Attached files
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of The Securities
Exchange Act of 1934
For the Fiscal Year Ended: December 31, 2009
Commission file number: 000-19838
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
State of Minnesota 41-1677062
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
30 East 7th Street, Suite 1300, St. Paul, Minnesota 55101
(Address of principal executive offices)
(651) 227-7333
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
Indicate by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X]
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Exchange
Act. Yes [ ] No [X]
Indicate by check mark whether the 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 [ ]
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (232.405 of this chapter)
during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [ ] No [ ]
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer,
or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "smaller reporting
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company [X]
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Act). Yes [ ] No [X]
As of June 30, 2009, there were 20,160.668 Units of limited
partnership interest outstanding and owned by nonaffiliates of
the registrant, which Units had an aggregate market value (based
solely on the price at which they were sold since there is no
ready market for such Units) of $20,160,668.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant has not incorporated any documents by reference
into this report.
PART I
ITEM 1. BUSINESS.
AEI Net Lease Income & Growth Fund XIX Limited Partnership
(the "Partnership" or the "Registrant") is a limited partnership
which was organized pursuant to the laws of the State of
Minnesota on September 14, 1990. The registrant is comprised of
AEI Fund Management XIX, Inc. ("AFM") as Managing General
Partner, Robert P. Johnson, the President and sole director of
AFM, as the Individual General Partner, and purchasers of
partnership units as Limited Partners. The Partnership offered
for sale up to $30,000,000 of limited partnership interests (the
"Units") (30,000 Units at $1,000 per Unit) pursuant to a
registration statement effective February 5, 1991. The
Partnership commenced operations on May 31, 1991 when minimum
subscriptions of 1,500 Limited Partnership Units ($1,500,000)
were accepted. The Partnership's offering terminated February 5,
1993 when the extended offering period expired. The Partnership
received subscriptions for 21,151.928 Limited Partnership Units
($21,151,928).
The Partnership was organized to acquire existing and
newly constructed commercial properties located in the United
States, to lease such properties to tenants under triple net
leases, to hold such properties and to eventually sell such
properties. From subscription proceeds, the Partnership
purchased nineteen properties, including partial interests in
four properties, at a total cost of $16,994,880. The balance of
the subscription proceeds was applied to organization and
syndication costs, working capital reserves and distributions,
which represented a return of capital. The properties are
commercial, single tenant buildings leased under triple net
leases.
The Partnership's properties were purchased without any
indebtedness. The Partnership will not finance properties in the
future to obtain proceeds for new property acquisitions. If it
is required to do so, the Partnership may incur short-term
indebtedness, which may be secured by a portion of the
Partnership's properties, to finance day-to-day cash flow
requirements (including cash flow necessary to repurchase Units).
The amount of borrowings that may be secured by the properties is
limited in the aggregate to 20% of the purchase price of all
properties. The Partnership will not incur borrowings to pay
distributions and will not incur borrowings while there is cash
available for distributions.
The Partnership will hold its properties until the General
Partners determine that the sale or other disposition of the
properties is advantageous in view of the Partnership's
investment objectives. In deciding whether to sell properties,
the General Partners will consider factors such as potential
appreciation, net cash flow and income tax considerations. Prior
to the third quarter of 2006, the Partnership sold some of its
properties and reinvested the proceeds from such sales in
additional properties. At the beginning of 2008, the Partnership
anticipated that it would sell its remaining properties and
liquidate by the end of 2009, depending on market conditions
among other things. Beginning in the fourth quarter of 2008,
general economic conditions caused the volume of property sales
to slow dramatically for all real estate sellers. As a result,
the Partnership was unable to sell its remaining properties in
2009. Until the economic conditions improve, it is difficult to
estimate when the Partnership may be able to sell its remaining
properties and liquidate.
ITEM 1. BUSINESS. (Continued)
Leases
Although there are variations in the specific terms of the
leases, the following is a summary of the general terms of the
Partnership's leases. The properties are leased to various
tenants under triple net leases, classified as operating leases.
Under a triple net lease, the tenant is responsible for all real
estate taxes, insurance, maintenance, repairs and operating
expenses for the property. At the time the properties were
acquired, the remaining primary lease term varied from 13 to 20
years. The leases provide the tenants with two to five five-year
renewal options subject to the same terms and conditions as the
primary term. The leases provide for base annual rental
payments, payable in monthly installments, and contain rent
clauses which entitle the Partnership to receive additional rent
in future years based on stated rent increases.
Property Activity During the Last Three Years
Prior to the third quarter of 2006, the Partnership sold
some of its properties and reinvested the proceeds from such
sales in additional properties. In the third quarter of 2006,
the Partnership decided to discontinue the reinvestment of
proceeds from property sales in additional properties and to
distribute sales proceeds to the Partners going forward. As of
December 31, 2006, the Partnership owned a significant interest
in ten properties and a minor interest in six properties with a
total original cost of $14,335,907, including acquisition
expenses. During the years ended December 31, 2007, 2008 and
2009, the Partnership sold nine property interests and received
net sale proceeds of $4,103,166, $2,974,814 and $2,912,264, which
resulted in net gains of $1,500,324, $584,999 and $677,530,
respectively. As of December 31, 2009, the Partnership owned a
significant interest in five properties and a minor interest in
two properties with a total original cost of $5,935,008,
including acquisition expenses.
Major Tenants
During 2009, four tenants each contributed more than ten
percent of the Partnership's total rental revenue. The major
tenants in aggregate contributed 78% of total rental revenue in
2009. It is anticipated that, based on minimum rental payments
required under the leases, each major tenant will continue to
contribute more than ten percent of rental revenue in 2010 and
future years. Any failure of these major tenants could
materially affect the Partnership's net income and cash
distributions.
Competition
The Partnership is a minor factor in the commercial real
estate business. There are numerous entities engaged in the
commercial real estate business which have greater financial
resources than the Partnership. At the time the Partnership
elects to dispose of its properties, the Partnership will be in
competition with other persons and entities to find buyers for
its properties.
Employees
The Partnership has no direct employees. Management
services are performed for the Partnership by AEI Fund
Management, Inc., an affiliate of AFM.
ITEM 1A. RISK FACTORS.
Not required for a smaller reporting company.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not required for a smaller reporting company.
ITEM 2. PROPERTIES.
Investment Objectives
The Partnership's investment objectives were to acquire
existing or newly-developed commercial properties throughout the
United States that offer the potential for (i) preservation and
protection of the Partnership's capital; (ii) partially tax-
deferred cash distributions from operations which may increase
through rent participation clauses or mandated rent increases;
and (iii) long-term capital gains through appreciation in value
of the Partnership's properties realized upon sale. The
Partnership does not have a policy, and there is no limitation,
as to the amount or percentage of assets that may be invested in
any one property. However, to the extent possible, the General
Partners attempted to diversify the type and location of the
Partnership's properties.
Description of Properties
The Partnership's properties are commercial, single tenant
buildings. The properties were acquired on a debt-free basis and
are leased to various tenants under triple net leases, classified
as operating leases. The only exception is under the Lease for
the Advance Auto Parts store, the Partnership is responsible for
repairs to the structural components of the building, except for
the roof, which is the tenant's responsibility. The Partnership
holds an undivided fee simple interest in the properties.
The Partnership's properties are subject to the general
competitive conditions incident to the ownership of single tenant
investment real estate. Since each property is leased under a
long-term lease, there is little competition until the
Partnership decides to sell the property. At this time, the
Partnership will be competing with other real estate owners, on
both a national and local level, in attempting to find buyers for
the properties. In the event of a tenant default, the
Partnership would be competing with other real estate owners, who
have property vacancies, to attract a new tenant to lease the
property. The Partnership's tenants operate in industries that
are very competitive and can be affected by factors such as
changes in regional or local economies, seasonality and changes
in consumer preference.
ITEM 2. PROPERTIES. (Continued)
The following table is a summary of the properties that
the Partnership acquired and owned as of December 31, 2009.
Annual Annual
Purchase Property Lease Rent Per
Property Date Cost Tenant Payment Sq. Ft.
