-----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, WpLb0ra0gH8pXFYOWrAr3w5gyiiVo00NtD+0n+Jk5x4FkYEsXgJXVptgnP0Ukdss evjam1EByI7R2k62NsTstQ== 0000787621-97-000001.txt : 19970505 0000787621-97-000001.hdr.sgml : 19970505 ACCESSION NUMBER: 0000787621-97-000001 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970502 SROS: NONE 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: 97594649 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391513 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 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, 1997 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period.........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 (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) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents: Unrestricted $ 1,692 Restricted - tenant security deposits 61 Investments 447 Accounts receivable, net of allowance 13 Escrows for taxes and insurance 108 Restricted escrows 326 Other assets 258 Investment property held for sale 850 Investment properties: Land $ 1,571 Buildings and related personal property 11,128 12,699 Less accumulated depreciation (5,813) 6,886 $10,641 Liabilities and Partners' Capital (Deficit) Accounts payable $ 103 Tenant security deposits 61 Accrued taxes 42 Other liabilities 60 Notes payable 2,325 Partners' Capital (Deficit) General partner $ (165) Corporate limited partner on behalf of the Unitholders - (128,810 Units issued and outstanding) 8,215 8,050 $10,641 See Accompanying Notes to Financial Statements b) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $ 543 $ 514 Other income 38 45 Total revenues 581 559 Expenses: Operating 168 158 General and administrative 52 61 Maintenance 57 63 Depreciation 122 127 Interest 46 49 Property taxes 41 44 Total expenses 486 502 Net income $ 95 $ 57 Net income allocated to general partner (1%) $ 1 $ 1 Net income allocated to limited partners (99%) 94 56 $ 95 $ 57 Net income per Unit of Depositary Receipt $ .73 $ .44 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 Receipt Receipt Partner (Note A) Total Original capital contributions 129,266 $ 1 $ 32,317 $ 32,318 Partners' capital (deficit) at December 31, 1996 128,810 $ (166) $ 8,121 $ 7,955 Net income for the three months ended March 31, 1997 -- 1 94 95 Partners' capital (deficit) at March 31, 1997 128,810 $ (165) $ 8,215 $ 8,050 See Accompanying Notes to Financial Statements
d) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 95 $ 57 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 122 127 Amortization of lease commissions, discounts and loan costs 12 13 Bad debt expense 10 8 Change in accounts: Restricted cash (8) -- Accounts receivable 6 (17) Escrows for taxes and insurance (41) (38) Other assets (13) 27 Accounts payable (1) (4) Accrued taxes (5) 43 Other liabilities (22) 14 Net cash provided by operating activities 155 230 Cash flows from investing activities: Property improvements and replacements (17) (10) Deposits to restricted escrows (18) (6) Net cash used in investing activities (35) (16) Cash flows from financing activities: Payments on notes payable -- (14) Loan costs paid (11) -- Distributions to partners -- (495) Net cash used in financing activities (11) (509) Net increase (decrease) in cash and cash equivalents 109 (295) Cash and cash equivalents at beginning of period 1,583 1,967 Cash and cash equivalents at end of period $1,692 $1,672 Supplemental disclosure of cash flow information: Cash paid for interest $ 43 $ 40 See Accompanying Notes to Financial Statements
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Johnstown/Consolidated Income Partners, (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. (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, 1997, 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 financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the fiscal year ended December 31, 1996. 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. Units of Depositary Receipt Johnstown/Consolidated Depositary Corporation (the "Corporate Limited Partner"), an affiliate of the General Partner, serves as a depositary of certain Units of Depositary Receipt ("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. For this reason, Partners' capital (deficit) is herein represented as an interest of the Unitholder. Investment Property Held for Sale Effective December 31, 1996, the Florida #6 Mini-Warehouse was classified as an investment property held for sale. Accordingly, the property has been recorded at the lower of carrying amount or fair value less costs to sell and no additional depreciation expense will be recorded during the period the assets are held for sale. NOTE B - TRANSACTIONS WITH AFFILIATED 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 Agreement provides that the Partnership shall pay in monthly installments to the General Partner, or an affiliate, a yearly asset management 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 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. Under this provision, fees of approximately $24,000 were paid to the General Partner and its affiliates for each of the three months ended March 31, 1997 and 1996, respectively, and are included in general and administrative expenses. The Partnership has paid property management fees based upon collected gross rental revenues for property management services in each