-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LIKeHAk4v7ae6zzayw1UfvEDCkGtdr4V+6UC6IF675rLoVBxeK1WI3J4ehoyhvem 8f7Md5w0b3FaPQz9Aa1EKg== 0000711642-04-000042.txt : 20040329 0000711642-04-000042.hdr.sgml : 20040329 20040329084822 ACCESSION NUMBER: 0000711642-04-000042 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040329 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY PROPERTIES FUND XIX CENTRAL INDEX KEY: 0000705752 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942887133 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-11935 FILM NUMBER: 04694591 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8642391000 MAIL ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10KSB 1 cpf19.txt CPF19 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 Form 10-KSB (Mark One) [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to _________ Commission file number 0-11935 CENTURY PROPERTIES FUND XIX (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. $13,125,000 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, 2003. 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 The matters discussed in this report contain certain forward-looking statements, including, without limitation, statements regarding future financial performance and the effect of government regulations. Actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors including, without limitation: national and local economic conditions; the terms of governmental regulations that affect the Registrant and interpretations of those regulations; the competitive environment in which the Registrant operates; financing risks, including the risk that cash flows from operations may be insufficient to meet required payments of principal and interest; real estate risks, including variations of real estate values and the general economic climate in local markets and competition for tenants in such markets; litigation, including costs associated with prosecuting and defending claims and any adverse outcomes, and possible environmental liabilities. Readers should carefully review the Registrant's financial statements and the notes thereto, as well as the risk factors described in the documents the Registrant files from time to time with the Securities and Exchange Commission. 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. Pursuant to the Partnership Agreement, the term of the Partnership was scheduled to expire on December 31, 2007. In connection with the refinancing of the mortgages encumbering three of the investment properties (see "Note B - Mortgage Notes Payable"), the lender required that the Partnership extend the term of the Partnership beyond the maturity date of the new loans, which is July 1, 2013. In this regard, on September 3, 2003 the Partnership sent the limited partners a consent solicitation seeking their consent to extend the term of the Partnership to December 31, 2024. The consent of a majority in interest of the limited partners was required to extend the term of the Partnership. The solicitation expired on September 22, 2003 and the Partnership received the consent of a majority of the limited partners to extend the term of the Partnership. Therefore, the term of the Partnership is scheduled to expire on December 31, 2024. 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 Partnership 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, 1994 and 2003. In addition, one property was foreclosed on in 1993. See "Item 2. Description of Properties" for a description of the Partnership's remaining seven properties. The Partnership 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 Partnership 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 provided such property management services for the years ended December 31, 2003 and 2002. Risk Factors The real estate business in which the Partnership is engaged is highly competitive. There are other residential properties within the market area of the Partnership's properties. The number and quality of competitive properties, including those which may be managed by an affiliate of the Managing General Partner, in such market area could have a material effect on the rental market for the apartments at the Partnership's properties and the rents that may be charged for such apartments. While the Managing General Partner and its affiliates own and/or control a significant number of apartment units in the United States, such units represent an insignificant percentage of total apartment units in the United States and competition for apartments is local. Laws benefiting disabled persons may result in the Partnership's incurrence of unanticipated expenses. Under the Americans with Disabilities Act of 1990, or ADA, all places intended to be used by the public are required to meet certain Federal requirements related to access and use by disabled persons. Likewise, the Fair Housing Amendments Act of 1988, or FHAA, requires apartments properties first occupied after March 13, 1990 to be accessible to the handicapped. These and other Federal, state and local laws may require modifications to the Partnership's properties, or restrict renovations of the properties. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants and also could result in an order to correct any non-complying feature, which could result in substantial capital expenditures. Although the Managing General Partner believes that the Partnership's properties are substantially in compliance with present requirements, the Partnership may incur unanticipated expenses to comply with the ADA and the FHAA. 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 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. In August 2003, the Partnership sold McMillan Place Apartments to an unrelated third party, for net proceeds of approximately $13,249,000 after payment of closing costs. The Partnership used approximately $9,128,000 of the net proceeds to repay the mortgage encumbering the property and to pay approximately $210,000 in contingent interest due to the lender. Contingent interest was required to be paid upon the sale of the property equal to 50% of the increase in the appreciated fair market value of the property above the stipulated amount of $12,860,000. The Partnership had previously accrued approximately $920,000 for this contingent interest. The over accrued contingent interest was reversed against interest expense during the year ended December 31, 2003 and is included in income (loss) from discontinued operations. The Partnership realized a gain of approximately $6,013,000 as a result of the sale. The property's operations are shown as income (loss) from discontinued operations and include revenues of approximately $1,594,000 and $2,711,000 for the years ended December 31, 2003 and 2002, respectively. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $5,000 as a result of unamortized loan costs being written off. This amount is included in income (loss) from discontinued operations. Schedule of Properties Set forth below for each of the Partnership'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 $13,816 $ 8,478 5-30 yrs S/L $ 1,827 Greenspoint Apartments 15,119 8,248 5-30 yrs S/L 2,588 Sandspoint Apartments 17,778 9,530 5-30 yrs S/L 2,783 Vinings Peak Apartments 16,163 9,215 5-30 yrs S/L 2,374 Plantation Crossing Apartments 10,167 5,963 5-30 yrs S/L 1,648 Sunrunner Apartments 8,038 4,992 5-30 yrs S/L 1,208 Misty Woods Apartments 8,675 5,210 5-30 yrs S/L 1,104 $89,756 $51,636 $13,532
See "Note A" of the consolidated financial statements included in "Item 7. Financial Statements" for a description of the Partnership's depreciation and capitalization policies. Schedule of Property Indebtedness The following table sets forth certain information relating to the loans encumbering the Partnership's properties.
Principal Principal Balance At Balance December 31, Interest Period Maturity Due At Property 2003 Rate Amortized Date Maturity (1) (in thousands) (in thousands) Wood Lake Apartments $ 7,402 4.41% 25 yrs 07/01/13 $ 4,592 Greenspoint Apartments 8,181 8.33% 30 yrs 05/15/05 7,988 Sandspoint Apartments 9,086 8.33% 30 yrs 05/15/05 8,874 Vinings Peak Apartments 8,359 4.41% 25 yrs 07/01/13 5,186 Plantation Crossing Apartments 4,421 4.41% 25 yrs 07/01/13 2,743 Sunrunner Apartments 4,391 7.06% 20 yrs 09/01/21 -- Misty Woods Apartments 4,958 7.88% 30 yrs 01/01/06 4,777 $46,798 $34,160
(1) See "Item 7. Financial Statements - Note B" for information with respect to the Partnership's ability to prepay these loans and other specific details about the loans. The first and second mortgage loans for McMillan Place Apartments matured in October 2002 and were in default at December 31, 2002. On March 25, 2003, the Managing General Partner and the lender agreed to an eleven-month extension of the terms of the first mortgage. As part of the agreement, an affiliate of the Managing General Partner advanced approximately $2,101,000 to the Partnership to repay the second mortgage loan. Pursuant to the agreement, the stated interest rate for the extension was 6.5% from the previous maturity date. This mortgage indebtedness was paid off during the year ended December 31, 2003 with the net sales proceeds of McMillan Place Apartments (see "Item 7. Financial Statements - Note E"). The mortgage encumbering McMillan Place Apartments required an annual cash flow payment based on a calculation of excess cash generated by the property. During the year ended December 31, 2003, the Partnership paid excess cash flow of approximately $839,000 to the mortgage lender. This amount was applied against the outstanding principal balance of the mortgage. On June 25, 2003 the Partnership refinanced the mortgage encumbering Vinings Peak Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $7,785,000 with a new mortgage of $8,470,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $53,000 are due on the first day of each month. A balloon payment of approximately $5,186,000 is due in July 2013. At the closing, a repair escrow of $334,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $249,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership received net proceeds of approximately $96,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Wood Lake Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $6,703,000 with a new mortgage of $7,500,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $47,000 are due on the first day of each month. A balloon payment of approximately $4,592,000 is due in July 2013. At the closing, a repair escrow of $295,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $231,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership received net proceeds of approximately $868,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Plantation Crossing Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $4,541,000 with a new mortgage of $4,480,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $28,000 are due on the first day of each month. A balloon payment of approximately $2,743,000 is due in July 2013. At the closing, a repair escrow of $145,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $173,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership had a shortfall of approximately $821,000 which was covered by the net proceeds received from the Wood Lake refinancing discussed above. Rental Rate and Occupancy Average annual rental rates and occupancy for 2003 and 2002 for each property:
