-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ndCvobN6HWvkLnkujo1xM+17ToLfnc/dCTeE4JCSa9NMgzMpv8envFCYQlhmbnH9 dU1GNoy+8CjzmCiiT/egGA== 0000950109-94-002180.txt : 19941201 0000950109-94-002180.hdr.sgml : 19941201 ACCESSION NUMBER: 0000950109-94-002180 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940930 FILED AS OF DATE: 19941122 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES CENTRAL INDEX KEY: 0000352983 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 942744492 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10831 FILM NUMBER: 94561373 BUSINESS ADDRESS: STREET 1: 5520 LBJ FRWY STE 430 CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2147020027 MAIL ADDRESS: STREET 1: 5520 LBJ FREEWAY STREET 2: SUITE 430 CITY: DALLAS STATE: TX ZIP: 75240 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1994 ------------------------------------------------- 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 0-10831 --------------------------------------------------------- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES - - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) California 94-2744492 - - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5520 LBJ Freeway, Suite 430, Dallas, Texas 75240 - - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) (214) 702-0027 - - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- Index to Exhibits: 10 Total Pages: 19 -1- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - - ------ -------------------- BALANCE SHEETS (unaudited) (in thousands, except unit data)
SEPTEMBER 30, DECEMBER 31, ASSETS 1994 1993 - - ------ ------------- ------------ Real estate, net of accumulated depreciation....... $ 4,855 $ 5,140 ------------- ------------ Net investment in Master Loan to affiliate......... 91,786 91,746 ------------- ------------ Cash and cash equivalents.......................... 476 222 United States Treasury Notes and other investments at cost (market - $8,813 in 1994 and $10,905 in 1993).......................................... 8,469 10,391 Due from affiliates................................ 780 559 Other assets....................................... 335 384 ------------- ------------ $ 106,701 $ 108,442 ============= ============ LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - - ------------------------------------------ Accounts payable and accrued expenses.............. $ 69 $ 177 Distributions payable.............................. 337 332 ------------- ------------ 406 509 ------------- ------------ Commitment (Note 4)................................ Partners' equity (deficit): Limited Partners - 199,045 units outstanding...... 106,599 108,220 General Partner................................... (304) (287) ------------- ------------ 106,295 107,933 ------------- ------------ $ 106,701 $ 108,442 ============= ============
The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -2- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES INCOME STATEMENTS (unaudited) (in thousands, except unit data)
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, ---------------------- --------------------- 1994 1993 1994 1993 ---------- ---------- --------- ---------- Revenues: Rental income............. $ 333 $ 310 $ 974 $ 877 Income on investment in Master Loan to affiliate.. 752 646 1,661 3,079 Investment income......... 174 269 509 761 ---------- ---------- --------- ---------- Total revenues.......... 1,259 1,225 3,144 4,717 ---------- ---------- --------- ---------- Costs and expenses: Property operations....... 171 162 455 511 Depreciation.............. 106 104 313 308 Administrative............ 88 139 347 568 Provision for possible losses................... - 100 - 100 ---------- ---------- --------- ---------- Total costs and expenses (a)........... 365 505 1,115 1,487 ---------- ---------- --------- ---------- Income from operations..... 894 720 2,029 3,230 Other income............... - - 56 - Gain on sale of United States Treasury Note...... - - - 17 ---------- ---------- --------- ---------- Net income................. $ 894 $ 720 $ 2,085 $ 3,247 ========== ========== ========= ========== Net income per Limited Partnership Unit: Income from operations.... $ 4.45 $ 3.58 $10.10 $ 16.06 Other income.............. - - .28 - Gain on sale of United States Treasury Note..... - - - .09 ---------- ---------- --------- ---------- Net income................. $ 4.45 $ 3.58 $ 10.38 $ 16.15 ========== ========== ========= ========== Distributions per Limited Partnership Unit.......... $ 6.77 $ 14.25 $ 18.52 $ 28.50 ========== ========== ========= ==========