HomeTown Buffet Restaurant
Tucson, AZ Summit Family
(2.2074%) 6/16/93 $ 28,418 Restaurants, Inc. $ 2,649 $12.49
Champps Americana Restaurant Champps
Troy, MI Operating
(.016%) 9/3/98 $ 788 Corporation $ 68 $38.42
Tumbleweed Restaurant
Chillicothe, OH
(40%) 11/20/98 $ 505,224 Tumbleweed, Inc.$ 52,787 $24.06
Champps Americana Restaurant Champps
Utica, MI Operating
(28%) 2/12/02 $ 963,874 Corporation $ 68,749 $28.60
Biaggi's Restaurant
Ft. Wayne, IN Biaggi's Ristorante
(50%) 7/3/03 $1,379,347 Italiano, LLC $130,540 $27.62
Winn-Dixie Store
Panama City, FL Winn-Dixie Stores
(31.4813%) 9/19/03 $1,457,354 Leasing, LLC $117,740 $ 7.23
Advance Auto Parts Store Advance Stores
Harlingen, TX 2/17/06 $1,600,003 Company, Inc. $111,210 $16.43
The properties listed above with a partial ownership
percentage are owned with affiliates of the Partnership and/or
unrelated third parties. The remaining interests in the
Tumbleweed restaurant in Chillicothe, Ohio are owned by AEI Real
Estate Fund XVIII Limited Partnership and an unrelated third
party. The remaining interests in the Champps Americana
restaurant in Utica, Michigan are owned by AEI Net Lease Income &
Growth Fund XX Limited Partnership and unrelated third parties.
The remaining interest in the Biaggi's restaurant is owned by AEI
Net Lease Income & Growth Fund XX Limited Partnership. The
remaining interests in the Winn-Dixie store are owned by AEI
Income & Growth Fund XXI Limited Partnership and unrelated third
parties. The remaining interests in the HomeTown Buffet
restaurant and the Champps Americana restaurant in Troy, Michigan
are owned by unrelated third parties.
ITEM 2. PROPERTIES. (Continued)
The Partnership accounts for properties owned as tenants-
in-common with affiliated entities and/or unrelated third parties
using the proportionate consolidation method. Each tenant-in-
common owns a separate, undivided interest in the properties.
Any tenant-in-common that holds more than a 50% interest does not
control decisions over the other tenant-in-common interests. The
financial statements reflect only this Partnership's percentage
share of the properties' land, building and equipment,
liabilities, revenues and expenses.
At the time the properties were acquired, the remaining
primary lease term varied from 13 to 20 years. The leases
provide the tenants with two to five five-year renewal options
subject to the same terms and conditions as the primary term.
Pursuant to the lease agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they occupy. The General Partners believe the properties are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.
For tax purposes, the Partnership's properties are
depreciated under the Modified Accelerated Cost Recovery System
(MACRS). The largest depreciable component of a property is the
building which is depreciated, using the straight-line method,
over 31.5 or 39 years, depending on the date when it was placed
in service. The remaining depreciable components of a property
are personal property and land improvements which are
depreciated, using an accelerated method, over 5 and 15 years,
respectively. Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6) of the
Internal Revenue Code which requires a percentage of the
properties' depreciable components to be depreciated over longer
lives using the straight-line method. In general, the federal
tax basis of the properties for tax depreciation purposes is the
same as the basis for book depreciation purposes.
At December 31, 2009, all properties listed above were
100% occupied.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCK-
HOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
(a) As of December 31, 2009, there were 1,459 holders of
record of the registrant's Limited Partnership Units. There is
no other class of security outstanding or authorized. The
registrant's Units are not a traded security in any market.
During the period covered by this report, the Partnership did not
sell any equity securities that are not registered under the
Securities Act of 1933.
Cash distributions of $28,365 and $39,112 were made to the
General Partners and $2,808,092 and $3,872,103 were made to the
Limited Partners for 2009 and 2008, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined, except as discussed below. These
distributions should not be compared with dividends paid on
capital stock by corporations.
As part of the Limited Partner distributions discussed
above, the Partnership distributed net sale proceeds of
$2,335,259 and $3,182,065 in 2009 and 2008, respectively. The
distributions reduced the Limited Partners' Adjusted Capital
Contributions.
(b) Not applicable.
(c) Pursuant to Section 7.7 of the Partnership Agreement,
each Limited Partner has the right to present Units to the
Partnership for purchase by submitting notice to the Managing
General Partner during September of each year. The purchase
price of the Units is based on a formula specified in the
Partnership Agreement. Beginning in 2009, the formula resulted
in a purchase price equal to zero. Therefore, the Partnership
will no longer purchase Units under this plan. During the last
three months of 2009, the Partnership did not purchase any Units
by any other arrangement.
ITEM 6. SELECTED FINANCIAL DATA.
Not required for a smaller reporting company.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
This section contains "forward-looking statements" which
represent management's expectations or beliefs concerning future
events, including statements regarding anticipated application of
cash, expected returns from rental income, growth in revenue, the
sufficiency of cash to meet operating expenses, rates of
distribution, and other matters. These, and other forward-
looking statements, should be evaluated in the context of a
number of factors that may affect the Partnership's financial
condition and results of operations, including the following:
Market and economic conditions which affect the value of
the properties the Partnership owns and the cash from
rental income such properties generate;
the federal income tax consequences of rental income,
deductions, gain on sales and other items and the
effects of these consequences for the Partners;
resolution by the General Partners of conflicts with
which they may be confronted;
the effect of tenant defaults; and
the condition of the industries in which the tenants of
properties owned by the Partnership operate.
Application of Critical Accounting Policies
The preparation of the Partnership's financial statements
requires management to make estimates and assumptions that may
affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and
liabilities. Management evaluates these estimates on an ongoing
basis, including those related to the carrying value of real
estate and the allocation by AEI Fund Management, Inc. of
expenses to the Partnership as opposed to other funds they
manage.
The Partnership purchased properties and recorded them in
the financial statements at cost (including capitalized
acquisition expenses). The Partnership tests long-lived assets
for recoverability when events or changes in circumstances
indicate that the carrying value may not be recoverable. For
properties the Partnership will hold and operate, management
determines whether impairment has occurred by comparing the
property's probability-weighted future undiscounted cash flows to
its current carrying value. For properties held for sale,
management determines whether impairment has occurred by
comparing the property's estimated fair value less cost to sell
to its current carrying value. If the carrying value is greater
than the realizable value, an impairment loss is recorded to
reduce the carrying value of the property to its realizable
value. Changes in these assumptions or analysis may cause
material changes in the carrying value of the properties.
AEI Fund Management, Inc. allocates expenses to each of
the funds they manage primarily on the basis of the number of
hours devoted by their employees to each fund's affairs. They
also allocate expenses at the end of each month that are not
directly related to a fund's operations based upon the number of
investors in the fund and the fund's capitalization relative to
other funds they manage. The Partnership reimburses these
expenses subject to detailed limitations contained in the
Partnership Agreement.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Management of the Partnership has discussed the
development and selection of the above accounting estimates and
the management discussion and analysis disclosures regarding them
with the managing partner of the Partnership.
Results of Operations
For the years ended December 31, 2009 and 2008, the
Partnership recognized rental income from continuing operations
of $424,902 and $425,505, respectively. In 2009, rental income
decreased due a reduction in rent for the Tumbleweed restaurant
as discussed below. This decrease was partially offset by a rent
increase on one property.
For the years ended December 31, 2009 and 2008, the
Partnership incurred Partnership administration expenses from
affiliated parties of $133,424 and $157,637, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and communicating with the Limited Partners. As the
Partnership's asset base decreases due to property sales, it is
allocated a smaller share of expenses that are allocated by AEI
Fund Management, Inc. based on the relative assets of the funds
under management. During the same periods, the Partnership
incurred Partnership administration and property management
expenses from unrelated parties of $26,342 and $25,579,
respectively. These expenses represent direct payments to third
parties for legal and filing fees, direct administrative costs,
outside audit costs, taxes, insurance and other property costs.
In March 2009, Tumbleweed, Inc., the tenant of the
Tumbleweed restaurant in Chillicothe, Ohio filed for Chapter 11
bankruptcy reorganization. In July 2009, the tenant contacted
the Partnership and offered to assume the Lease and extend the
Lease term five years in exchange for a 15% rent reduction. The
Partnership accepted this offer and agreed to a Lease Amendment,
which was subject to court approval of the tenant's Plan of
Reorganization. In December 2009, the bankruptcy court approved
the Plan of Reorganization. Under the Plan, Tumbleweed assumed
the Lease for this property and the Lease amendment became
effective. As of the date of this report, Tumbleweed has
complied with all Lease terms.
