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 0-10273
CONSOLIDATED CAPITAL PROPERTIES III
(Exact name of small business issuer as specified in its charter)
California 94-2653686
(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 III
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
March 31, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 3,022
Restricted-tenant security deposits 135
Prepaid and other assets 517
Investment properties:
Land $ 1,828
Buildings and related personal property 16,739
18,567
Less accumulated depreciation (12,996) 5,571
$ 9,245
Liabilities and Partners' Capital (Deficit)
Accounts payable and accrued expenses $ 556
Notes and interest payable 6,693
Partners' Capital (Deficit)
General partner $ (1,950)
Limited partners (158,636 units
issued and outstanding) 3,946 1,996
$ 9,245
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES III
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Revenues:
Rental income $ 1,085 $ 1,056
Other income 105 148
Total revenues 1,190 1,204
Expenses:
Property operations 671 673
Depreciation 229 274
Interest 161 213
Administrative 81 188
Total expenses 1,142 1,348
Net income (loss) $ 48 $ (144)
Net income (loss) allocated to general partner (4%) $ 2 $ (6)
Net income (loss) allocated to limited partners (96%) 46 (138)
$ 48 $ (144)
Net income (loss) per weighted limited
partnership unit $ .29 $ (.87)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) CONSOLIDATED CAPITAL PROPERTIES III
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C>
Original capital contributions 158,945 $ 1 $79,473 $79,474
Partners' capital (deficit) at
December 31, 1995 158,636 $(1,952) $ 3,900 $ 1,948
Net income for the three months
ended March 31, 1996 2 46 48
Partners' capital (deficit)
at March 31, 1996 158,636 $(1,950) $ 3,946 $ 1,996
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CONSOLIDATED CAPITAL PROPERTIES III
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 48 $ (144)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization of discounts
and loan costs 238 289
Change in accounts:
Tenant security deposits (12) --
Interest on note receivable -- 15
Prepaids and other assets (83) (5)
Accounts payable and accrued expenses 44 137
Note interest payable -- 55
Net cash provided by operating activities 235 347
Cash flows from investing activities:
Property improvements and replacements (53) (53)
Disposition of property 11 --
Purchase of investments -- (3,087)
Proceeds from sale of investments -- 3,019
Repayment of notes receivable -- 2,316
Net cash (used in) provided by investing
activities (42) 2,195
Cash flows from financing activities:
Payments on notes payable (25) (55)
Partners' distributions -- (1,428)
Net cash used in financing activities (25) (1,483)
Net increase in cash and cash equivalents 168 1,059
Cash and cash equivalents at beginning of period 2,854 2,154
Cash and cash equivalents at end of period $3,022 $ 3,213
Supplemental disclosure of cash flow information:
Cash paid for interest $ 154 $ 145
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CONSOLIDATED CAPITAL PROPERTIES III
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties III ("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 Managing 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.
Consolidation
The Partnership's financial statements include the accounts of ConCap Mountain
Plaza Associates, Ltd. ("Mountain Plaza Associates), CCP III Associates, Ltd.
("CCP III Associates") and ConCap Village Green Associates, Ltd. ("Village Green
Associates"), three wholly-owned limited partnerships. All intercompany
transactions have been eliminated.
Cash and Cash Equivalents
Cash and cash equivalents for purposes of reporting cash flows include cash on
hand, demand deposits and money market funds.
Note B - Transactions with Affiliated Partners
The Partnership has paid property management fees equal to 5% of collected gross
rental revenues ("Rental Revenues") for property management services in each of
the three months ended March 31, 1996 and 1995. In late December 1994, an
affiliate of Insignia Financial Group, Inc. ("Insignia") assumed day-to-day
property management responsibilities for all of the Partnerships' properties.
Fees paid to Insignia and affiliates for the three months ended March 31, 1996,
and March 31, 1995, which are included in operating expenses, have been
reflected in the following table as compensation to related parties in the
applicable periods:
For the Three Months Ended
March 31,
1996 1995
(in thousands)
Property management fees $55 $56
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 during the first quarter of 1996 and 1995 as reflected in the
following table:
For the Three Months Ended
March 31,
1996 1995
(in thousands)
Reimbursement for services of affiliates $42 $92
Note C - Distributions
In January of 1995, the General Partner declared and paid distributions
representing a return of capital totalling approximately $1.4 million or $9.00
per Unit to the Limited Partners.
