<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
-------------------------------------------------
OR
[ ] 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 0-10831
---------------------------------------------------------
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-2744492
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5520 LBJ Freeway, Suite 430, Dallas, Texas 75240
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
(214) 702-0027
- - --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant, (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Index to Exhibits: 10
Total Pages: 19
-1-
<PAGE>
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- - ------ --------------------
BALANCE SHEETS
(unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1994 1993
- - ------ ------------- ------------
<S> <C> <C>
Real estate, net of accumulated depreciation....... $ 4,855 $ 5,140
------------- ------------
Net investment in Master Loan to affiliate......... 91,786 91,746
------------- ------------
Cash and cash equivalents.......................... 476 222
United States Treasury Notes and other investments
at cost (market - $8,813 in 1994 and $10,905
in 1993).......................................... 8,469 10,391
Due from affiliates................................ 780 559
Other assets....................................... 335 384
------------- ------------
$ 106,701 $ 108,442
============= ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIT)
- - ------------------------------------------
Accounts payable and accrued expenses.............. $ 69 $ 177
Distributions payable.............................. 337 332
------------- ------------
406 509
------------- ------------
Commitment (Note 4)................................
Partners' equity (deficit):
Limited Partners - 199,045 units outstanding...... 106,599 108,220
General Partner................................... (304) (287)
------------- ------------
106,295 107,933
------------- ------------
$ 106,701 $ 108,442
============= ============
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-2-
<PAGE>
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
INCOME STATEMENTS
(unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
---------------------- ---------------------
1994 1993 1994 1993
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Revenues:
Rental income............. $ 333 $ 310 $ 974 $ 877
Income on investment in
Master Loan to affiliate.. 752 646 1,661 3,079
Investment income......... 174 269 509 761
---------- ---------- --------- ----------
Total revenues.......... 1,259 1,225 3,144 4,717
---------- ---------- --------- ----------
Costs and expenses:
Property operations....... 171 162 455 511
Depreciation.............. 106 104 313 308
Administrative............ 88 139 347 568
Provision for possible
losses................... - 100 - 100
---------- ---------- --------- ----------
Total costs and
expenses (a)........... 365 505 1,115 1,487
---------- ---------- --------- ----------
Income from operations..... 894 720 2,029 3,230
Other income............... - - 56 -
Gain on sale of United
States Treasury Note...... - - - 17
---------- ---------- --------- ----------
Net income................. $ 894 $ 720 $ 2,085 $ 3,247
========== ========== ========= ==========
Net income per Limited
Partnership Unit:
Income from operations.... $ 4.45 $ 3.58 $10.10 $ 16.06
Other income.............. - - .28 -
Gain on sale of United
States Treasury Note..... - - - .09
---------- ---------- --------- ----------
Net income................. $ 4.45 $ 3.58 $ 10.38 $ 16.15
========== ========== ========= ==========
Distributions per Limited
Partnership Unit.......... $ 6.77 $ 14.25 $ 18.52 $ 28.50
========== ========== ========= ==========
</TABLE>
(a) Costs and expenses include $90,000 and $98,000 to related parties for the
three months ended September 30, 1994 and 1993, respectively, and $308,000
and $269,000 for the nine months ended September 30, 1994 and 1993. See
supplemental information with respect to related party transactions in
Notes 2 and 3 of the financial statements.
