-----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, GwiFj0CZJ1GXu2LkNbJ4nt3r7Ob0IGOFBZYZ75Ke6/0Ge08vYskz/mRYtHhxj1NJ 2DIPoG6r5WFzapbyRTH8sg== 0000276779-98-000007.txt : 19980806 0000276779-98-000007.hdr.sgml : 19980806 ACCESSION NUMBER: 0000276779-98-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980805 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONSOLIDATED CAPITAL PROPERTIES VI CENTRAL INDEX KEY: 0000755908 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 942940204 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14099 FILM NUMBER: 98677866 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: POST OFFICE BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 2147020027 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 OR TRANSITIONAL 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 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1998 [ ] TRANSITION REPORT PURSUANT TO 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period_________to_________ Commission file number 0-14099 CONSOLIDATED CAPITAL PROPERTIES VI (Exact name of small business issuer as specified in its charter) California 94-2940204 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) 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 VI CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) June 30, 1998 Assets Cash and cash equivalents $ 1,871 Receivables and deposits 131 Restricted escrows 97 Other assets 81 Investment property: Land $ 916 Buildings and related personal property 9,073 9,989 Less accumulated depreciation (3,815) 6,174 $ 8,354 Liabilities and Partners' Capital (Deficit) Liabilities: Accounts payable $ 32 Tenant security deposit liabilities 64 Accrued property taxes 59 Other liabilities 70 Mortgage note payable 4,375 Partners' Capital (Deficit): General partner's $ 1 Special limited partners' (48) Limited partners' (181,300 units issued and outstanding) 3,801 3,754 $ 8,354 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL PROPERTIES VI CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Six Months Ended June 30, Ended June 30, 1998 1997 1998 1997 Revenues: Rental income $ 405 $ 700 $ 778 $ 1,407 Other income 49 75 109 142 Total revenues 454 775 887 1,549 Expenses: Operating 217 291 424 661 General and administrative 35 42 68 80 Depreciation 87 183 174 365 Interest 110 251 220 486 Property taxes 26 73 56 146 Total expenses 475 840 942 1,738 Net loss $ (21) $ (65) $ (55) $ (189) Net loss allocated to general partner (.2%) $ -- $ -- $ -- $ -- Net loss allocated to limited partners (99.8%) (21) (65) (55) (189) $ (21) $ (65) $ (55) $ (189) Net loss per limited partnership unit $ (.12) $ (.36) $ (.30) $ (1.04) Distributions per limited partnership unit $ -- $ -- $ 2.76 $ -- See Accompanying Notes to Consolidated Financial Statements c) CONSOLIDATED CAPITAL PROPERTIES VI CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data) Limited Special Partnership General Limited Limited Units Partner Partners Partners Total Original capital contributions 181,808 $ 1 $ -- $45,452 $45,453 Partners' capital (deficit) at December 31, 1997 181,300 $ 1 $ (52) $ 4,360 $ 4,309 Amortization of timing difference -- -- 4 (4) -- Distributions paid to partners -- -- -- (500) (500) Net loss for the six months ended June 30, 1998 -- -- -- (55) (55) Partners' capital (deficit) at June 30, 1998 181,300 $ 1 $ (48) $ 3,801 $ 3,754 See Accompanying Notes to Consolidated Financial Statements d) CONSOLIDATED CAPITAL PROPERTIES VI CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended June 30, 1998 1997 Cash flows from operating activities: Net loss $ (55) $ (189) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 174 365 Amortization of loan costs and discounts 12 114 Change in accounts: Receivables and deposits 218 (2) Other assets 12 (27) Accounts payable (28) (146) Tenant security deposit liabilities 9 (10) Accrued property taxes (59) 34 Other liabilities (1) 16 Net cash provided by operating activities 282 155 Cash flows from investing activities: Property improvements and replacements (123) (50) Proceeds from sale of investments 302 -- Dividends received from investments -- 3 Net deposits to restricted escrows (7) (46) Net cash provided by (used in) investing activities 172 (93) Cash flows from financing activities: Payments on mortgage notes payable (32) (112) Distributions paid to limited partners (500) -- Net cash used in financing activities (532) (112) Net decrease in cash and cash equivalents (78) (50) Cash and cash equivalents at beginning of period 1,949 1,478 Cash and cash equivalents at end of period $1,871 $1,428 Supplemental disclosure of cash flow information: Cash paid for interest $ 209 $ 359 See Accompanying Notes to Consolidated Financial Statements