(a) Costs and expenses include $90,000 and $98,000 to related parties for the three months ended September 30, 1994 and 1993, respectively, and $308,000 and $269,000 for the nine months ended September 30, 1994 and 1993. See supplemental information with respect to related party transactions in Notes 2 and 3 of the financial statements. The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -3- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (unaudited) For the Nine Months Ended September 30, 1994 and 1993 (in thousands)
TOTAL GENERAL LIMITED PARTNERS' PARTNER PARTNERS EQUITY (DEFICIT) ------- -------- ---------------- Balance at December 31, 1992... $ (163) $120,575 $ 120,412 Net income..................... 32 3,215 3,247 Distributions.................. (57) (5,673) (5,730) ------- -------- ---------- Balance at September 30, 1993.. $ (188) $118,117 $ 117,929 ======= ======== ========== Balance at December 31, 1993... $ (287) $108,220 $ 107,933 Net income..................... 20 2,065 2,085 Distributions.................. (37) (3,686) (3,723) ------- -------- ---------- Balance at September 30, 1994.. $ (304) $106,599 $ 106,295 ======= ======== ==========
The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -4- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES STATEMENTS OF CASH FLOWS (unaudited) Increase (Decrease) in Cash and Cash Equivalents (in thousands)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ---------------------- 1994 1993 -------- -------- Cash flows from operating activities: Cash received from tenants........................... $ 969 $ 879 Cash paid to suppliers (a)........................... (878) (865) Investment income received (b)....................... 2,038 4,738 Property taxes paid.................................. (68) - Other income......................................... 50 - -------- -------- Net cash provided by operating activities............. 2,111 4,752 -------- -------- Cash flows from investing activities: Additions to real estate............................. (28) (15) Advances on Master Loan to affiliate................. (40) (340) Purchase of mortgage loan............................ - (100) Purchase of United States Treasury Note.............. (3,392) - Proceeds from sale of United States Treasury Note.... 5,320 616 -------- -------- Net cash provided by investing activities............. 1,860 161 -------- -------- Cash flows from financing activities: Distributions paid................................... (3,717) (5,703) -------- -------- Net increase (decrease) in cash and cash equivalents.. 254 (790) Cash and cash equivalents, at beginning of period..... 222 1,877 -------- -------- Cash and cash equivalents, at end of period........... $ 476 $ 1,087 ======== ========
(a) Payments to related parties totaling $308,000 and $269,000 for the nine months ended September 30, 1994 and 1993, respectively, are included in cash paid to suppliers. See Note 2. (b) Payments from related parties totaling $1.5 million and $4 million for the nine months ended September 30, 1994 and 1993, respectively, are included in interest received. See Note 3. The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -5- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES Notes to Financial Statements September 30, 1994 (Unaudited) NOTE 1 - BASIS OF PRESENTATION - - ------------------------------ The financial statements reflect all adjustments necessary for a fair presentation of the financial position of Consolidated Capital Institutional Properties (the "Partnership") and the results of its operations. All adjustments were of a normal recurring nature. However, the results of operations for the nine months ended September 30, 1994, are not necessarily indicative of the results to be expected for the year ending December 31, 1994. The financial statements should be read in conjunction with the financial statements contained in the Partnership's Annual Report on Form 10-K for the year ended December 31, 1993 (the "1993 Annual Report"), and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to the General Partner, ConCap Equities, Inc. ("CEI"), Investor Relations, 5520 LBJ Freeway, Suite 430, Dallas, Texas 75240. Presentation of Accounts - - ------------------------ Certain prior period amounts within the accompanying financial statements have been reclassified to conform with current presentation. NOTE 2 - RELATED PARTY TRANSACTIONS - - ----------------------------------- The Partnership has paid property management fees equal to 5% of collected gross rental revenues ("Rental Revenues") for property management services in each of the nine month periods ended September 30, 1994 and 1993. A portion of such property management fees