-----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, Hi9ptTb3osVOgKx7bBiNLGsL7+SscDIDaXYcApLEPvgPtDz5Wy6LbrYgNw9a+Pes jREvhRNE9if+FQTWbZ2kow== 0000201529-97-000002.txt : 19970501 0000201529-97-000002.hdr.sgml : 19970501 ACCESSION NUMBER: 0000201529-97-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970430 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: 97591918 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 March 31, 1997 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) (dollar amounts in thousands) March 31, 1997 Assets Cash: Unrestricted $ 1,443 Restricted--tenant security deposits 346 Accounts receivable 25 Escrow for taxes 352 Restricted escrows 572 Other assets 677 Investment properties: Land $ 4,610 Buildings and related personal property 36,948 41,558 Less accumulated depreciation (21,165) 20,393 $ 23,808 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 229 Tenant security deposits 346 Accrued taxes 148 Other liabilities 354 Mortgage notes payable 30,690 Partners' Deficit General partners $ (3,507) Limited partners (49,196 units issued and outstanding) (4,452) (7,959) $ 23,808 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL GROWTH FUND CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except for unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $ 2,619 $ 2,594 Interest income 40 46 Other income 131 124 Total revenues 2,790 2,764 Expenses: Operating 935 811 General and administrative 80 75 Partnership management fees 82 123 Maintenance 359 316 Depreciation 481 455 Interest 558 498 Property taxes 154 175 Total expenses 2,649 2,453 Income before extraordinary item 141 311 Extraordinary loss on early extinguishment of debt -- (119) Net income $ 141 $ 192 Net income allocated to general partners (1%) $ 1 $ 2 Net income allocated to limited partners (99%) 140 190 $ 141 $ 192 Per limited partnership unit: Income before extraordinary item $ 2.84 $ 6.26 Extraordinary item -- (2.40) Net income per limited partnership unit $ 2.84 $ 3.86 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 Partners Partners Total Original capital contributions 49,196 $ 1 $ 49,196 $ 49,197 Partners' capital (deficit) at December 31, 1996 49,196 $ (3,339) $ 2,131 $ (1,208) Distributions to partners (169) (6,723) (6,892) Net income for the three months months ended March 31, 1997 1 140 141 Partners' capital (deficit) at March 31, 1997 49,196 $ (3,507) $ (4,452) $ (7,959) See Accompanying Notes to Consolidated Financial Statements d) CONSOLIDATED CAPITAL GROWTH FUND CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 141 $ 192 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 481 455 Amortization of loan costs 19 12 Extraordinary loss on early extinguishment of debt -- 119 Change in accounts: Restricted cash -- 1 Accounts receivable 20 11 Escrows for taxes (129) (62) Other assets 21 -- Accounts payable 2 (104) Tenant security deposit liabilities -- (5) Accrued taxes 148 162 Other liabilities (12) 8 Net cash provided by operating activities 691 789 Cash flows from investing activities: Property improvements and replacements (452) (245) Receipts from restricted escrows 435 -- Deposits to restricted escrows (92) (3) Net cash used in investing activities (109) (248) Cash flows from financing activities: Loan costs (10) -- Payments on mortgage notes payable -- (32) Repayment of mortgage notes payable -- (1,282) Distributions to partners (6,892) (1,514) Net cash used in financing activities (6,902) (2,828) Net decrease in cash and cash equivalents (6,320) (2,287) Cash and cash equivalents at beginning of period 7,763 4,717 Cash and cash equivalents at end of period $ 1,443 $ 2,430 Supplemental disclosure of cash flow information: Cash paid for interest $ 539 $ 420 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 month period ended March 31, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. 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, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 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 three month periods ended March 31, 1997 and 1996, 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 affiliates received reimbursements and fees as reflected in the following table: For the Three Months Ended March 31, 1997 1996 (in thousands) Property management fees $ 137 $ 136 Reimbursement for services of affiliates (1) 49 44 Partnership management fees (2) 82 123 (1) Included in "reimbursement for services of affiliates" for 1997 is approximately $4,000 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. The Partnership insures 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 - 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 consists of four apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1997 and 1996: Average Occupancy Property 1997 1996 Breckinridge Square Louisville, Kentucky 89% 94% Churchill Park Louisville, Kentucky 88% 91% The Lakes Raleigh, North Carolina 91% 95% Tahoe Springs Miami, Florida 