-----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, OyUeyyp4EeliDE8a9KVn2ZthsB67AKg0xBHrPTKFcsK+QhnouS6042TgQG2CX9mK BVOXUyYIBqJWQKtB+lib7g== 0000950131-94-000668.txt : 19940527 0000950131-94-000668.hdr.sgml : 19940527 ACCESSION NUMBER: 0000950131-94-000668 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940519 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: 94529488 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 March 31, 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)
MARCH 31, DECEMBER 31, ASSETS 1994 1993 - - ------ --------- ------------ Real estate, net of accumulated depreciation........... $ 5,064 $ 5,140 --------- -------- Net investment in Master Loan.......................... 91,786 91,746 --------- -------- Cash and cash equivalents.............................. 398 222 United States Treasury Notes (Treasury Notes) at cost (market - $8,316 in 1994 and $10,905 in 1993)....... 7,991 10,391 Due from affiliates.................................... 1,023 559 Other assets........................................... 377 384 --------- -------- $106,639 $108,442 ======== ======== LIABILITIES AND PARTNERS' EQUITY (DEFICIT) - - ------------------------------------------ Accounts payable and accrued expenses.................. $ 102 $ 177 Distributions payable.................................. 348 332 -------- -------- 450 509 -------- -------- Commitment (Note 4).................................... Partners' equity (deficit): Limited Partners - 199,046 units outstanding........ 106,494 108,220 General Partner..................................... (305) (287) -------- -------- 106,189 107,933 -------- -------- $106,639 $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 STATEMENT (unaudited) (in thousands, except unit data)
FOR THE THREE MONTHS ENDED MARCH 31, ---------------------------- 1994 1993 -------- --------- Revenues: Rental income............................ $ 314 $ 292 Income on investment in Master Loan from affiliate.......................... 474 1,628 Interest on investments.................. 167 250 ------ ------ Total revenues.......................... 955 2,170 ------ ------ Costs and expenses: Property operations...................... 144 152 Depreciation............................. 104 102 Administrative........................... 138 245 ------ ------ Total costs and expenses (a)............ 386 499 ------ ------ Income from operations.................... 569 1,671 Other income.............................. 50 - Gain on sale of Treasury Note............. - 17 ------ ------ Net income................................ $ 619 $1,688 ====== ====== Net income per Limited Partnership Unit: Income from operations................... $ 2.83 $ 8.31 Other income............................. .25 - Gain on sale of Treasury Notes........... - .09 ------ ------ Net income............................... $ 3.08 $ 8.40 ====== ====== Distributions per Limited Partner- ship Unit................................ $11.75 $14.25 ====== ======
[FN] (a) Costs and expenses include $103,000 to related parties for the three months ended March 31, 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 Three Months Ended March 31, 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......................... 17 1,671 1,688 Distributions...................... (29) (2,836) (2,865) ----- -------- -------- Balance at March 31, 1993.......... $(175) $119,410 $119,235 ===== ======== ======== Balance at December 31, 1993....... $(287) $108,220 $107,933 Net income......................... 6 613 619 Distributions...................... (24) (2,339) (2,363) ----- -------- -------- Balance at March 31, 1994.......... $(305) $106,494 $106,189 ===== ======== ========
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 THREE MONTHS ENDED MARCH 31, ------------------------------------------ 1994 1993 ------------- --------------- Cash flows from operating activities: Cash received from tenants........................... $ 318 $ 287 Cash paid to suppliers (a)........................... (397) (259) Interest received (b)................................ 220 2,157 Other income received................................ 50 - ------- ------- Net cash provided by operating activities............. 191 2,185 ------- ------- Cash flows from investing activities: Additions to real estate............................. (28) - Advances on Master Loan.............................. (40) (340) Proceeds from sale of Treasury Notes................. 4,720 616 Purchase of Treasury notes........................... (2,320) - ------- ------- Net cash provided by investing activities............. 2,332 276 ------- ------- Cash flows from financing activities: Distributions to partners............................ (2,347) (2,837) ------- ------- Net increase (decrease) in cash and cash equivalents.. 176 (376) Cash and cash equivalents, at beginning of period..... 222 1,877 ------- ------- Cash and cash equivalents, at end of period........... $ 398 $ 1,501 ======= =======