equal to 4% of Rental Revenues has been paid to the property management company performing day-to-day property management services and the portion equal to 1% of Rental Revenues has been paid to Partnership Services, Inc. ("PSI") for advisory services related to day-to-day property operations. Prior to July 1993, day-to-day property management services were provided to the Partnership's property by an unaffiliated management company. In July 1993, Coventry Properties, Inc. ("Coventry"), an affiliate of the General Partner, assumed day-to-day property management responsibilities for the Partnership's property under the same management fee arrangement as the unaffiliated management company. Fees paid to PSI and Coventry have been reflected in the table below as compensation to related parties:
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ----------------------- COMPENSATION 1994 1993 - - ------------ -------- -------- (in thousands) Charged to property operations expense: Property management fees............... $ 48 $ 22 ======== ========
The Partnership Agreement provides for reimbursement to the general partner and its affiliates for costs incurred in connection with administration of Partnership activities and for reimbursement to Coventry for expenses related to property operations (primarily salaries and related costs for on-site property personnel). The General Partner and its affiliates, including Coventry, received reimbursements included in the following table: -6-
FOR THE NINE MONTHS ENDED SEPTEMBER 30, ----------------------- REIMBURSEMENT 1994 1993 - - ------------- -------- -------- (in thousands) Charged to property operations expense: Reimbursement of direct property expense... $ 101 $ 25 Charged to administrative expenses: Reimbursement of administrative expenses (including payroll reimbursements)........ 159 222 -------- -------- $ 260 $ 247 ======== ========
In addition to the compensation and reimbursements described above, interest payments are received from and loan advances are made to Consolidated Capital Equity Partners ("CCEP") pursuant to the New Master Loan Agreement, which is described more fully in the 1993 Annual Report. See Note 3. NOTE 3 - NET INVESTMENT IN MASTER LOAN - - -------------------------------------- Interest due to the Partnership according to the terms of the New Master Loan Agreement but not recognized in the income statements totaled approximately $6.1 million and $18.6 million for the three and nine months ended September 30, 1994, respectively, and $5.5 million and $15.1 million for the three and nine months ended September 30, 1993, respectively. At September 30, 1994, cumulative unrecognized interest totaling approximately $104.8 million was not included in the balance of the investment in Master Loan. In February 1994, the Partnership advanced $40,000 to CCEP as an advance on the Master Loan. CCEP then advanced $40,000 to New Carlton House Partners as an advance on the note receivable secured by the Carlton House Apartment and Office Building ("Carlton House") to pay the remaining balance of 1993 property taxes that were due. NOTE 4 - COMMITMENT - - ------------------- The Partnership is required by the Partnership Agreement to maintain working capital reserves for contingencies of not less than 5% of Net Invested Capital, as defined in the Partnership Agreement. Reserves, including cash and cash equivalents and Treasury Notes (at market), totaling approximately $9.3 million at September 30, 1994, were greater than the reserve requirement of $8 million. NOTE 5 - DISTRIBUTIONS - - ---------------------- In March 1994, the General Partner distributed approximately $2.3 million or $11.75 per Unit to the Limited Partners and paid a matching general partner distribution of approximately $24,000. In September 1994, the General Partner distributed approximately $1.4 million or $6.77 per unit to Limited Partners and accrued a matching general partner distribution of approximately $13,000. NOTE 6 - OTHER INCOME - - --------------------- As described in the 1993 Annual Report, the Partnership (and simultaneously 15 affiliated partnerships) entered claims in Southmark Corporation's Chapter 11 bankruptcy proceeding in 1991. These claims related to Southmark Corporation's activities while it exercised control (directly, or indirectly through its affiliates) over the Partnership. The Bankruptcy Court set the Partnership's and the affiliated partnerships' allowed claim at $11 million, in aggregate. In March 1994, the Partnership received cash, 909 shares of Southmark Corporation Redeemable Series A Preferred Stock and 6,651 shares of Southmark Corporation