In September 2009, Champps Operating Corporation, the
tenant of the Champps Americana restaurant in Utica, Michigan,
approached the Partnership with a request to adjust the rent on
the property to a market rental rate based on the restaurant's
performance and the current conditions in the market. In
December 2009, after reviewing the financial statements for the
restaurant and Champps, the Partnership agreed to amend the Lease
to reduce the annual rent for the property by 45% to $68,749 for
the next three years. On January 1, 2013, the rent will revert
to the original amount due under the Lease. During the three-
year period, the amendment provides for additional rental
payments if the restaurant's sales exceed certain stated amounts.
For the years ended December 31, 2009 and 2008, the
Partnership recognized interest income of $12,470 and $33,257,
respectively. In 2008, interest income was higher due to higher
money market interest rates in 2008, when compared to 2009, and
the Partnership had more money invested in a money market account
due to property sales. The majority of the sales proceeds were
subsequently distributed to the Partners.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
Upon complete disposal of a property or classification of
a property as Real Estate Held for Sale, the Partnership includes
the operating results and sale of the property in discontinued
operations. In addition, the Partnership reclassifies the prior
periods' operating results of the property to discontinued
operations. For the year ended December 31, 2009, the
Partnership recognized income from discontinued operations of
$869,634, representing rental income less property management
expenses and depreciation of $192,104 and gain on disposal of
real estate of $677,530. For the year ended December 31, 2008,
the Partnership recognized income from discontinued operations of
$905,481, representing rental income less property management
expenses and depreciation of $320,482 and gain on disposal of
real estate of $584,999.
In October 2007, the tenant of the Applebee's restaurant
in Temple Terrace, Florida exercised its option to purchase the
property. On March 20, 2008, the sale closed with the
Partnership receiving net proceeds of $193,282 for its 9.0963%
interest in the property, which resulted in a net gain of
$122,708. At the time of sale, the cost and related accumulated
depreciation was $96,262 and $25,688, respectively.
During the first quarter of 2008, the Partnership sold its
remaining 4.1062% interest in the Eckerd drug store in Auburn,
New York, in two separate transactions, to unrelated third
parties. The Partnership received total net sale proceeds of
$203,264, which resulted in a net gain of $24,346. The cost and
related accumulated depreciation of the interests sold was
$187,841 and $8,923, respectively.
In March 2008, the Partnership entered into an agreement
to sell the Johnny Carino's restaurant in Brownsville, Texas to
an unrelated third party. On May 15, 2008, the sale closed with
the Partnership receiving net proceeds of $2,578,268, which
resulted in a net gain of $437,945. At the time of sale, the
cost and related accumulated depreciation was $2,322,610 and
$182,287, respectively.
In February 2009, the Partnership entered into an
agreement to sell the Taco Cabana restaurant in San Antonio,
Texas to an unrelated third party. On March 13, 2009, the sale
closed with the Partnership receiving net proceeds of $1,259,658,
which resulted in a net gain of $419,943. At the time of sale,
the cost and related accumulated depreciation was $1,147,274 and
$307,559, respectively. At December 31, 2008, the property was
classified as Real Estate Held for Sale with a carrying value of
$839,715.
In May 2009, the Partnership entered into an agreement to
sell the Tractor Supply Company retail store in Mesquite, Texas
to an unrelated third party. On July 2, 2009, the sale closed
with the Partnership receiving net proceeds of $1,332,125, which
resulted in a net gain of $192,222. At the time of sale, the
cost and related accumulated depreciation was $1,231,625 and
$91,722, respectively.
On June 3, 2009, the Partnership sold its remaining
2.5775% interest in the Marie Callender's restaurant in
Henderson, Nevada to an unrelated third party. The Partnership
received net sale proceeds of $45,359, which resulted in a net
gain of $9,570. The cost and related accumulated depreciation of
the interest sold was $44,142 and $8,353, respectively.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
On September 3, 2009, the Partnership sold 5.5187% of the
Winn-Dixie store in Panama City, Florida to an unrelated third
party. The Partnership received net sale proceeds of $275,122,
which resulted in a net gain of $55,795. The cost and related
accumulated depreciation of the interest sold was $255,475 and
$36,148, respectively. The Partnership is attempting to sell its
remaining 31.4813% interest in the property. At December 31,
2009 and 2008, the property was classified as Real Estate Held
for Sale with a carrying value of $1,251,149 and $1,470,476,
respectively.
In the third quarter of 2006, the Partnership decided to
discontinue the reinvestment of proceeds from property sales in
additional properties. As a result, the Partnership's rental
income and operating income will decrease in the future as the
Partnership sells its remaining properties.
Management believes inflation has not significantly
affected income from operations. Leases may contain rent
increases, based on the increase in the Consumer Price Index over
a specified period, which will result in an increase in rental
income over the term of the leases. Inflation also may cause the
real estate to appreciate in value. However, inflation and
changing prices may have an adverse impact on the operating
margins of the properties' tenants, which could impair their
ability to pay rent and subsequently reduce the Net Cash Flow
available for distributions.
Liquidity and Capital Resources
During the year ended December 31, 2009, the Partnership's
cash balances increased $482,973 as a result of cash generated
from the sale of property, which was partially offset by
distributions paid to the Partners in excess of cash generated
from operating activities. During the year ended December 31,
2008, the Partnership's cash balances decreased $4,461,930 as a
result of distributions paid to the Partners in excess of cash
generated from operating and investing activities.
Net cash provided by operating activities decreased from
$667,022 in 2008 to $460,811 in 2009 as the result of a decrease
in total rental and interest income in 2009, which was partially
offset by a decrease in Partnership administration and property
management expenses in 2009 and net timing differences in the
collection of payments from the tenants and the payment of
expenses.
During the years ended December 31, 2009 and 2008, the
Partnership generated cash flow from the sale of real estate of
$2,912,264 and $2,974,814, respectively.
The Partnership's primary use of cash flow is distribution
payments to Partners. The Partnership declares its regular
quarterly distributions before the end of each quarter and pays
the distribution in the first week after the end of each quarter.
The Partnership attempts to maintain a stable distribution rate
from quarter to quarter.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
For the years ended December 31, 2009 and 2008, the
Partnership declared distributions of $2,836,457 and $3,911,215,
respectively, which were distributed 99% to the Limited Partners
and 1% to the General Partners. The Limited Partners received
distributions of $2,808,092 and $3,872,103 and the General
Partners received distributions of $28,365 and $39,112 for the
periods, respectively. In June and September 2009, the
Partnership declared special distributions of net sale proceeds
of $1,010,101 and $1,313,131, respectively. In September 2008,
the Partnership declared a special distribution of net sale
proceeds of $3,030,303, which resulted in higher distributions in
2008. In 2009, regular distributions were lower due to decreases
in the distribution rate per Unit, effective July 1, 2008 and
January 1, 2009. In addition, the regular distributions in 2009
were paid on a capital balance that was reduced by the special
distributions of net sale proceeds in 2009 and 2008.
During 2009 and 2008, the Partnership distributed net sale
proceeds of $2,358,847 and $3,214,207 to the Limited and General
Partners as part of their quarterly distributions, which
represented a return of capital of $115.81 and $157.80 per
Limited Partnership Unit, respectively.
The continuing rent payments from the properties, together
with cash generated from property sales, should be adequate to
fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
The Economy and Market Conditions
The impact of conditions in the current economy, including
the turmoil in the credit markets, has adversely affected many
real estate companies. However, the absence of mortgage
financing on the Partnership's properties eliminates the risks of
foreclosure and debt-refinancing that can negatively impact the
value and distributions of leveraged real estate companies.
Nevertheless, a prolonged economic downturn may adversely affect
the operations of the Partnership's tenants and their cash flows.
If a tenant were to default on its lease obligations, the
Partnership's income would decrease, its distributions would
likely be reduced and the value of its properties might decline.
At the beginning of 2008, the Partnership anticipated that
it would sell its remaining properties and liquidate by the end
of 2009, depending on market conditions among other things.
Beginning in the fourth quarter of 2008, general economic
conditions caused the volume of property sales to slow
dramatically for all real estate sellers. As a result, the
Partnership was unable to sell its remaining properties in 2009.
Until the economic conditions improve, it is difficult to
estimate when the Partnership may be able to sell its remaining
properties and liquidate.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not required for a smaller reporting company.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See accompanying index to financial statements.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
Balance Sheet as of December 31, 2009 and 2008
Statements for the Years Ended December 31, 2009 and 2008:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Partners:
AEI Net Lease Income & Growth Fund XIX Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI Net
Lease Income & Growth Fund XIX Limited Partnership (a Minnesota
limited partnership) as of December 31, 2009 and 2008, and the
related statements of income, cash flows and changes in partners'
capital for the years then ended. The Partnership's management
is responsible for these financial statements. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (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. The company is not
required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the company's internal control over
financial reporting. Accordingly, we express no such opinion.