[FN] (a) Payments to related parties totaling $103,000 for the three months ended March 31, 1994 and 1993, respectively, are included in cash paid to suppliers. (b) Payments from related parties totaling approximately $261,000 for the three months ended March 31, 1993, are included in interest received. 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. -5- CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES Notes to Financial Statements March 31, 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 three months ended March 31, 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. Income per Partnership Unit - - --------------------------- Income per Unit is computed by dividing net income allocated to the Unitholders by the number of Units outstanding. Per Unit information has been computed based on 199,046 and 199,051 Units outstanding for the three months ended March 31, 1994 and 1993, respectively. 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 three month periods ended March 31, 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. During the three months ended March 31, 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 THREE MONTHS ENDED MARCH 31, ----------------------------------- COMPENSATION 1994 1993 - - ------------ ------------- ------------ (in thousands) Charged to property operations expense: Property management fees........... $ 16 $ 3 ===== ====
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 THREE MONTHS ENDED MARCH 31, -------------------- REIMBURSEMENT 1994 1993 - - ------------- --------- --------- (in thousands) Charged to property operations expenses: Reimbursement of direct property expense............. $ 31 $ - Charged to administrative expenses: Reimbursement of administrative expenses (including payroll reimbursements)............................. 56 100 ----- --------- $ 87 $ 100 ===== =========
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 $6.2 million and $4.4 million for the three months ended March 31, 1994, and 1993, respectively. At March 31, 1994, such cumulative unrecognized interest totaling approximately $92.4 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. 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 $8.7 million, were greater than the reserve requirement of $8 million at March 31, 1994. NOTE 5 - PARTNERS' EQUITY (DEFICIT) - - ----------------------------------- During March 1994, the General Partner paid distributions of distributable cash from operations of approximately $2.3 million or $11.75 per Unit to Limited Partners, and accrued a matching general partner distribution of approximately $24,000. 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 U.S. Bankruptcy Court set the Partnership's and the affiliated partnerships' allowed claim at $11 million, in aggregate. In March 1994, The Partnership received $50,000 in cash, 909 shares of Southmark Corporation Redeemable Series A Preferred Stock and 6,651 shares of Southmark Corporation New Common Stock 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 months ended March 31, 1994, rental revenues increased $22,000 or 8% over 1993 due to increased rental rates at the Loft Apartments. Property operations expense decreased $8,000 or 5% for 1994 compared with 1993 primarily because higher average occupancies resulted in reduced leasing costs and vacant units' maintenance costs. Real estate taxes increased by approximately $8,000 due to a tax refund received in the first part of 1993. Administrative Expenses: Administrative expenses for the three months ended March 31, 1994, decreased $107,000 or 44% from 1993 because of lower insurance costs and a decrease in administrative overhead costs. Income on Investment in 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 three months ended March 31, 1994 and 1993, respectively:
FOR THE THREE MONTHS ENDED MARCH 31, ---------------------- 1994 1993 ---------- ---------- Funds provided by property operations................ $ 4,487 $ 4,471 Funds used for property operations (includes admin- istrative expenses)................................. (3,165) (2,688) Debt service payments on underlying notes payable.... (266) (310) ------- ------- Net funds from property operations................... 1,056 1,473 Collection of note receivable........................ - 150 ------- ------- Total funds from operations.......................... 1,056 1,623 Advance on Carlton House note receivable............. (589) - Net investing activity............................... 7 5 ------- ------- Net funds provided................................... $ 474 $ 1,628 ======= ======= Master Loan activity: Interest income...................................... $ 474 $ 1,628 ------- ------- $ 474 $ 1,628 ======= =======
Income from the investment in the Master Loan decreased $1.2 million or 71% in the three months ended March 31, 1994 from 1993. Funds provided by operations of the CCEP properties were comparable for the three months ended March 31, 1994 with 1993. Funds used for property operations increased $477,000 or 18% in 1994 because of increases in replacements and refurbishments and an increase in general property expenses. Debt service payments to third-party lien holders decreased $44,000 due to the maturity and payoff of a note payable the third quarter of 1993 and elimination of mortgage interest participation. 