New Common Stock, with a total market value on the date of receipt of $56,000, representing the Partnership's share of the recovery based on its pro rata portion of claims filed. -7- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND - - ------ --------------------------------------------------------------- RESULTS OF OPERATIONS --------------------- RESULTS OF OPERATIONS - - --------------------- Property Operations: For the three and nine months ended September 30, 1994, rental revenues increased $23,000 or 7% and $97,000 or 11%, respectively, over 1993, primarily due to increased rental rates at the Loft Apartments. Property operation expenses for the three months ended September 30, 1994, increased $9,000 or 6% compared with the same period in 1993, primarily as a result of increased personnel costs. Property operation expenses for the nine months ended September 30, 1994, decreased $56,000 or 11%, primarily as a result of decreased personnel and replacement costs. Administrative Expenses: Administrative expenses for the three and nine month period ended September 30, 1994 decreased $51,000 or 37% and $221,000 or 39%, respectively, compared to the same periods in 1993, primarily because of a decrease in data processing and administrative overhead expenses. Income on Investment in Master Loan: As described below under "Status of the Master Loan," income on the investment in Master Loan is based on operations of CCEP's properties which secure the Master Loan. The following table summarizes the sources of income on the investment in Master Loan with respect to CCEP's operations during the nine months ended September 30, 1994 and 1993, respectively:
FOR THE NINE MONTHS ENDED SEPTEMBER 30, -------------------- 1994 1993 -------- -------- Funds provided by property operations.......... $ 13,445 $ 13,421 Funds used for property operations (includes administrative expenses)...................... (10,564) (9,569) Proceeds from sale of property................. 130 - Debt service payments on underlying notes payable....................................... (798) (939) -------- -------- Net funds from property operations............. 2,213 2,913 Collection of note receivable.................. - 150 -------- -------- Total funds from operations.................... 2,213 3,063 Advance on Carlton House note receivable....... (589) - Net investing activity......................... 37 16 -------- -------- Net funds provided............................. $ 1,661 $ 3,079 ======== ======== Income from the investment in Master Loan $ 1,661 $ 3,079 ======== ========
Income from the investment in Master Loan during the nine months ended September 30, 1994, decreased $1.4 million or 46% from 1993. Net funds provided by CCEP for Master Loan payments decreased as a result of several factors as hereinafter described. Funds used for CCEP property operations increased $995,000 or 10% in 1994 because of increases in replacements and refurbishments and an increase in service and utility expenses. Debt service payments to CCEP third party lien holders decreased $141,000 or 15% from 1993 as a result of the maturity and payoff of a note payable and the modification of a note payable to eliminate mortgage interest participation during the third quarter of 1993. In August 1994, CCEP sold a tract of land and the related improvements adjacent to one of the Partnership's properties and received proceeds of approximately $130,000. In March 1994, CCEP advanced $589,000 to New Carlton House Partners, as an advance on the Carlton House Note, to pay Carlton House's 1994 property taxes in an effort to protect CCEP's interest in the property. As discussed in the 1993 Annual Report, all cash flows generated by Carlton House are being reinvested in the property. -8- LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- Nine Months Ended September 30, 1994 - - ------------------------------------ The Partnership's net cash inflows totaling approximately $7.4 million for the nine months ended September 30, 1994, consisted of proceeds from the sale of United States Treasury Notes of approximately $5.3 million and net cash provided by operations of approximately $2.1 million. The Partnership's uses of cash for the same nine month period, totaling approximately $7.2 million, were primarily distributions paid to Limited Partners of $3.7 million and purchase of United States Treasury Notes of approximately $3.4 million. The Partnership is required by the Partnership Agreement to maintain working capital reserves for contingencies of not less than 5% of Net Invested Capital, as defined in the Partnership Agreement. Reserves, including cash and cash