-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AAZjHsH9JA81x8yEvJW1D6v9BXIEtvFGeVVRGrVuhnX3W+MS46vIucGktrGUSZlS yPgjAEjULK/ItihAMUNHCg== 0000889812-95-000200.txt : 19950517 0000889812-95-000200.hdr.sgml : 19950516 ACCESSION NUMBER: 0000889812-95-000200 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NONE 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11935 FILM NUMBER: 95537292 BUSINESS ADDRESS: STREET 1: 5665 NORTHSIDE DR NW STREET 2: SUITE 370 CITY: ATLANTA STATE: GA ZIP: 30328 BUSINESS PHONE: 4049169090 MAIL ADDRESS: STREET 1: 5665 NORTHSIDE DRIVE NW STREET 2: SUITE 370 CITY: ATLANTA STATE: GA ZIP: 30328 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------- ----------- Commission file number 0-11935 Century Properties Fund XIX (Exact name of registrant as specified in its charter) California 94-2887133 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 5665 Northside Drive N.W., Ste. 370, Atlanta, Georgia 30328 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (404) 916-9090 N/A Former name, former address and fiscal year, if changed since last report. Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No ---- ---- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date . ------------------- 1 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 PART I - FINANCIAL INFORMATION Item 1. Financial Statements. Consolidated Balance Sheets March 31, December 31, 1995 1994 (Unaudited) (Audited) Assets Cash and cash equivalents $ 342,000 $ 218,000 Restricted cash 683,000 787,000 Deferred costs and other assets 1,912,000 1,643,000 Real Estate: Real estate 94,168,000 94,106,000 Accumulated depreciation (32,334,000) (31,650,000) Allowance for impairment of value (500,000) (500,000) -------------- -------------- Real estate, net 61,334,000 61,956,000 -------------- -------------- Total assets $ 64,271,000 $ 64,604,000 ============== ============== Liabilities and Partners' Equity Accrued expenses and other liabilities $ 1,321,000 $ 1,195,000 Notes payable 58,990,000 59,063,000 -------------- -------------- Total liabilities 60,311,000 60,258,000 -------------- -------------- Commitments and Contingencies Partners' Equity (Deficit): General partner (8,604,000) (8,558,000) Limited partners (89,292 units outstanding at March 31, 1995 and December 31, 1994) 12,564,000 12,904,000 -------------- -------------- Total partners' equity 3,960,000 4,346,000 -------------- -------------- Total liabilities and partners' equity $ 64,271,000 $ 64,604,000 ============== ============== See notes to consolidated financial statements. 2 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 Consolidated Statements of Operations (Unaudited) For the Three Months Ended March 31, 1995 March 31, 1994 Revenues: Rental $ 3,568,000 $ 3,417,000 Interest 17,000 13,000 Loss on sale of property - (149,000) -------------- -------------- Total revenues 3,585,000 3,281,000 -------------- -------------- Expenses: Operating 1,661,000 1,563,000 Interest 1,577,000 1,381,000 Depreciation 684,000 685,000 General and administrative 49,000 137,000 -------------- -------------- Total expenses 3,971,000 3,766,000 -------------- -------------- Net loss $ (386,000) $ (485,000) ============== ============== Net loss per limited partnership unit $ (4) $ (5) ============== ============== See notes to consolidated financial statements. 3 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended March 31, 1995 March 31, 1994 Operating Activities: Net loss $ (386,000) $ (485,000) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 787,000 779,000 Loss on sale of property - 149,000 Changes in operating assets and liabilities: Receivables and other assets (373,000) (228,000) Accrued expenses and other liabilities 127,000 170,000 ------------- -------------- Net cash provided by operating activities 155,000 385,000 ------------- -------------- Investing Activities: Additions to rental properties (62,000) (72,000) Decrease in restricted cash 104,000 - Property sales expenses paid - (3,000) Proceeds on sale of property - 2,450,000 ------------- -------------- Net cash provided by investing activities 42,000 2,375,000 ------------- -------------- Financing Activities: Repayment of notes payable to affiliate of the general partner - (370,000) Notes payable principal payments (73,000) (125,000) Repayment of note payable on sale of rental property - (1,965,000) ------------- -------------- Cash (used in) financing activities (73,000) (2,460,000) ------------- -------------- Increase in Cash and Cash Equivalents 124,000 300,000 Cash and Cash Equivalents at Beginning of Period 218,000 119,000 ------------- -------------- Cash and Cash Equivalents at End of Period $ 342,000 $ 419,000 ============= ============== Supplemental Disclosure of Cash Flow Information: Interest paid in cash during the period $ 1,428,000 $ 1,345,000 ============= ============== See notes to consolidated financial statements. 