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE>
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
STATEMENTS OF PARTNERS' EQUITY (DEFICIT)
(unaudited)
For the Nine Months Ended September 30, 1994 and 1993
(in thousands)
<TABLE>
<CAPTION>
TOTAL
GENERAL LIMITED PARTNERS'
PARTNER PARTNERS EQUITY (DEFICIT)
------- -------- ----------------
<S> <C> <C> <C>
Balance at December 31, 1992... $ (163) $120,575 $ 120,412
Net income..................... 32 3,215 3,247
Distributions.................. (57) (5,673) (5,730)
------- -------- ----------
Balance at September 30, 1993.. $ (188) $118,117 $ 117,929
======= ======== ==========
Balance at December 31, 1993... $ (287) $108,220 $ 107,933
Net income..................... 20 2,065 2,085
Distributions.................. (37) (3,686) (3,723)
------- -------- ----------
Balance at September 30, 1994.. $ (304) $106,599 $ 106,295
======= ======== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE>
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
STATEMENTS OF CASH FLOWS
(unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(in thousands)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
----------------------
1994 1993
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants........................... $ 969 $ 879
Cash paid to suppliers (a)........................... (878) (865)
Investment income received (b)....................... 2,038 4,738
Property taxes paid.................................. (68) -
Other income......................................... 50 -
-------- --------
Net cash provided by operating activities............. 2,111 4,752
-------- --------
Cash flows from investing activities:
Additions to real estate............................. (28) (15)
Advances on Master Loan to affiliate................. (40) (340)
Purchase of mortgage loan............................ - (100)
Purchase of United States Treasury Note.............. (3,392) -
Proceeds from sale of United States Treasury Note.... 5,320 616
-------- --------
Net cash provided by investing activities............. 1,860 161
-------- --------
Cash flows from financing activities:
Distributions paid................................... (3,717) (5,703)
-------- --------
Net increase (decrease) in cash and cash equivalents.. 254 (790)
Cash and cash equivalents, at beginning of period..... 222 1,877
-------- --------
Cash and cash equivalents, at end of period........... $ 476 $ 1,087
======== ========
</TABLE>
(a) Payments to related parties totaling $308,000 and $269,000 for the nine
months ended September 30, 1994 and 1993, respectively, are included in cash
paid to suppliers. See Note 2.
(b) Payments from related parties totaling $1.5 million and $4 million for the
nine months ended September 30, 1994 and 1993, respectively, are included
in interest received. See Note 3.
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE>
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
Notes to Financial Statements
September 30, 1994
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
- - ------------------------------
The financial statements reflect all adjustments necessary for a fair
presentation of the financial position of Consolidated Capital Institutional
Properties (the "Partnership") and the results of its operations. All
adjustments were of a normal recurring nature. However, the results of
operations for the nine months ended September 30, 1994, are not necessarily
indicative of the results to be expected for the year ending December 31, 1994.
The financial statements should be read in conjunction with the financial
statements contained in the Partnership's Annual Report on Form 10-K for the
year ended December 31, 1993 (the "1993 Annual Report"), and the notes thereto,
as filed with the Securities and Exchange Commission, which is available upon
request by writing to the General Partner, ConCap Equities, Inc. ("CEI"),
Investor Relations, 5520 LBJ Freeway, Suite 430, Dallas, Texas 75240.
Presentation of Accounts
- - ------------------------
Certain prior period amounts within the accompanying financial statements have
been reclassified to conform with current presentation.
NOTE 2 - RELATED PARTY TRANSACTIONS
- - -----------------------------------
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 nine month periods ended September 30, 1994 and 1993. A portion of such
property management fees equal to 4% of Rental Revenues has been paid to the
property management company performing day-to-day property management services
and the portion equal to 1% of Rental Revenues has been paid to Partnership
Services, Inc. ("PSI") for advisory services related to day-to-day property
operations. Prior to July 1993, day-to-day property management services were
provided to the Partnership's property by an unaffiliated management company.
In July 1993, Coventry Properties, Inc. ("Coventry"), an affiliate of the
General Partner, assumed day-to-day property management responsibilities for the
Partnership's property under the same management fee arrangement as the
unaffiliated management company. Fees paid to PSI and Coventry have been
reflected in the table below as compensation to related parties:
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
-----------------------
COMPENSATION 1994 1993
- - ------------ -------- --------
(in thousands)
<S> <C> <C>
Charged to property operations expense:
Property management fees............... $ 48 $ 22
======== ========
</TABLE>
The Partnership Agreement provides for reimbursement to the general partner and
its affiliates for costs incurred in connection with administration of
Partnership activities and for reimbursement to Coventry for expenses related to
property operations (primarily salaries and related costs for on-site property
personnel). The General Partner and its affiliates, including Coventry,
received reimbursements included in the following table:
-6-
<PAGE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
-----------------------
REIMBURSEMENT 1994 1993
- - ------------- -------- --------
(in thousands)
<S> <C> <C>
Charged to property operations expense:
Reimbursement of direct property expense... $ 101 $ 25
Charged to administrative expenses:
Reimbursement of administrative expenses
(including payroll reimbursements)........ 159 222
-------- --------
$ 260 $ 247
======== ========
</TABLE>
In addition to the compensation and reimbursements described above, interest
payments are received from and loan advances are made to Consolidated Capital
Equity Partners ("CCEP") pursuant to the New Master Loan Agreement, which is
described more fully in the 1993 Annual Report. See Note 3.
