-----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, Wb0HjwxhcCjnDWAaaxdQSJkC7BRuUWjvHWgFkiqPOD6cBzMnrSDLVbmSHYJU4EV4 eHVn+WvUeACH6JOeW6f0hw== 0000812431-96-000002.txt : 19960506 0000812431-96-000002.hdr.sgml : 19960506 ACCESSION NUMBER: 0000812431-96-000002 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960503 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: 96555840 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 (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 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, 1996 Assets Cash and cash equivalents $ 495 Accounts receivable 5 Escrows for taxes 21 Prepaid and other assets 8 Investment properties: Land $ 650 Buildings and related personal property 1,536 2,186 Less accumulated depreciation (427) 1,759 $2,288 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 1 Accrued taxes 12 Other liabilities 31 Partners' Capital (Deficit) General partner $ (37) Corporate limited partners - on behalf of the Unitholders - (67,814 Units issued and outstanding) 2,281 2,244 $2,288 See Accompanying Notes to Consolidated Financial Statements b) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 1996 1995 Revenues: Rental income $ 99 $ 87 Other income 9 9 Total revenues 108 96 Expenses: Operating 19 23 General and administrative 9 15 Maintenance 4 4 Depreciation 20 20 Property taxes 12 12 Total expenses 64 74 Net income $ 44 $ 22 Net income allocated to general partner (1%) $ 1 $ -- Net income allocated to Unitholders (99%) 43 22 $ 44 $ 22 Net income per Unit of Depositary Receipt: $ .63 $ .32 See Accompanying Notes to Consolidated 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 Receipts Receipts Partner (Note A) Total Original capital contributions 68,854 $ 1 $6,885 $6,886 Partners' capital (deficit) at December 31, 1995 67,814 $ (38) $2,238 $2,200 Net income for the three months ended March 31, 1996 -- 1 43 44 Partners' capital (deficit) at March 31, 1996 67,814 $ (37) $2,281 $2,244 See Accompanying Notes to Consolidated Financial Statements
d) JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) Three Months Ended March 31, 1996 1995 Cash flows from operating activities: Net income $ 44 $ 22 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 20 20 Change in accounts: Accounts receivable 1 (4) Escrows for taxes (12) (8) Prepaid and other assets 5 (5) Accounts payable (4) (3) Accrued taxes 12 12 Other liabilities 5 22 Net cash provided by operating activities 71 56 Cash flows from investing activities: Property improvements and replacements -- (1) Purchase of securities available for sale -- (80) Proceeds from sale of securities available for sale -- 109 Net cash provided by investing activities -- 28 Cash flows from financing activities: -- -- Net increase in cash and cash equivalents 71 84 Cash and cash equivalents at beginning of period 424 152 Cash and cash equivalents at end of period $ 495 $ 236 See Accompanying Notes to Consolidated Financial Statements 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 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 financial statements and footnotes thereto included in the annual report on Form 10-KSB for the fiscal year ended December 31, 1995, for Johnstown/Consolidated Income Partners/2 (the "Partnership"). Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Units of Depositary Receipts 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 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. Note B - Transactions with Affiliated Parties The Partnership has paid the property management fees noted below based upon collected gross rental revenues for property management services in each of the three months ended March 31, 1996 and 1995. Fees paid to Insignia and affiliates for the three months ended March 31, 1996 and 1995 are presented below. These expenses are included in operating expenses. For the Three Months Ended March 31, 1996 1995 (in thousands) Property management fees $6 $6 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 $4 $9 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 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. Cash and cash equivalents of approximately $495,000 at March 31, 1996, exceeded the Partnership's reserve requirement of approximately $73,000. 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, 1996 and 1995: Average Occupancy 1996 1995 Florida #6 Mini-Warehouse 91% 94% Lauderhill, Florida The decrease in occupancy is due to increased competition from similar facilities in the area. The Partnership realized net income of $44,000 for the three months ended March 31, 1996, compared to net income of $22,000 for the three months ended March 31, 1995. The increase in net income is due to an increase in rental income resulting from an overall increase in rental rates at the Partnership's sole investment property as well as a decrease in operating and general and administrative expenses. Operating expenses decreased due to reduced personnel costs. General and administrative expenses decreased due to reduced expense reimbursements related primarily to the efforts of the Dallas partnership administration staff during the management transition period in 1995. 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, 1996, the Partnership held cash and cash equivalents of approximately $495,000 compared to approximately $236,000 at March 31, 1995. Net cash provided by operations increased primarily due to increased net income, as discussed above. No cash was provided by or used in either investing or financing activities in the three months ended March 31, 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. Future cash distributions will depend on the levels of net cash generated from operations, 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 exploring the possibility of selling the commercial property in which it has invested. Currently, disposition is not considered imminent. Additionally, other investing parties are involved who must be consulted before such a transaction can be consummated. The General Partner intends to solicit the Unitholders of the Partnership 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 December 31, 1996, 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. During the first three months of 1996 or 1995, 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 registrant 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/ Carroll D. Vinson Carroll D. Vinson President By: /s/ Robert D. Long, Jr. Robert D. Long, Jr. Vice President/CAO Date: May 3, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Johnstown/Consolidated Income Partners/2 1996 First Quarter 10-QSB and is qualified in its entirety by reference to usch 10-QSB filing. 0000812431 JOHNSTOWN/CONSOLIDATED INCOME PARTNERS/2 1,000 3-MOS DEC-31-1996 MAR-31-1996 495 5 0 0 0 2,186 427 2,288 0 0 0 0 0 2,244 2,288 0 108 0 0 64 0 0 0 0 0 0 0 0 0 44 .63 0 The Partnership has an unclassified balance sheet.
-----END PRIVACY-ENHANCED MESSAGE-----