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 reinvested in the property. -8- LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- Three Months Ended March 31, 1994 - - --------------------------------- The Partnership's net cash inflows, which totaled approximately $4.9 million were generated from two primary sources: proceeds from the sale of Treasury Notes of approximately $4.7 million and net cash provided by operations of $191,000. The primary uses of cash for the same three-month period, totaling approximately $4.7 million were distributions paid to Limited Partners of $2.3 million, purchase of Treasury notes of approximately $2.3 million, payment of Master Loan advances of $40,000 and additions to real estate of $28,000. 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 $8.7 million, were greater than the reserve requirement of approximately $8 million at March 31, 1994. 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 $50,000 in cash, 909 shares of Southmark Corporation Redeemable Series A Preferred Stock and 6,651 shares of Southmark Corporation New Common Stock representing the Partnership's share of the recovery based on its pro rata portion of claims filed. 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 finalize all payments required in the payment in 1993 of Carlton House's delinquent property taxes. CCEP Property Operations - - ------------------------ For the three months ended March 31, 1994, CCEP's net loss totaled $6.7 million on total revenues of $5.6 million primarily because CCEP's statements of operations includes interest expense of approximately $6.7 million, attributable to the Master Loan of which approximately $6.2 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 - - ------------- During March 1994, the General Partner paid distributions of distributable cash from operations of approximately $2.3 million or $11.75 per Unit to Limited Partners, and accrued a matching general partner distribution of approximately $24,000. -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 March 31, 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 three months ended March 31, 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, May 19, 1994 By: /s/ David C. Meek - - --------------------- ------------------------------ Date David C. Meek President May 19, 1994 By: /s/ David K. Ronck - - --------------------- ------------------------------ Date David K. Ronck Vice President and Secretary May 19, 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 THREE MONTHS ENDED MARCH 31, 1994 AND 1993 -12- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. BALANCE SHEETS (unaudited) (in thousands)
MARCH 31, DECEMBER 31, ASSETS 1994 1993 - - ------ ----------- ---------------- Real estate, net of accumulated depreciation... $ 44,034 $ 45,140 Real estate assets of property in-substance foreclosed, net of accumulated depreciation... 19,687 19,808 --------- --------- 63,721 64,948 Cash and cash equivalents...................... 3,156 2,429 Investments in limited partnerships............ 2,508 2,508 Other assets................................... 1,189 1,083 --------- --------- $ 70,574 $ 70,968 ========== ========= LIABILITIES AND PARTNERS' DEFICIT - - --------------------------------- Master Loan and interest payable to affiliate.. $ 220,045 $ 213,798 Notes and interest payable.................... 5,185 5,338 Due to affiliates............................. 1,051 620 Other liabilities............................. 1,756 1,897 --------- --------- 228,037 221,653 --------- --------- Partners' deficit: Limited Partners............................. (155,888) (149,178) General Partner.............................. (1,575) (1,507) --------- --------- (157,463) (150,685) --------- --------- $ 70,574 $ 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 ENDED MARCH 31, ------------------------------- 1994 1993 -------- ---------------- Revenues: Rental income.................. $ 5,592 $ 4,452 Interest....................... 7 154 ------- ------- Total revenues................ 5,599 4,606 ------- ------- Costs and expenses: Interest (a)................... 6,809 6,138 Property operations............ 3,851 2,578 Depreciation................... 1,475 1,337 Administrative................. 242 199 ------- ------- Total costs and expenses (b).. 12,377 10,252 ------- ------- Net loss........................ $(6,778) $(5,646) ======= =======
[FN] (a) Interest expense includes approximately $6.7 million and $6 million to a related party for the three months ended March 31, 1994 and 1993, respectively. (b) Costs and expenses include $519,000 and $169,000 to related parties for the three months ended March 31, 1994 and 1993, respectively. 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 accompaning notes are an integral part of the financial statements. -14- CONSOLIDATED CAPITAL EQUITY PARTNERS L.P. STATEMENTS OF PARTNERS' EQUITY (DEFICIT) (unaudited) For the Three Months Ended March 31, 1994 and 1993 (in thousands)
TOTAL GENERAL LIMITED PARTNERS' PARTNER PARTNERS EQUITY (DEFICIT) ------- -------------- ---------------- Balance at December 31, 1992.. $ (1,225) $(121,258) $(122,483) Net loss...................... (56) (5,590) (5,646) --------- ---------- ---------- Balance at March 31, 1993..... $ (1,281) $(126,848) $(128,129) ======== ========= ========= Balance at December 31, 1993.. $ (1,507) $(149,178) $(150,685) Net loss...................... (68) (6,710) (6,778) -------- --------- --------- Balance at March 31, 1994..... $ (1,575) $(155,888) $(157,463) ========= ========= =========