NOTE 3 - NET INVESTMENT IN MASTER LOAN
- - --------------------------------------
Interest due to the Partnership according to the terms of the New Master Loan
Agreement but not recognized in the income statements totaled approximately $6.1
million and $18.6 million for the three and nine months ended September 30,
1994, respectively, and $5.5 million and $15.1 million for the three and nine
months ended September 30, 1993, respectively. At September 30, 1994, cumulative
unrecognized interest totaling approximately $104.8 million was not included in
the balance of the investment in Master Loan.
In February 1994, the Partnership advanced $40,000 to CCEP as an advance on the
Master Loan. CCEP then advanced $40,000 to New Carlton House Partners as an
advance on the note receivable secured by the Carlton House Apartment and Office
Building ("Carlton House") to pay the remaining balance of 1993 property taxes
that were due.
NOTE 4 - COMMITMENT
- - -------------------
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies of not less than 5% of Net Invested Capital,
as defined in the Partnership Agreement. Reserves, including cash and cash
equivalents and Treasury Notes (at market), totaling approximately $9.3 million
at September 30, 1994, were greater than the reserve requirement of $8 million.
NOTE 5 - DISTRIBUTIONS
- - ----------------------
In March 1994, the General Partner distributed approximately $2.3 million or
$11.75 per Unit to the Limited Partners and paid a matching general partner
distribution of approximately $24,000. In September 1994, the General Partner
distributed approximately $1.4 million or $6.77 per unit to Limited Partners and
accrued a matching general partner distribution of approximately $13,000.
NOTE 6 - OTHER INCOME
- - ---------------------
As described in the 1993 Annual Report, the Partnership (and simultaneously 15
affiliated partnerships) entered claims in Southmark Corporation's Chapter 11
bankruptcy proceeding in 1991. 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 affiliated partnerships' allowed claim at $11 million, in aggregate. In
March 1994, the Partnership received cash, 909 shares of Southmark Corporation
Redeemable Series A Preferred Stock and 6,651 shares of Southmark Corporation
New Common Stock, with a total market value on the date of receipt of $56,000,
representing the Partnership's share of the recovery based on its pro rata
portion of claims filed.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- - ------ ---------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
RESULTS OF OPERATIONS
- - ---------------------
Property Operations:
For the three and nine months ended September 30, 1994, rental revenues
increased $23,000 or 7% and $97,000 or 11%, respectively, over 1993, primarily
due to increased rental rates at the Loft Apartments.
Property operation expenses for the three months ended September 30, 1994,
increased $9,000 or 6% compared with the same period in 1993, primarily as a
result of increased personnel costs. Property operation expenses for the nine
months ended September 30, 1994, decreased $56,000 or 11%, primarily as a result
of decreased personnel and replacement costs.
Administrative Expenses:
Administrative expenses for the three and nine month period ended September 30,
1994 decreased $51,000 or 37% and $221,000 or 39%, respectively, compared to the
same periods in 1993, primarily because of a decrease in data processing and
administrative overhead expenses.