An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AEI Net Lease Income & Growth Fund XIX Limited Partnership as
of December 31, 2009 and 2008, and the results of its operations
and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of
America.
/s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
Certified Public Accountants
Minneapolis, Minnesota
March 29, 2010
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
2009 2008
CURRENT ASSETS:
Cash $ 852,028 $ 369,055
Receivables 950 0
----------- -----------
Total Current Assets 852,978 369,055
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 1,558,642 1,903,818
Buildings and Equipment 2,919,012 3,849,603
Accumulated Depreciation (627,628) (621,928)
----------- -----------
3,850,026 5,131,493
Real Estate Held for Sale 1,251,149 2,310,191
----------- -----------
Net Investments in Real Estate 5,101,175 7,441,684
----------- -----------
Total Assets $ 5,954,153 $ 7,810,739
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 19,484 $ 38,437
Distributions Payable 109,390 163,035
Unearned Rent 3,105 0
----------- -----------
Total Current Liabilities 131,979 201,472
----------- -----------
PARTNERS' CAPITAL:
General Partners 6,585 5,655
Limited Partners, $1,000 per Unit;
30,000 Units authorized; 21,152 Units issued;
20,166 Units outstanding 5,815,589 7,603,612
----------- -----------
Total Partners' Capital 5,822,174 7,609,267
----------- -----------
Total Liabilities and Partners' Capital $ 5,954,153 $ 7,810,739
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 31
2009 2008
RENTAL INCOME $ 424,902 $ 425,505
EXPENSES:
Partnership Administration - Affiliates 133,424 157,637
Partnership Administration and Property
Management - Unrelated Parties 26,342 25,579
Depreciation 97,876 98,788
----------- -----------
Total Expenses 257,642 282,004
----------- -----------
OPERATING INCOME 167,260 143,501
OTHER INCOME:
Interest Income 12,470 33,257
----------- -----------
INCOME FROM CONTINUING OPERATIONS 179,730 176,758
Income from Discontinued Operations 869,634 905,481
----------- -----------
NET INCOME $ 1,049,364 $ 1,082,239
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 29,295 $ 30,142
Limited Partners 1,020,069 1,052,097
----------- -----------
$ 1,049,364 $ 1,082,239
=========== ===========
INCOME PER LIMITED PARTNERSHIP UNIT:
Continuing Operations $ 8.82 $ 8.68
Discontinued Operations 41.76 43.49
----------- -----------
Total $ 50.58 $ 52.17
=========== ===========
Weighted Average Units Outstanding -
Basic and Diluted 20,166 20,166
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,049,364 $ 1,082,239
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 105,775 199,769
Gain on Sale of Real Estate (677,530) (584,999)
Increase in Receivables (950) 0
Decrease in Payable to
AEI Fund Management, Inc. (18,953) (29,987)
Increase in Unearned Rent 3,105 0
----------- -----------
Total Adjustments (588,553) (415,217)
----------- -----------
Net Cash Provided By
Operating Activities 460,811 667,022
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sale of Real Estate 2,912,264 2,974,814
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions Paid to Partners (2,890,102) (8,103,766)
----------- -----------
NET INCREASE (DECREASE) IN CASH 482,973 (4,461,930)
CASH, beginning of year 369,055 4,830,985
----------- -----------
CASH, end of year $ 852,028 $ 369,055
=========== ===========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 31
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 2007 $ 14,625 $10,423,618 $10,438,243 20,165.79
Distributions Declared (39,112) (3,872,103) (3,911,215)
Net Income 30,142 1,052,097 1,082,239
--------- ----------- ----------- ----------
BALANCE, December 31, 2008 5,655 7,603,612 7,609,267 20,165.79
Distributions Declared (28,365) (2,808,092) (2,836,457)
Net Income 29,295 1,020,069 1,049,364
--------- ----------- ----------- ----------
BALANCE, December 31, 2009 $ 6,585 $ 5,815,589 $ 5,822,174 20,165.79
========= =========== =========== ==========
The accompanying Notes to Financial Statements are an integral
part of this statement.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(1) Organization -
AEI Net Lease Income & Growth Fund XIX Limited Partnership
("Partnership") was formed to acquire and lease commercial
properties to operating tenants. The Partnership's
operations are managed by AEI Fund Management XIX, Inc.
("AFM"), the Managing General Partner. Robert P. Johnson,
the President and sole director of AFM, serves as the
Individual General Partner. AFM is a wholly owned
subsidiary of AEI Capital Corporation of which Mr. Johnson
is the majority shareholder. AEI Fund Management, Inc.
("AEI"), an affiliate of AFM, performs the administrative
and operating functions for the Partnership.
The terms of the Partnership offering called for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on May 31, 1991 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The offering terminated
February 5, 1993 when the extended offering period expired.
The Partnership received subscriptions for 21,151.928
Limited Partnership Units. Under the terms of the Limited
Partnership Agreement, the Limited Partners and General
Partners contributed funds of $21,151,928, and $1,000,
respectively.
During operations, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
Any Net Proceeds of Sale, as defined, from the sale or
financing of properties which the General Partners determine
to distribute will, after provisions for debts and reserves,
be paid in the following manner: (i) first, 99% to the
Limited Partners and 1% to the General Partners until the
Limited Partners receive an amount equal to: (a) their
Adjusted Capital Contribution plus (b) an amount equal to
12% of their Adjusted Capital Contribution per annum,
cumulative but not compounded, to the extent not previously
distributed from Net Cash Flow; (ii) any remaining balance
will be distributed 90% to the Limited Partners and 10% to
the General Partners. Distributions to the Limited Partners
will be made pro rata by Units.
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of property, will be
allocated first in the same ratio in which, and to the
extent, Net Cash Flow is distributed to the Partners for
such year. Any additional profits will be allocated in the
same ratio as the last dollar of Net Cash Flow is
distributed. Net losses from operations will be allocated
98% to the Limited Partners and 2% to the General Partners.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(1) Organization - (Continued)
For tax purposes, profits arising from the sale, financing,
or other disposition of property will be allocated in
accordance with the Partnership Agreement as follows: (i)
first, to those partners with deficit balances in their
capital accounts in an amount equal to the sum of such
deficit balances; (ii) second, 99% to the Limited Partners
and 1% to the General Partners until the aggregate balance
in the Limited Partners' capital accounts equals the sum of
the Limited Partners' Adjusted Capital Contributions plus an
amount equal to 12% of their Adjusted Capital Contributions
per annum, cumulative but not compounded, to the extent not
previously allocated; (iii) third, the balance of any
remaining gain will then be allocated 90% to the Limited
Partners and 10% to the General Partners. Losses will be
allocated 98% to the Limited Partners and 2% to the General
Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(2) Summary of Significant Accounting Policies -
Financial Statement Presentation
The accounts of the Partnership are maintained on the
accrual basis of accounting for both federal income tax
purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing
these financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions may affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses.
Actual results could differ from those estimates.
Significant items, subject to such estimates and
assumptions, include the carrying value of investments in
real estate and real estate held for sale.
The Partnership regularly assesses whether market events
and conditions indicate that it is reasonably possible to
recover the carrying amounts of its investments in real
estate from future operations and sales. A change in
those market events and conditions could have a material
effect on the carrying amount of its real estate.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(2) Summary of Significant Accounting Policies - (Continued)
Cash Concentrations of Credit Risk
The Partnership's cash is deposited in one financial
institution and at times during the year it may exceed
FDIC insurance limits.
Receivables
Credit terms are extended to tenants in the normal course
of business. The Partnership performs ongoing credit
evaluations of its customers' financial condition and,
generally, requires no collateral.
Receivables are recorded at their estimated net
realizable value. The Partnership follows a policy of
providing an allowance for doubtful accounts; however,
based on historical experience, and its evaluation of the
current status of receivables, the Partnership is of the
belief that such accounts will be collectible in all
material respects and thus an allowance is not necessary.
Accounts are considered past due if payment is not made
on a timely basis in accordance with the Partnership's
credit terms. Receivables considered uncollectible are
written off.
