-----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, BNUZYotLRwPM2hRjEm6USKOaoyLNaxWUp1F7yfXGP12jJSM4AvU1U4D1lXe0+sAP fxGmLY8szEBsYw/DQjv3zQ== 0000755908-95-000006.txt : 19951118 0000755908-95-000006.hdr.sgml : 19951118 ACCESSION NUMBER: 0000755908-95-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951109 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOHNSTOWN CONSOLIDATED INCOME PARTNERS CENTRAL INDEX KEY: 0000787621 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 943004963 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16010 FILM NUMBER: 95588529 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO 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 FORMER COMPANY: FORMER CONFORMED NAME: CONSOLIDATED CAPITAL INCOME GROWTH PARTNERS DATE OF NAME CHANGE: 19860401 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 0-16010 JOHNSTOWN/CONSOLIDATED INCOME PARTNERS (Exact name of small business issuer as specified in its charter) California 94-3004963 (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) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS BALANCE SHEET (Unaudited) (in thousands, except for unit data)
September 30, 1995 Assets Cash and cash equivalents $ 1,957 Securities available for sale 476 Prepaid and other assets 475 Investment properties: Land $ 1,896 Buildings and related personal property 11,694 13,590 Less accumulated depreciation (5,283) 8,307 $11,215 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable and accrued expenses $ 309 Notes and interest payable 1,913 Partners' Capital (Deficit) General partner $ (155) Corporate limited partners - on behalf of the Unitholders - (128,810 Units (Note A) issued and outstanding) 9,148 8,993 $11,215
[FN] See Accompanying Notes to Financial Statements b) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS 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 $ 584 $ 561 $1,661 $1,673 Interest and dividend income 30 61 163 172 Total revenues 614 622 1,824 1,845 Expenses: Property operations 283 247 743 738 Depreciation and amortization 124 168 402 530 Interest 46 48 134 144 Administrative 71 78 266 231 Total expenses 524 541 1,545 1,643 Income from operations 90 81 279 202 Loss on sales of securities available for sale -- (18) -- (18) Other income (Note D) -- -- -- 251 Net income $ 90 $ 63 $ 279 $ 435 Net income allocated to general partners (1%) $ 1 $ 1 $ 3 $ 4 Net income allocated to limited partners (99%) 89 62 276 431 $ 90 $ 63 $ 279 $ 435 Net income per weighted average Unit of Depositary Receipt (Note A): $ .69 $ .48 $ 2.14 $ 3.34
[FN] See Accompanying Notes to Financial Statements c) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Unitholders Units of Units of Depositary Depositary General Receipts Receipts Partners (Note A) Total Original capital contributions 129,266 $ 1 $32,317 $32,318 Partners' capital (deficit) at December 31, 1994 128,810 $ (148) $ 9,862 $ 9,714 Net income for the nine months ended September 30, 1995 -- 3 276 279 Distributions paid -- (10) (990) (1,000) Partners' capital (deficit) at September 30, 1995 128,810 $ (155) $ 9,148 $ 8,993
[FN] See Accompanying Notes to Financial Statements d) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENTS OF CASH FLOWS (Unaudited)
Nine Months Ended September 30, 1995 1994 Cash flows from operating activities: Net income $ 279 $ 435 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of discounts, loan costs and lease commissions 413 541 Loss on sale of securities available for sale -- 18 Change in accounts: Prepaids and other assets (107) (49) Accounts payable and accrued expenses 195 (226) Interest payable 13 -- Net cash provided by operating activities 793 719 Cash flows from investing activities: Property improvements and replacements (78) (66) Purchase of securities available for sale (1,009) (1,704) Proceeds from sale of securities available for sale 2,713 2,922 Deposits to restricted escrows (16) -- Proceeds from sale of real estate -- 1,500 Net cash provided by investing activities 1,610 2,652 Cash flows from financing activities: Payments on notes payable (37) (39) Partners' distributions (1,000) (3,720) Net cash used in financing activities (1,037) (3,759) Net increase in cash 1,366 (388) Cash and cash equivalents at beginning of period 591 835 Cash and cash equivalents at end of period $ 1,957 $ 447 Supplemental disclosure of cash flow information: Cash paid for interest $ 107 $ 132