4 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. General The accompanying consolidated financial statements, footnotes and discussions should be read in conjunction with the consolidated financial statements, related footnotes and discussions contained in the Partnership's Annual Report for the year ended December 31, 1994. The financial information contained herein is unaudited. In the opinion of management, however, all adjustments necessary for a fair presentation of such financial information have been included. All adjustments are of a normal recurring nature, except as disclosed in Note 3. At March 31, 1995, the Partnership had approximately $342,000 invested in overnight repurchase agreements earning approximately 6% per annum. The results of operations for the three months ended March 31, 1995 and 1994 are not necessarily indicative of the results to be expected for the full year. 2. Transactions with Related Parties (a) An affiliate of NPI, Inc. received reimbursements of administrative expenses amounting to $36,000 and $27,000 during the three months ended March 31, 1995 and 1994, respectively. These reimbursements are primarily included in general and administrative expenses. (b) An affiliate of NPI, Inc. is entitled to receive a management fee equal to 5% of the annual gross receipts from certain properties it manages. For the three months ended March 31, 1995 and 1994, affiliates of NPI, Inc. received $167,000 and $55,000, respectively. These fees are included in operating expenses. 3. Disposition of Rental Property Plantation Forest Apartments located in Atlanta, Georgia, was sold on February 8, 1994 for $2,450,000. After payment of the existing loan of $1,965,000 and expenses of the sale, the proceeds to the Partnership were approximately $482,000. The loss on sale was $149,000. Net proceeds realized from the sale were partially used to fully repay $370,000 of demand notes, including accrued interest, held by an affiliate of the general partner. 5 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. This item should be read in conjunction with the Consolidated Financial Statements and other Items contained elsewhere in this Report. Liquidity and Capital Resources Registrant holds investments in and operates eight apartment complexes. Registrant receives rental income from its properties and is responsible for operating expenses, administrative expenses, capital improvements and debt service payments. As of May 1, 1995, five of the thirteen properties originally purchased by Registrant were sold or otherwise disposed. All of Registrant's eight properties except for McMillan Apartments, generated positive cash flow from operations during the three months ended March 31, 1995. Registrant uses working capital reserves provided from any undistributed cash flow from operations, sales and refinancing proceeds as its primary sources of liquidity. There have been no distributions since 1987. Registrant is prohibited from making any distributions from operations until the mortgages encumbering McMillan Place Apartments are satisfied. Future distributions from sales or refinancings are permitted and will be evaluated at such time. The level of liquidity based upon cash and cash equivalents experienced a $124,000 increase at March 31, 1995, as compared to December 31, 1994. Registrant's $155,000 of cash provided by operating activities and $42,000 of cash provided by investing activities were partially offset by $73,000 of notes payable principal payments (financing activities). Cash provided by investing activities resulted from a decrease of $104,000 in restricted cash (primarily relating to the partial repayment of the mortgage encumbering Registrant's Misty Woods property), which was partially offset by $62,000 of improvements to rental properties. Registrant has no significant capital expenditures planned for the year. All other increases (decreases) in certain assets and liabilities are the result of the timing of receipt and payment of various operating activities. Working capital reserves are invested in a money market account or repurchase agreements secured by United States Treasury obligations. The Managing General Partner believes that, if market conditions remain relatively stable, cash flow from operations, when combined with working capital reserves, will be sufficient to fund required capital improvements and regular debt service payments until June 1995, when the balloon payments encumbering the Greenspoint and Sandspoint Apartments come due in the approximate amount of $8,084,000 and $9,417,000, respectively. The ability to hold and operate these properties is dependent on Registrant's ability to obtain refinancing or debt modification as required. If Greenspoint and Sandspoint Apartments are lost through foreclosure, Registrant would incur losses of approximately $1,000,000 and $1,100,000, respectively. In addition, Registrant has substantial balloon payments due in 1996, 1997, 1998 and 1999 in the amounts of $5,083,000, $3,169,000, $19,920,000 and $12,971,000, respectively. Although management is confident that these mortgages can be replaced, if the mortgages are not extended or refinanced, or the properties are not sold, the properties could be lost through foreclosure. Pursuant