-----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, KDuV2AD/MizoandLd/WninPfl7o4a1P3+eYyNgK61uOyxl7u9n456xLpt7WLXqaO 9mAg/Zf/ZFBLaZ1wjNR+Jw== 0000755908-96-000002.txt : 19960513 0000755908-96-000002.hdr.sgml : 19960513 ACCESSION NUMBER: 0000755908-96-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960510 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: 1934 Act SEC FILE NUMBER: 000-14099 FILM NUMBER: 96558858 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 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 March 31, 1996 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-14099 CONSOLIDATED CAPITAL PROPERTIES VI (Exact name of small business issuer as specified in its charter) California 94-2940204 (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 (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 VI CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 1,426 Restricted - tenant security deposits 99 Investments 390 Accounts receivable 5 Escrows for taxes and insurance 176 Restricted escrows 42 Prepaid and other assets 150 Investment properties: Land $ 1,652 Buildings and personal property 14,728 16,380 Less accumulated depreciation (6,624) 9,756 $12,044 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 43 Tenant security deposits 97 Accrued taxes 124 Other liabilities 237 Mortgage notes payable 10,132 Partners' Capital (Deficit) General partner $ (5) Special limited partners (68) Limited partners (181,288 units issued and outstanding) 1,484 1,411 $12,044 See Accompanying Notes to Consolidated Financial Statements b) CONSOLIDATED CAPITAL PROPERTIES VI CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1996 1995 Revenues: Rental income $ 746 $ 793 Other income 70 67 Total revenues 816 860 Expenses: Operating 307 250 General and administrative 38 432 Maintenance 114 72 Depreciation 173 162 Interest 210 238 Property tax 66 61 Total expenses 908 1,215 Net loss $ (92) $ (355) Net loss allocated to general partner (.2%) $ -- $ (1) Net loss allocated to limited partners (99.8%) (92) (354) $ (92) $ (355) Net loss per limited partnership unit: $ (.51) $(1.95) See Accompanying Notes to Consolidated Financial Statements c) CONSOLIDATED CAPITAL PROPERTIES VI CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) For the Three Months Ended March 31, 1996 (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, 1995 181,288 $ (5) $ (70) $ 1,578 $ 1,503 Amortization of timing difference (Note D) -- -- 2 (2) -- Net loss for the three months ended March 31, 1996 -- -- -- (92) (92) Partners' capital (deficit) at March 31, 1996 181,288 $ (5) $ (68) $ 1,484 $ 1,411 See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL PROPERTIES VI CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net loss $ (92) $ (355) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 173 162 Amortization of loan costs and discounts 57 49 Change in accounts: Restricted cash (5) -- Accounts receivable 6 (7) Escrows for taxes and insurance (21) 118 Prepaid and other assets 192 47 Accounts payable (134) 183 Tenant security deposit liabilities 2 (8) Accrued taxes 12 (150) Other liabilities (46) 234 Net cash provided by operating activities 144 273 Cash flows from investing activities: Property improvements and replacements (74) (44) Purchase of investments -- (1,502) Proceeds from sale of investments -- 1,656 Deposits to restricted escrows (24) (15) Receipts from restricted escrows 120 -- Net cash provided by investing activities 22 95 Cash flows from financing activities: Payments on mortgage notes payable (51) (43) Distributions to partners -- (275) Net cash used in financing activities (51) (318) Net increase in cash and cash equivalents 115 50 Cash and cash equivalents at beginning of period 1,311 414 Cash and cash equivalents at end of period $1,426 $ 464 Supplemental disclosure of cash flow information: Cash paid for interest $ 191 $ 171 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 the General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. 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, 1995. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Investments Investments consisting primarily of U.S. Treasury Notes with original maturities of more than ninety days, are considered to be held-to-maturity securities. Note B - Transactions with Affiliated Parties The Partnership has paid property management fees equal to 5% of collected gross rental revenues for property management services in each of the three months ended March 31, 1996 and 1995. Fees paid to affiliates of the General Partner for the three months ended March 31, 1996 and 1995, are presented below. These property management fees are included in operating expenses. For the Nine Months Ended March 31, 1996 1995 (in thousands) Property management fees $39 $41 The Limited Partnership Agreement ("Partnership Agreement") provides for a special management fee equal to 9% of the total distributions made to the limited partners to be paid to the General Partner for executive and administrative management services. The Partnership paid approximately $24,000 to affiliates of the General Partner for the three months ended March 31, 1995, under this provision of the Partnership Agreement. No such fees were paid or accrued for the three months ended March 31, 1996. Note B - Transactions with Affiliated Parties - (continued) 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 received reimbursements as reflected in the following table: For the Three Months Ended March 31, 1996 1995 (in thousands) Reimbursement for services of affiliates $25 $43 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 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, totalling approximately $1.9 million, are less than the reserve requirement of approximately $2.3 million at March 31, 1996. The Partnership intends to replenish working capital reserves from cash flow from operations. 