equivalents and United States Treasury Notes (at market), totaling approximately $9.3 million, were greater than the reserve requirement of approximately $8 million at September 30, 1994. Status of the Master Loan - - ------------------------- In February 1994, the Partnership advanced $40,000 to CCEP as an advance on the Master Loan. CCEP then advanced $40,000 to New Carlton House Partners as an advance on the note receivable secured by the Carlton House Apartment and Office Building ("Carlton House") to pay the remaining balance of Carlton House's 1993 property taxes that were due. CCEP Property Operations - - ------------------------ For the three and nine months ended September 30, 1994, CCEP's net loss totaled approximately $7.2 million and $20.6 million on total revenues of $5.8 million and $17 million primarily because CCEP's statements of operations include interest expense of approximately $6.8 million and $20.3 million, attributable to the Master Loan, of which approximately $6.1 million and $18.6 million represents interest accrued in excess of required payments. CCEP recognizes interest expense on the Master Loan obligation according to the note terms, although payments to the Partnership are required only to the extent of excess cash flow, as defined in the New Master Loan Agreement. CCEP will continue to generate operating losses as a result of such interest accruals and noncash charges for depreciation. Distributions - - ------------- In March 1994, the General Partner distributed approximately $2.3 million or $11.75 per Unit to the Limited Partners and paid a matching general partner distribution of approximately $24,000. In September 1994, the General Partner distributed approximately $1.4 million or $6.77 per unit to Limited Partners and accrued a matching general partner distribution of approximately $13,000. Other Income - - ------------ As described in the 1993 Annual Report, the Partnership (and simultaneously 15 affiliated partnerships) entered claims in Southmark Corporation's Chapter 11 bankruptcy proceeding in 1991. These claims related to Southmark Corporation's activities while it exercised control (directly, or indirectly through its affiliates) over the Partnership. The U.S. Bankruptcy Court set the Partnership's and the Affiliated Partnership's allowed claim at $11 million, in aggregate. In March 1994, The Partnership received cash, 909 shares of Southmark Corporation Redeemable Series A Preferred Stock and 6,651 shares of Southmark Corporation New Common Stock, with a total market value on the date of receipt of $56,000, representing the Partnership's share of the recovery based on its pro rata portion of claims filed. -9- PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS - - ------ ----------------- Neither the Partnership, nor CCEP, are parties to, nor are any of the Partnership's or CCEP's properties the subject of, any material pending legal proceedings as of September 30, 1994. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - - ------ -------------------------------- (a) Exhibits.
S-K REFERENCE SEQUENTIAL NUMBER DESCRIPTION PAGE NUMBER -------------- ----------- ----------- 28.1 Consolidated Capital Equity Partners, L.P., unaudited Financial Statements for the nine months ended September 30, 1994 and 1993.
(b) Reports on Form 8-K: None. -10- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES SIGNATURE PAGE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES By: CONCAP EQUITIES, INC. Its General Partner, November 21, 1994 By: /s/ David C. Meek - - ----------------- --------------------------------- Date David C. Meek President November 21, 1994 By: /s/ David K. Ronck - - ----------------- --------------------------------- Date David K. Ronck Vice President and Secretary November 21, 1994 By: /s/ Patricia L. Campbell - - ----------------- --------------------------------- Date Patricia L. Campbell Vice President and Treasurer (chief accounting officer) -11- CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P. UNAUDITED FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993 -12- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. BALANCE SHEETS (unaudited) (in thousands)