Average Annual Average Rental Rates Occupancy (per unit) Property 2003 2002 2003 2002 Wood Lake Apartments (1) $ 8,925 $ 9,723 91% 87% Greenspoint Apartments (2) 6,215 8,213 85% 90% Sandspoint Apartments (2) 6,850 7,134 82% 87% Vinings Peak Apartments (1) 8,392 9,165 91% 87% Plantation Crossing Apartments (1) 8,082 8,601 94% 88% Sunrunner Apartments 7,301 7,197 92% 94% Misty Woods Apartments (3) 6,754 6,885 91% 88%
(1) The Managing General Partner attributes the increase in occupancy at these properties to increased marketing efforts by property management in the local markets. (2) The Managing General Partner attributes the decrease in occupancy at these properties to a slow economy, job layoffs and higher unemployment, and increased home purchases due to favorable interest rates. (3) The Managing General Partner attributes the increase in occupancy at Misty Woods Apartments to decreased rental rates at the property. 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 2003 for each property were: 2003 2003 Billing Rate (in thousands) Wood Lake Apartments $148 2.99% Greenspoint Apartments 152 1.21% Sandspoint Apartments 204 1.32% Vinings Peak Apartments 173 2.99% Plantation Crossing Apartments 100 3.00% Sunrunner Apartments 160 2.47% Misty Woods Apartments 103 1.16% Capital Improvements Wood Lake Apartments During the year ended December 31, 2003, the Partnership completed approximately $173,000 of capital improvements at the property consisting primarily of roof and structural upgrades, parking lot resurfacing, air conditioning units, major landscaping, and appliance, wall covering, and floor covering replacements. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $121,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as replacement reserves and the anticipated cash flow generated by the property. Greenspoint Apartments During the year ended December 31, 2003, the Partnership completed approximately $211,000 of capital improvements at the property consisting primarily of roof upgrades, and air conditioning, appliance and floor covering replacements. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $185,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as the anticipated cash flow generated by the property. Sandspoint Apartments During the year ended December 31, 2003, the Partnership completed approximately $374,000 of capital improvements at the property consisting primarily of major landscaping, exterior painting, plumbing enhancements, structural upgrades, roof replacements, and floor covering, air conditioning unit and appliance replacements. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $238,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as the anticipated cash flow generated by the property. Vinings Peak Apartments During the year ended December 31, 2003, the Partnership completed approximately $209,000 of capital improvements at the property consisting primarily of floor covering and appliance replacements, air conditioning upgrades, and structural improvements. These improvements were funded from operating cash flow and insurance proceeds. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $154,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as replacement reserves and the anticipated cash flow generated by the property. Plantation Crossing Apartments During the year ended December 31, 2003, the Partnership completed approximately $149,000 of capital improvements at the property consisting primarily of plumbing fixture upgrades, exterior painting, structural upgrades, and floor covering and appliance replacements. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $99,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as replacement reserves and the anticipated cash flow generated by the property. Sunrunner Apartments During the year ended December 31, 2003, the Partnership completed approximately $72,000 of capital improvements at the property consisting primarily of floor covering replacements, air conditioning upgrades, and structural enhancements. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $110,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as the anticipated cash flow generated by the property. Misty Woods Apartments During the year ended December 31, 2003, the Partnership completed approximately $76,000 of capital improvements at the property consisting primarily of floor covering and appliance replacements and fire safety upgrades. These improvements were funded from operating cash flow. The Partnership is currently evaluating the capital improvement needs of the property for the upcoming year and currently expects to budget approximately $125,000. Additional improvements may be considered during 2004 and will depend on the physical condition of the property as well as replacement reserves and anticipated cash flow generated by the property. McMillan Place Apartments During the year ended December 31, 2003, the Partnership completed approximately $122,000 of capital improvements at the property consisting primarily of HVAC improvements and floor covering and water heater replacements. These improvements were funded from operating cash flow. McMillan Place Apartments was sold in August 2003. 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 purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that 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 that 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 sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, 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 Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. In general terms, the proposed settlement provides for certification for settlement purposes of a settlement class consisting of all limited partners in this Partnership and others (the "Partnerships") as of December 20, 2002, the dismissal with prejudice and release of claims in the Nuanes and Heller litigation, payment by AIMCO of $9.9 million (which shall be distributed to settlement class members after deduction of attorney fees and costs of class counsel and certain costs of settlement) and up to $1 million toward the cost of independent appraisals of the Partnerships' properties by a Court appointed appraiser. An affiliate of the Managing General Partner has also agreed to make at least one round of tender offers to purchase all of the partnership interests in the Partnerships within one year of final approval, if it is granted, and to provide partners with the independent appraisals at the time of these tenders. The proposed settlement also provided for the limitation of the allowable costs which the Managing General Partner or its affiliates will charge the Partnerships in connection with this litigation and imposes limits on the class counsel fees and costs in this litigation. On April 11, 2003, notice was distributed to limited partners providing the details of the proposed settlement. On June 13, 2003, the Court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On November 24, 2003, the Objector filed an application requesting the Court order AIMCO to withdraw settlement tender offers it had commenced, refrain from making further offers pending the appeal and auction any units tendered to third parties, contending that the offers did not conform with the terms of the Settlement. Counsel for the Objector (on behalf of another investor) had alternatively requested the Court take certain action purportedly to enforce the terms of the settlement agreement. On December 18, 2003, the Court heard oral argument on the motions and denied them both in their entirety. On January 28, 2004, Objector filed his opening brief in his pending appeal. The Managing General Partner is currently scheduled to file a brief in support of the order approving settlement and entering judgment thereto by April 23, 2004. On August 8, 2003 AIMCO Properties L.P., an affiliate of the Managing General Partner, was served with a Complaint in the United States District Court, District of Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The Complaint is styled as a Collective Action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the Complaint alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating maintenance workers for time that they worked in responding to a call while "on-call". The Complaint also attempts to certify a subclass for salaried service directors who are challenging their classification as exempt from the overtime provisions of the FLSA. AIMCO Properties L.P. has filed an answer to the Complaint denying the substantive allegations. Discovery is currently underway. The Managing General Partner does not anticipate that any costs to the Partnership, whether legal or settlement costs, associated with these cases will be material to the Partnership's overall operations. Item 4. Submission of Matters to a Vote of Security Holders On September 3, 2003, the Partnership began soliciting the consent of its limited partners to an amendment (the "Amendment") to the Amended and Restated Agreement of Limited Partnership of the Partnership to extend the term of the Partnership from December 31, 2007 to December 31, 2024. The consent of limited partners who own more than 50% of all outstanding limited partnership units in the Partnership ("units") was required to approve the Amendment. At midnight, New York City time, on September 22, 2003, the consent solicitation expired pursuant to its terms. Limited partners owning more than 50% of all outstanding limited partnership units in the Partnership consented to the Amendment. On September 29, 2003, the general partner of the Partnership executed the Amendment as the general partner and on behalf of the limited partners, and has made the requisite filings with the Secretary of the State of California. 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 3,706 limited partners of record at December 31, 2003. Affiliates of the Managing General Partner owned 53,593 units or 60.02% at December 31, 2003. 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, 2003 and 2002 (see "Item 6. Management's Discussion and Analysis or Plan of Operation" for further details)(in thousands, except per unit data):
