-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Na1TB7pKIAlm3X0v7Hjk2e9Cq098ZzvN3BCMgDTS/MkcM31OhA/s0FGRKP+JPsf4 R0m1DkI/BRnc8uFpnP4FeA== 0000201529-96-000005.txt : 19961031 0000201529-96-000005.hdr.sgml : 19961031 ACCESSION NUMBER: 0000201529-96-000005 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961030 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL GROWTH FUND CENTRAL INDEX KEY: 0000201529 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 942382571 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-08639 FILM NUMBER: 96649745 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 QUARTERLY OR TRANSITIONAL REPORT (As last amended by 34-32231, eff. 6/3/93.) U. S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 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 0-8639 CONSOLIDATED CAPITAL GROWTH FUND (Exact name of small business issuer as specified in its charter) California 94-2382571 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Check whether the issuer (1) 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 . PART I - FINANCIAL INFORMATION ITEM 1.FINANCIAL STATEMENTS a) CONSOLIDATED CAPITAL GROWTH FUND CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands) September 30, 1996 Assets Cash: Unrestricted $ 1,778 Restricted--tenant security deposits 337 Accounts receivable 37 Escrow for taxes 575 Restricted escrows 823 Other assets 553 Investment properties: Land $ 4,610 Buildings and related personal property 36,044 40,654 Less accumulated depreciation (20,190) 20,464 $24,567 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 93 Tenant security deposits 336 Accrued taxes 451 Other liabilities 450 Mortgage notes payable 24,690 Partners' Capital (Deficit) General partner $ (3,342) Limited partners (49,196 units issued and outstanding) 1,889 (1,453) $24,567 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL GROWTH FUND CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Nine Months End September 30, September 30, 1996 1995 1996 1995 Revenues: Rental income $2,680 $2,546 $7,905 $ 7,712 Other income 242 317 593 1,033 Total revenues 2,922 2,863 8,498 8,745 Expenses: Operating 914 861 2,598 2,874 General and administrative 131 138 349 323 Partnership management fees 90 123 213 613 Maintenance 483 644 1,226 1,257 Depreciation 479 462 1,401 1,392 Interest 442 160 1,381 534 Property taxes 114 146 464 535 Total expenses 2,653 2,534 7,632 7,528 Gain on sale of investment property -- -- -- 3,693 Income before extraordinary item 269 329 866 4,910 Extraordinary (loss) gain on early extinguishment of debt -- -- (119) 121 Net income $ 269 $ 329 $ 747 $ 5,031 Net income allocated to general partner (1%) $ 2 $ 3 $ 7 $ 50 Net income allocated to limited partners (99%) 267 326 740 4,981 $ 269 $ 329 $ 747 $ 5,031 Per limited partnership unit: Income before extraordinary item $ 5.41 $ 6.62 $17.42 $ 98.80 Extraordinary (loss) gain on early extinguishment of debt -- -- (2.40) 2.44 Net income per limited partnership unit $ 5.41 $ 6.62 $15.02 $101.24 See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL GROWTH FUND CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except for unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 49 196 $ 1 $49,196 $49,197 Partners' capital (deficit) at December 31, 1995 49,196 $(3,267) $ 4,057 $ 790 Distributions to partners (82) (2,908) (2,990) Net income for the nine months ended September 30, 1996 7 740 747 Partners' capital (deficit) at September 30, 1996 49,196 $(3,342) $ 1,889 $(1,453) See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL GROWTH FUND CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Nine Months Ended September 30, 1996 1995 Cash flows from operating activities: Net income $ 747 $ 5,031 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 1,401 1,392 Amortization of discounts and loan costs 38 23 Gain on sale of investment property -- (3,693) Loss (gain) on early extinguishment of debt 96 (121) Loss on disposal of property -- 67 Change in accounts: Restricted cash (26) 87 Accounts receivable (1) 23 Escrows for taxes (448) (445) Other assets 47 (59) Accounts payable (215) 493 Tenant security deposit liabilities 26 (41) Accrued taxes 451 37 Other liabilities 34 (131) Net cash provided by operating activities 2,150 2,663 Cash flows from investing activities: Property improvements and replacements (851) (806) Cash received from sale of securities available for sale -- 4,441 Proceeds from sale of investment property -- 7,966 Receipts from restricted escrows 118 444 Deposits to restricted escrows (24) -- Net cash (used in) provided by investing activities (757) 12,045 Cash flows from financing activities: Payments on mortgage notes payable (32) (332) Repayment of mortgage notes payable (1,282) (4,850) Loan costs paid (28) -- Distributions to partners (2,990) (7,107) Net cash used in financing activities (4,332) (12,289) Net (decrease) increase in cash and cash equivalents (2,939) 2,419 Cash and cash equivalents at beginning of period 4,717 2,358 Cash and cash equivalents at end of period $ 1,778 $ 4,777 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,239 $ 487 See Accompanying Notes to Consolidated Financial Statements