SEPTEMBER 30, DECEMBER 31, ASSETS 1994 1993 - - ------ ------------- ----------- Real estate, net of accumulated depreciation.. $ 42,270 $ 45,140 Real estate assets of property in-substance foreclosed, net of accumulated depreciation.. 19,684 19,808 ----------- ----------- 61,954 64,948 Cash and cash equivalents 3,126 2,429 Investment in United States Treasury Notes at cost...................................... 195 - Investments in limited partnerships........... 2,508 2,508 Other assets.................................. 1,362 1,083 ----------- ----------- $ 69,145 $ 70,968 =========== =========== LIABILITIES AND PARTNERS' DEFICIT - - --------------------------------- Master Loan and interest payable.............. $ 232,444 $ 213,798 Notes and interest payable.................... 4,858 5,338 Due to affiliates............................. 850 620 Other liabilities............................. 2,325 1,897 ----------- ----------- 240,477 221,653 ----------- ----------- Partners' deficit: Limited Partners............................. (169,619) (149,178) General Partner.............................. (1,713) (1,507) ----------- ----------- (171,332) (150,685) ----------- ----------- $ 69,145 $ 70,968 =========== ===========
The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -13- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. STATEMENTS OF OPERATIONS (unaudited) (in thousands, except unit data)
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------- -------------------- 1994 1993 1994 1993 -------- -------- -------- -------- Revenues: Rental income............... $ 5,766 $ 4,504 $ 16,964 $ 13,385 Interest.................... 34 6 50 167 -------- -------- -------- -------- Total revenues............ 5,800 4,510 17,014 13,552 -------- -------- -------- -------- Costs and expenses: Interest (a)................ 6,945 6,241 20,629 18,601 Property operations (b)..... 4,277 3,136 11,814 8,525 Depreciation................ 1,589 1,252 4,568 3,926 Administrative (b).......... 261 141 650 549 -------- -------- -------- -------- Total costs and expenses.. 13,072 10,770 37,661 31,601 -------- -------- -------- -------- Net loss..................... $ (7,272) $ (6,260) $(20,647) $(18,049) ======== ======== ======== ========
(a) Interest expense includes $6.8 million and $6.1 million to related parties for the three months ended September 30, 1994 and 1993, respectively, and $20.3 million and $18.1 million for the nine months ended September 30, 1994 and 1993, respectively. See supplemental information with respect to related party transactions in Note 2 of the financial statements. (b) Costs and expenses include $432,000 and $225,000 to related parties for the three months ended September 30, 1994 and 1993, respectively, and $1.5 million and $573,000 for the nine months ended September 30, 1994 and 1993, respectively. See supplemental information with respect to related party transactions in Note 2 of the financial statements. The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -14- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. STATEMENTS OF PARTNERS' DEFICIT (unaudited) For the Nine Months Ended September 30, 1994 and 1993 (in thousands)
TOTAL GENERAL LIMITED PARTNERS' PARTNER PARTNERS DEFICIT ------- -------- --------- Balance at December 31, 1992...... $(1,225) $ (121,258) $ (122,483) Net loss.......................... (180) (17,869) (18,049) ------- ---------- ---------- Balance at September 30, 1993..... $(1,405) $ (139,127) $ (140,532) ======= ========== ========== Balance at December 31, 1993...... $(1,507) $ (149,178) $ (150,685) Net loss.......................... (206) (20,441) (20,647) ------- ---------- ---------- Balance at September 30, 1994..... $(1,713) $ (169,619) $ (171,332) ======= ========== ==========
The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -15- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. STATEMENTS OF CASH FLOWS (unaudited) Increase (Decrease) in Cash and Cash Equivalents (in thousands)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, --------------------- 1994 1993 -------- -------- Cash flows from operating activities: Cash received from tenants........................... $ 16,976 $ 13,403 Cash paid to suppliers (a)........................... (11,336) (8,286) Interest received.................................... 50 167 Interest paid (b).................................... (1,837) (4,421) Property taxes paid.................................. (915) (351) -------- -------- Net cash provided by operating activities............. 2,938 512 -------- -------- Cash flows from investing activities: Additions to real estate............................. (1,736) (410) Purchase of United States Treasury Notes............. (195) - Proceeds from sale of real estate.................... 130 - ------- -------- Net cash used in investing activities................. (1,801) (410) ------- -------- Cash flows from financing activities: Advances on Master Loan.............................. 40 340 Principal payments on notes payable.................. (480) (459) ------- -------- Net cash used in financing activities................. (440) (119) ------- -------- Net increase (decrease) in cash and cash equivalents.. 697 (17) Cash and cash equivalents, at beginning of period..... 2,429 998 ------- -------- Cash and cash equivalents, at end of period........... $ 3,126 $ 981 ======= ========