Per Limited Per Limited Year Ended Partnership Year Ended Partnership December 31, 2003 Unit December 31, 2002 Unit Operations $ -- $ -- $1,861 $18.38 Sale (1) 2,324 25.51 -- -- $2,324 $25.51 $1,861 $18.38
(1) Proceeds from the sale of McMillan Place Apartments in August 2003. 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. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit any distributions to its partners in 2004 or subsequent periods. See "Item 2. Description of Properties - Capital Improvements" for information relating to anticipated capital expenditures at the properties. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 53,593 limited partnership Units (the "Units") in the Partnership representing 60.02% of the outstanding units at December 31, 2003. 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 Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 60.02% of the outstanding Units, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. However, with respect to the 25,228.66 Units acquired on January 19, 1996, AIMCO IPLP, L.P. (formerly known as Insignia Properties, LP ("IPLP"), an affiliate of the Managing General Partner and of AIMCO, agreed to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the vote cast by third party unitholders. Except for the foregoing, no other limitations are imposed on IPLP's, AIMCO's or any other affiliates' right to vote each Unit held. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO, as its sole stockholder. Item 6. Management's Discussion and Analysis or Plan of Operation This item should be read in conjunction with the financial statements and other items contained in this report. Results of Operations The Partnership's net income for the year ended December 31, 2003 was approximately $5,694,000 compared to net income of approximately $853,000 for the corresponding period in 2002. The increase in net income for the year ended December 31, 2003 is due to the gain on the sale of McMillan Place Apartments and an increase in income from discontinued operations. Effective January 1, 2002, the Partnership adopted Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which established standards for the way that public business enterprises report information about long-lived assets that are either being held for sale or have already been disposed of by sale or other means. The standard requires that results of operations for a long-lived asset that is being held for sale or has already been disposed of be reported as discontinued operations on the statement of operations. As a result, the accompanying consolidated statements of operations have been restated as of January 1, 2002 to reflect the operations of McMillan Place Apartments, which sold in August 2003, as income (loss) from discontinued operations. In August 2003, the Partnership sold McMillan Place Apartments to an unrelated third party, for net proceeds of approximately $13,249,000 after payment of closing costs. The Partnership used approximately $9,128,000 of the net proceeds to repay the mortgage encumbering the property and to pay approximately $210,000 in contingent interest due to the lender. Contingent interest was required to be paid upon the sale of the property equal to 50% of the increase in the appreciated fair market value of the property above the stipulated amount of $12,860,000. The Partnership had previously accrued approximately $920,000 for this contingent interest. The over accrued contingent interest was reversed against interest expense during the year ended December 31, 2003 and is included in income (loss) from discontinued operations. The Partnership realized a gain of approximately $6,013,000 as a result of the sale. The property's operations are shown as income (loss) from discontinued operations and include revenues of approximately $1,594,000 and $2,711,000 for the years ended December 31, 2003 and 2002, respectively. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $5,000 as a result of unamortized loan costs being written off. This amount is included in income (loss) from discontinued operations. Excluding the discontinued operations and gain on sale, the Partnership's loss from continuing operations for the year ended December 31, 2003 was approximately $775,000 compared to income from continuing operations of approximately $998,000 for the corresponding period in 2002. The increase in loss from continuing operations for the year ended December 31, 2003 is due to a decrease in total revenues and an increase in total expenses. Total revenues decreased for the year ended December 31, 2003 due to decreases in rental income and casualty gains partially offset by an increase in other income. Rental income decreased due to decreases in average rental rates at six of the properties and average occupancy at three of the properties and an increase in rental concessions at five of the properties. This was partially offset by an increase in occupancy at four of the properties. Other income increased due to increases in late charges and lease cancellation fees at all of the Partnership's properties. In May 2001, one of the Partnership's investment properties, Vinings Peak Apartments, incurred damages to ten units as a result of a fire. As a result of the damage, approximately $369,000 of fixed assets and approximately $222,000 of accumulated depreciation were written off resulting in a net write off of approximately $147,000. The property received approximately $461,000 in proceeds from the insurance company to repair the damaged units during 2002 and recognized a casualty gain of approximately $314,000 as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. During the year ended December 31, 2003, the Partnership received additional proceeds of approximately $171,000 which were recognized as a casualty gain as the damaged assets had been fully written off in 2002. In May 2002, one of the Partnership's investment properties, Sandspoint Apartments, incurred damages to twenty-four units as a result of a fire. As a result of the damage, approximately $238,000 of fixed assets and approximately $135,000 of accumulated depreciation were written off resulting in a net write off of approximately $103,000. During 2002, the property received approximately $372,000 in proceeds from the insurance company to repair the damaged units and to cover approximately $15,000 in emergency expenses. For financial statement purposes, a casualty gain of approximately $254,000 was recognized during 2002 as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. Total expenses increased for the year ended December 31, 2003 due to increases in operating and depreciation expenses partially offset by a decrease in interest expense. Operating expenses increased due to increased advertising, property, and maintenance expenses. Advertising expense increased due to increases in periodical advertising and referral fees at most of the Partnership's properties. Property expenses increased due to increases in payroll and related benefits at most of the Partnership's properties. Maintenance expense increased due to an increase in contract labor and repairs at most of the Partnership's properties. Depreciation expense increased due to fixed assets placed into service during the past twelve months, primarily at Greenspoint and Sandspoint Apartments. Interest expense decreased due to the refinancing of the mortgages encumbering three of the Partnership's properties, which resulted in lower interest rates (see "Liquidity and Capital Resources" for further details). Included in general and administrative expenses for the years ended December 31, 2003 and 2002 are management reimbursements to the Managing General Partner as allowed under the Partnership Agreement. In addition to these reimbursements, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included in general and administrative expenses. 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, the Managing General Partner may use rental concessions and rental rate reductions to offset softening market conditions, accordingly, there is no guarantee that the Managing General Partner will be able to sustain such a plan. Liquidity and Capital Resources At December 31, 2003, the Partnership had cash and cash equivalents of approximately $1,250,000 compared to approximately $2,025,000 at December 31, 2002. For the year ended December 31, 2003, cash and cash equivalents decreased approximately $775,000. The decrease in cash and cash equivalents is due to approximately $14,567,000 of cash used in financing activities partially offset by approximately $11,265,000 of cash provided by investing activities and approximately $2,527,000 of cash provided by operating activities. Net cash used in financing activities consisted of the repayment of the advance from an affiliate of the Managing General Partner, distributions to partners, the repayment of the mortgages encumbering Plantation Crossing, Vinings Peak, Wood Lake and McMillan Place Apartments, loan costs associated with the refinancings of Plantation Crossing, Vinings Peak and Wood Lake Apartments, and scheduled principal payments on the mortgages encumbering the Partnership's investment properties, partially offset by the refinancing proceeds received for Plantation Crossing, Vinings Peak, and Wood Lake Apartments and advances received from an affiliate of the Managing General Partner. Net cash provided by investing activities consisted of the proceeds from the sale of McMillan Place Apartments and insurance proceeds received partially offset by net deposits to restricted escrows maintained by the mortgage lenders and property improvements and replacements. The Partnership invests its working capital reserves in interest bearing accounts. 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 Partnership and to comply with Federal, state, and local legal and regulatory requirements. The Managing General Partner monitors developments in the area of legal and regulatory compliance and is studying new federal laws, including the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act of 2002 mandates or suggests additional compliance measures with regard to governance, disclosure, audit and other areas. In light of these changes, the Partnership expects that it will incur higher expenses related to compliance, including increased legal and audit fees. The Partnership is currently evaluating the capital improvement needs of the properties for the upcoming year and currently expects to budget approximately $1,032,000. 