Income Taxes
The income or loss of the Partnership for federal income
tax reporting purposes is includable in the income tax
returns of the partners. In general, no recognition has
been given to income taxes in the accompanying financial
statements.
The tax return and the amount of distributable
Partnership income or loss are subject to examination by
federal and state taxing authorities. If such an
examination results in changes to distributable
Partnership income or loss, the taxable income of the
partners would be adjusted accordingly.
Revenue Recognition
The Partnership's real estate is leased under triple net
leases, classified as operating leases. The leases
provide for base annual rental payments payable in
monthly installments. The Partnership recognizes rental
revenue according to the terms of the individual leases.
For leases that contain stated rental increases, the
increases are recognized in the year in which they are
effective. Contingent rental payments are recognized
when the contingencies on which the payments are based
are satisfied and the rental payments become due under
the terms of the leases.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(2) Summary of Significant Accounting Policies - (Continued)
Investments in Real Estate
The Partnership purchases properties and records them at
cost. The Partnership compares the carrying amount of
its properties to the estimated probability-weighted
future undiscounted cash flows expected to result from
the property and its eventual disposition. If the sum of
the expected future cash flows is less than the carrying
amount of the property, the Partnership recognizes an
impairment loss by the amount by which the carrying
amount of the property exceeds the fair value of the
property.
The buildings and equipment of the Partnership are
depreciated using the straight-line method for financial
reporting purposes based on estimated useful lives of 30
years and 10 years, respectively.
Upon complete disposal of a property or classification of
a property as Real Estate Held for Sale, the Partnership
includes the operating results and sale of the property
in discontinued operations. In addition, the Partnership
reclassifies the prior periods' operating results of the
property to discontinued operations.
The Partnership accounts for properties owned as tenants-
in-common with affiliated entities and/or unrelated third
parties using the proportionate consolidation method.
Each tenant-in-common owns a separate, undivided interest
in the properties. Any tenant-in-common that holds more
than a 50% interest does not control decisions over the
other tenant-in-common interests. The financial
statements reflect only this Partnership's percentage
share of the properties' land, building and equipment,
liabilities, revenues and expenses.
The Partnership's properties are subject to environmental
laws and regulations adopted by various governmental
entities in the jurisdiction in which the properties are
located. These laws could require the Partnership to
investigate and remediate the effects of the release or
disposal of hazardous materials at these locations if
found. For each property, an environmental assessment is
completed prior to acquisition. In addition, the lease
agreements typically strictly prohibit the production,
handling, or storage of hazardous materials (except where
incidental to the tenant's business such as use of
cleaning supplies) in violation of applicable law to
restrict environmental and other damage. Environmental
liabilities are recorded when it is determined the
liability is probable and the costs can reasonably be
estimated. There were no environmental issues noted or
liabilities recorded at December 31, 2009 and 2008.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(2) Summary of Significant Accounting Policies - (Continued)
Fair Value Measurements
The Partnership adopted new guidance for measuring
financial assets and liabilities at fair value on a
recurring basis on January 1, 2008 and for certain
nonfinancial assets and liabilities measured on a
nonrecurring basis on January 1, 2009. The Partnership
has no assets or liabilities measured at fair value on a
recurring basis or nonrecurring basis that would require
disclosure under this new guidance.
Recently Issued Accounting Pronouncements
Management has reviewed recently issued, but not yet
effective, accounting pronouncements and does not expect
the implementation of these pronouncements to have a
significant effect on the Partnership's financial
statements.
Reclassification
Certain items related to discontinued operations in the
prior year's financial statements have been reclassified
to conform to 2009 presentation. These reclassifications
had no effect on Partners' capital, net income or cash
flows.
(3) Related Party Transactions -
The Partnership owns the percentage interest shown below in
the following properties as tenants-in-common with the
affiliated entities listed: Tumbleweed restaurant in
Chillicothe, Ohio (40% - AEI Real Estate Fund XVIII Limited
Partnership and an unrelated third party); Champps Americana
restaurant in Utica, Michigan (28% - AEI Net Lease Income &
Growth Fund XX Limited Partnership and unrelated third
parties); Biaggi's restaurant (50% - AEI Net Lease Income &
Growth Fund XX Limited Partnership) and Winn-Dixie store
(31.4813% - AEI Income & Growth Fund XXI Limited Partnership
and unrelated third parties).
The Partnership owned a 50% interest in a Tractor Supply
Company store. AEI Net Lease Income & Growth Fund XX
Limited Partnership owned a 50% interest in this property
until the property was sold to an unrelated third party in
2009.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(3) Related Party Transactions - (Continued)
AEI received the following reimbursements for costs and
expenses from the Partnership for the years ended December
31:
2009 2008
a.AEI is reimbursed for costs incurred in providing services
related to managing the Partnership's operations and
properties, maintaining the Partnership's books, and
communicating with the Limited Partners. $ 133,424 $ 157,637
======== ========
b.AEI is reimbursed for all direct expenses it paid on the
Partnership's behalf to third parties related to Partnership
administration and property management. These
expenses included printing costs, legal and filing fees,
direct administrative costs, outside audit costs, taxes
insurance and other property costs. These amounts
included $6,775 and $9,144 of expenses related to
Discontinued Operations in 2009 and 2008,
respectively. $ 33,117 $ 34,723
======== ========
c.AEI is reimbursed for costs incurred in providing
services related to the sale of property. $ 95,632 $ 49,446
======== ========
The payable to AEI Fund Management, Inc. represents the
balance due for the services described in 3a, b and c. This
balance is non-interest bearing and unsecured and is to be
paid in the normal course of business.
(4) Investments in Real Estate -
The Partnership leases its properties to various tenants
under triple net leases, classified as operating leases.
Under a triple net lease, the tenant is responsible for all
real estate taxes, insurance, maintenance, repairs and
operating expenses for the property. The only exception is
under the Lease for the Advance Auto Parts store, the
Partnership is responsible for repairs to the structural
components of the building, except for the roof, which is
the tenant's responsibility. At the time the properties
were acquired, the remaining primary lease term varied from
13 to 20 years. The leases provide the tenants with two to
five five-year renewal options subject to the same terms and
conditions as the primary term.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(4) Investments in Real Estate - (Continued)
The Partnership's properties are commercial, single-tenant
buildings. The HomeTown Buffet restaurant was constructed
and acquired in 1993. The Champps Americana restaurant in
Troy, Michigan and the Tumbleweed restaurant were
constructed and acquired in 1998. The land for the Champps
Americana restaurant in Utica, Michigan was acquired in 2001
and construction of the restaurant was completed in 2002.
The Biaggi's restaurant was constructed in 2001 and acquired
in 2003. The Winn-Dixie store was constructed in 1997 and
acquired in 2003. The Advance Auto Parts store was
constructed in 2005 and acquired in 2006. There have been
no costs capitalized as improvements subsequent to the
acquisitions.
The cost of the properties not held for sale and related
accumulated depreciation at December 31, 2009 are as
follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
HomeTown Buffet, Tucson, AZ $ 15,314 $ 13,104 $ 28,418 $ 7,227
Champps Americana, Troy, MI 256 532 788 204
Tumbleweed, Chillicothe, OH 206,725 298,499 505,224 117,236
Champps Americana, Utica, MI 346,554 617,320 963,874 169,312
Biaggi's, Ft. Wayne, IN 503,205 876,142 1,379,347 189,832
Advance Auto Parts, Harlingen, TX 486,588 1,113,415 1,600,003 143,817
--------- --------- --------- ---------
$1,558,642 $2,919,012 $4,477,654 $ 627,628
========= ========= ========= =========
In March 2009, Tumbleweed, Inc., the tenant of the
Tumbleweed restaurant in Chillicothe, Ohio filed for Chapter
11 bankruptcy reorganization. In July 2009, the tenant
contacted the Partnership and offered to assume the Lease
and extend the Lease term five years in exchange for a 15%
rent reduction. The Partnership accepted this offer and
agreed to a Lease Amendment, which was subject to court
approval of the tenant's Plan of Reorganization. In
December 2009, the bankruptcy court approved the Plan of
Reorganization. Under the Plan, Tumbleweed assumed the
Lease for this property and the Lease amendment became
effective. As of the date of this report, Tumbleweed has
complied with all Lease terms.