Note D - Repayment of Note Receivable
In October of 1988, the Partnership accepted a $2.1 million note receivable in
connection with the sale of the Columns of Castleton Apartments. The note was
scheduled to mature in June of 1996. In March of 1995, the Partnership received
the outstanding principal balance of approximately $2.3 million, which
represents the original principal balance plus unpaid interest, in settlement of
the borrower's liability under the note agreement.
Note E - Subsequent Events
On May 3, 1996, the Partnership entered into an interim financing arrangement
for both Ventura Landing and Village Green for $2.2 million and $2 million,
respectively. The then existing Ventura Landing note of $3.2 million was repaid
at that time. The interest rate is 250 basis points over the 30-day LIBOR,
resulting in a total note rate of 7.94% on May 3. The loans mature on August 1,
1996 with a 60-day extension option. The Partnership hopes to obtain long-term
financing prior to the expiration of the interim financing arrangement.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Partnership's investment properties consist of four apartment complexes
and one commercial property. The following table sets forth the average
occupancy of the properties for the three months ended March 31, 1996 and 1995:
Average Occupancy
1996 1995
Mountain Plaza Apartments 83% 82%
El Paso, TX
Professional Plaza Office Building 96% 98%
Salt Lake City, UT
Ventura Landing Apartments 93% 90%
Orlando, FL
Village Green Apartments 95% 90%
Altamante Springs, FL
West Chase Apartments 93% 92%
Lexington, KY
The Partnership realized net income from operations of approximately $48,000 for
the three months ended March 31, 1996, compared to a net loss from operations of
approximately $144,000 for the three months ended March 31, 1995.
Depreciation, interest and administrative expenses decreased for the three
months ended March 31, 1996, compared to the three months ended March 31, 1995.
Administrative expenses decreased for the three months ended March 31, 1996,
compared to the three months ended March 31, 1995, due to decreased legal,
printing and postage costs associated with the Partnership's required responses
to various tender offers made in 1995. The decrease in administrative expenses
was also affected by decreased expense reimbursements related to the combined
efforts of the Dallas and Greenville partnership administration staffs during
the transition period in the first quarter of 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. Interest expense decreased as a
result of the retirement of notes payable secured by the Professional Plaza
Office Building and the Village Green Apartments in August 1995.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment 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 Corporate 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
Corporate General Partner will be able to sustain such a plan.
At March 31, 1996, the Partnership held cash and cash equivalents of
approximately $3,157,000 including restricted cash, compared to approximately
$3,213,000 at March 31, 1995. Net cash provided by operating activities
decreased primarily due to increased funding of the tax escrow accounts. Also
contributing to the decrease was lower interest income from the Columns of
Castleton note receivable, which was collected in March of 1995 (See "Note D"
for further discussion). Net cash used in investing activities decreased due to
the final collection of the Columns of Castleton note receivable in March of
1995 favorably impacting 1995's cash flows. Net cash used in financing
activities decreased due to the Partners' distributions in January of 1995.
The Partnership modified its Partnership Agreement in the fourth quarter of 1995
to eliminate the requirement that the Partnership maintain reserves equal to at
least 5% of invested capital and instead require reserves in an amount deemed
reasonable and prudent by the General Partner.
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 $6,693,000 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 net cash
generated from operations, capital expenditure requirements, property sales and
the availability of cash reserves.
On January 20, 1995, an affiliate of the General Partner, Insignia CCP III
Acquisition, L.L.C., closed an offer to purchase Units (the "Tender Offer") for
a cash price of $50.00 per Unit to Limited Partners of record as of December 15,
1994. Approximately 2,260 Limited Partners holding 36,882 Units (23.24% of
total Units) accepted the Tender Offer and sold their Units to Insignia CCP III
Acquisition, L.L.C. effective January 20, 1995, for an aggregate sales price of
approximately $1.8 million.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) 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 III
By: CONCAP EQUITIES, INC.
General Partner
By: /s/ Carroll D. Vinson
Carroll D. Vinson
President
By: /s/ Robert D. Long, Jr.
Vice President/CAO
Date: May 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties III 1996 First Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000317331
<NAME> CONSOLIDATED CAPITAL PROPERTIES III
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,022
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 18,567
<DEPRECIATION> 12,996
<TOTAL-ASSETS> 9,245
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 6,642
0
0
<COMMON> 0
<OTHER-SE> 1,996
<TOTAL-LIABILITY-AND-EQUITY> 9,245
<SALES> 0
<TOTAL-REVENUES> 1,190
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,142
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 161
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 48
<EPS-PRIMARY> .29
<EPS-DILUTED> 0
<FN>
<F1>The Partnership has an unclassified balance sheet.
</FN>
</TABLE>