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 Partnership's distributable cash flow, if any, may be adversely affected at least in the short term. The first and second mortgage loans for McMillan Place Apartments matured in October 2002 and were in default at December 31, 2002. On March 25, 2003, the Managing General Partner and the lender agreed to an eleven month extension of the terms of the mortgage. As part of the agreement, an affiliate of the Managing General Partner advanced approximately $2,101,000 to the Partnership to repay the second mortgage loans. Pursuant to the agreement, the stated interest rate is 6.5% from the previous maturity date. This indebtedness was paid off during the year ended December 31, 2003 with the net sales proceeds of McMillan Place Apartments, as previously discussed. 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. During the year ended December 31, 2003, the Managing General Partner exceeded this credit limit and advanced the Partnership approximately $2,101,000. This advance was used to repay the second mortgage encumbering McMillan Place Apartments, which was part of the loan extension agreement. Interest expense for this loan was approximately $66,000 during the year ended December 31, 2003. The advance and accrued interest were paid in full during the year ended December 31, 2003 with the sales proceeds of McMillan Place Apartments (see Note E). No advances were received in 2002. On June 25, 2003 the Partnership refinanced the mortgage encumbering Vinings Peak Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $7,785,000 with a new mortgage of $8,470,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $53,000 are due on the first day of each month. A balloon payment of approximately $5,186,000 is due in July 2013. At the closing, a repair escrow of $334,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $249,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership received net proceeds of approximately $96,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Wood Lake Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $6,703,000 with a new mortgage of $7,500,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $47,000 are due on the first day of each month. A balloon payment of approximately $4,592,000 is due in July 2013. At the closing, a repair escrow of $295,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $231,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership received net proceeds of approximately $868,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Plantation Crossing Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $4,541,000 with a new mortgage of $4,480,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $28,000 are due on the first day of each month. A balloon payment of approximately $2,743,000 is due in July 2013. At the closing, a repair escrow of $145,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $173,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership had a shortfall of approximately $821,000 which was covered by the net proceeds received from the Wood Lake refinancing discussed above. The Partnership's assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Partnership. The mortgage indebtedness encumbering Sunrunner Apartments of approximately $4,391,000 matures in September 2021, at which time the loan is scheduled to be fully amortized. The mortgage indebtedness encumbering Greenspoint and Sandspoint Apartments of approximately $17,267,000 matures in May 2005 at which time balloon payments of approximately $16,862,000 are required. The mortgage indebtedness encumbering Misty Woods Apartments of approximately $4,958,000 matures in January 2006 at which time a balloon payment of approximately $4,777,000 is required. The mortgage indebtedness encumbering Vinings Peak, Plantation Crossing and Woods Lake Apartments of approximately $20,182,000 matures in July 2013 at which time balloon payments of approximately $12,521,000 are required. 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 Partnership will risk losing such property through foreclosure. Pursuant to the Partnership Agreement, the term of the Partnership was scheduled to expire on December 31, 2007. In connection with the refinancing of the mortgages encumbering three of the investment properties (see "Note B - Mortgage Notes Payable"), the lender required that the Partnership extend the term of the Partnership beyond the maturity date of the new loans, which is July 1, 2013. In this regard, on September 3, 2003 the Partnership sent the limited partners a consent solicitation seeking their consent to extend the term of the Partnership to December 31, 2024. The consent of a majority in interest of the limited partners was required to extend the term of the Partnership. The solicitation expired on September 22, 2003 and the Partnership received the consent of a majority of the limited partners to extend the term of the Partnership. Therefore, the term of the Partnership is scheduled to expire on December 31, 2024. During the years ended December 31, 2003 and 2002, the Partnership distributed the following amounts (in thousands, except per unit data):
Per Limited Per Limited Year Ended Partnership Year Ended Partnership December 31, 2003 Unit December 31, 2002 Unit Operations $ -- $ -- $1,861 $18.38 Sale (1) 2,324 25.51 -- -- $2,324 $25.51 $1,861 $18.38
(1) Proceeds from the sale of McMillan Place Apartments in August 2003. 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. There can be no assurance, however, that the Partnership will generate sufficient funds from operations after required capital expenditures to permit any distributions to its partners in 2004 or subsequent periods. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 53,593 limited partnership units (the "Units") in the Partnership representing 60.02% of the outstanding Units at December 31, 2003. 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 Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 60.02% of the outstanding Units, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. However, with respect to the 25,228.66 Units acquired on January 19, 1996, AIMCO IPLP, L.P. (formerly known as Insignia Properties, LP ("IPLP"), an affiliate of the Managing General Partner and of AIMCO, agreed to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the vote cast by third party unitholders. Except for the foregoing, no other limitations are imposed on IPLP's, AIMCO's or any other affiliates' right to vote each Unit held. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO, as its sole stockholder. Critical Accounting Policies and Estimates A summary of the Partnership's significant accounting policies is included in "Note A - Organization and Significant Accounting Policies" which is included in the financial statements in "Item 7. Financial Statements". The Managing General Partner believes that the consistent application of these policies enables the Partnership to provide readers of the financial statements with useful and reliable information about the Partnership's operating results and financial condition. The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires the Partnership to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Judgments and assessments of uncertainties are required in applying the Partnership's accounting policies in many areas. The following may involve a higher degree of judgment and complexity. Impairment of Long-Lived Assets Investment properties are recorded at cost, less accumulated depreciation, unless considered impaired. If events or circumstances indicate that the carrying amount of a property may be impaired, the Partnership will make an assessment of its recoverability by estimating the undiscounted future cash flows, excluding interest charges, of the property. If the carrying amount exceeds the aggregate future cash flows, the Partnership would recognize an impairment loss to the extent the carrying amount exceeds the fair value of the property. Real property investments are subject to varying degrees of risk. Several factors may adversely affect the economic performance and value of the Partnership's investment properties. These factors include, but are not limited to, changes in the national, regional and local economic climate; local conditions, such as an oversupply of multifamily properties; competition from other available multifamily property owners and changes in market rental rates. Any adverse changes in these factors could cause impairment of the Partnership's assets. Revenue Recognition The Partnership generally leases apartment units for twelve-month terms or less. Rental income attributable to leases is recognized monthly as it is earned. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants. The Partnership will offer rental concessions during particularly slow months or in response to heavy competition from other similar complexes in the area. Any concessions given at the inception of the lease are amortized over the life of the lease. Item 7. Financial Statements CENTURY PROPERTIES FUND XIX LIST OF FINANCIAL STATEMENTS Report of Ernst & Young LLP, Independent Auditors Consolidated Balance Sheet - December 31, 2003 Consolidated Statements of Operations - Years ended December 31, 2003 and 2002 Consolidated Statements of Changes in Partners' (Deficiency) Capital - Years ended December 31, 2003 and 2002 Consolidated Statements of Cash Flows - Years ended December 31, 2003 and 2002 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, 2003, and the related consolidated statements of operations, changes in partners' (deficiency) capital, and cash flows for each of the two years in the period ended December 31, 2003. 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Century Properties Fund XIX at December 31, 2003, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. /s/ERNST & YOUNG LLP Greenville, South Carolina February 27, 2004 CENTURY PROPERTIES FUND XIX CONSOLIDATED BALANCE SHEET (in thousands, except unit data) December 31, 2003
Assets Cash and cash equivalents $ 1,250 Receivables and deposits 226 Restricted escrows 822 Other assets 1,258 Investment properties (Notes B, E and F): Land $ 9,200 Buildings and related personal property 80,556 89,756 Less accumulated depreciation (51,636) 38,120 $ 41,676 Liabilities and Partners' (Deficiency) Capital Liabilities Accounts payable $ 303 Tenant security deposit payable 320 Accrued property taxes 178 Due to former affiliate 376 Other liabilities 502 Mortgage notes payable (Note B) 46,798 Partners' (Deficiency) Capital General partner $ (9,802) Limited partners (89,292 units issued and and outstanding) 3,001 (6,801) $ 41,676 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per unit data)
