-----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, Q9EM8eGoOJQZuSwAMQNCr3Df2DSQ+JLPlgYMxJuqYlvYi+9otllvMzpN8geSxwOn pCd+D8+6bvzPqZrYUTKEeA== 0000788955-95-000002.txt : 19951119 0000788955-95-000002.hdr.sgml : 19951119 ACCESSION NUMBER: 0000788955-95-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: AMEX 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: 95589357 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 (As last amended by 34-32231, eff. 6/3/93.) U.S. Securities and Exchange Commission Washington, D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 [ ] 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 0-13083 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) (Zip Code) Issuer's telephone number (803) 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 for unit data)
September 30, 1995 Assets Cash and cash equivalents $ 400 Securities available for sale 307 Prepaid and other assets 613 Investment properties: Land $ 2,393 Buildings and personal property 23,685 26,078 Less accumulated depreciation (16,311) 9,767 $11,087 Liabilities and Partners' Deficit Liabilities Accounts payable and accrued expenses $ 865 Mortgage notes and interest payable 10,915 Partners' Deficit General partner $ (16) Special limited partners (57) Limited partners (179,617 units issued and outstanding) (620) (693) $11,087
[FN] 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 Nine Months Ended September 30, September 30, 1995 1994 1995 1994 Revenues: Rental income $1,283 $1,174 $ 3,666 $ 3,609 Interest and dividend income 7 37 48 110 Total revenues 1,290 1,211 3,714 3,719 Expenses: Property operations 902 821 2,597 2,442 Depreciation and amortization 351 385 1,019 1,181 Interest 335 380 1,009 1,177 Administrative 67 72 270 182 Total expenses 1,655 1,658 4,895 4,982 Loss from operations (365) (447) (1,181) (1,263) Gain on sale of securities available for sale -- 12 -- 12 Casualty Gain -- -- 32 -- Other income (Note E) -- -- -- 67 Loss before extraordinary item -- (435) -- (1,184) Extraordinary item (Note F) -- 275 -- 275 Net loss $ (365) $ (160) $(1,149) $ (909) Net loss allocated to general partners (.2%) $ (1) $ -- $ (2) $ (2) Net loss allocated to limited partners (99.8%) (364) (160) (1,147) (907) $ (365) $ (160) $(1,149) $ (909) Net loss per limited partnership unit: Loss before extraordinary item $(2.03) $(2.42) $ (6.39) $ (6.58) Extraordinary item -- 1.53 -- 1.53 Net loss $(2.03) $ (.89) $ (6.39) $ (5.05)
[FN] See Accompanying Notes to Consolidated Financial Statements c) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) For the Nine Months Ended September 30, 1995 (in thousands, except unit data)
Limited Special Partnership General Limited Limited Units Partners Partner Partners Total Original capital contributions 180,037 $ 1 $ -- $45,009 $45,010 Partners' deficit at December 31, 1994 179,617 $ (14) $ (58) $ 528 $ 456 Net loss for the nine months ended September 30, 1995 -- (2) -- (1,147) (1,149) Amortization of timing difference (Note D) -- -- 1 (1) -- Partners' deficit at September 30, 1995 179,617 $ (16) $ (57) $ (620) $ (693)
[FN] See Accompanying Notes to Consolidated Financial Statements d) CONSOLIDATED CAPITAL PROPERTIES V CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net loss $(1,149) $ (909) Adjustments to reconcile net loss to net cash provided by (used in) operating activities Depreciation and amortization of lease commissions, discounts and loan costs 1,115 1,286 Casualty gain (32) -- Extraordinary item -- (275) Gain on sale of securities available for sale -- (12) Change in accounts: Prepaids and other assets 31 (65) Accounts payable and accrued expenses 159 (192) Interest payable 101 52 Net cash provided by (used in) operating activities 225 (115) Cash flows from investing activities: Deposits to restricted escrows (42) -- Receipts from restricted escrows 26 -- Property improvements and replacements (403) (356) Purchases of securities available for sale -- (441) Proceeds from sale of securities available for sale 398 1,303 Net insurance proceeds on casualty item 32 -- Net cash provided by investing activities 11 506 Cash flows from financing activities: Payments on mortgage notes payable (76) (83) Proceeds from refinancing -- 5,150 Repayment of note payable -- (5,530) Direct financing costs -- (134) Net cash used in financing activities (76) (597) Net increase (decrease) in cash 160 (206) Cash at beginning of period 240 438 Cash at end of period $ 400 $ 232 Supplemental disclosure of cash flow information: Cash paid for interest $ 812 $ 1,060 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 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 the General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine month periods ended September 30, 1995, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1995. For further information, refer to the financial statements and footnotes thereto included in the annual report on Form 10-K for the fiscal year ended December 31, 1994, for Consolidated Capital Properties V (the "Partnership"). Certain reclassifications have been made to the 1994 information to conform to the 1995 presentation. Consolidation The Partnership's financial statements include the accounts of two wholly- owned limited partnerships (Aspen Ridge Associates, Ltd. and Race Street Associates, Ltd.). All intercompany transactions have been eliminated. Cash and Cash Equivalents For purposes of reporting cash flows, cash includes cash on hand, demand deposits and money market funds. Net Loss Per Weighted Average Limited Partnership Unit Net loss per weighted average Limited Partnership Unit is computed by dividing the net loss