-----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, ByC+NUWnCxdG+GvfeWCLYH9YDt/k/OWcYJCikx5YfsCgjdcjI1/pBZ0SKBRfWwfW QoNNvpsKLFQgaqIIDfy7uQ== 0000774655-97-000002.txt : 19970502 0000774655-97-000002.hdr.sgml : 19970502 ACCESSION NUMBER: 0000774655-97-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970501 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JOHNSTOWN CONSOLIDATED INCOME PARTNERS 2 CENTRAL INDEX KEY: 0000812431 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 943032501 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-16682 FILM NUMBER: 97593591 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391591 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 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 0-16682 JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 (Exact name of small business issuer as specified in its charter) California 94-3032501 (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/2 BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 1997 Assets Cash and cash equivalents $ 683 Accounts receivable 5 Escrows for taxes 19 Other assets 6 Investment property held for sale 1,701 $2,414 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 1 Accrued taxes 13 Other liabilities 21 Partners' Capital (Deficit) General partner $ (36) Corporate limited partners - on behalf of the Unitholders - (67,814 Units issued and outstanding) 2,415 2,379 $2,414 See Accompanying Notes to Financial Statements b) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1997 1996 Revenues: Rental income $ 96 $ 99 Other income 11 9 Total revenues 107 108 Expenses: Operating 23 19 General and administrative 12 9 Maintenance 4 4 Depreciation -- 20 Property taxes 13 12 Total expenses 52 64 Net income $ 55 $ 44 Net income allocated to general partner (1%) $ 1 $ 1 Net income allocated to Unitholders (99%) 54 43 $ 55 $ 44 Net income per Unit of Depositary Receipts $ .80 $ .63 See Accompanying Notes to Financial Statements c) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 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 68,854 $ 1 $6,885 $6,886 Partners' capital (deficit) at December 31, 1996 67,814 $ (37) $2,361 $2,324 Net income for the three months ended March 31, 1997 -- 1 54 55 Partners' capital (deficit) at March 31, 1997 67,814 $ (36) $2,415 $2,379 See Accompanying Notes to Financial Statements
JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 55 $ 44 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation -- 20 Change in accounts: Accounts receivable (1) 1 Escrows for taxes (13) (12) Other assets 1 5 Accounts payable (1) (4) Accrued taxes 13 12 Other liabilities (4) 5 Net cash provided by operating activities 50 71 Cash flows from investing activities: -- -- Cash flows from financing activities: -- -- Net increase in cash and cash equivalents 50 71 Cash and cash equivalents at beginning of period 633 424 Cash and cash equivalents at end of period $ 683 $ 495 See Accompanying Notes to Financial Statements JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 NOTES TO FINANCIAL STATEMENTS (continued) (Unaudited) NOTE A - BASIS OF PRESENTATION The accompanying unaudited financial statements of Johnstown/Consolidated Income Partners/2 (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 months ended March, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1997. 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. Units of Depositary Receipt Johnstown/Consolidated Depositary Corporation/2 (the "Corporate Limited Partner"), an affiliate of the former 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, Partner's capital (deficit) is herein represented as an interest of the Unitholders. Investment Property Held for Sale Effective December 31, 1996, the Partnership's investment property was classified as 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 - 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 the Partnership activities, as provided for in the partnership agreement. The Partnership has paid property management fees based upon collected gross rental revenues for property management services for each of the three month periods ended March 31, 1997 and 1996. Property management fees of approximately $6,000 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 $4,000 were paid to the General Partner and its affiliates for the three months ended March 31, 1997 and 1996, respectively. In July 1995, the Partnership began insuring its property 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 3% 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 of approximately $683,000 exceeded the Partnership's reserve requirement of approximately $73,000 at March 31, 1997. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS The Partnership's investment property consists of a two-thirds interest in a mini-warehouse. The following table sets forth the average occupancy of the property for the three months ended March 31, 1997 and 1996: Average Occupancy 1997 1996 Florida #6 Mini-Warehouse 90% 91% Lauderhill, Florida The Partnership realized net income of approximately $55,000 for the three months ended March 31, 1997, compared to net income of approximately $44,000 for the three months ended March 31, 1996. The increase in net income is primarily due to a decrease in depreciation expense resulting from the classification of the property as investment property held for sale at December 31, 1996. Accordingly, no depreciation expense is recognized during the period the assets are held for sale. Operating expenses increased as a result of increased advertising costs resulting from efforts to increase occupancy and increased insurance expense resulting from premium increases. General and administrative expenses increased primarily as a result of increased audit and tax fees. 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 March 31, 1997, the Partnership held cash and cash equivalents of approximately $683,000 compared to approximately $495,000 at March 31, 1996. Net cash provided by operating activities decreased for the three months ended March 31, 1997 compared to the three months ended March 31, 1996 due primarily to increased operating and administrative expenses. No cash was provided by or used in either investing or financing activities during the three months ended March 31, 1997 or 1996, respectively. 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. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. On September 20, 1996, the General Partner distributed a consent solicitation to the Limited Partners to modify the Partnership Agreement for a certain proposal (the "Proposal") as described in the proxy statement. The Partnership filed a definitive Schedule 14A Information Statement with the Securities and Exchange Commission concurrent with the distribution of the consent solicitation. The General Partner formulated the Proposal to amend the Partnership Agreement to authorize the General Partner to sell all or substantially all of the Partnership's assets to unaffiliated entities pursuant to a binding agreement to be entered into on or before June 30, 1997, at a price of not less than $2,000,000. A consequence of the closing of such a sale would likely be the dissolution and termination of the Partnership. On November 22, 1996, the proposal was adopted with a majority of the outstanding units approving the proposals. The Unitholders voted 53% in favor of the matter, 5% opposed or abstained and 42% did not respond. The General Partner is currently in negotiations to sell the Florida #6 Mini-Warehouse. It is not certain that these negotiations will ultimately result in the sale of the Partnership's investment property. During the first three months of 1997 and 1996, no cash distributions were declared or paid. 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/2 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 1, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Johnstown/Consolidated Income Partners/2 1997 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000812431 JOHNSTOWN CONSOLIDATED INCOME PARTNERS 2 1,000 3-MOS DEC-31-1997 MAR-31-1997 683 0 5 0 0 0 1,701 0 2,414 0 0 0 0 0 2,379 2,414 0 107 0 0 52 0 0 0 0 0 0 0 0 55 .80 0 Partnership has an unclassified balance sheet. Investment property held for sale. Multiplier is 1.
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