Years Ended December 31, 2003 2002 Revenues: (Restated) Rental income $11,631 $12,609 Other income 1,323 1,135 Casualty gains (Note G) 171 568 Total revenues 13,125 14,312 Expenses: Operating 5,841 4,893 General and administrative 465 485 Depreciation 3,170 3,117 Interest 3,390 3,767 Property taxes 1,034 1,052 Total expenses 13,900 13,314 (Loss) income from continuing operations (775) 998 Income (loss) from discontinued operations 456 (145) Gain on sale of discontinued operations 6,013 -- Net income (Note C) $ 5,694 $ 853 Net income allocated to general partner $ 82 $ 100 Net income allocated to limited partners 5,612 753 $ 5,694 $ 853 Per limited partnership unit: (Loss) income from continuing operations $ (7.66) $ 9.86 Income (loss) from discontinued operations 4.50 (1.43) Gain on sale of discontinued operations 66.00 -- $ 62.84 $ 8.43 Distributions per limited partnership unit $ 25.51 $ 18.38 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' (DEFICIENCY) CAPITAL (in thousands, except per unit data)
Limited Partnership General Limited Units Partner's Partners' Total Original capital contributions 89,292 $ -- $ 89,292 $ 89,292 Partners' (deficiency) capital at December 31, 2001 89,292 (9,718) 555 (9,163) Distribution paid to partners -- (220) (1,641) (1,861) Net income for the year ended December 31, 2002 -- 100 753 853 Partners' deficit at December 31, 2002 89,292 (9,838) (333) (10,171) Distribution paid to partners -- (46) (2,278) (2,324) Net income for the year ended December 31, 2003 -- 82 5,612 5,694 Partners' (deficiency) capital at December 31, 2003 89,292 $(9,802) $ 3,001 $ (6,801) See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Years Ended December 31, 2003 2002 Cash flows from operating activities: Net income $ 5,694 $ 853 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 3,495 3,592 Amortization of loan costs and discount 141 90 Gain on sale of investment property (6,013) -- Loss on early extinguishment of debt 5 -- Contingent interest on mortgage note encumbering McMillan Place -- 420 Casualty gain (171) (568) Change in accounts: Receivables and deposits 1,038 (265) Other assets (278) (20) Accounts payable (91) 86 Tenant security deposits payable 34 (14) Accrued property taxes (598) 148 Due to former affiliate 12 94 Other liabilities (741) (283) Net cash provided by operating activities 2,527 4,133 Cash flows from investing activities: Property improvements and replacements (1,378) (1,836) Net proceeds from sale of discontinued operations 13,249 -- Net insurance proceeds received 171 833 Net (deposits to) withdrawals from restricted escrows (777) 124 Net cash provided by (used in) investing activities 11,265 (879) Cash flows from financing activities: Payment on mortgage notes payable (1,782) (1,013) Repayment of mortgage notes payable (30,258) -- Proceeds from mortgage notes payable 20,450 -- Distributions to partners (2,324) (1,861) Advances received from affiliate 2,101 -- Repayment of advances from affiliate (2,101) -- Loan costs paid (653) -- Net cash used in financing activities (14,567) (2,874) Net (decrease) increase in cash and cash equivalents (775) 380 Cash and cash equivalents at beginning of the year 2,025 1,645 Cash and cash equivalents at end of the year $ 1,250 $ 2,025 Supplemental disclosure of cash flow information: Cash paid for interest $ 3,724 $ 4,309 See Accompanying Notes to Consolidated Financial Statements
CENTURY PROPERTIES FUND XIX NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2003 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, 2003, the Partnership operated seven residential apartment complexes located throughout the United States. The general partner of the Partnership is Fox Partners 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. Pursuant to the Partnership Agreement, the term of the Partnership was scheduled to expire on December 31, 2007. In connection with the refinancing of the mortgages encumbering three of the investment properties (see "Note B - Mortgage Notes Payable"), the lender required that the Partnership extend the term of the Partnership beyond the maturity date of the new loans, which is July 1, 2013. In this regard, on September 3, 2003 the Partnership sent the limited partners a consent solicitation seeking their consent to extend the term of the Partnership to December 31, 2024. The consent of a majority in interest of the limited partners was required to extend the term of the Partnership. The solicitation expired on September 22, 2003 and the Partnership received the consent of a majority of the limited partners to extend the term of the Partnership. Therefore, the term of the Partnership is scheduled to expire on December 31, 2024. Basis of Presentation Effective January 1, 2002, the Partnership adopted Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which established standards for the way that public business enterprises report information about long-lived assets that are either being held for sale or have already been disposed of by sale or other means. The standard requires that results of operations for a long-lived asset that is being held for sale or has already been disposed of be reported as discontinued operations on the statement of operations. As a result, the accompanying consolidated statements of operations have been restated as of January 1, 2002 to reflect the operations of McMillan Place Apartments, which sold in August 2003, as income (loss) from discontinued operations. Principles of Consolidation The Partnership's financial statements include the accounts of Misty Woods CPF 19, LLC, a limited liability company in which the Partnership ultimately owns a 100% interest. All significant inter-entity transactions have been eliminated. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 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 based on the Partnership's incremental borrowing rate, approximates its carrying value. Cash and Cash Equivalents Cash and cash equivalents include 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 $1,183,000 at December 31, 2003 that are maintained by the affiliated management company on behalf of affiliated entities in cash concentration accounts. Restricted Escrows Reserve Account - As a condition of refinancing the debt of Misty Woods, the Partnership was required to establish a reserve account. The reserve account was 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 the property. The balance at December 31, 2003, is approximately $48,000, which includes interest. Repair Reserve - At the time of the refinancing of the mortgages encumbering Vinings Peak, Wood Lake and Plantation Crossing Apartments in June 2003, the Partnership was required to establish a reserve to cover necessary repairs at the properties. As of December 31, 2003, the reserve balance was $774,000. 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 seven apartment complexes and are stated at cost. Acquisition fees are capitalized as a cost of real estate. Expenditures in excess of $250 that maintain an existing asset which has a useful life of more than one year are capitalized as capital replacement expenditures and depreciated over the estimated useful life of the asset. Expenditures for ordinary repairs, maintenance and apartment turnover costs are expensed as incurred. In accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", 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. No adjustments for impairment of value were recorded in the years ended December 31, 2003 and 2002. 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 Partnership generally leases apartment units for twelve-month terms or less. The Partnership recognizes income as earned on its leases. The Partnership evaluates all accounts receivable from residents and establishes an allowance, after the application of security deposits, for accounts greater than 30 days past due on current tenants and all receivables due from former tenants. 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. Any concessions given at the inception of the lease are amortized over the life of the lease. Advertising Costs The Partnership expenses the costs of advertising as incurred. Advertising costs of approximately $395,000 and $232,000 for the years ended December 31, 2003 and 2002, respectively, were charged to operating expense as incurred. Loan Costs Loan costs of approximately $1,303,000 are included in other assets in the accompanying consolidated balance sheet and are being amortized by the straight-line method over the life of the loans. At December 31, 2003, accumulated amortization is approximately $427,000. Amortization of loan costs is included in interest expense and income (loss) from discontinued operations. Amortization expense is expected to be approximately $121,000 in 2004, $104,000 in 2005, and $75,000 in 2006 through 2008. Segment Reporting SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" established standards for the way that public business enterprises report information about operating segments in annual financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. It also 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. Note B - Mortgage Notes Payable
Principal Monthly Principal Balance At Payment Stated Balance December 31, Including Interest Maturity Due At Property 2003 Interest Rate Date Maturity (in thousands) (in thousands) Wood Lake Apartments $ 7,402 $ 47 4.41% 07/01/13 $ 4,592 Greenspoint Apartments 8,181 68 8.33% 05/15/05 7,988 Sandspoint Apartments 9,086 76 8.33% 05/15/05 8,874 Vinings Peak Apartments 8,359 53 4.41% 07/01/13 5,186 Plantation Crossing Apartments 4,421 28 4.41% 07/01/13 2,743 Sunrunner Apartments 4,391 36 7.06% 09/01/21 -- Misty Woods Apartments 4,958 40 7.88% 01/01/06 4,777 $46,798 $348 $34,160