e) CONSOLIDATED CAPITAL GROWTH FUND NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Consolidated Capital Growth Fund (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Article 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of ConCap Equities, Inc. ("General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended December 31, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. NOTE B - TRANSACTIONS WITH AFFILIATED PARTIES The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all partnership activities. The Partnership paid property management fees based upon collected gross rental revenues for property management services as noted below for the nine month periods ended September 30, 1996 and 1995, respectively. Such fees are included in operating expense on the consolidated statements of operations and are reflected in the following table. The Limited Partnership Agreement ("Agreement") provides for reimbursement to the General Partner and its affiliates for costs incurred in connection with the administration of Partnership activities. The General Partner and its current and former affiliates received reimbursements and fees as reflected in the following table: For the Nine Months Ended September 30, 1996 1995 (in thousands) Property management fees $ 414 $ 405 Reimbursement for services of affiliates (1) 158 184 Partnership management fees (2) 213 613 (1) Included in "reimbursements for services of affiliates" for 1996 is approximately $13,000 in reimbursements for construction oversight costs. (2) The Agreement provides for a fee equal to 9% of the total distributions made to the limited partners from "cash available for distribution" to the limited partners (as defined in the Agreement) to be paid to the General Partner for executive and administrative management services. On July 1, 1995, the Partnership began insuring its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the General Partner who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. NOTE C - DISPOSITION OF REAL ESTATE On February 10, 1995, the General Partner, on behalf of the Partnership, executed a contract for the sale of Forest Hills Apartments for a gross sales price of $8.25 million. The Partnership realized a net gain of approximately $3.7 million on the sale after repayment of the related mortgage debt and other closing costs. The following table sets forth the statement of operations for Forest Hills Apartments for the nine months ended September 30, 1995: Nine Months Ended September 30, 1995 Revenues: Rental income $ 234 Other income 77 Total revenues 311 Expenses: Operating 272 Maintenance 57 Depreciation 45 Interest 39 Property taxes 70 Total expenses 483 Gain on sale of real estate 3,693 Income before extraordinary item 3,521 Extraordinary gain on early extinguishment of debt 121 Net income $3,642 NOTE D - EARLY EXTINGUISHMENT OF DEBT In March 1996, the Partnership paid off the first and second mortgages of Tahoe Springs totaling approximately $1,282,000, with a portion of the refinancing proceeds received in December 1995 from the refinancing of Breckinridge Square, Churchill Park and The Lakes. An extraordinary loss on early extinguishment of debt in the amount of approximately $119,000 was recorded upon payoff of the mortgage notes. Of this amount, approximately $96,000 was recorded due to the write off of the remaining mortgage note discount and approximately $23,000 was recorded due to prepayment penalties incurred. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of four apartment complexes. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 1996 and 1995: Average Occupancy Property 1996 1995 Breckinridge Square Louisville, Kentucky 94% 92% Churchill Park Louisville, Kentucky 93% 94% The Lakes Raleigh, North Carolina 95% 93% Tahoe Springs Miami, Florida 95% 92% Results of Operations The Partnership's net income for the nine months ended September 30, 1996, was approximately $747,000 versus net income of approximately $5,031,000 for the nine months ended September 30, 1995. The Partnership's net income for the three months ended September 30, 1996, was approximately $269,000 compared to approximately $329,000 for the same period in 1995. The decrease in net income for the nine months ended September 30, 1996, is primarily due to the recognition of a $3,693,000 gain on the sale of Forest Hills Apartment complex in February 1995. Also, in 1995 the Partnership recognized a $121,000 extraordinary gain on early extinguishment of debt as a result of a partial forgiveness of debt by the mortgage holder upon the sale of Forest Hills Apartments. In the nine months ended September 30, 1996, a $119,000 extraordinary loss on the early extinguishment of debt at Tahoe Springs was recognized as a result of the write off of the related mortgage note discounts and prepayment penalties paid in connection with the early payoff of the mortgage notes. The decrease in net income for the three month period ended September 30, 1996, is primarily due to the increase in total expenses as explained below. Contributing to the decrease in net income during the three and nine month periods ended September 30, 1996, was a decrease in other income, which resulted from a decrease in interest income due to a decrease in securities available for sale and cash reserves. Prior to March 31, 1995, all securities available for sale were liquidated in order to facilitate the $7,107,000 distributions paid to the partners during the nine months ended September 30, 1995. Additionally, interest bearing cash accounts were further depleted to fund the $2,990,000 distributed to the partners during the nine months ended September 30, 1996. The