for April 29, 2002. The Court has set the matter for trial in January 2003. During the third quarter of 2001, a complaint (the "Heller action") was filed against the same defendants that are named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or about August 6, 2001, plaintiffs filed a first amended complaint. The first amended complaint in the Heller action is brought as a purported derivative action, and asserts claims for among other things breach of fiduciary duty; unfair competition; conversion, unjust enrichment; and judicial dissolution. Plaintiffs in the Nuanes action filed a motion to consolidate the Heller action with the Nuanes action and stated that the Heller action was filed in order to preserve the derivative claims that were dismissed without leave to amend in the Nuanes action by the Court order dated July 10, 2001. On October 5, 2001, the Managing General Partner and affiliated defendants moved to strike the first amended complaint in its entirety for violating the Court's July 10, 2001 order granting in part and denying in part defendants' demurrer in the Nuanes action, or alternatively, to strike certain portions of the complaint based on the statute of limitations. Other defendants in the action demurred to the fourth amended complaint, and, alternatively, moved to strike the complaint. On December 11, 2001, the court heard argument on the motions and took the matters under submission. On February 4, 2002, the Court served notice of its order granting defendants' motion to strike the Heller complaint as a violation of its July 10, 2001 order in the Nuanes action. The Managing General Partner does not anticipate that any costs, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None. PART III Item 9. Directors, Executive Officers, Promoters and Control Persons, Compliance with Section 16(a) of the Exchange Act Neither Century Properties Fund XIX (the "Partnership" or the "Registrant") nor Fox Partners II ("Fox"), the general partner of the Partnership, has any officers or directors. Fox Capital Management Corporation ("FCMC" or the "Managing General Partner"), the managing general partner of Fox, manages and controls substantially all of the Partnership's affairs and has general responsibility and ultimate authority in all matters affecting its business. The names and ages of, as well as the positions and offices held by, the present executive officers and director of the Managing General Partner are set forth below. There are no family relationships between or among any officers or directors. Name Age Position Patrick J. Foye 44 Executive Vice President and Director Martha L. Long 42 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. One or more of the above persons are also directors and/or officers of a general partner (or general partner of a general partner) of limited partnerships which either have a class of securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the reporting requirements of Section 15(d) of such Act. Further, one or more of the above persons are also directors and/or officers of Apartment Investment and Management Company and the general partner of AIMCO Properties, L.P., entities that have a class of securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, or are subject to the reporting requirements of Section 15 (d) of such Act. The executive officers and director of the Managing General Partner fulfill the obligations of the Audit Committee and oversee the Partnership's financial reporting process on behalf of the Managing General Partner. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the executive officers and director of the Managing General Partner reviewed the audited financial statements with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The executive officers and director of the Managing General Partner reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, their judgments as to the quality, not just the acceptability, of the Partnership's accounting principles and such other matters as are required to be discussed with the Audit Committee or its equivalent under auditing standards generally accepted in the United States. In addition, the Partnership has discussed with the independent auditors the auditors' independence from management and the Partnership including the matters in the written disclosures required by the Independence Standards Board and considered the compatibility of non-audit services with the auditors' independence. The executive officers and director of the Managing General Partner discussed with the Partnership's independent auditors the overall scope and plans for their audit. In reliance on the reviews and discussions referred to above, the executive officers and director of the Managing General Partner has approved the inclusion of the audited financial statements in the Form 10-KSB for the year ended December 31, 2001 for filing with the Securities and Exchange Commission. The Managing General Partner has reappointed Ernst & Young LLP as independent