e) CONSOLIDATED CAPITAL PROPERTIES VI NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements of Consolidated Capital Properties VI (the "Partnership") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and 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. ("CEI" or 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 six month periods ended June 30, 1998, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1997. Certain reclassifications have been made to the 1997 balances to conform to the 1998 presentation. NOTE B - RELATED PARTY TRANSACTIONS The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all partnership activities. The General Partner is wholly-owned by Insignia Properties Trust ("IPT"), an affiliate of Insignia Financial Group, Inc. ("Insignia"). The Partnership Agreement provides for certain payments to affiliates for services and the reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following expenses were paid or accrued to affiliates of the General Partner for the six months ended June 30, 1998 and 1997 (in thousands): 1998 1997 Property management fees (included in operating expenses) $ 42 $ 79 Reimbursements for services of affiliates (included in general and administrative expenses) 33 51 In addition, the Partnership paid approximately $1,000 during each of the six month periods ended June 30, 1998 and 1997, to an affiliate of the General Partner for construction oversight reimbursements related to capital improvements and major repair projects. The Partnership Agreement also provides for a special management fee equal to 9% of the total distributions from operations made to the Limited Partners to be paid to the General Partner for executive and administrative management services. No such fees were paid or accrued in 1998 or 1997. For the period from January 1, 1997 to August 31, 1997, the Partnership insured its properties under a master policy through an agency affiliated with the General Partner but with an 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 master policy. The agent assumed the financial obligations to the affiliate of the General Partner, which received payments on these obligations from the agent. The amount of the Partnership's insurance premiums that accrued to the benefit of the affiliate of the General Partner by virtue of the agent's obligations was not significant. On March 17, 1998, Insignia entered into an agreement to merge its national residential property management operations, and its controlling interest in IPT, with Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust. The closing, which is anticipated to happen in September or October of 1998, is subject to customary conditions, including government approvals and the approval of Insignia's shareholders. If the closing occurs, AIMCO will then control the General Partner of the Partnership. NOTE C - COMMITMENT The Partnership is required to maintain working capital reserves for 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 $2,095,000 exceed the reserve requirement of approximately $2,070,000 at June 30, 1998. NOTE D - CHANGE IN STATUS OF NON-CORPORATE GENERAL PARTNER During 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 II ("CCG"), to that of special limited partners ("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 retained 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 its tax basis negative capital account. After the conversion, the various 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 differences between the Special Limited Partners' capital accounts for financial statement and tax reporting purposes are being amortized to the Limited Partners' capital accounts as the components of the timing differences which created the balance reverse. NOTE E - DISTRIBUTIONS In the first quarter of 1998, the Partnership declared and paid a cash distribution to the limited partners in the amount of $500,000 ($2.76 per limited partnership unit). The distribution was from surplus funds from the sale of Celina Plaza in October 1997. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment property consists of one apartment complex, Colony of Springdale Apartments, located in Springdale, Ohio. The average occupancy for the six month periods ended June 30, 1998 and 1997, was 92% and 89%, respectively. The Partnership realized net losses of approximately $55,000 and $189,000 for the six month periods ended June 30, 1998 and 1997, respectively. The Partnership realized net losses of approximately $21,000 and $65,000 for the three months ended June 30, 1998 and 1997, respectively. The decrease in net loss is primarily attributable to the improvement in operations arising from the sale of Celina Plaza in the third quarter of 1997. Celina Plaza incurred net losses of approximately $65,000 and $131,000 for the three and six month periods ended June 30, 1997. Contributing to the decrease in net loss was a decrease in administrative costs due to a decrease in reimbursements to the General Partner in 1998 due to the sale of Celina Plaza in the third quarter of 1997. The Partnership realized an increase in the net loss of its remaining property from approximately $8,000 for the six month period ended June 30, 1997, to $32,000 for the six month period ended June 30, 1998. This increase is primarily due to the increase in utility costs at the property and increased maintenance expenses, including exterior building repairs, landscaping and interior painting. Partially offsetting these increases in expense is an increase in rental income. The increase in rental income resulted from an increase in occupancy, as noted above. Additionally, due to stricter tenant qualification procedures, instituted in 1997, bad debt expense also declined. Included in operating expenses for the Partnership's remaining property for the six months ended June 30, 1998, is approximately $34,000 of major repairs and maintenance comprised primarily of major landscaping and exterior building improvements. The amount of major repairs and maintenance included in operating expenses for the Partnership's remaining property for the six months ended June 30, 1997, is not significant. On October 20, 1997, the Partnership sold Celina Plaza Apartments, located in El Paso, Texas, to an unaffiliated party, The Vandenburg Organization, a Texas corporation. The sales price of the property was $6,600,000 and the sale resulted in net proceeds of approximately $6,456,000, after payment of closing costs. The net proceeds were used to pay accrued taxes and to pay-off the mortgage debt secured by this property. Excess proceeds after such payments amounted to approximately $779,000 to the Partnership. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment property 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, 1998, the Partnership had cash and cash equivalents of approximately $1,871,000 as compared to approximately $1,428,000 at June 30, 1997. The net decrease in cash and cash equivalents for the six month periods ended June 30, 1998 and 1997, were approximately $78,000 and $50,000, respectively. Net cash provided by operating activities increased due to an increase in cash provided by receivables and deposits as a result of the return of funds held in escrow for taxes on Celina Plaza. Net cash provided by investing activities increased due to the sale of the Partnership's investment in Treasury bills. The increase in cash provided by investing activities was partially offset by an increase in property improvements and replacement expenditures at Colony of Springdale. Net cash used in financing activities increased due to the distribution of $500,000 from the proceeds of the sale of Celina Plaza during the first quarter of 1998. 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 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 $4,375,000 has a maturity date of May 2001, at which time the property will either be sold or the mortgage refinanced. In the first quarter of 1998, the Partnership declared and paid a cash distribution to the limited partners in the amount of $500,000 ($2.76 per limited partnership unit). The distribution was from surplus funds from the sale of Celina Plaza. There were no distributions made during the six months ended June 30, 1997. Future cash distributions will depend on the levels of net cash generated from operations, capital expenditure requirements, a property sale or refinancing and the availability of cash reserves. Year 2000 The Partnership is dependent upon the General Partner and Insignia for management and administrative services. Insignia has completed an assessment and will have to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter (the "Year 2000 Issue"). The project is estimated to be completed not later than December 31, 1998, which is prior to any anticipated impact on its operating systems. The General Partner believes that with modifications to existing software and conversions to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. However, if such modifications and conversions are not made, or are not completed timely, the Year 2000 Issue could have a material impact on the operations of the Partnership. Other Certain items discussed in this quarterly report may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Partnership to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. Such forward-looking statements speak only as of the date of this quarterly report. The Partnership expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Partnership's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled ROSALIE NUANES, ET AL. V. INSIGNIA FINANCIAL GROUP, INC., ET AL. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The complaint purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia and its affiliates of interests in certain general partner entities, past tender offers by Insignia affiliates to acquire limited partnership units, the management of partnerships by Insignia affiliates as well as a recently announced agreement between Insignia and AIMCO. The complaint seeks monetary damages and equitable relief, including judicial dissolution of the Partnership. The General Partner believes the action to be without merit, and intends to vigorously defend it. On June 24, 1998, the General Partner filed a motion seeking dismissal of the action. In May 1998, the Partnership and its General Partner were named as respondents in a Petition in Los Angeles Superior Court. The Petition, brought by a limited partner of the Partnership, seeks performance by the General Partner of certain alleged contractual obligations under the Partnership Agreement and compliance with certain alleged statutory requirements. Service on the Partnership was only recently accomplished, and the General Partner has not yet replied to the Petition. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature. The General Partner 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 filed during the quarter ended June 30, 1998. 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 VI By: CONCAP EQUITIES, INC. General Partner By: /s/William H. Jarrard, Jr. William H. Jarrard, Jr. President By: /s/Ronald Uretta Ronald Uretta Vice President and Treasurer Date: August 5, 1998 EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Properties VI 1998 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000755908 CONSOLIDATED CAPITAL PROPERTIES VI 1,000 6-MOS DEC-31-1998 JUN-30-1998 1,871 0 0 0 0 0 9,989 3,815 8,354 0 4,375 0 0 0 3,754 8,354 0 887 0 0 722 0 220 0 0 0 0 0 0 (55) (.30) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
-----END PRIVACY-ENHANCED MESSAGE-----