-----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, P7fmwSdS9r4C0RZmp+dPx70rhDtBdofeo1pxWlH06FVNa+DcqIY3V6lCpcH+msLZ BT1+ja72BTcYlEwE6LOgNg== 0000773679-97-000003.txt : 19970805 0000773679-97-000003.hdr.sgml : 19970805 ACCESSION NUMBER: 0000773679-97-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970804 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL PROPERTIES V CENTRAL INDEX KEY: 0000725614 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 942918560 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-13083 FILM NUMBER: 97651074 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: POST OFFICE 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 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 June 30, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-13083 CONSOLIDATED CAPITAL PROPERTIES V (Exact name of small business issuer as specified in its charter) California 94-2918560 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) 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 Exchange Act during the past 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 PROPERTIES V CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1997 Assets Cash and cash equivalents: Unrestricted $ 718 Restricted - tenant security deposits 77 Investments 104 Accounts receivable 43 Escrows for taxes 131 Restricted escrows 675 Other assets 341 Investment properties: Land $ 1,969 Buildings and related personal property 18,645 20,614 Less accumulated depreciation (13,610) 7,004 $ 9,093 Liabilities and Partners' Deficit Liabilities Accounts payable $ 180 Tenant security deposits 76 Accrued taxes 359 Other liabilities 131 Mortgage notes payable 11,210 Partners' Deficit General partner $ (20) Special limited partners (53) Limited partners (179,617 units (2,790) issued and outstanding) (2,863) $ 9,093 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data)
Three Months Ended Six Months Ended June 30, June 30, 1997 1996 1997 1996 Revenues: Rental income $1,038 $1,006 $2,122 $1,984 Other income 46 66 111 97 Total revenues 1,084 1,072 2,233 2,081 Expenses: Operating 364 389 766 756 General and administrative 45 80 86 136 Maintenance 127 141 332 240 Depreciation 270 285 538 567 Interest 204 244 410 493 Property taxes 91 62 201 176 Total expenses 1,101 1,201 2,333 2,368 Net loss $ (17) $ (129) $ (100) $ (287) Net loss allocated to general partner (.2%) $ -- $ -- $ -- $ (1) Net loss allocated to limited partners (99.8%) (17) (129) (100) (286) Net loss $ (17) $ (129) $ (100) $ (287) Net loss per limited partnership unit: $ (.09) $ (.72) $ (.56) $(1.59) See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited)
Limited Special Partnership General Limited Limited Units Partner Partners Partners Total Original capital contributions 180,037 $ 1 $ -- $45,009 $45,010 Partners deficit at December 31, 1996 179,617 $ (20) $ (54) $(2,689) $(2,763) Amortization of timing difference (Note D) -- -- 1 (1) -- Net loss for the six months ended June 30, 1997 -- -- -- (100) (100) Partners' deficit at June 30, 1997 179,617 $ (20) $ (53) $(2,790) $(2,863) See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1997 1996 Cash flows from operating activities: Net loss $ (100) $ (287) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 538 567 Amortization of lease commission, discounts and loan costs 33 84 Change in accounts: Restricted cash 16 3 Accounts receivable (13) (12) Escrows for taxes 106 (10) Other assets (57) 12 Tenant security deposit liabilities (19) (10) Accounts payable 99 (140) Accrued taxes (47) (6) Other liabilities (16) (48) Net cash provided by operating activities 540 153 Cash flows from investing activities: Property improvements and replacements (252) (104) Deposits to restricted escrows (68) (33) Receipts from restricted escrows 297 -- Dividend received on investments 4 -- Net cash used in investing activities (19) (137) Cash flows from financing activities: Payments on mortgage notes payable (84) (111) Repayment of mortgage note payable -- (700) Loan costs paid (9) -- Net cash used in financing activities (93) (811) Net increase (decrease) in unrestricted cash and cash equivalents 428 (795) Unrestricted cash and cash equivalents at beginning of period 290 1,078 Unrestricted cash and cash equivalents at end of period $ 718 $ 283 Supplemental disclosure of cash flow information: Cash paid for interest $ 402 $ 455 See Accompanying Notes to Consolidated Financial Statements
e) CONSOLIDATED CAPITAL PROPERTIES V NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Consolidated Capital Properties V (the "Partnership" or the "Registrant") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 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. (the "General Partner" or "CEI"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 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 financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1996. NOTE B - TRANSACTIONS WITH RELATED PARTIES The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all of the Partnership activities, as provided for in the Partnership Agreement. The Partnership pays property management fees based upon collected gross rental revenues for property management services. Property management fees of approximately $108,000 and $100,000 were paid to affiliates of the General Partner for each of the six months ended June 30, 1997 and 1996, respectively. These fees are included in operating expenses. The Partnership Agreement also provides for reimbursement to the General Partner and its affiliates for costs incurred in connection with the administration of Partnership activities. Reimbursements for services of affiliates of approximately $56,000 and $75,000 were paid to the General Partner and its affiliates during each of the six months ended June 30, 1997 and 1996, respectively. These reimbursements are included in general and administrative expenses. 