In September 2009, Champps Operating Corporation, the tenant
of the Champps Americana restaurant in Utica, Michigan,
approached the Partnership with a request to adjust the rent
on the property to a market rental rate based on the
restaurant's performance and the current conditions in the
market. In December 2009, after reviewing the financial
statements for the restaurant and Champps, the Partnership
agreed to amend the Lease to reduce the annual rent for the
property by 45% to $68,749 for the next three years. On
January 1, 2013, the rent will revert to the original amount
due under the Lease. During the three-year period, the
amendment provides for additional rental payments if the
restaurant's sales exceed certain stated amounts.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(4) Investments in Real Estate - (Continued)
The Partnership owns a 2.2074% interest in a HomeTown Buffet
restaurant and a .016% interest in a Champps Americana
restaurant in Troy, Michigan. The remaining interests in
these properties are owned by unrelated third parties, who
own the properties with the Partnership as tenants-in-
common.
For properties owned as of December 31, 2009, the minimum
future rent payments required by the leases are as follows:
2010 $ 483,743
2011 487,926
2012 496,960
2013 549,649
2014 549,649
Thereafter 2,274,429
---------
$4,842,356
=========
There were no contingent rents recognized in 2009 and 2008.
(5) Major Tenants -
The following schedule presents rent revenue from individual
tenants, or affiliated groups of tenants, who each
contributed more than ten percent of the Partnership's total
rent revenue for the years ended December 31:
Tenants Industry 2009 2008
Winn-Dixie Stores Leasing, LLC Retail $ 131,615 $ 138,380
Biaggi's Ristorante Italiano, LLC Restaurant 130,540 130,540
Champps Operating Corporation Restaurant 121,506 120,120
Advance Stores Company, Inc. Retail 111,210 111,210
Texas Taco Cabana L.P. Restaurant N/A 115,000
Tractor Supply Company Retail N/A 92,218
--------- ---------
Aggregate rent revenue of major tenants $ 494,871 $ 707,468
========= =========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 78% 83%
========= =========
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(6) Discontinued Operations -
In October 2007, the tenant of the Applebee's restaurant in
Temple Terrace, Florida exercised its option to purchase the
property. On March 20, 2008, the sale closed with the
Partnership receiving net proceeds of $193,282 for its
9.0963% interest in the property, which resulted in a net
gain of $122,708. At the time of sale, the cost and related
accumulated depreciation was $96,262 and $25,688,
respectively.
During the first quarter of 2008, the Partnership sold its
remaining 4.1062% interest in the Eckerd drug store in
Auburn, New York, in two separate transactions, to unrelated
third parties. The Partnership received total net sale
proceeds of $203,264, which resulted in a net gain of
$24,346. The cost and related accumulated depreciation of
the interests sold was $187,841 and $8,923, respectively.
In March 2008, the Partnership entered into an agreement to
sell the Johnny Carino's restaurant in Brownsville, Texas to
an unrelated third party. On May 15, 2008, the sale closed
with the Partnership receiving net proceeds of $2,578,268,
which resulted in a net gain of $437,945. At the time of
sale, the cost and related accumulated depreciation was
$2,322,610 and $182,287, respectively.
In February 2009, the Partnership entered into an agreement
to sell the Taco Cabana restaurant in San Antonio, Texas to
an unrelated third party. On March 13, 2009, the sale
closed with the Partnership receiving net proceeds of
$1,259,658, which resulted in a net gain of $419,943. At
the time of sale, the cost and related accumulated
depreciation was $1,147,274 and $307,559, respectively. At
December 31, 2008, the property was classified as Real
Estate Held for Sale with a carrying value of $839,715.
In May 2009, the Partnership entered into an agreement to
sell the Tractor Supply Company retail store in Mesquite,
Texas to an unrelated third party. On July 2, 2009, the
sale closed with the Partnership receiving net proceeds of
$1,332,125, which resulted in a net gain of $192,222. At
the time of sale, the cost and related accumulated
depreciation was $1,231,625 and $91,722, respectively.
On June 3, 2009, the Partnership sold its remaining 2.5775%
interest in the Marie Callender's restaurant in Henderson,
Nevada to an unrelated third party. The Partnership
received net sale proceeds of $45,359, which resulted in a
net gain of $9,570. The cost and related accumulated
depreciation of the interest sold was $44,142 and $8,353,
respectively.
On September 3, 2009, the Partnership sold 5.5187% of the
Winn-Dixie store in Panama City, Florida to an unrelated
third party. The Partnership received net sale proceeds of
$275,122, which resulted in a net gain of $55,795. The cost
and related accumulated depreciation of the interest sold
was $255,475 and $36,148, respectively. The Partnership is
attempting to sell its remaining 31.4813% interest in the
property. At December 31, 2009 and 2008, the property was
classified as Real Estate Held for Sale with a carrying
value of $1,251,149 and $1,470,476, respectively.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(6) Discontinued Operations - (Continued)
During 2009 and 2008, the Partnership distributed net sale
proceeds of $2,358,847 and $3,214,207 to the Limited and
General Partners as part of their quarterly distributions,
which represented a return of capital of $115.81 and $157.80
per Limited Partnership Unit, respectively.
The financial results for these properties are reflected as
Discontinued Operations in the accompanying financial
statements. The following are the results of discontinued
operations for the years ended December 31:
2009 2008
Rental Income $ 206,778 $ 430,607
Property Management Expenses (6,775) (9,144)
Depreciation (7,899) (100,981)
Gain on Disposal of Real Estate 677,530 584,999
--------- ---------
Income from Discontinued Operations $ 869,634 $ 905,481
========= =========
(7) Partners' Capital -
For the years ended December 31, 2009 and 2008, the
Partnership declared distributions of $2,836,457 and
$3,911,215, respectively. The Limited Partners received
distributions of $2,808,092 and $3,872,103 and the General
Partners received distributions of $28,365 and $39,112 for
the years, respectively. The Limited Partners'
distributions represent $139.25 and $192.01 per Limited
Partnership Unit outstanding in 2009 and 2008, respectively,
using 20,166 weighted average Units for both years. The
distributions represent $50.58 and $52.17 per Unit of Net
Income and $88.67 and $139.84 per Unit of return of capital
in 2009 and 2008, respectively.
As part of the Limited Partner distributions discussed
above, the Partnership distributed net sale proceeds of
$2,335,259 and $3,182,065 in 2009 and 2008, respectively.
The distributions reduced the Limited Partners' Adjusted
Capital Contributions.
After the effect of redemptions and the return of capital
from the sale of property, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$219.79 per original $1,000 invested.
AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2009 AND 2008
(8) Income Taxes -
The following is a reconciliation of net income for
financial reporting purposes to income reported for federal
income tax purposes for the years ended December 31:
2009 2008
Net Income for Financial Reporting Purposes $ 1,049,364 $ 1,082,239
Depreciation for Tax Purposes (Over) Under
Depreciation for Financial Reporting Purposes (20,782) 37,450
Income Accrued for Tax Purposes Over
Income for Financial Reporting Purposes 3,105 0
Gain on Sale of Real Estate for Tax Purposes
Over (Under) Gain for Financial Reporting
Purposes 22,679 (39,226)
----------- -----------
Taxable Income to Partners $ 1,054,366 $ 1,080,463
=========== ===========
The following is a reconciliation of Partners' capital for
financial reporting purposes to Partners' capital reported
for federal income tax purposes for the years ended December
31:
2009 2008
Partners'Capital for Financial Reporting Purposes $5,822,174 $ 7,609,267
Adjusted Tax Basis of Investments in Real Estate
Over Net Investments in Real Estate
for Financial Reporting Purposes 141,190 139,293
Income Accrued for Tax Purposes Over
Income for Financial Reporting Purposes 3,105 0
Syndication Costs Treated as Reduction
of Capital For Financial Reporting Purposes 3,012,278 3,012,278
--------- ----------
Partners' Capital for Tax Reporting Purposes $8,978,747 $10,760,838
========= ==========
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 9AT.CONTROLS AND PROCEDURES.
(a) Disclosure Controls and Procedures.
Under the supervision and with the participation of
management, including its President and Chief Financial Officer,
the Managing General Partner of the Partnership evaluated the
effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934 (the "Exchange Act")). Based
upon that evaluation, the President and Chief Financial Officer
of the Managing General Partner concluded that, as of the end of
the period covered by this report, our disclosure controls and
procedures were effective in ensuring that information required
to be disclosed by us in the reports that we file or submit under
the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in applicable rules and forms
and that such information is accumulated and communicated to
management, including the President and Chief Financial Officer
of the Managing General Partner, in a manner that allows timely
decisions regarding required disclosure.