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 in Cash and Cash Equivalents (in thousands)
FOR THE THREE MONTHS ENDED MARCH 31, ----------------------------------- 1994 1993 ----------- ------------------ Cash flows from operating activities: Cash received from tenants.......................... $ 5,624 $ 4,471 Cash paid to suppliers (a).......................... (3,674) (2,390) Interest received................................... 7 154 Interest paid (b)................................... (123) (2,047) Property taxes paid................................. (746) (163) ------- ------- Net cash provided by operating activities............ 1,088 25 ------- ------- Cash flows from investing activities: Additions to real estate............................ (248) (65) ------- ------- Cash flows from financing activities: Advances on Master Loan............................. 40 340 Principal payments on notes payable................. (153) (152) ------- ------- Net cash provided by (used in) financing activities.. (113) 188 ------- ------- Net increase in cash and cash equivalents............ 727 148 Cash and cash equivalents, at beginning of period.... 2,429 998 ------- ------- Cash and cash equivalents, at end of period.......... $ 3,156 $ 1,146 ======= =======
[FN] (a) Payments to related parties totaling $519,000 and $169,000 for the three months ended March 31, 1994 and 1993, respectively, are included in cash paid to suppliers. (b) Payments to related parties totaling $261,000 for the three months ended March 31, 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 March 31, 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 three months ended March 31, 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 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. 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 three month periods ended March 31, 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. During the three months ended March 31, 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. 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:
FOR THE THREE MONTHS ENDED MARCH 31, -------------------- COMPENSATION 1994 1993 - - ------------ -------- --------- (in thousands) Charged to property operations expenses: Property management fees................. $ 164 $ 45 Charged to administrative expenses: Investment advisory fee.................. 64 60 ----- ----- $228 $ 105 ===== =====
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: -17-
FOR THE THREE MONTHS ENDED MARCH 31, -------------------- REIMBURSEMENT 1994 1993 - - ------------- --------- --------- (in thousands) Charged to property operations expenses: Reimbursement of direct property expense.. $ 223 $ - Charged to administrative expenses: Reimbursement of administrative expenses (including payroll reimbursements).... 68 64 ----- --------- $ 291 $ 64 ===== =========
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 $474,000 and $261,000 in the three months ended March 31, 1994 and 1993, respectively. CCEP received advances under the New Master Loan Agreement totaling $40,000 and $340,000 in the three months ended March 31, 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 finalize all payments required in the payment in 1993 of Carlton House's delinquent property taxes. NOTE 8 - 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 March 31, 1994 and December 31, 1993, and the results of its operations for the three month period ended March 31, 1994, prepared on the same basis as CCEP's financial statements. There were no results of operations for the three month period ended March 31, 1993, as Carlton House was not deemed in-substance foreclosed until September 30, 1993. Any intercompany balances between CCEP and the Carlton House have been eliminated in CCEP's consolidated financial statements and the summarized financial statements set forth below:
MARCH 31, DECEMBER 31, ASSETS 1994 1993 - - ------ ---------- --------------- (in thousands) Real estate: Land.............................. $ 3,805 $ 3,805 Buildings and improvements........ 16,286 16,205 ------- ------- 20,091 20,010 Less: Accumulated depreciation.... (404) (202) ------- ------- 19,687 19,808 Cash and cash equivalents.......... 1,214 997 Prepaid expenses and other assets.. 592 149 ------- -------- $21,493 $20,954 ======= =======
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MARCH 31, DECEMBER 31, LIABILITIES AND PARTNERS' EQUITY 1994 1993 - - -------------------------------- --------- -------------- (in thousands) Note and interest payable $ 50 $ 58 Other liabilities 627 474 ------- ------- Total liabilities 677 532 ------- ------- Partners' equity 20,816 20,422 ------- ------- Total liabilities and partners' equity $21,493 $20,954 ======= =======
FOR THE THREE MONTHS ENDED MARCH 31, 1994 -------------------- (in thousands) Rental revenue........................... $ 1,122 ------- Costs and expenses: Property operations..................... 1,073 Depreciation............................ 202 Interest................................ 4 Administrative.......................... 78 ------- Total costs and expenses................. 1,357 ------- Net loss................................. $ (235) =======
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