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 payment 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 - COMMITMENT The Partnership is required to maintain working capital reserves for normal repairs, replacements, working capital and contingencies of not less than 5% of Net Invested Capital, as defined in the Partnership Agreement. In the event expenditures are made from these reserves, operating revenue shall be allocated to such reserves to the extent necessary to maintain the foregoing level. Cash and cash equivalents, tenant security deposits and investments totaling approximately $899,000, are less than the reserve requirement of approximately $1,761,000 at June 30, 1997. The Partnership intends to replenish the working capital reserve from cash flow from operations after consideration of any capital improvement needs of the properties. The Partnership's recent cash flows from operations, however, have not been sufficient to replenish the reserve and there is no assurance that future levels of cash flow from operations will be adequate to accomplish this objective. The working capital requirement must be met prior to any consideration for distributions to the partners. NOTE D - CHANGE IN STATUS OF NON-CORPORATE GENERAL PARTNER In the year ended December 31, 1991, the Partnership Agreement was amended to convert the General Partner interests held by the non-corporate General Partner, Consolidated Capital Group ("CCG"), to that of a special limited partner ("Special Limited Partners"). The Special Limited Partners do not have a vote and do not have any of the other rights of a Limited Partner except the right to inspect the Partnership's books and records; however, the Special Limited Partners will retain the economic interest in the Partnership which they previously owned as general partner. CEI became the sole general partner of the Partnership effective December 31, 1991. In connection with CCG's conversion, a special allocation of gross income was made to the Special Limited Partners in order to eliminate their tax basis negative capital accounts. After the conversion, the various owners of interests in the Special Limited Partners transferred portions of their interests to CEI so that CEI now holds a .2% interest in all allocable items of income, loss and distribution. The difference between the Special Limited Partners' capital accounts for financial statement and tax reporting purposes is being amortized as the components of the timing differences which created the balance reverse. NOTE E - DEBT RESTRUCTURING The Partnership restructured the mortgage debt secured by the 51 North High Street Building and made a principal prepayment (without penalty) of $700,000 in January 1996. In addition to this payment, the lender reduced the note's face amount by an additional $700,000 and the stated interest rate of the note was reduced from 13.5% to 9%. The maturity date of June 1, 2004, was unchanged. The debt restructuring was accounted for as a modification of terms. The total future cash payments under the restructured loan exceed the carrying value of the loan as of the date of restructure. Consequently, the carrying amount of the loan was reduced only by the $700,000 principal prepayment actually paid with no gain being recognized on the restructuring. Interest on the restructured debt accrues at an imputed rate of 4%, the rate required to equate the present value of the total future cash payments under the new terms to the carrying amount of the loan at the date of restructure. NOTE F - REFINANCING OF MORTGAGE NOTES PAYABLE In September 1996, the mortgage note encumbering Sutton Place Apartments was refinanced. Under the terms of the refinancing agreement, the new $2,800,000 mortgage note, which bears interest at 9.125% and matures in October 2003, replaced the previous mortgage note of approximately $2,200,000, which carried a stated interest rate of 10.25%. In November 1996, the Partnership refinanced the mortgage encumbering Aspen Ridge Apartments. The total mortgage indebtedness of approximately $5,016,000 on the previous note was carried at a stated interest rate of 9.88%. The new mortgage indebtedness of $5,750,000 carries a stated interest rate of 7.33%, with a balloon payment due November 1, 2003. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes and one commercial property. The following table sets forth the average occupancy of the properties for the six months ended June 30, 1997 and 1996: 1997 1996 Aspen Ridge Apartments Chicago, Illinois 95% 93% Sutton Place Apartments Corpus Christi, Texas 95% 92% 51 North High Street Building Columbus, Ohio 94% 88% The increase in occupancy at Aspen Ridge Apartments is primarily due to rental concessions offered during 1996, which increased occupancy throughout 1996 and the first six months of 1997. The increase in occupancy at Sutton Place Apartments resulted from additional military troops being re-located to Corpus Christi, as well as improved curb appeal of the property. The improved appeal resulted from the exterior building improvements completed at the property. The increase in occupancy at the 51 North High Street Building is due to existing tenants leasing additional space and the addition of a new tenant. The Partnership realized a net loss of approximately $17,000 and $100,000 for the three and six months ended June 30, 1997, respectively, compared to a net loss of approximately $129,000 and $287,000 for the three and six months ended June 30, 1996, respectively. The decrease in net loss resulted primarily from increased rental income and decreased general and administrative and interest expense. These decreased expenses were partially offset by increased maintenance expense. The increase in rental income is due to rental rate increases at the Partnership's investment properties and due to higher occupancy levels at all of the Partnership's investment properties, as discussed above. General and administrative costs decreased due to decreased audit and tax return fees. There were additional fees in 1996 in connection with the sale of Fourth and Race Tower in December 1995. General and administrative fees were further reduced by a decrease in legal costs resulting from additional legal fees in 1996 relating to the loan modification of the 51 North High Street Building (See "Note E"). The decrease in interest expense is due to a principal payment of $700,000 on the debt secured by the 51 North High Street Building in January 1996. Additionally, the imputed interest rate on the debt was reduced to 4%. Also, the mortgage notes secured by Sutton Place Apartments and Aspen Ridge Apartments were refinanced during the third and fourth quarters of 1996, respectively, at lower interest rates (See "Note E" and "Note F"). The increase in maintenance expense is primarily due to the exterior building improvements and parking lot repairs project at Sutton Place Apartments. Included in maintenance expense for the six months ended June 30, 1997, is approximately $88,000 of major repairs and maintenance comprised primarily of gutter repairs, exterior building improvements and exterior painting at Sutton Place Apartments. For the six months ended June 30, 1996, approximately $16,000 of major repairs and maintenance comprised primarily of exterior painting and building improvements, major landscaping and swimming pool repairs are included in maintenance expense. 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 expenses. 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. At June 30, 1997, the Partnership held unrestricted cash and cash equivalents of approximately $718,000 compared to approximately $283,000 at June 30, 1996. Net cash provided by operating activities increased due to (1) the timing of withdrawals from tax escrows, (2) the timing of payment of operating expenses out of accounts payable, and (3) due to the decreased net loss, as discussed above. Net cash used in investing activities decreased as a result of receipts from the capital improvement escrow for Sutton Place Apartments for exterior capital improvements to the property. A related increase in property improvements and replacements partially offset the impact of the escrow receipts. Net cash used in financing activities decreased as a result of the non-recurring nature of the $700,000 debt reduction on the debt secured by 51 North High Street Building during January 1996 (see "Note E"). Additionally, as a result of the refinancing of Aspen Ridge Apartments and Sutton Place Apartments in 1996, the payments on the mortgage notes decreased due to the reduction of the monthly payments. The Partnership incurred an additional $9,000 of loan costs related to the refinance of the mortgage debt secured by Aspen Ridge Apartments in November 1996 (see "Note F"). 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 $11,210,000, net of discount, matures from October 2003 until June 2004 with balloon payments of $10,446,000 due at maturity, at which time the properties will either be sold or the mortgages refinanced. Future cash distributions will depend on the levels of net cash generated from operations, capital expenditure requirements, property sales and the availability of cash reserves. During the six months ended June 30, 1997, and June 30, 1996, no distributions were declared or paid. 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 June 30, 1996. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CONSOLIDATED CAPITAL PROPERTIES V By: CONCAP EQUITIES, INC. General Partner By: /s/Bill Jarrard Bill Jarrard President By: /s/Ron Uretta Ron Uretta Vice President/Treasurer Date: August 4, 1997
EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Properties V 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000725614 CONSOLIDATED CAPITAL PROPERTIES V 1,000 6-MOS DEC-31-1997 JUN-30-1997 718 0 43 0 0 0 20,614 13,610 9,093 0 11,210 0 0 0 (2,863) 9,093 0 2,233 0 0 2,333 0 410 (100) 0 (100) 0 0 0 (100) (.56) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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