decrease in other income for the three months ended September 30, 1996, was offset by increases in deposit forfeitures, late charges and receipt of a tax refund. These charges increased as a result of higher occupancy at Breckinridge Square, The Lakes and Tahoe Springs. In addition, Tahoe Springs received a $76,000 tax refund on their 1995 property taxes in July 1996. Net income decreased during the three and nine month periods ended September 30, 1996, due to an increase in total expenses. The increase in total expenses was primarily attributable to an increase in interest expense, which resulted from the mortgage refinancing at Breckinridge Square and new mortgage financing at The Lakes and Churchill Park, all of which closed in December 1995. Partially offsetting the increase in total expenses was a decrease in partnership management fees, maintenance expense and property taxes. Maintenance expenses decreased for the three months ended September 30, 1996, due to increased expenses in the third quarter of 1995. During the same three month period in 1995, The Lakes incurred major repairs and replacements of stairwells, atrium area repairs and floor coverings. In addition, the property incurred major landscaping renovation costs. Breckinridge Square Apartments incurred maintenance expenses for roof and balcony repairs as well as hallway texturing. Property tax expense decreased for the three and nine month periods ended September 30, 1996, as a result of lower tax expense estimates for 1996. These lower estimates are based upon the taxes paid in 1995, less the tax refund received upon the successful appeal of the taxes assessed at Tahoe Springs in 1995. Partnership management fees for the three and nine months ended September 30, 1996, decreased due to the decrease in distributions made to limited partners from "cash available for distribution" (as defined in the Agreement). As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels, and protecting the Partnership from increases in expense. As part of this plan, the General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the General Partner will be able to sustain such a plan. Liquidity and Capital Resources At September 30, 1996, the Partnership had unrestricted cash of approximately $1,778,000 versus approximately $4,777,000 at September 30, 1995. Net cash provided by operating activities decreased primarily due to a decrease in accounts payable due to the timing of payments. Offsetting the decrease in accounts payable was an increase in accrued taxes due to the timing of payments to the taxing authorities. Net cash used in investing activities increased due to cash received in 1995 from securities available for sale and the proceeds received in 1995 from the sale of Forest Hills Apartments. Net cash used in financing activities decreased due to the repayment of the mortgage note payable on Forest Hills in 1995, and a decrease in cash distributions paid during the nine months ended September 30, 1996. The Partnership has no material capital programs scheduled to be performed in 1996, although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations or is received from the capital reserve account. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the properties to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $24,690,000 requires monthly interest only payments. These notes require balloon payments on December 1, 2005, at which time the properties will either be refinanced or sold. During the nine months ended September 30, 1996, the Partnership distributed approximately $2,908,000 to the limited partners and approximately $82,000 to the General Partner. Included in these amounts are payments made by the Partnership to the Georgia Department of Revenue and the North Carolina Department of Revenue for withholding taxes related to income generated by the Partnership's investment properties located in those states. These payments were treated as distributions to the partners. During the nine months ended September 30, 1995, the Partnership distributed approximately $7,033,000 to the limited partners and approximately $74,000 to the General Partner. Included in these amounts are amounts paid and accrued for withholding taxes to the North Carolina Department of Revenue. These taxes relate to income generated by the Partnership's investment property located in that state. These payments and accruals were treated as distributions to the partners. Future cash distributions will depend on the levels of cash generated from operations, capital expenditure requirements, property sales, refinancings and the availability of cash reserves. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K: None filed during the quarter ended September 30, 1996. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONSOLIDATED CAPITAL GROWTH FUND By: CONCAP EQUITIES, INC. the General Partner By:/s/ Carroll D. Vinson Carroll D. Vinson President By:/s/ Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: October 30, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Growth Fund 1996 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000201529 CONSOLIDATED CAPITAL GROWTH FUND 1,000 9-MOS DEC-31-1996 SEP-30-1996 1,778 0 37 0 0 0 40,654 (20,190) 24,567 0 24,690 0 0 0 (1,453) 24,567 0 8,498 0 0 7,632 0 1,381 0 0 0 0 (119) 0 747 15.02 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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