Income on Investment in Master Loan:
As described below under "Status of the Master Loan," income on the investment
in Master Loan is based on operations of CCEP's properties which secure the
Master Loan. The following table summarizes the sources of income on the
investment in Master Loan with respect to CCEP's operations during the nine
months ended September 30, 1994 and 1993, respectively:
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
--------------------
1994 1993
-------- --------
<S> <C> <C>
Funds provided by property operations.......... $ 13,445 $ 13,421
Funds used for property operations (includes
administrative expenses)...................... (10,564) (9,569)
Proceeds from sale of property................. 130 -
Debt service payments on underlying notes
payable....................................... (798) (939)
-------- --------
Net funds from property operations............. 2,213 2,913
Collection of note receivable.................. - 150
-------- --------
Total funds from operations.................... 2,213 3,063
Advance on Carlton House note receivable....... (589) -
Net investing activity......................... 37 16
-------- --------
Net funds provided............................. $ 1,661 $ 3,079
======== ========
Income from the investment in Master Loan $ 1,661 $ 3,079
======== ========
</TABLE>
Income from the investment in Master Loan during the nine months ended September
30, 1994, decreased $1.4 million or 46% from 1993. Net funds provided by CCEP
for Master Loan payments decreased as a result of several factors as hereinafter
described. Funds used for CCEP property operations increased $995,000 or 10% in
1994 because of increases in replacements and refurbishments and an increase in
service and utility expenses. Debt service payments to CCEP third party lien
holders decreased $141,000 or 15% from 1993 as a result of the maturity and
payoff of a note payable and the modification of a note payable to eliminate
mortgage interest participation during the third quarter of 1993. In August
1994, CCEP sold a tract of land and the related improvements adjacent to one of
the Partnership's properties and received proceeds of approximately $130,000.
In March 1994, CCEP advanced $589,000 to New Carlton House Partners, as an
advance on the Carlton House Note, to pay Carlton House's 1994 property taxes in
an effort to protect CCEP's interest in the property. As discussed in the 1993
Annual Report, all cash flows generated by Carlton House are being reinvested in
the property.
-8-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
Nine Months Ended September 30, 1994
- - ------------------------------------
The Partnership's net cash inflows totaling approximately $7.4 million for the
nine months ended September 30, 1994, consisted of proceeds from the sale of
United States Treasury Notes of approximately $5.3 million and net cash provided
by operations of approximately $2.1 million. The Partnership's uses of cash for
the same nine month period, totaling approximately $7.2 million, were primarily
distributions paid to Limited Partners of $3.7 million and purchase of United
States Treasury Notes of approximately $3.4 million.
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies of not less than 5% of Net Invested Capital,
as defined in the Partnership Agreement. Reserves, including cash and cash
equivalents and United States Treasury Notes (at market), totaling approximately
$9.3 million, were greater than the reserve requirement of approximately $8
million at September 30, 1994.
Status of the Master Loan
- - -------------------------
In February 1994, the Partnership advanced $40,000 to CCEP as an advance on the
Master Loan. CCEP then advanced $40,000 to New Carlton House Partners as an
advance on the note receivable secured by the Carlton House Apartment and Office
Building ("Carlton House") to pay the remaining balance of Carlton House's 1993
property taxes that were due.
CCEP Property Operations
- - ------------------------
For the three and nine months ended September 30, 1994, CCEP's net loss totaled
approximately $7.2 million and $20.6 million on total revenues of $5.8 million
and $17 million primarily because CCEP's statements of operations include
interest expense of approximately $6.8 million and $20.3 million, attributable
to the Master Loan, of which approximately $6.1 million and $18.6 million
represents interest accrued in excess of required payments. CCEP recognizes
interest expense on the Master Loan obligation according to the note terms,
although payments to the Partnership are required only to the extent of excess
cash flow, as defined in the New Master Loan Agreement. CCEP will continue to
generate operating losses as a result of such interest accruals and noncash
charges for depreciation.
Distributions
- - -------------
In March 1994, the General Partner distributed approximately $2.3 million or
$11.75 per Unit to the Limited Partners and paid a matching general partner
distribution of approximately $24,000. In September 1994, the General Partner
distributed approximately $1.4 million or $6.77 per unit to Limited Partners and
accrued a matching general partner distribution of approximately $13,000.