to the terms of a Settlement Agreement entered into in connection with the Ruben and Andrews actions, DeForest Ventures I L.P. will make a tender offer for an aggregate number of units of Registrant (including the units purchased in the initial tender) constituting up to 49% of the total number of units of Registrant at a price equal to the initial tender price plus 15% less attorney's fees 6 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Liquidity and Capital Resources (Continued) and expenses. In addition, pursuant to the terms of the proposed settlement, the Managing General Partner will agree to provide Registrant a credit line of $150,000 per property, borrowings under which would bear interest at the lesser of prime plus 1% or the rate permitted by the Partnership Agreement of Registrant. A hearing for final approval of the settlement is scheduled for May 19, 1995. See Part II - Other Information, "Item 1 - Legal Proceedings". If the settlement receives final Court approval, it is expected that the tender offer will commence on or about June 19, 1995. The Managing General Partner believes that the settlement will not have an adverse effect on Registrant. At this time, it appears that the investment objective of capital growth will not be attained and that investors will not receive a return of all of their invested capital. The extent to which invested capital is returned to investors is dependent upon the performance of Registrant's properties and the markets in which such properties are located and on the sales price of the remaining properties. In this regard, it is anticipated at this time that the remaining properties will be held longer than originally expected. The ability to hold and operate these properties is dependent on Registrant's ability to obtain refinancing or debt modification as required. Real Estate Market The national real estate market has suffered from the effects of the real estate recession including, but not limited to, a downward trend in market values of existing residential properties. In addition, the bailout of the savings and loan associations and sales of foreclosed properties by auction reduced market values and caused a further restriction on the ability to obtain credit. As a result, Registrant's ability to refinance or sell its properties may be restricted. These factors caused a decline in market property values and serve to reduce market rental rates and/or sales prices. Compounding these difficulties have been relatively low interest rates, which encourage existing and potential tenants to purchase homes. In addition, there has been a significant decline nationally in new household formation. Despite the above, the rental market appears to be experiencing a gradual strengthening and management anticipates that increases in revenue will generally exceed increases in expenses during 1995. Furthermore, management believes that the emergence of new institutional purchasers, including real estate investment trusts and insurance companies, should create a more favorable market value for Registrant's properties in the future. Results of Operations Three Months Ended March 31, 1995 vs. March 31, 1994 Operating results improved by $99,000 for the three months ended March 31, 1995, as compared to 1994, due to an increase in revenues of $304,000, which was partially offset by an increase in expenses of $205,000. Revenues increased by $304,000 for the three months ended March 31, 1995, as compared to 1994, due to improved operations and the loss on the disposition of Plantation Forest Apartments during the 1994 period. With respect to the remaining properties, rental income increased by $209,000 primarily due 7 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Three Months Ended March 31, 1995 vs. March 31, 1994 (Continued) to an increase in rental rates and occupancy at Misty Woods Apartments, McMillan Place Apartments and Sunrunner Apartments. The $4,000 increase in interest income is primarily due to an increase in interest rates. With respect to the remaining properties, expenses increased by $363,000 due to increases in operating expenses of $124,000, interest expense of $228,000 and depreciation expense of $11,000. Operating expenses increased primarily due to an under accrual of real estate taxes in the prior period, an insurance adjustment and an increase in repairs and maintenance expenses. The increase in interest expense is primarily attributable to increased variable interest rates on mortgages encumbering the Wood Lake, Wood Ridge, Plantation Crossing, Greenspoint and Sandspoint Apartments. Depreciation expense increased due to the effect of real estate improvements. General and administrative expenses decreased by $88,000 due to a decrease in asset management costs. Properties A description of the properties in which Registrant has an ownership interest in the period covered by this Report, along with the occupancy data, follows: CENTURY PROPERTIES FUND XIX OCCUPANCY SUMMARY For the Quarters Ended March 31, 1995 and 1994 Number Average of Date of Occupancy Rate (%) Name and Location