of the three months ended March 31, 1997 and 1996. Property management fees of approximately $28,000 and $30,000 were paid to affiliates of the General Partner for the three months ended March 31, 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 $25,000 and $24,000 were paid to the General Partner and its affiliates for each of the three months ended March 31, 1997 and 1996, respectively. Reimbursements of costs are classified as general and administrative expenses. Also during the three months ended March 31, 1997, approximately $6,000 of leasing commissions were paid to an affiliate of Insignia. Leasing commissions are capitalized and included in other assets. Approximately $16,000 during the three months ended March 31, 1997, was paid to affiliates for construction oversight costs incurred in conjunction with improvements made at the Cedar Brooke Apartments. These amounts are included in maintenance expense. 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 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, tenant security deposits and investments totalling approximately $2,200,000 at March 31, 1997, exceeded the Partnership's reserve requirement of approximately $1,385,000. NOTE D - DISTRIBUTIONS In March of 1996, the Partnership paid distributions attributable to cash flow from operations of approximately $495,000. During the three months ended March 31, 1997, no distributions were declared or paid. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS 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 three months ended March 31, 1997 and 1996: Average Occupancy 1997 1996 Cedar Brooke Apartments Independence, Missouri 97% 99% Florida #6 Mini-Warehouse Lauderhill, Florida 90% 91% Florida #11 Mini-Warehouse Davie, Florida 99% 93% Phoenix Business Campus College Park, Georgia 70% 58% The increase in occupancy at the Florida #11 Mini-Warehouse is due to the improved curb appeal of the property resulting from the exterior painting project completed in 1996 and increased marketing efforts at the property. The increase in average occupancy at the Phoenix Business Center is due to a new tenant who moved in in the fourth quarter of 1996, occupying 14% of the total square footage. The Partnership realized net income of approximately $95,000 for the three months ended March 31, 1997, compared to net income of approximately $57,000 for the three months ended March 31, 1996. The increase in net income is primarily due to the increase in rental income resulting from rental rate increases at the Cedar Brooke Apartments and occupancy increases at the Florida #11 Mini- Warehouse and Phoenix Business Campus, as noted above. Property operating expenses increased slightly due to increased flood insurance coverage at the Cedar Brooke Apartments. General and administrative expenses decreased primarily as a result of lower audit fees. The mortgage note secured by Cedar Brooke Apartments was refinanced in November of 1996. Accordingly, the debt is no longer regulated by the U.S. Department of Housing and Urban Development which required a separate audit. Included in maintenance expense is approximately $19,000 of major repairs and maintenance comprised primarily of construction oversight costs related to the ongoing repair projects at Cedar Brooke paid during the three months ended March 31, 1997. For the three months ended March 31, 1996, approximately $29,000 of major repairs and maintenance comprised primarily of exterior painting which was 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 March 31, 1997, the Partnership held cash and cash equivalents of approximately $1,692,000 compared to approximately $1,672,000 at March 31, 1996. Net cash provided by operating activities decreased primarily due to the timing of property tax payments and the annual audit fee payment. Net cash used in investing activities increased as a result of increased property improvements and replacements and increased escrow funding requirements for the Cedar Brooke Apartments. Net cash used in financing activities decreased primarily as a result of the absence of cash distributions to partners during the three months ended March 31, 1997. 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 $2,325,000, matures in 2003, at which time the debt will either be refinanced or the related property 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 the return to the Unitholders, the Partnership is negotiating the sale of its one-third interest in the Florida #6 Mini-Warehouse. During the three months ended March 31, 1996, cash distributions of approximately $495,000 were paid. No cash distributions were declared or paid during the three months ended March 31, 1997. 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 Partnership 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/William H. Jarrard, Jr. William H. Jarrard, Jr. President By: /s/Ronald Uretta Ronald Uretta Vice President/Treasurer Date: May 2, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Johnstown/Consolidated Income Partners 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000787621 JOHNSTOWN CONSOLIDATED INCOME PARTNERS 1,000 3-MOS DEC-31-1997 MAR-31-1997 1,692 447 13 0 0 0 12,699 5,813 10,641 0 2,325 0 0 0 8,050 10,641 0 581 0 0 486 0 46 0 0 0 0 0 0 95 .73 0 Partnership has an unclassified balance sheet. Multiplier is 1.
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