The first and second mortgage loans for McMillan Place Apartments matured in October 2002 and were in default at December 31, 2002. On March 25, 2003, the Managing General Partner and the lender agreed to an eleven-month extension of the terms of the first mortgage. As part of the agreement, an affiliate of the Managing General Partner advanced approximately $2,101,000 to the Partnership to repay the second mortgage loan. Pursuant to the agreement, the stated interest rate for the extension was 6.5% from the previous maturity date. This mortgage indebtedness was paid off during the year ended December 31, 2003 with the net sales proceeds of McMillan Place Apartments (see "Note E"). The mortgage encumbering McMillan Place Apartments required an annual cash flow payment based on a calculation of excess cash generated by the property. During the year ended December 31, 2003, the Partnership paid excess cash flow of approximately $839,000 to the mortgage lender. This amount was applied against the outstanding principal balance of the mortgage. On June 25, 2003 the Partnership refinanced the mortgage encumbering Vinings Peak Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $7,785,000 with a new mortgage of $8,470,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $53,000 are due on the first day of each month. A balloon payment of approximately $5,186,000 is due in July 2013. At the closing, a repair escrow of $334,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $249,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership received net proceeds of approximately $96,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Wood Lake Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $6,703,000 with a new mortgage of $7,500,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $47,000 are due on the first day of each month. A balloon payment of approximately $4,592,000 is due in July 2013. At the closing, a repair escrow of $295,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $231,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership received net proceeds of approximately $868,000. On June 25, 2003 the Partnership refinanced the mortgage encumbering Plantation Crossing Apartments. The refinancing replaced the previous mortgage indebtedness of approximately $4,541,000 with a new mortgage of $4,480,000. The mortgage was refinanced at a rate of 4.41% compared to the prior rate of 7.50%. Payments of approximately $28,000 are due on the first day of each month. A balloon payment of approximately $2,743,000 is due in July 2013. At the closing, a repair escrow of $145,000 was established and is being held by the mortgage lender. After payment of closing costs of approximately $173,000, which were capitalized and included in other assets on the consolidated balance sheet, and interest, the Partnership had a shortfall of approximately $821,000 which was covered by the net proceeds received from the Wood Lake refinancing discussed above. The mortgage notes payable are nonrecourse and are secured by pledge of the Partnership's rental properties and by pledge of revenues from the respective rental properties. Certain notes impose prepayment penalties if repaid prior to maturity and prohibit resale of the properties subject to existing indebtedness. Scheduled principal payments of the mortgage notes payable subsequent to December 31, 2003, are as follows (in thousands): 2004 $ 1,167 2005 17,905 2006 5,650 2007 917 2008 962 Thereafter 20,197 $46,798 Note C - Income Taxes The Partnership 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 Partnership is reported in the income tax returns of its partners. The following is a reconciliation of reported net income and Federal taxable income for the years ended December 31, 2003 and 2002 (in thousands, except per unit data): 2003 2002 Net income as reported $ 5,694 $ 853 Add (deduct): Depreciation differences 1,796 1,011 Gain on sale of investment property 3,686 -- Interest expense (1,014) -- Unearned income (97) (51) Other (181) (171) Federal taxable income $ 9,884 $ 1,642 Federal taxable income per limited partnership unit $ 96.96 $ 16.22 The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets and liabilities (in thousands): 2003 Net liabilities as reported $ (6,801) Land and buildings (5,160) Accumulated depreciation (19,428) Deferred Sales Commission 7,947 Syndication and distribution costs 4,451 Unearned income 158 Other 206 Net liabilities - Federal tax basis $(18,627) Note D - Transactions with Affiliated Parties The Partnership has no employees and is dependent on the Managing General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Affiliates of the Managing General Partner are entitled to receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $719,000 and $834,000 for the years ended December 31, 2003 and 2002, respectively, which is included in operating expenses and income (loss) from discontinued operations. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $189,000 and $172,000 for the years ended December 31, 2003 and 2002, respectively, which is included in general and administrative expenses. 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. No fees were earned during the year ended December 31, 2003 as there were no distributions from operations. Approximately $186,000 in Partnership management fees were paid along with the distributions from operations made during the year ended December 31, 2002. In connection with the refinancings of Vinings Peak, Wood Lake, and Plantation Crossing Apartments on June 25, 2003, the Partnership paid the Managing General Partner a fee of approximately $205,000 pursuant to the Partnership Agreement. This fee was capitalized and included in other assets on the accompanying consolidated balance sheet and is being amortized over the life of the loans. 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. During the year ended December 31, 2003, the Managing General Partner exceeded this credit limit and advanced the Partnership approximately $2,101,000. This advance was used to repay the second mortgage encumbering McMillan Place Apartments, which was part of the loan extension agreement. Interest expense for this loan was approximately $66,000 during the year ended December 31, 2003. The advance and accrued interest were paid in full during the year ended December 31, 2003 with the sales proceeds of McMillan Place Apartments (see Note E). No advances were received in 2002. The Partnership insures 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, 2003 and 2002, the Partnership paid AIMCO and its affiliates approximately $217,000 and $263,000, respectively, for insurance coverage and fees associated with policy claims administration. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 53,593 limited partnership units (the "Units") in the Partnership representing 60.02% of the outstanding Units at December 31, 2003. 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 Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 60.02% of the outstanding Units, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. However, with respect to the 25,228.66 Units acquired on January 19, 1996, AIMCO IPLP, L.P. (formerly known as Insignia Properties, LP ("IPLP"), an affiliate of the Managing General Partner and of AIMCO, agreed to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the vote cast by third party unitholders. Except for the foregoing, no other limitations are imposed on IPLP's, AIMCO's or any other affiliates' right to vote each Unit held. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO, as its sole stockholder. Note E - Sale of Investment Property In August 2003, the Partnership sold McMillan Place Apartments to an unrelated third party, for net proceeds of approximately $13,249,000 after payment of closing costs. The Partnership used approximately $9,128,000 of the net proceeds to repay the mortgage encumbering the property and to pay approximately $210,000 in contingent interest due to the lender. Contingent interest was required to be paid upon the sale of the property equal to 50% of the increase in the appreciated fair market value of the property above the stipulated amount of $12,860,000. The Partnership had previously accrued approximately $920,000 for this contingent interest. The over accrued contingent interest was reversed against interest expense during the year ended December 31, 2003 and is included in income (loss) from discontinued operations. The Partnership realized a gain of approximately $6,013,000 as a result of the sale. The property's operations are shown as income (loss) from discontinued operations and include revenues of approximately $1,594,000 and $2,711,000 for the years ended December 31, 2003 and 2002, respectively. In addition, the Partnership recorded a loss on early extinguishment of debt of approximately $5,000 as a result of unamortized loan costs being written off. This amount is included in income (loss) from discontinued operations. 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 $ 7,402 $ 1,206 $10,980 $ 1,630 Greenspoint Apartments 8,181 2,165 11,199 1,755 Sandspoint Apartments 9,086 2,124 13,158 2,496 Vinings Peak Apartments 8,359 1,632 12,321 2,210 Plantation Crossing Apartments 4,421 1,062 7,576 1,529 Sunrunner Apartments 4,391 634 6,485 919 Misty Woods Apartments 4,958 429 6,846 1,400 $46,798 $ 9,252 $68,565 $11,939
Gross Amount At Which Carried At December 31, 2003 (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 $12,610 $13,816 $ 8,478 1983 12/83 5-30 yrs Greenspoint Apartments 2,140 12,979 15,119 8,248 1984 2/84 5-30 yrs Sandspoint 2,147 15,631 17,778 9,530 1984 2/84 5-30 yrs Apartments Vinings Peak Apartments 1,632 14,531 16,163 9,215 1982 4/84 5-30 yrs Plantation Crossing Apartments 1,062 9,105 10,167 5,963 1980 6/84 5-30 yrs Sunrunner 587 7,451 8,038 4,992 1981 7/84 5-30 yrs Apartments Misty Woods Apartments 426 8,249 8,675 5,210 1985 6/85 5-30 yrs $ 9,200 $80,556 $89,756 $51,636