(a) Payments to related parties totaling $1.5 million and $573,000 for the nine months ended September 30, 1994 and 1993, respectively, are included in cash paid to suppliers. (b) Payments to related parties totaling $1.5 million and $4 million for the nine months ended September 30, 1994 and 1993, are included in interest paid. See supplemental information with respect to related party transactions in Notes 2 and 3 of the financial statements. The financial information included herein has been prepared by management without audit by independent public accountants. The accompanying notes are an integral part of the financial statements. -16- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. Notes to Financial Statements September 30, 1994 (Unaudited) NOTE 1 - BASIS OF PRESENTATION - - ------------------------------ The financial statements reflect all adjustments necessary for a fair presentation of the financial position of Consolidated Capital Equity Partners, L.P. ("CCEP") and the results of its operations. All adjustments were of a normal recurring nature. However, the results of operations for the nine months ended September 30, 1994, are not necessarily indicative of the results to be expected for the year ending December 31, 1994. The financial statements should be read in conjunction with the financial statements contained in Consolidated Capital Institutional Properties' ("CCIP") Annual Report on Form 10-K for the year ended December 31, 1993 (the "1993 Annual Report"), and the notes thereto, as filed with the Securities and Exchange Commission, which is available upon request by writing to CCIP's general partner, ConCap Equities, Inc. ("CEI"), Investor Relations, 5520 LBJ Freeway, Suite 430, Dallas, Texas 75240. Presentation of Accounts - - ------------------------ Certain prior period amounts within the accompanying financial statements have been reclassified to conform with current presentation. NOTE 2 - RELATED PARTY TRANSACTIONS - - ----------------------------------- CCEP has paid property management fees equal to 5% of collected gross rental revenues ("Rental Revenues") for property management services in each of the nine month periods ended September 30, 1994 and 1993. A portion of such property management fees equal to 4% of Rental Revenues has been paid to the property management companies performing day-to-day property management services and the portion equal to 1% of Rental Revenues has been paid to Partnership Services, Inc. ("PSI") for advisory services related to day-to-day property operations. Prior to July 1993, day-to-day property management services were provided to CCEP's properties by unaffiliated management companies. In July 1993, Coventry Properties, Inc. ("Coventry"), an affiliate of CCEP's general partner, ConCap Holdings, Inc. ("CHI"), assumed day-to-day property management responsibilities for two of CCEP's properties under the same management fee arrangement as the unaffiliated management companies. Coventry assumed day-to- day property management responsibilities for two additional CCEP properties in January 1994. The management fee arrangements with Coventry and the unaffiliated management companies also provide for the payment of leasing commissions to the management companies as compensation for their services in connection with obtaining new or renewed leases with tenants of the commercial office buildings. Fees paid to PSI and Coventry have been reflected in the table below as compensation to related parties. Also, CCEP is subject to an Investment Advisory Agreement between CCEP and an affiliate of CHI. This agreement provides for an annual fee, payable in monthly installments, to an affiliate of CHI for advising and consulting services for CCEP's properties. Advisory fees paid pursuant to this agreement are reflected in the following table: -17-
FOR THE NINE MONTHS ENDED SEPTEMBER 30, --------------------------- COMPENSATION 1994 1993 - - ------------ ---------- ---------- (in thousands) Charged to other assets: Lease commissions........................ $ 70 $ - Charged to property operations expenses: Property management fees................. 326 160 Charged to administrative expenses: Investment advisory fee.................. 193 172 ---------- ---------- $ 589 $ 332 ========== ==========