(b) Internal Control Over Financial Reporting.
(i) Management's Report on Internal Control Over Financial
Reporting. The Managing General Partner, through its management,
is responsible for establishing and maintaining adequate internal
control over our financial reporting, as defined in Rule 13a-
15(f) under the Exchange Act, and for performing an assessment of
the effectiveness of our internal control over financial
reporting as of December 31, 2009. Internal control over
financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. Our
system of internal control over financial reporting includes
those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
Partnership; (ii) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Partnership
are being made only in accordance with authorizations of
management of the Managing General Partner; and (iii) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
Partnership's assets that could have a material effect on the
financial statements.
Management of the Managing General Partner performed an
assessment of the effectiveness of our internal control over
financial reporting as of December 31, 2009 based upon criteria
in Internal Control-Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission ("COSO").
Based on our assessment, management of the Managing General
Partner determined that our internal control over financial
reporting was effective as of December 31, 2009 based on the
criteria in Internal Control-Integrated Framework issued by the
COSO.
ITEM 9AT.CONTROLS AND PROCEDURES. (Continued)
This annual report does not include an attestation report
of our registered public accounting firm regarding internal
control over financial reporting. Management's report was not
subject to attestation by our registered public accounting firm
pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management's report in
this annual report.
(ii) Changes in Internal Control Over Financial
Reporting. During the most recent period covered by this report,
there has been no change in our internal control over financial
reporting (as defined in Rule 13a-15(f) under the Exchange Act)
that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The registrant is a limited partnership and has no
officers, directors, or direct employees. The General Partners
manage and control the Partnership's affairs and have general
responsibility and the ultimate authority in all matters
affecting the Partnership's business. The General Partners are
AEI Fund Management XIX, Inc. (AFM), the Managing General
Partner, and Robert P. Johnson, Chief Executive Officer,
President and sole director of AFM, the Individual General
Partner. AFM is a wholly owned subsidiary of AEI Capital
Corporation of which Mr. Johnson is the majority shareholder.
AFM has only one senior financial executive, its Chief Financial
Officer. The Chief Financial Officer reports directly to Mr.
Johnson and is accountable for his actions to Mr. Johnson.
Although Mr. Johnson and AFM require that all of their personnel,
including the Chief Financial Officer, engage in honest and
ethical conduct, ensure full, fair, accurate, timely, and
understandable disclosure, comply with all applicable
governmental laws, rules and regulations, and report to Mr.
Johnson any deviation from these principles, because the
organization is composed of only approximately 35 individuals,
because the management of a partnership by an entity that has
different interests in distributions and income than investors
involves numerous conflicts of interest that must be resolved on
a daily basis, and because the ultimate decision maker in all
instances is Mr. Johnson, AFM has not adopted a formal code of
conduct. Instead, the materials pursuant to which investors
purchase Units disclose these conflicts of interest in detail and
Mr. Johnson, as the CEO and sole director of AFM, resolves
conflicts to the best of his ability, consistent with his
fiduciary obligations to AFM and the fiduciary obligations of AFM
to the Partnership. The director and officers of AFM are as
follows:
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
(Continued)
Robert P. Johnson, age 65, is Chief Executive Officer,
President and sole director and has held these positions since
the formation of AFM in September, 1990, and has been elected to
continue in these positions until December 2010. From 1970 to
the present, he has been employed exclusively in the investment
industry, specializing in limited partnership investments. In
that capacity, he has been involved in the development, analysis,
marketing and management of public and private investment
programs investing in net lease properties as well as public and
private investment programs investing in energy development.
Since 1971, Mr. Johnson has been the president, a director and a
registered principal of AEI Securities, Inc., which is registered
with the SEC as a securities broker-dealer, is a member of the
Financial Industry Regulatory Authority (FINRA) and is a member
of the Security Investors Protection Corporation (SIPC). Mr.
Johnson has been president, a director and the principal
shareholder of AEI Fund Management, Inc., a real estate
management company founded by him, since 1978. Mr. Johnson is
currently a general partner or principal of the general partner
in ten limited partnerships and a managing member in five LLCs.
Patrick W. Keene, age 50, is Chief Financial Officer,
Treasurer and Secretary and has held these positions since
January 22, 2003 and has been elected to continue in these
positions until December 2010. Mr. Keene has been employed by
AEI Fund Management, Inc. and affiliated entities since 1986.
Prior to being elected to the positions above, he was Controller
of the various entities. From 1982 to 1986, Mr. Keene was with
KPMG Peat Marwick Certified Public Accountants, first as an
auditor and later as a tax manager. Mr. Keene is responsible for
all accounting functions of AFM and the registrant.
Since Mr. Johnson serves as the Individual General Partner
of the Partnership, as well as the sole director of AFM, all of
the duties that might be assigned to an audit committee are
assigned to Mr. Johnson. Mr. Johnson is not an audit committee
financial expert, as defined. As an officer and majority owner,
through a parent company, of AFM, and as the Individual General
Partner, Mr. Johnson is not a "disinterested director" and may be
subject to a number of conflicts of interests in his capacity as
sole director of AFM.
Before the independent auditors are engaged, Mr. Johnson,
as the sole director of AFM, approves all audit-related fees, and
all permissible nonaudit fees, for services of our auditors.
Section 16(a) Beneficial Ownership Reporting Compliance
Under federal securities laws, the directors and officers
of the General Partner of the Partnership, and any beneficial
owner of more than 10% of a class of equity securities of the
Partnership, are required to report their ownership of the
Partnership's equity securities and any changes in such ownership
to the Securities and Exchange Commission (the "Commission").
Specific due dates for these reports have been established by the
Commission, and the Partnership is required to disclose in this
Annual Report on 10-K any delinquent filing of such reports and
any failure to file such reports during the fiscal year ended
December 31, 2009. Based upon information provided by officers
and directors of the General Partner, all officers, directors and
10% owners filed all reports on a timely basis in the 2009 fiscal
year.
ITEM 11. EXECUTIVE COMPENSATION.
The General Partner and affiliates are reimbursed at cost
for all services performed on behalf of the registrant and for
all third party expenses paid on behalf of the registrant. The
cost for services performed on behalf of the registrant is actual
time spent performing such services plus an overhead burden.
These services include organizing the registrant and arranging
for the offer and sale of Units, reviewing properties for
acquisition and rendering administrative, property management and
property sales services. The amount and nature of such payments
are detailed in Item 13 of this annual report on Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
The following table sets forth information pertaining to
the ownership of the Units by each person known by the
Partnership to beneficially own 5% or more of the Units, by each
General Partner, and by each officer or director of the Managing
General Partner as of February 28, 2010:
Name and Address Number of Percent
of Beneficial Owner Units Held of Class
AEI Fund Management XIX, Inc. 0 0.00%
Robert P. Johnson 5.12 0.03%
Patrick W. Keene 0 0.00%
Address for all:
1300 Wells Fargo Place
30 East 7th Street, St. Paul, Minnesota 55101
The persons set forth in the preceding table hold sole voting
power and power of disposition with respect to all of the Units
set forth opposite their names. The General Partners know of no
holders of more than 5% of the outstanding Units.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.
The registrant, AFM and its affiliates have common
management and utilize the same facilities. As a result, certain
administrative expenses are allocated among these related
entities. All of such activities and any other transactions
involving the affiliates of the General Partner of the registrant
are governed by, and are conducted in conformity with, the
limitations set forth in the Limited Partnership Agreement of the
registrant. Reference is made to Note 3 of the Financial
Statements, as presented, and is incorporated herein by
reference, for details of related party transactions for the
years ended December 31, 2009 and 2008.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE. (Continued)
Neither the registrant, nor the Managing General Partner
of the registrant, has a board of directors consisting of any
members who are "independent." The sole director of the Managing
General Partner, Robert P. Johnson, is also the Individual
General Partner of the registrant, and is the Chief Executive
Officer, and indirectly the principal owner, of the Managing
General Partner. Accordingly, there is no disinterested board,
or other functioning body, that reviews related party
transactions, or the transactions between the registrant and the
General Partners, except as performed in connection with the
audit of its financial statements.
The limitations included in the Partnership Agreement
require that the cumulative reimbursements to the General
Partners and their affiliates for administrative expenses not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the sum of (i) the front-end fees allowed by the Guidelines less
the front-end fees paid by the Partnership, (ii) the cumulative
property management fees allowed by the Guidelines but not paid,
(iii) any real estate commission allowed by the Guidelines, and
(iv) 10% of Net Cash Flow less the Net Cash Flow actually
distributed to the General Partners. The administrative expenses
not allowed under the Guidelines include a controlling person's
salary and fringe benefits, rent and depreciation. As of
December 31, 2009, the cumulative reimbursements to the General
Partners and their affiliates did not exceed those amounts.