Reconciliation of "Real Estate and Accumulated Depreciation": Years Ended December 31, 2003 2002 (in thousands) Investment Properties Balance at beginning of year $103,405 $102,501 Property improvements 1,378 1,511 Disposal of assets (15,027) (607) Balance at end of year $ 89,756 $103,405 Accumulated Depreciation Balance at beginning of year $ 55,970 $ 52,735 Additions charged to expense 3,495 3,592 Disposal of assets (7,829) (357) Balance at end of year $ 51,636 $ 55,970 The aggregate cost of the real estate for Federal income tax purposes at December 31, 2003 and 2002, is approximately $84,596,000 and $98,255,000, respectively. The accumulated depreciation for Federal income tax purposes at December 31, 2003 and 2002, is approximately $71,064,000 and $80,628,000, respectively. Note G - Casualty Gain In May 2001, one of the Partnership's investment properties, Vinings Peak Apartments, incurred damages to ten units as a result of a fire. As a result of the damage, approximately $369,000 of fixed assets and approximately $222,000 of accumulated depreciation were written off resulting in a net write off of approximately $147,000. The property received approximately $461,000 in proceeds from the insurance company to repair the damaged units during 2002 and recognized a casualty gain of approximately $314,000 as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. During the year ended December 31, 2003, the Partnership received additional proceeds of approximately $171,000 which were recognized as a casualty gain as the damaged assets had been fully written off in 2002. In May 2002, one of the Partnership's investment properties, Sandspoint Apartments, incurred damages to twenty-four units as a result of a fire. As a result of the damage, approximately $238,000 of fixed assets and approximately $135,000 of accumulated depreciation were written off resulting in a net write off of approximately $103,000. During 2002, the property received approximately $372,000 in proceeds from the insurance company to repair the damaged units and to cover approximately $15,000 in emergency expenses. For financial statement purposes, a casualty gain of approximately $254,000 was recognized during 2002 as a result of the difference between the proceeds received and the net book value of the buildings which were damaged. 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 purported to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) that 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 that 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 sought monetary damages and equitable relief, including judicial dissolution of the Partnership. In addition, 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 Heller action was brought as a purported derivative action, and asserted claims for, among other things, breach of fiduciary duty, unfair competition, conversion, unjust enrichment, and judicial dissolution. On January 8, 2003, the parties filed a Stipulation of Settlement in proposed settlement of the Nuanes action and the Heller action. In general terms, the proposed settlement provides for certification for settlement purposes of a settlement class consisting of all limited partners in this Partnership and others (the "Partnerships") as of December 20, 2002, the dismissal with prejudice and release of claims in the Nuanes and Heller litigation, payment by AIMCO of $9.9 million (which shall be distributed to settlement class members after deduction of attorney fees and costs of class counsel and certain costs of settlement) and up to $1 million toward the cost of independent appraisals of the Partnerships' properties by a Court appointed appraiser. An affiliate of the Managing General Partner has also agreed to make at least one round of tender offers to purchase all of the partnership interests in the Partnerships within one year of final approval, if it is granted, and to provide partners with the independent appraisals at the time of these tenders. The proposed settlement also provided for the limitation of the allowable costs which the Managing General Partner or its affiliates will charge the Partnerships in connection with this litigation and imposes limits on the class counsel fees and costs in this litigation. On April 11, 2003, notice was distributed to limited partners providing the details of the proposed settlement. On June 13, 2003, the Court granted final approval of the settlement and entered judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector ("Objector") filed an appeal seeking to vacate and/or reverse the order approving the settlement and entering judgment thereto. On November 24, 2003, the Objector filed an application requesting the Court order AIMCO to withdraw settlement tender offers it had commenced, refrain from making further offers pending the appeal and auction any units tendered to third parties, contending that the offers did not conform with the terms of the Settlement. Counsel for the Objector (on behalf of another investor) had alternatively requested the Court take certain action purportedly to enforce the terms of the settlement agreement. On December 18, 2003, the Court heard oral argument on the motions and denied them both in their entirety. On January 28, 2004, Objector filed his opening brief in his pending appeal. The Managing General Partner is currently scheduled to file a brief in support of the order approving settlement and entering judgment thereto by April 23, 2004. On August 8, 2003 AIMCO Properties L.P., an affiliate of the Managing General Partner, was served with a Complaint in the United States District Court, District of Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor Standards Act (FLSA) by failing to pay maintenance workers overtime for all hours worked in excess of forty per week. The Complaint is styled as a Collective Action under the FLSA and seeks to certify state subclasses in California, Maryland, and the District of Columbia. Specifically, the plaintiffs contend that AIMCO Properties L.P. failed to compensate maintenance workers for time that they were required to be "on-call". Additionally, the Complaint alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating maintenance workers for time that they worked in responding to a call while "on-call". The Complaint also attempts to certify a subclass for salaried service directors who are challenging their classification as exempt from the overtime provisions of the FLSA. AIMCO Properties L.P. has filed an answer to the Complaint denying the substantive allegations. Discovery is currently underway. The Managing General Partner does not anticipate that any costs to the Partnership, 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 matters involving it or its investment properties that are 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. Item 8a. Controls and Procedures (a) Disclosure Controls and Procedures. The Partnership's management, with the participation of the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership's principal executive officer and principal financial officer, respectively, has evaluated the effectiveness of the Partnership's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report. Based on such evaluation, the principal executive officer and principal financial officer of the Managing General Partner, who are the equivalent of the Partnership's principal executive officer and principal financial officer, respectively, have concluded that, as of the end of such period, the Partnership's disclosure controls and procedures are effective. (b) Internal Control Over Financial Reporting. There have not been any changes in the Partnership's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fourth quarter of 2003 that have materially affected, or are reasonably likely to materially affect, the Partnership's internal control over financial reporting. PART III Item 9. Directors, 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 directors or officers. 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 directors and officers of the Managing General Partner are set forth below. There are no family relationships between or among any directors or officers. Name Age Position Peter K. Kompaniez 59 Director Martha L. Long 44 Director and Senior Vice President Harry G. Alcock 41 Executive Vice President Miles Cortez 60 Executive Vice President, General Counsel and Secretary Patti K. Fielding 40 Executive Vice President Paul J. McAuliffe 47 Executive Vice President and Chief Financial Officer Thomas M. Herzog 41 Senior Vice President and Chief Accounting Officer Peter K. Kompaniez has been Director of the Managing General Partner since February 2004. Mr. Kompaniez has been Vice Chairman of the Board of Directors of AIMCO since July 1994 and was appointed President in July 1997. Mr. Kompaniez has also served as Chief Operating Officer of NHP Incorporated after it was acquired by AIMCO in December 1997. Effective April 1, 2004, Mr. Kompaniez resigned as President of AIMCO. Mr. Kompaniez will continue in his role as Director of the Managing General Partner and Vice Chairman of AIMCO's Board and will serve AIMCO on a variety of special and ongoing projects in an operating role. Martha L. Long has been a Director and Senior Vice President of the Managing General Partner since February 2004. Ms. Long has been with AIMCO since October 1998 and has served in various capacities. From 1998 to 2001, Ms. Long served as Senior Vice President and Controller of AIMCO and the Managing General Partner. During 2002 and 2003, Ms. Long served as Senior Vice President of Continuous Improvement for AIMCO. Harry G. Alcock was appointed Executive Vice President of the Managing General Partner in February 2004 and has been Executive Vice President and Chief Investment Officer of AIMCO since October 1999. Prior to October 1999 Mr. Alcock served as a Vice President of AIMCO from July 1996 to October 1997, when he was promoted to Senior Vice President-Acquisitions where he served until October 1999. Mr. Alcock has had responsibility for acquisition and financing activities of AIMCO since July 1994. Miles Cortez was appointed Executive Vice President, General Counsel and Secretary of the Managing General Partner in February 2004 and of AIMCO in August 2001. Prior to joining AIMCO, Mr. Cortez was the senior partner of Cortez Macaulay Bernhardt & Schuetze LLC, a Denver law firm, from December 1997 through September 2001. Patti K. Fielding was appointed Executive Vice President - Securities and Debt of the Managing General Partner in February 2004 and of AIMCO in February 2003. Ms. Fielding previously served as Senior Vice President - Securities and Debt of AIMCO from January 2000 to February 2003. Ms. Fielding is responsible for securities and debt financing and the treasury department. Ms. Fielding joined AIMCO in February 1997 and served as Vice President - Tenders, Securities and Debt until January 2000. Paul J. McAuliffe has been Executive Vice President and Chief Financial Officer of the Managing General Partner since April 2002. Mr. McAuliffe has served as Executive Vice President of AIMCO since February 1999 and was appointed Chief Financial Officer of AIMCO in October 1999. From May 1996 until he joined AIMCO, Mr. McAuliffe was Senior Managing Director of Secured Capital Corp. Thomas M. Herzog was appointed Senior Vice President and Chief Accounting Officer of the Managing General Partner in February 2004 and of AIMCO in January 2004. Prior to joining AIMCO in January 2004, Mr. Herzog was at GE Real Estate, serving as Chief Accounting Officer & Global Controller from April 2002 to January 2004 and as Chief Technical Advisor from March 2000 to April 2002. Prior to joining GE Real Estate, Mr. Herzog was at Deloitte & Touche LLP from 1990 until 2000, including a two-year assignment in the real estate national office. 