96% 95% The General Partner attributes the decreases in occupancy at Breckinridge Square, Churchill Park and The Lakes to softening real estate markets and increased competition from new complexes in the Louisville and Raleigh areas. Results of Operations The Partnership's net income for the three months ended March 31, 1997, was approximately $141,000 versus net income of approximately $192,000 for the three months ended March 31, 1996. This decrease is primarily the result of increases in operating, maintenance, depreciation and interest expenses. The increase in operating expenses is the result of increased concessions. The concessions have been incurred in an attempt to offset the decreases in occupancy. The increase in maintenance expenses is the result of purchases of office equipment and an exterior painting project at Churchill Park. Included in maintenance expense for the three months ended March 31, 1997, is approximately $91,000 of major repairs and maintenance comprised primarily of office equipment, exterior painting and exterior building repairs. Depreciation expense increased as a result of the property improvements and replacements incurred since March 31, 1996. Interest expense increased due to the refinancing of Tahoe Springs in November 1996. These increases were offset by decreases in partnership management fees, property taxes and extraordinary loss on early extinguishment of debt. Partnership management fees decreased due to the decrease in distributions made to limited partners from "cash available for distribution" (as defined in the Partnership Agreement). The decrease in property taxes is as a result of a decrease in tax estimates for 1997. The tax expense for the three months ended March 31, 1996, was calculated based on the taxes paid in 1995. Subsequent to March 31, 1996, the Partnership received a tax refund on the 1995 taxes following a successful appeal of the 1995 taxes at Tahoe Springs. The tax expense for the three months ended March 31, 1997, was calculated based on the reduced taxes paid in 1996. In 1996, the Partnership recognized an extraordinary loss of approximately $119,000 due to the early extinguishment of debt at Tahoe Springs. 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 March 31, 1997, the Partnership had unrestricted cash of approximately $1,443,000 versus approximately $2,430,000 at March 31, 1996. Net cash provided by operating activities decreased as a result of the increase in escrows for taxes and the decrease in net income as described above. Net cash used in investing activities decreased primarily due to an increase in receipts from restricted escrows. This increase was offset by increases in the purchases of property improvements and replacements and deposits to restricted escrows. Net cash used in financing activities increased primarily due to an increase in distributions made to the partners in 1997. Major capital programs budgeted for 1997 include a chiller replacement at Churchill Park at an estimated cost of approximately $233,000 and an HVAC replacement at The Lakes at an estimated cost of approximately $182,000. The Partnership has no other material capital programs scheduled to be performed in 1997, 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. 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. 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 approximately $30,690,000 requires monthly interest only payments. These notes require balloon payments on November 1, 2003, and December 1, 2005, at which time the properties will either be refinanced or sold. During the three months ended March 31, 1997, the Partnership distributed approximately $6,723,000 to the limited partners and approximately $169,000 to the General Partner. During the three months ended March 31, 1996, a distribution of approximately $1,363,000 was made to the limited partners and a distribution of approximately $14,000 was made to the General Partner. Also, during the first quarter of 1996, the Partnership paid $137,000 to the Georgia Department of Revenue for withholding taxes related to income generated by Forest Hills, located in Georgia. These taxes were treated as a distribution to the partners and was allocated $136,000 to the limited partners and $1,000 to the General Partner. 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 March 31, 1997. 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/ William H. Jarrard, Jr. William H. Jarrard, Jr. President By:/s/ Ronald Uretta Ronald Uretta Vice President/Treasurer Date: April 30, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Growth Fund 1997 first quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000201529 CONSOLIDATED CAPITAL GROWTH FUND 1,000 3-MOS DEC-31-1997 MAR-31-1997 1,443 0 25 0 0 0 41,558 (21,165) 23,808 0 30,690 0 0 0 (7,959) 23,808 0 2,790 0 0 2,649 0 558 0 0 0 0 0 0 141 2.84 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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