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 II ("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 Note D - Change in Status of Non-Corporate General Partner - (continued) 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 account as the components of the timing differences which created the balance reverse. Note E - Distributions In March 1995, the Partnership declared and paid distributions, attributable to cash flow from operations, totalling approximately $275,000 to the partners. No distributions were declared or paid during the three months ended March 31, 1996. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of two apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended March 31, 1996 and 1995: Occupancy for the Three Months Ended March 31, 1996 1995 Celina Plaza Apartments El Paso, Texas 88% 94% Colony of Springdale Apartments Springdale, Ohio 88% 92% The decrease in occupancy at the Celina Plaza Apartments is due to a decline in the El Paso market resulting from military spending cuts and the relocation of military personnel, which has created increased competition from similar apartment complexes in the area. In 1995, the managing agent evaluated the tenant base at the Colony of Springdale Apartments and identified several tenants with large delinquent balances. In an effort to improve rent collectability, the tenants who did not pay their outstanding balances were evicted, thereby decreasing the property's occupancy level. This occupancy decrease is expected to be short-term as capital improvements were made in the fourth quarter of 1995 which are expected to increase the curb appeal of the property and enhance the property's ability to attract higher quality tenants. Ongoing property improvements at both locations, resulting in improved consumer appeal, are expected to positively impact rental rates and occupancy. The Partnership realized a net loss of approximately $92,000 for the three months ended March 31, 1996, compared to net loss of approximately $355,000 for the three months ended March 31, 1995. The decreased net loss is due primarily to decreased general and administrative expenses, partially offset by decreased rental income and increased operating and maintenance expenses. Administrative expenses decreased due to prior year operations being unfavorably impacted by approximately $340,000 in legal costs associated with the Partnership's required responses to various tender offers in 1995 and $27,000 in expense reimbursements related to the efforts of the Dallas partnership administration staff during the transition period in 1995. Administrative expenses were also higher for the three months ended March 31, 1995, due to a special management fee of approximately $24,000 incurred in conjunction with the distribution made to the Limited Partners in March 1995. Rental income decreased due to lower occupancy levels at the Partnership's properties resulting from declining conditions and increased competition as noted above. The increase in property operating expenses is due primarily to higher concessions being granted to attract tenants to the Celina Plaza Apartments in El Paso. Maintenance expenses increased due to additional expenditures made for interior and exterior repairs in efforts to improve the curb appeal of the Partnership's properties. 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 expense. 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 March 31, 1996, the Partnership held cash and cash equivalents of approximately $1,426,000 compared to approximately $464,000 at March 31, 1995. Net cash provided by operating activities decreased primarily to reduced rental income, increased operating expenses and the timing of tax payments. Net cash provided by investing activities decreased due to increased property improvements and replacements and a decrease in the proceeds from the sale of investments partially offset by an increase in receipts from restricted escrows. Net cash used in financing activities decreased due to the absence of partner distributions during the first quarter of 1996. 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 $10.1 million, 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 cash generated from operations, capital expenditure requirements, property sales and the availability of cash reserves. During the first three months of 1995 distributions of approximately $275,000 were declared and paid. No cash distributions were declared or paid during the first three months of 1996. 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. 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/ Carroll D. Vinson Carroll D. Vinson President By: /s/ Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: May 10, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Consolidated Capital Properties VI 1996 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000755908 CONSOLIDATED CAPITAL PROPERTIES VI 1,000 3-MOS DEC-31-1996 MAR-31-1996 1,426 390 5 0 0 0 16,380 6,624 12,044 0 10,132 0 0 0 1,411 12,044 0 816 0 0 908 0 210 0 0 0 0 0 0 (92) (.51) 0 The Partnership has an unclassified balance sheet.
-----END PRIVACY-ENHANCED MESSAGE-----