Units Purchase 1995 1994 - ----------------- ----- -------- ---- ---- Wood Lake Apartments 220 12/83 96 95 Atlanta, Georgia Greenspoint Apartments 336 02/84 97 98 Phoenix, Arizona Sandspoint Apartments 432 02/84 95 96 Phoenix, Arizona Wood Ridge Apartments 280 04/84 94 95 Atlanta, Georgia Plantation Crossing Apartments 180 06/84 96 98 Atlanta, Georgia Plantation Forest Apartments (1) 64 06/84 - 99 Atlanta, Georgia Sunrunner Apartments 200 07/84 95 92 St. Petersburg, Florida 8 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Properties (Continued) Number Average of Date of Occupancy Rate (%) Name and Location Units Purchase 1995 1994 - ----------------- ----- -------- ---- ---- McMillan Place Apartments 402 06/85 97 95 Dallas, Texas Misty Woods Apartments 228 06/85 98 90 Charlotte, North Carolina (1) Property was sold in February 1994. 1994 average occupancy rate covers period through date of sale. 9 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 PART II - OTHER INFORMATION Item 1. Legal Proceedings Lawrence M. Whiteside, on behalf of himself and all other similarly situated, v. Fox Capital Management Corporation, et al., Superior Court of the State of California, San Mateo County, Case No. 390018 ("Whiteside"). Bonnie L. Ruben and Sidney Finkel, on behalf of themselves and all others similarly situated, v. DeForest Ventures I L.P., et al., United States District Court, Northern District of Georgia, Atlanta Division, Case No. 1-94-CV-2983-JEC ("Ruben"). Roger L. Vernon, individually and on behalf of all similarly situated persons v. DeForest Ventures I L.P., et al., Circuit Court of Cook County, County Departments, Chancery Division, State of Illinois, Case No. 94CH0100592 ("Vernon"). James Andrews, et al., on behalf of themselves and all other similarly situated v. Fox Capital Management Corporation, et al., United States District Court, Northern District of Georgia, Atlanta Division, Case No. 1-94-CV-3351-JEC ("Andrews"). On March 16, 1995 the United States District Court for the Northern District of Georgia, Atlanta Division, entered an order which granted preliminary approval to a settlement agreement in the Ruben and Andrews actions, conditionally certified two classes for purpose of settlement, and authorized the parties to give notice to the classes of the terms of the proposed settlement. Plaintiffs counsel in the Vernon and Whiteside action have joined in the Settlement Agreement as well. The two certified classes constitute all limited partners of Registrant and the eighteen other affiliated partnerships who either tendered their units in connection with the October tender offers or continue to hold their units in Registrant and the other affiliated partnerships. Pursuant to the terms of the proposed settlement, which are described in the notice sent to the class members in March 1995, (and more fully described in the Amended Stipulation of Settlement submitted to the court on March 14, 1995) all claims which either were made or could have been asserted in any of the class actions would be dismissed with prejudice and/or released. In consideration for the dismissal and/or release of such claims, among other things, DeForest I would pay to each unit holder who tendered their units in Registrant an amount equal to 15% of the original tender offer price less attorney's fees and expenses. In addition, DeForest I will commence a second tender offer for an aggregate number of units of Registrant (including the units purchased in the initial tender) constituting up to 49% of the total number of units of Registrant at a price equal to the initial tender price plus 15% less attorney's fees and expenses. Furthermore, under the terms of the proposed settlement, the Managing General Partner would agree, among other things, to provide Registrant a credit line of $150,000 per property which would bear interest at the lesser of prime rate plus 1% and the rate permitted under the partnership agreement of Registrant. A hearing on the final approval of the settlement is scheduled for May 19, 1995. Item 6. Exhibits and Reports on Form 8-K. No report on Form 8-K was required to be filed during the period. 10 of 11 CENTURY PROPERTIES FUND XIX - FORM 10-Q - MARCH 31, 1995 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly 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, A General Partner /S/ARTHUR N. QUELER --------------------------------------- ARTHUR N. QUELER Secretary/Treasurer and Director (Principal Financial Officer) 11 of 11 EX-27 2 FINANCIAL DATA SCHEDULE
5 The schedule contains summary financial information extracted from Century Properties Fund XIX and is qualified in its entirety by reference to such financial statements. 1 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 1,025,000 0 0 0 0 0 94,168,000 (32,834,000) 64,271,000 0 58,990,000 0 0 0 3,960,000 64,271,000 0 3,568,000 0 2,345,000 0 0 1,577,000 (386,000) 0 (386,000) 0 0 0 (386,000) (4) (4) Cash includes restricted cash of $683,000. Depreciation includes a $500,000 allowance for impairment of value.
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