auditors to audit the financial statements of the Partnership for the current fiscal year. Fees for the last fiscal year were audit services of approximately $80,000 and non-audit services (principally tax-related) of approximately $41,000. Item 10. Executive Compensation Neither the director nor any of the officers of the Managing General Partner received any remuneration from the Registrant. Item 11. Security Ownership of Certain Beneficial Owners and Management Except as noted below, no person or entity was known by the Registrant to be the beneficial owner of more than 5% of the Units of Limited Partnership Interest of the Registrant as of December 31, 2001. Entity Number of Units Percent of Total Insignia Properties, L.P. 25,228.66 28.26% (an affiliate of AIMCO) Fox Capital Management Corporation 100.00 0.11% (an affiliate of AIMCO) IPLP Acquisition I, LLC 4,892.00 5.48% (an affiliate of AIMCO) AIMCO Properties, LP 19,986.00 22.38% (an affiliate of AIMCO) Insignia Properties, LP, Fox Capital Management Corporation and IPLP Acquisition I, LLC are indirectly ultimately owned by AIMCO. Their business address is 55 Beattie Place, Greenville, South Carolina 29602. AIMCO Properties, LP is indirectly ultimately controlled by AIMCO. Its business address is 2000 South Colorado Boulevard, Denver, Colorado 80222. No director or officer of the Managing General Partner owns any Units. As a result of its ownership of 50,206.66 limited partnership units, AIMCO, through its affiliates, could be in a position to influence all voting decisions with respect to the Partnership. Under the Partnership Agreement, unit holders holding a majority of the Units are entitled to take action with respect to a variety of matters. When voting on matters, IPLP would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, IPLP is required to vote 24,811.66 of its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering unit holders. Except for the foregoing, no other limitations are imposed on IPLP's right to vote its Units. Item 12. Certain Relationships and Related Transactions The 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 (i) certain payments to affiliates for services and (ii) reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments to the Managing General Partner and its affiliates were incurred during the years ended December 31, 2001 and 2000: 2001 2000 (in thousands) Property management fees $969 $889 Reimbursement for services of affiliates 166 213 Partnership management fee 277 397 Loan costs 47 -- During the years ended December 31, 2001 and 2000, 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 $969,000 and $889,000 for the years ended December 31, 2001 and 2000, respectively. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $166,000 and $213,000 for the years ended December 31, 2001 and 2000, respectively. Pursuant to the Partnership Agreement, for managing the affairs of the Partnership, the general partner is entitled to receive a Partnership management fee equal to 10% of the Partnership's adjusted cash from operations as distributed. Approximately $277,000 and $397,000 in Partnership management fees were paid along with the distributions from operations made during the years ended December 31, 2001 and 2000, respectively. During the year ended December 31, 2001, the Partnership paid an affiliate of the Managing General Partner approximately $47,000 for loan costs associated with the refinancing of Sunrunner Apartments. 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. Beginning in 2001, the Partnership began insuring its properties up to certain limits through coverage provided by AIMCO which is generally self-insured for a portion of losses and liabilities related to workers compensation, property casualty and vehicle liability. The Partnership insures its properties above the AIMCO limits through insurance policies obtained by AIMCO from insurers unaffiliated with the Managing General Partner. During the year ended December 31, 2001, the Partnership paid AIMCO and its affiliates approximately $136,000 for insurance coverage and fees associated with policy claims administration. During the year ended December 31, 2001, an affiliate of the Managing General Partner paid approximately $284,000 in costs associated with repairs on Vinings Peak Apartments. This amount is included in accounts payable on the consolidated balance sheet. Vinings Peak Apartments will reimburse the affiliate for these costs. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 50,206.66 limited partnership units in the Partnership representing 56.23% of the outstanding units at December 31, 2001. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO either through private purchases or tender offers. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters, which would include voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 56.23% of the outstanding units, AIMCO is in a position to influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the Managing General Partner because of its affiliation with the Managing General Partner. However, IPLP, an affiliate of the Managing General Partner, is required to vote 24,811.66 of its Units: (i) against any proposal to increase the fees and other compensation payable by the Partnership to the Managing General Partner and any of its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the votes cast by non tendering unit holders. Except for the foregoing, no other limitations are imposed on IPLP's right to vote its Units. Item 13. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K filed in the fourth quarter of calendar year 2001: None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PROPERTIES FUND XIX By: FOX PARTNERS II, Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION, Its Managing General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated. /s/Patrick J. Foye Executive Vice President Date: Patrick J. Foye and Director /s/Martha L. Long Senior Vice President Date: Martha L. Long and Controller CENTURY PROPERTIES INCOME FUND XIX EXHIBIT INDEX Exhibit Number Description of Exhibit 2.1 NPI, Inc. Stock Purchase Agreement, dated as of August 7, 1995, incorporated by reference to the Registrant's Current Report on Form 8-K dated August 7, 1995. 2.2 Partnership Units Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.1 to Form 8-K filed by Insignia Financial Group, Inc. ("Insignia") with the Securities and Exchange Commission on September 1, 1995. 2.3 Management Purchase Agreement dated as of August 17, 1995, incorporated by reference to Exhibit 2.2 to Form 8-K filed by Insignia with the Securities and Exchange Commission on September 1, 1995. 2.4 Agreement and Plan of Merger, dated as of October 1, 1998, by and between AIMCO and IPT (incorporated by reference to Exhibit 2.1 of Registrant's Current Report on Form 8-K dated October 1, 1998). 3.4 Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of the Partnership dated September 20, 1983, as amended on June 13, 1989, and as thereafter supplemented contained in the Registrant's Registration Statement on Form S-11 (Reg. No. 2-79007). 10.1 Amended and Restated Note A, made as of September 1, 1994, by the Registrant in favor of The Travelers Insurance Company ("Travelers") in the principal amount of $10,800,000, incorporated by reference to the Registrant's Form 10-Q for the quarter ended December 31, 1994. 10.2 Amended and Restated Note B, made as of September 1, 1994, by the Registrant in favor of Travelers in the principal amount of $2,138,673.53, incorporated by reference to the Registrant's Form 10-Q for the quarter ended December 31, 1994. 10.3 Amended and Restated Deed of Trust, dated as of September 1, 1994, between the Registrant and Travelers, incorporated by reference to the Registrant's Form 10-Q for the quarter ended December 31, 1994. 10.4 Amended and Restated Note B, made as of September 1, 1994, between the Registrant and Travelers, incorporated by reference to the Registrant's Form 10-Q for the quarter ended December 31, 1994. 10.5 Promissory Note made December 15, 1995, by the Registrant in favor of Connecticut General Life Insurance Company ("CIGNA") in the principal amount of $22,000,000 relating to the refinancing of Wood Lake, Wood Ridge, and Plantation Crossing incorporated by reference to Exhibit 10.5 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995. 10.6 Form of Deed to Secure Debt and Security Agreement from the Registrant to CIGNA relating to the refinancing of Wood Lake, Wood Ridge, and Plantation Crossing incorporated by reference to Exhibit 10.6 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995. 10.7 First Mortgage Note from the Registrant to Secore Financial Corporation ("Secore") relating to the refinancing of Misty Woods Apartments incorporated by reference to Exhibit 10.7 to the Partnership's Annual Report on Form 10-K for the year ended December 31, 1995. 10.8 First Mortgage and Security Agreement dated as of December 29, 1995, from the Registrant to Secore relating to the refinancing of Misty Woods Apartments incorporated by reference to Exhibit 10.8 to the Partnership Annual Report on Form 10-K for the year ended December 31, 1995. 10.10 Amendment to Amended and Restated Note A dated January 29, 1998, between the Partnership and The Travelers Insurance Company relating to McMillan Place. 10.11 Amendment to Amended and Restated Note B dated January 29, 1998, between the Partnership and The Travelers Insurance Company relating to McMillan Place. 10.12 Multifamily Note dated August 30, 2001 between GMAC Commercial Mortgage Corporation and Century Properties Fund XIX for the refinance of Sunrunner Apartments. 16.0 Letter from the Registrant's former Independent Auditor dated April 27, 1994, incorporated by reference to the Registrant's Current Report on Form 8-K dated April 22, 1994. 16.1 Letter from the Registrant's former Independent Auditor dated November 11, 1998, incorporated by reference to the Registrant's Current Report on Form 8-K dated November 16, 1998.