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 board of directors of the Managing General Partner does not have a separate audit committee. As such, the board of directors of the Managing General Partner fulfills the functions of an audit committee. The board of directors has determined that Martha L. Long meets the requirement of an "audit committee financial expert". The directors and officers of the Managing General Partner with authority over the Partnership are all employees of subsidiaries of AIMCO. AIMCO has adopted a code of ethics that applies to such directors and officers that is posted on AIMCO's website (www.AIMCO.com). AIMCO's website is not incorporated by reference to this filing. Item 10. Executive Compensation Neither the directors nor any of the officers of the Managing General Partner received any remuneration from the Partnership. Item 11. Security Ownership of Certain Beneficial Owners and Management Except as noted below, no person or entity was known by the Partnership to be the beneficial owner of more than 5% of the Units of Limited Partnership Interest of the Partnership as of December 31, 2003. Entity Number of Units Percent of Total AIMCO IPLP, L.P. 25,229.00 28.25% (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, L.P. 23,372.00 26.18% (an affiliate of AIMCO) AIMCO IPLP, L.P. (formerly known as Insignia Properties, L.P.), 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, L.P. is indirectly ultimately controlled by AIMCO. Its business address is 4582 S. Ulster St. Parkway, Suite 1100, Denver, Colorado 80237. No director or officer of the Managing General Partner owns any Units. As a result of its ownership of 53,593 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 certain payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. Affiliates of the Managing General Partner are entitled to receive 5% of gross receipts from all of the Partnership's properties as compensation for providing property management services. The Partnership paid to such affiliates approximately $719,000 and $834,000 for the years ended December 31, 2003 and 2002, respectively, which is included in operating expenses and income (loss) from discontinued operations. An affiliate of the Managing General Partner received reimbursement of accountable administrative expenses amounting to approximately $189,000 and $172,000 for the years ended December 31, 2003 and 2002, respectively, which is included in general and administrative expenses. 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. No fees were earned during the year ended December 31, 2003 as there were no distributions from operations. Approximately $186,000 in Partnership management fees were paid along with the distributions from operations made during the year ended December 31, 2002. In connection with the refinancings of Vinings Peak, Wood Lake, and Plantation Crossing Apartments on June 25, 2003, the Partnership paid the Managing General Partner a fee of approximately $205,000 pursuant to the Partnership Agreement. This fee was capitalized and included in other assets on the accompanying consolidated balance sheet and is being amortized over the life of the loans. 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. During the year ended December 31, 2003, the Managing General Partner exceeded this credit limit and advanced the Partnership approximately $2,101,000. This advance was used to repay the second mortgage encumbering McMillan Place Apartments, which was part of the loan extension agreement. Interest expense for this loan was approximately $66,000 during the year ended December 31, 2003. The advance and accrued interest were paid in full during the year ended December 31, 2003 with the sales proceeds of McMillan Place Apartments. No advances were received in 2002. The Partnership insures 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, 2003 and 2002, the Partnership paid AIMCO and its affiliates approximately $217,000 and $263,000, respectively, for insurance coverage and fees associated with policy claims administration. In addition to its indirect ownership of the general partner interest in the Partnership, AIMCO and its affiliates owned 53,593 limited partnership units (the "Units") in the Partnership representing 60.02% of the outstanding Units at December 31, 2003. 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 Units in exchange for cash or a combination of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO, either through private purchases or tender offers. Pursuant to the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters that include, but are not limited to, voting on certain amendments to the Partnership Agreement and voting to remove the Managing General Partner. As a result of its ownership of 60.02% of the outstanding Units, AIMCO and its affiliates are in a position to influence all such voting decisions with respect to the Partnership. However, with respect to the 25,228.66 Units acquired on January 19, 1996, AIMCO IPLP, L.P. (formerly known as Insignia Properties, LP ("IPLP"), an affiliate of the Managing General Partner and of AIMCO, agreed to vote such Units: (i) against any increase in compensation payable to the Managing General Partner or to its affiliates; and (ii) on all other matters submitted by it or its affiliates, in proportion to the vote cast by third party unitholders. Except for the foregoing, no other limitations are imposed on IPLP's, AIMCO's or any other affiliates' right to vote each Unit held. Although the Managing General Partner owes fiduciary duties to the limited partners of the Partnership, the Managing General Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a result, the duties of the Managing General Partner, as managing general partner, to the Partnership and its limited partners may come into conflict with the duties of the Managing General Partner to AIMCO, as its sole stockholder. Item 13. Exhibits and Reports on Form 8-K (a) Exhibits: See Exhibit Index attached. (b) Reports on Form 8-K filed in the fourth quarter of calendar year 2003: Current Report on Form 8-K dated September 29, 2003 and filed on October 3, 2003 disclosing the Amendment to the Amended and Restated Limited Partnership Agreement. Item 14. Principal Accounting Fees and Services The Managing General Partner has reappointed Ernst & Young LLP as independent auditors to audit the financial statements of the Partnership for 2004. Audit Fees. The Partnership paid to Ernst & Young LLP audit fees of approximately $77,000 and $70,000 for 2003 and 2002, respectively. Tax Fees. The Partnership paid to Ernst & Young LLP fees for tax services for 2003 and 2002 of approximately $31,000 and $33,000, respectively. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY PROPERTIES FUND XIX By: FOX PARTNERS II, Its General Partner By: FOX CAPITAL MANAGEMENT CORPORATION, Its Managing General Partner By: /s/Martha L. Long Martha L. Long Senior Vice President By: /s/Thomas M. Herzog Thomas M. Herzog Senior Vice President and Chief Accounting Officer Date: March 29, 2004 In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. /s/Peter K. Kompaniez Director Date: March 29, 2004 Peter K. Kompaniez /s/Martha L. Long Director and Senior Vice Date: March 29, 2004 Martha L. Long President /s/Thomas M. Herzog Senior Vice President and Date: March 29, 2004 Thomas M. Herzog Chief Accounting Officer 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). 3.5 Amendment to the Amended and Restated Limited Partnership Agreement, dated September 29, 2003. 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. 10.12 Multifamily Note dated August 30, 2001 between GMAC Commercial Mortgage Corporation and Century Properties Fund XIX for the refinance of Sunrunner Apartments. 10.13 Multifamily Note for $4,480,000 dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.14 Replacement Reserve Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.15 Repair Escrow Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.16 Multifamily Note for $8,470,000 dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.17 Replacement Reserve Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.18 Repair Escrow Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.19 Multifamily Note for $7,500,000 dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.20 Replacement Reserve Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.21 Repair Escrow Agreement dated June 25, 2003 between Century Properties Fund XIX and KeyCorp Real Estate Capital Markets, Inc. 10.22 Purchase and Sale Contract between Registrant and Suncase Corporation, dated June 11, 2003. 10.23 First Amendment to the Purchase and Sale Contract between Registrant and Suncase Corporation, dated July 10, 2003. 10.24 Second Amendment to the Purchase and Sale Contract between Registrant and Suncase Corporation, dated August 13, 2003. 10.25 Assignment Agreement between Suncase Corporate and McMillan Development Associates, LP dated August 25, 2003. 31.1 Certification of equivalent of Chief Executive Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2 Certification of equivalent of Chief Financial Officer pursuant to Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Exhibit 31.1 CERTIFICATION I, Martha L. Long, certify that: 1. I have reviewed this annual report on Form 10-KSB of Century Properties Fund XIX; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 29, 2004 /s/Martha L. Long Martha L. Long Senior Vice President of Fox Capital Management Corporation, equivalent of the chief executive officer of the Partnership Exhibit 31.2 CERTIFICATION I, Thomas M. Herzog, certify that: 1. I have reviewed this annual report on Form 10-KSB of Century Properties Fund XIX; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 29, 2004 /s/Thomas M. Herzog Thomas M. Herzog Senior Vice President and Chief Accounting Officer of Fox Capital Management Corporation, equivalent of the chief financial officer of the Partnership Exhibit 32.1 Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Annual Report on Form 10-KSB of Century Properties Fund XIX (the "Partnership"), for the year ended December 31, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Martha L. Long, as the equivalent of the Chief Executive Officer of the Partnership, and Thomas M. Herzog, as the equivalent of the Chief Financial Officer of the Partnership, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership. /s/Martha L. Long Name: Martha L. Long Date: March 29, 2004 /s/Thomas M. Herzog Name: Thomas M. Herzog Date: March 29, 2004 This certification is furnished with this Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. -----END PRIVACY-ENHANCED MESSAGE-----