[FN] See Accompanying Notes to Financial Statements e) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS NOTES TO 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 Johnstown/Consolidated Income Partners (the "Partnership"). Certain reclassifications have been made to the 1994 information to conform to the 1995 presentation. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents includes cash on hand, demand deposits and money market funds, and U.S. Treasury Bills with original maturities of three months or less. Units of Depositary Receipts Johnstown/Consolidated Depositary Corporation, an affiliate of the General Partner, serves as a depositary of certain Units of Depositary Receipts ("Units"). The Units represent economic rights attributable to the limited partnership interests in the Partnership and entitle the holders thereof ("Unitholders") to certain economic benefits, allocations and distributions of the Partnership. Net Income Per Unit Net income per Unit is computed by dividing net income allocated to the Unitholders by the weighted average number of Units outstanding. Per Unit information has been computed based on weighted average Units outstanding of 128,810 and 128,851 for the nine months ended September 30, 1995 and 1994, respectively. Note B - Related Party Transactions The Partnership Agreement provides that the Partnership shall pay in monthly installments to the General Partner, or an affiliate, a yearly asset management Note B - Related Party Transactions - continued fee equal to: (i) 3/8 of 1% of the original principal balance of mortgage loans outstanding at the end of the month preceding the installment payment; (ii) 1/8 of 1% of the market value of guaranteed mortgage-backed securities ("MBS") as of the end of the Partnership quarter immediately preceding the installment payment; and (iii) 5/8 of 1% of the purchase price of the properties plus improvements for managing the Partnership's assets. In the event the property was not owned at the beginning or end of the year, such fee shall be pro-rated for the short-year period of ownership. These asset management fees are included in compensation to related parties in the table below. The Partnership has paid the property management fees noted below based on collected gross rental revenues ("Rental Revenues") for property management services in each of the nine months 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") or its predecessor for advisory services related to day-to-day property operations. In July 1993, Coventry Properties, Inc. ("Coventry"), an affiliate of the General Partner, assumed day-to-day property management responsibilities for two of the Partnership's properties under the same management fee arrangement as the unaffiliated management companies. 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 except for Cedar Brooke Apartments. Management of Cedar Brooke was assumed by an Insignia affiliate on February 15, 1995. Fees paid to Insignia and affiliates for the nine months ended September 30, 1995, and fees 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) Asset management fee $74 $83 Property management fees 92 44 Note B - Related Party Transactions - 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, 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 $106 $77 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 - Sale of Real Estate In March 1994, the Partnership sold the Evergreen Heights Office Building for a gross sales price of approximately $1.6 million. The Partnership received net cash proceeds of $1.5 million after payment of related closing costs. As a result of the sale, $665,000 was charged to the allowance for possible losses in the nine months ended September 30, 1994. No gain or loss was recognized on the sale. The sales transaction is summarized in the following table: Cash proceeds received $1,500 Cost of sales: Net real estate $1,578 Other (78) Total cost of sales $1,500 Net real estate represents real estate, net of accumulated depreciation and allowance for possible loss. Note D - 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. 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 4,405 shares of Southmark Corporation Redeemable Series A Preferred Stock and 29,585 shares of Southmark Corporation New Common Stock with an aggregate market value on the date of receipt of approximately $29,000 and $222,000 in cash representing the Partnership's share of the recovery, based on its pro rata share of the claims filed. Note E - Commitment The Partnership is required by the Partnership Agreement to maintain working capital 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. Reserves, including cash and cash equivalents and securities available for sale totalling approximately $2.4 million at September 30, 1995, exceeded the Partnership's reserve requirement of approximately $1.4 million. Note F - Distributions In March of 1995, the General Partner declared and paid distributions attributable to cash flow from operations totalling approximately $495,000 or $3.84 per Unit to the Unitholders along with a corresponding General Partner distribution of approximately $5,000. In September 1995, the General Partner declared and paid distributions attributable to cash flow from operations totalling approximately $495,000 or $3.84 per Unit to the Unitholders along with a corresponding General Partner distribution of approximately $5,000. In March 1994, the General Partner declared and paid distributions of approximately $2.2 million or $17.27 per Unit to the Unitholders, representing a return of capital from repayment of a note receivable in September 1993. In September 1994, the General Partner declared and paid distributions of approximately $1.5 million or $11.60 per Unit to the Unitholders, representing a return of capital from proceeds of a property sale in March 1994. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of one apartment complex, two commercial properties and a one-third (1/3) undivided interest in the Florida #6 Mini-Warehouse property. 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 Cedar Brooke Apartments Independence, Missouri 99% 99% Florida #6 Mini-Warehouse Lauderhill, Florida 91% 99% Florida #11 Mini-Warehouse Davie, Florida 96% 99% Phoenix Business Center College Park, Georgia 57% 82% The decrease in occupancy at the Florida #6 Mini-Warehouse is due to commercial clients reducing their inventory levels, which resulted in reduced usage of storage facilities in 1995 compared to 1994. The decrease in occupancy at the Phoenix Business Center is primarily due to a large tenant vacating their space after building their own office facilities in 1995. As of September 30, 1995, this space remains vacant with the Partnership actively searching for new tenants, as well as considering sub-dividing the space to increase its leasability. The impact of the decrease in rental income as a result of this tenant vacating has been mitigated by rent increases on the Partnership's other investment properties. The Partnership realized income from operations of $279,000 for the nine months ended September 30, 1995, compared to $202,000 for the nine months ended September 30, 1994. For the three months ended September 30, 1995, the Partnership realized income from operations of $90,000 compared to $81,000 for the three months ended September 30, 1994. Property operations increased for the three months ended September 30, 1995, due to increased maintenance expenditures to improve the curb appeal of the Partnership's properties in an effort to increase occupancy. Depreciation expense decreased due to the reduced carrying values of depreciable assets resulting from the valuation reserves recorded in prior years. Administrative expenses increased for the nine months ended September 30, 1995, due to increased mailing costs, professional fees, and expense reimbursements related to the combined efforts of the Dallas and Greenville partnership administration staffs during the transition period. The reimbursements for the Dallas office amounted to approximately $63,000 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. 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 D of the Notes to the 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 had cash and cash equivalents of $1,957,000 compared to $447,000 at September 30, 1994. Net cash provided by operating activities increased primarily due to increases in accounts payable and other accrued expenses. Net cash provided by investing activities decreased due to the receipt of proceeds from the sale of the Evergreen Heights Office Building in March of 1994 (See Note D of the Notes to Financial Statements in Item 1), partially offset by a decrease in purchases of securities available for sale. Net cash used in financing activities decreased as a result of reduced Partners' distributions for the nine months ended September 30, 1995, compared to the nine months ended September 30, 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. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of approximately $1.9 million, net of discount, matures in 2013, at which time the related property 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. As part of the Partnership's ongoing attempt to maximize return to the Unitholders, the Partnership is exploring the possibility of selling the Florida #6 Mini-Warehouse in which it has invested. Currently, no such disposition is considered imminent. Additionally, other investing parties are involved who must be considered before such a transaction can be approved. For the nine months ended September 30, 1995, cash distributions of approximately $1 million were declared and paid compared to cash distributions of approximately $3.7 million for the nine months ended September 30, 1994. 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. JOHNSTOWN/CONSOLIDATED INCOME PARTNERS 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 9, 1995 EX-27 2
5 This schedule contains summary financial information extracted from Johnstown/Consolidated Income Partners 1995 Third Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB. 0000787621 JOHNSTOWN/CONSOLIDATED INCOME PARTNERS 1,000 9-MOS DEC-31-1995 SEP-30-1995 1,927 476 0 0 0 0 13,590 5,283 11,215 0 1,913 0 0 0 8,993 11,215 0 1,824 0 0 1,545 0 134 0 0 0 0 0 0 279 2.17 0 The Partnership has an unclassified balance sheet.
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