allocated to the Limited Partners by the weighted average number of Units outstanding. Per Unit information has been computed based on weighted average Units outstanding of 179,617 for the nine months ended September 30, 1995 and 1994. Note B - Related Party Transactions The Partnership has paid property management fees noted below based upon collected gross rental revenues ("Rental Revenues") for property management services in each of the nine month periods ended September 30, 1995 and 1994, respectively. For the nine months ended September 30, 1994, a portion of such property management fees equal to 4% of Rental Revenues was paid to the property management companies performing day-to-day property management services and a portion equal to 1% of Rental Revenues was paid to Partnership Services, Inc. ("PSI") for advisory services related to day-to-day operations. In January 1994, Coventry Properties, Inc. ("Coventry"), an affiliate of the General Partner, assumed day-to-day property management responsibilities for one of the Partnership's properties under the same management fee arrangement as the unaffiliated management company. In late December 1994, an affiliate of Insignia Financial Group, Inc. ("Insignia") assumed day-to-day property management responsibilities for all of the Partnership's properties with the exception of the Fourth and Race Tower which is managed by a third party. Fees accrued or paid to Insignia and affiliates for the nine months ended September 30, 1995, and fees accrued or paid to PSI and Coventry for the nine months ended September 30, 1994, have been reflected in the following table as compensation to related parties in the applicable periods: For the Nine Months Ended September 30, 1995 1994 (in thousands) Property management fees $188 $76 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. The General Partner and its affiliates, which includes Coventry for the nine months ended September 30, 1994, received reimbursements as reflected in the following table: For the Nine Months Ended September 30, 1995 1994 (in thousands) Reimbursement for services of affiliates $141 $102 In July 1995, the Partnership began insuring its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the General Partner, who receives 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. Reserves, consisting of cash and cash equivalents and securities available for sale totalling $707,000, are less than the reserve requirement of $1,761,000 at September 30, 1995. The Partnership intends to replenish the working capital reserve from cash flow from operations, however, the Partnership's recent cash flows from operations 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 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 Partner"). The Special Limited Partner does not have a vote and does 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 Partner will retain the economic interest in the Partnership which it previously owned as general partner. ConCap Equities, Inc. ("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 Partner in order to eliminate its tax basis negative capital account. After the conversion, the various owners of interests in the Special Limited Partner 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 Partner's capital accounts for financial statement and tax reporting purposes is being amortized to the Limited Partners' capital accounts as the components of the timing differences which created the balance reversal. Note E - Other Income In 1991, the Partnership (and simultaneously other affiliated partnerships) entered claims in Southmark Corporation's Chapter 11 bankruptcy proceeding. These claims related to Southmark Corporation's activities while it exercised control (directly, or indirectly through its affiliates) over the Partnership. Note E - Other Income - continued The Bankruptcy Court set the Partnership's and the other affiliated partnerships' allowed claim at $11 million, in the aggregate. In March 1994, the Partnership received 1,078 shares of Southmark Corporation Redeemable Series A Preferred Stock and 7,882 shares of Southmark Corporation New Common Stock with an aggregate market value on the date of receipt of approximately $8,000 and approximately $59,000 in cash representing the Partnership's share of the recovery, based on its pro rata share of the claims filed. Note F - Notes Payable In April 1994, the Partnership refinanced approximately $4.5 million of mortgage debt secured by the Aspen Ridge Apartments. In order to facilitate the refinancing, title to the property was transferred to a wholly-owned limited partnership, Aspen Ridge Associates, Ltd., in April 1994. Under the terms of the refinancing agreement, the new mortgage note of approximately $5.2 million bears interest at 9.875% and matures in May 2001. After repayment of the existing debt, payment of refinancing and closing costs, and establishment of a capital improvement escrow, the Partnership received net proceeds of $455,000. At December 31, 1993, the Partnership was obligated under two mortgage notes payable aggregating approximately $1.6 million secured by the Fourth and Race Office Building. During 1994, the General Partner and the lender negotiated an arrangement which provided for prepayment of the notes at a substantial discount. The Partnership capitalized on the discount opportunity in September 1994, by paying $1 million to the lender in full settlement of the mortgage debts. The Partnership recognized an extraordinary gain of $275,000 on the transaction, related to the debt extinguishment and a non-cash expense amortizing the remaining mortgage discount. The General Partner has begun negotiations to sell the Fourth and Race Office Building in an effort to realize the Partnership's equity in the property. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes and two commercial properties. The following table sets forth the average occupancy of the properties for the nine months ended September 30, 1995 and 1994: Average Occupancy 1995 1994 Aspen Ridge Apartments West Chicago, Illinois 91% 96% Fourth and Race Tower Cincinnati, Ohio 59% 59% Sutton Place Apartments Corpus Christi, Texas 90% 94% 51 North High Street Building Columbus, Ohio 85% 82% The occupancy decrease at the Aspen Ridge Apartments is due to increased competition in the local market as a result of new townhouses being built. The occupancy decrease at the Sutton Place Apartments is primarily due to the closing of a naval base in the Corpus Christi market. The Partnership realized a loss from operations of $1,181,000 for the nine months ended September 30, 1995, compared to a loss from operations of $1,263,000 for the nine months ended September 30, 1994. For the three months ended September 30, 1995, the Partnership realized a loss from operations of $365,000 compared to a loss from operations of $447,000 for the three months ended September 30, 1994. Interest income decreased for the three and nine months ended September 30, 1995, compared to the three and nine months ended September 30, 1994, as a result of lower cash balances available for investment. This decrease was partially offset by increased dividends received on the Partnership's investment in Southmark preferred stock in 1995. Depreciation and amortization expense decreased due to the reduced carrying values of depreciable assets resulting from the valuation adjustments recorded in prior years. Interest expense decreased due primarily to the repayment of approximately $1.6 million in mortgage notes payable which were secured by the Fourth and Race Tower in September of 1994. Administrative expenses increased for the nine months ended September 30, 1995, compared to the nine months ended September 30, 1994, due to increased expense reimbursements related to the combined efforts of the Dallas and Greenville partnership administration staffs during the transition period in the first and second quarters of 1995. The reimbursements for the Dallas office were $84,000 for the nine months ended September 30, 1995. The increased costs related to the transition efforts were incurred to minimize any disruption in the year-end reporting function including the financial reporting and K-1 preparation and distribution. The General Partner expects recurring administrative expenses to be reduced now that the management transition is completed. For the nine months ended September 30, 1995, the Partnership realized a casualty gain as a result of a fire at the Fourth and Race Tower on June 5, 1995. The total insurance proceeds received as of September 30, 1995, were $68,000, with $15,000 remaining to be received. These proceeds exceed the total estimated costs of replacing the equipment destroyed, resulting in a casualty gain of $32,000. Other income realized in the nine months ended September 30, 1994, related to the receipt of the Partnership's pro rata share of the claims filed in Southmark's Chapter 11 bankruptcy proceeding (See Note E to the Consolidated Financial Statements in Item 1). 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. As of September 30, 1995, the Partnership held cash of $400,000 compared to $232,000 at September 30, 1994. Net cash provided by operating activities increased primarily due to the Partnership paying $248,000 less in interest for 1995 compared to 1994, as well as reduced payments of outstanding payables. Net cash provided by investing activities decreased primarily due to reduced proceeds from the sale of securities. Net cash used in financing activities decreased due to the repayment of the Fourth and Race Tower's note in 1994. 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 property to adequately maintain the physical assets and meet other operating needs of the Partnership. The General Partner is currently in negotiations to sell the Fourth and Race Tower, and the remaining assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $10.8 million, net of discount, matures at various times with balloon payments due at maturity, at which time the properties will either be refinanced or sold. 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 first nine months of 1995 or 1994, no distributions were declared or paid. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Partnership is unaware of any pending or outstanding litigation that is not of a routine nature. The General Partner of the Partnership believes that all such pending or outstanding litigation will be resolved without a material adverse effect upon the business, financial condition, or operations of the Partnership. 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. 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/ Carroll D. Vinson Carroll D. Vinson President By: /s/ Robert D. Long, Jr. Robert D. Long, Jr. Controller and Principal Accounting Officer Date: November 13, 1995
EX-27 2
5 This schedule contains summary information extracted from Consolidated Captial Properties V 1995 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB. 0000725614 CONSOLIDATED CAPITAL PROPERTIES V 1,000 9-MOS DEC-31-1995 SEP-30-1995 400 307 0 0 0 0 26,078 16,311 11,087 0 10,915 0 0 0 (693) 11,087 0 3,714 0 0 4,895 0 1,009 0 0 0 0 0 0 (1,149) (6.39) 0 The Partnership has an unclassified balance sheet.
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