The New Partnership Agreement, as defined in the 1993 Annual Report, provides for reimbursement to the general partner and its affiliates for costs incurred in connection with administration of CCEP's activities and for reimbursement to Coventry for expenses related to property operations (primarily salaries and related costs for on-site property personnel). CHI and its affiliates, including Coventry, received reimbursements included in the following table:
FOR THE NINE MONTHS ENDED SEPTEMBER 30, --------------------------- REIMBURSEMENT 1994 1993 - - ------------- ---------- ---------- (in thousands) Charged to property operations: Reimbursement of direct property expense.. $ 632 $ 63 Charged to administrative expenses: Reimbursement of administrative expenses (including payroll reimbursements)....... 227 178 ---------- ---------- $ 859 $ 241 ========== ==========
In addition to the compensation and reimbursements described above, interest payments are made to and loan advances are received from CCIP pursuant to the New Master Loan Agreement, which is described more fully in the 1993 Annual Report. Such interest payments totaled $1.5 million and $4 million in the nine months ended September 30, 1994 and 1993, respectively. CCEP received advances under the New Master Loan Agreement totaling $40,000 and $340,000 in the nine months ended September 30, 1994 and 1993, respectively. NOTE 3 - MASTER LOAN AND ACCRUED INTEREST PAYABLE - - ------------------------------------------------- In February 1994, CCIP advanced $40,000 to CCEP as an advance on the Master Loan. CCEP then advanced $40,000 to New Carlton House Partners as an advance on the note receivable secured by the Carlton House Apartment and Office Building ("Carlton House") to pay the remaining balance of Carlton House's 1993 property taxes that were due. NOTE 4 - NOTE RECEIVABLE DEEMED IN-SUBSTANCE FORECLOSED - - ------------------------------------------------------- As more fully described in the 1993 Annual Report, the Carlton House Note is deemed in-substance foreclosed. Summarized below are the assets, liabilities and partner's equity of New Carlton House Partners as of September 30, 1994 and December 31, 1993, and the results of its operations for the nine month period ended September 30, 1994, prepared on the same basis as CCEP's financial statements. Results of operations for the nine month period ended September 30, 1993, have not been presented below as Carlton House was not deemed in-substance foreclosed until September 30, 1993. Any intercompany balances between CCEP and Carlton House have been eliminated in CCEP's consolidated financial statements and the summarized financial statements set forth below: -18-
SEPTEMBER 30, DECEMBER 31, ASSETS 1994 1993 ------ ------------- ------------ (in thousands) Real estate: Land.................................. $ 3,805 $ 3,805 Buildings and improvements............ 16,753 16,205 ------------- ------------ 20,558 20,010 Less: Accumulated depreciation....... (874) (202) ------------- ------------ 19,684 19,808 Cash and cash equivalents............... 1,001 997 United States Treasury Notes at cost (market - $195)........................ 195 - Prepaid expenses and other assets...... 143 149 ------------- ------------ $ 21,023 $ 20,954 ============= ============ LIABILITIES AND PARTNERS' EQUITY -------------------------------- Note and interest payable............... $ 20 $ 58 Other liabilities....................... 229 474 ------------- ------------ Total liabilities....................... 249 532 ------------- ------------ Partners' equity........................ 20,774 20,422 ------------- ------------ Total liabilities and partners' equity. $ 21,023 $ 20,954 ============= ============
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1994 -------------------------- (in thousands) Rental revenue.......................... $ 3,498 -------- Costs and expenses: Property operations.................... 3,136 Depreciation........................... 672 Interest............................... 3 Administrative......................... 25 -------- Total costs and expenses................ 3,836 -------- Net loss................................ $ (338) ========
-19- EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the financial statements of Consolidated Capital Institutional Properties/2 as filed in the Partnership's Quarterly Report on Form 10-Q for the quarter ended September 30, 1994 and is qualified in its entirety by reference to such financial statements. 1,000 U.S. DOLLARS 9-MOS DEC-31-1994 JAN-01-1994 SEP-30-1994 1 1,314 9,769 91,838 (39,730) 0 0 10,686 2,339 71,985 310 0 0 0 0 71,675 71,985 0 2,686 0 2,447 (44) 0 0 275 0 275 0 0 0 275 .30 0
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