The following table sets forth the forms of compensation,
distributions and cost reimbursements paid by the registrant to
the General Partners or their Affiliates in connection with the
operation of the Fund and its properties for the period from
inception through December 31, 2009.
Person or Entity Amount Incurred From
Receiving Form and Method Inception (September 14, 1990)
Compensation of Compensation To December 31, 2009
AEI Securities, Inc. Selling Commissions equal to 7% $2,115,193
of proceeds plus a 3% nonaccountable
expense allowance, most of which was
reallowed to Participating Dealers.
General Partners and Reimbursement at Cost for other $ 903,786
Affiliates Organization and Offering Costs.
General Partners and Reimbursement at Cost for all $ 793,888
Affiliates Acquisition Expenses.
General Partners and Reimbursement at Cost for providing $4,154,666
Affiliates administrative services to the Fund,
including all expenses related to
management of the Fund's properties
and all other transfer agency, reporting,
partner relations and other administrative
functions.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE. (Continued)
Person or Entity Amount Incurred From
Receiving Form and Method Inception (September 14, 1990)
Compensation of Compensation To December 31, 2009
General Partners and Reimbursement at Cost for providing $1,391,272
Affiliates service related to the disposition of
the Fund's properties.
General Partners 1% of Net Cash Flow in any fiscal $ 257,620
year until the Limited Partners have
received annual, non-cumulative
distributions of Net Cash Flow equal
to 10% of their Adjusted Capital
Contributions and 10% of any remaining
Net Cash Flow in such fiscal year.
General Partners 1% of distributions of Net Proceeds $ 168,886
of Sale until Limited Partners have
received an amount equal to (a) their
Adjusted Capital Contributions, plus
(b) an amount equal to 12% of their
Adjusted Capital Contributions per
annum, cumulative but not compounded,
to the extent not previously
distributed. 10% of distributions of
Net Proceeds of Sale thereafter.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
The following is a summary of the fees billed to the
Partnership by Boulay, Heutmaker, Zibell & Co. P.L.L.P. for
professional services rendered for the years ended December 31,
2009 and 2008:
Fee Category 2009 2008
Audit Fees $ 11,725 $ 12,700
Audit-Related Fees 0 0
Tax Fees 0 0
All Other Fees 0 0
--------- --------
Total Fees $ 11,725 $ 12,700
========= ========
Audit Fees - Consists of fees billed for professional services
rendered for the audit of the Partnership's annual financial
statements and review of the interim financial statements
included in quarterly reports, and services that are normally
provided by Boulay, Heutmaker, Zibell & Co. P.L.L.P. in
connection with statutory and regulatory filings or engagements.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. (Continued)
Audit-Related Fees - Consists of fees billed for assurance and
related services that are reasonably related to the performance
of the audit or review of financial statements and are not
reported under "Audit Fees." These services include consultations
concerning financial accounting and reporting standards.
Tax Fees - Consists of fees billed for professional services for
federal and state tax compliance, tax advice and tax planning.
All Other Fees - Consists of fees for products and services other
than the services reported above.
Policy for Preapproval of Audit and Permissible Non-Audit
Services of Independent Auditors
Before the Independent Auditors are engaged by the
Partnership to render audit or non-audit services, the engagement
is approved by Mr. Johnson acting as the Partnership's audit
committee.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
(a) (1) A list of the financial statements contained
herein is set forth on page 13.
(a) (2) Schedules are omitted because of the absence of
conditions under which they are required or because
the required information is presented in the
financial statements or related notes.
(a) (3) The Exhibits filed in response to Item 601 of
Regulation S-K are listed below.
3.1 Certificate of Limited Partnership (incorporated by
reference to Exhibit 3.1 of the registrant's Registration
Statement on Form S-11 filed on October 10, 1990 [File No.
33-37239]).
3.2 Limited Partnership Agreement (incorporated by
reference to Exhibit 3.2 of the registrant's Registration
Statement on Form S-11 filed on October 10, 1990 [File No.
33-37239]).
10.1 Net Lease Agreement dated April 13, 1998 between the
Partnership, AEI Real Estate Fund XVIII Limited Partnership,
Robert P. Johnson, and Tumbleweed, LLC relating to the
Property at 1150 North Bridge Street, Chillicothe, Ohio
(incorporated by reference to Exhibit 10.2 of Form 10-QSB
filed May 14, 1998).
10.2 First Amendment to Net Lease Agreement dated November
20, 1998 between the Partnership, AEI Real Estate Fund XVIII
Limited Partnership, Robert P. Johnson and Tumbleweed, LLC
relating to the Property at 1150 North Bridge Street,
Chillicothe, Ohio (incorporated by reference to Exhibit
10.53 of Form 10-KSB filed March 30, 1999).
10.3 Net Lease Agreement dated April 27, 2001 between the
Partnership, AEI Real Estate Fund XVII Limited Partnership,
AEI Net Lease Income & Growth Fund XX Limited Partnership
and Champps Entertainment, Inc. relating to the Property at
12515 Hall Road, Utica, Michigan (incorporated by reference
to Exhibit 10.2 of Form 10-QSB filed May 15, 2001).
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. (Continued)
10.4 First Amendment to Net Lease Agreement dated February
12, 2002 between the Partnership, AEI Real Estate Fund XVII
Limited Partnership, AEI Net Lease Income & Growth Fund XX
Limited Partnership and Champps Entertainment, Inc. relating
to the Property at 12515 Hall Road, Utica, Michigan
(incorporated by reference to Exhibit 10.77 of Form 10-KSB
filed March 29, 2002).
10.5 Assignment and Assumption of Lease dated July 3, 2003,
between the Partnership, AEI Net Lease Income & Growth Fund
XX Limited Partnership and NMA Fort Wayne, LLC relating to
the Property at 4010 Jefferson Boulevard, Fort Wayne,
Indiana (incorporated by reference to Exhibit 10.3 of Form
10-QSB filed August 14, 2003).
10.6 Assignment and Assumption of Lease Agreement dated
September 19, 2003 between the Partnership, AEI Income &
Growth Fund XXI Limited Partnership, AEI Income & Growth
Fund 24, LLC and Transmitter Crossing, LLC relating to the
Property at 3621 Highway 231 North, Panama City, Florida
(incorporated by reference to Exhibit 10.2 of Form 10-QSB
filed November 13, 2003).
10.7 Assignment and Assumption of Lease dated February 17,
2006 between the Partnership and Meyer-Lamph Development
Group, LTD. relating to the Property at 621 South 77
Sunshine Strip, Harlingen, Texas (incorporated by reference
to Exhibit 10.26 of Form 10-KSB filed March 30, 2006).
10.8 Purchase Agreement dated February 10, 2009 between the
Partnership and the Thorsen Living Trust relating to the
Property at 6040 Bandera Road, San Antonio, Texas
(incorporated by reference to Exhibit 10.1 of Form 8-K filed
March 19, 2009).
10.9 Amendment to Purchase Agreement dated July 1, 2009
between the Partnership, AEI Net Lease Income & Growth Fund
XX Limited Partnership and ZYL Investments, L.L.C. relating
to the Property at 1740 North Beltline Road, Mesquite, Texas
(incorporated by reference to Exhibit 10.1 of Form 8-K filed
July 8, 2009).
31.1 Certification of Chief Executive Officer of General
Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and
Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of Chief Financial Officer of General
Partner pursuant to Rule 15d-14(a)(17 CFR 240.15d-14(a)) and
Section 302 of the Sarbanes-Oxley Act of 2002.
32 Certification of Chief Executive Officer and Chief
Financial Officer of General Partner pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
AEI NET LEASE INCOME & GROWTH FUND XIX
Limited Partnership
By: AEI Fund Management XIX, Inc.
Its Managing General Partner
March 29, 2010 By:/s/ ROBERT P JOHNSON
Robert P. Johnson, President and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
/s/ROBERT P JOHNSON President (Principal Executive Officer) March 29, 2010
Robert P. Johnson and Sole Director of Managing General
Partner
/s/PATRICK W KEENE Chief Financial Officer and Treasurer March 29, 2010
Patrick W. Keene (Principal Accounting Officer