Other Income
- - ------------
As described in the 1993 Annual Report, the Partnership (and simultaneously 15
affiliated partnerships) entered claims in Southmark Corporation's Chapter 11
bankruptcy proceeding in 1991. These claims related to Southmark Corporation's
activities while it exercised control (directly, or indirectly through its
affiliates) over the Partnership. The U.S. Bankruptcy Court set the
Partnership's and the Affiliated Partnership's allowed claim at $11 million, in
aggregate. In March 1994, The Partnership received cash, 909 shares of
Southmark Corporation Redeemable Series A Preferred Stock and 6,651 shares of
Southmark Corporation New Common Stock, with a total market value on the date of
receipt of $56,000, representing the Partnership's share of the recovery based
on its pro rata portion of claims filed.
-9-
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- - ------ -----------------
Neither the Partnership, nor CCEP, are parties to, nor are any of the
Partnership's or CCEP's properties the subject of, any material pending legal
proceedings as of September 30, 1994.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - ------ --------------------------------
(a) Exhibits.
<TABLE>
<CAPTION>
S-K REFERENCE SEQUENTIAL
NUMBER DESCRIPTION PAGE NUMBER
-------------- ----------- -----------
<S> <C> <C>
28.1 Consolidated Capital Equity Partners, L.P.,
unaudited Financial Statements for the nine
months ended September 30, 1994 and 1993.
</TABLE>
(b) Reports on Form 8-K:
None.
-10-
<PAGE>
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
SIGNATURE PAGE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
By: CONCAP EQUITIES, INC.
Its General Partner,
November 21, 1994 By: /s/ David C. Meek
- - ----------------- ---------------------------------
Date David C. Meek
President
November 21, 1994 By: /s/ David K. Ronck
- - ----------------- ---------------------------------
Date David K. Ronck
Vice President and Secretary
November 21, 1994 By: /s/ Patricia L. Campbell
- - ----------------- ---------------------------------
Date Patricia L. Campbell
Vice President and Treasurer (chief accounting
officer)
-11-
<PAGE>
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
UNAUDITED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1994 AND 1993
-12-
<PAGE>
CONSOLIDATED CAPITAL EQUITY PARTNERS L.P.
BALANCE SHEETS
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1994 1993
- - ------ ------------- -----------
<S> <C> <C>
Real estate, net of accumulated depreciation.. $ 42,270 $ 45,140
Real estate assets of property in-substance
foreclosed, net of accumulated depreciation.. 19,684 19,808
----------- -----------
61,954 64,948
Cash and cash equivalents 3,126 2,429
Investment in United States Treasury Notes
at cost...................................... 195 -
Investments in limited partnerships........... 2,508 2,508
Other assets.................................. 1,362 1,083
----------- -----------
$ 69,145 $ 70,968
=========== ===========
<CAPTION>
LIABILITIES AND PARTNERS' DEFICIT
- - ---------------------------------
<S> <C> <C>
Master Loan and interest payable.............. $ 232,444 $ 213,798
Notes and interest payable.................... 4,858 5,338
Due to affiliates............................. 850 620
Other liabilities............................. 2,325 1,897
----------- -----------
240,477 221,653
----------- -----------
Partners' deficit:
Limited Partners............................. (169,619) (149,178)
General Partner.............................. (1,713) (1,507)
----------- -----------
(171,332) (150,685)
----------- -----------
$ 69,145 $ 70,968
=========== ===========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-13-
<PAGE>
CONSOLIDATED CAPITAL EQUITY PARTNERS L.P.
STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------- --------------------
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Rental income............... $ 5,766 $ 4,504 $ 16,964 $ 13,385
Interest.................... 34 6 50 167
-------- -------- -------- --------
Total revenues............ 5,800 4,510 17,014 13,552
-------- -------- -------- --------
Costs and expenses:
Interest (a)................ 6,945 6,241 20,629 18,601
Property operations (b)..... 4,277 3,136 11,814 8,525
Depreciation................ 1,589 1,252 4,568 3,926
Administrative (b).......... 261 141 650 549
-------- -------- -------- --------
Total costs and expenses.. 13,072 10,770 37,661 31,601
-------- -------- -------- --------
Net loss..................... $ (7,272) $ (6,260) $(20,647) $(18,049)
======== ======== ======== ========
</TABLE>
(a) Interest expense includes $6.8 million and $6.1 million to related parties
for the three months ended September 30, 1994 and 1993, respectively, and
$20.3 million and $18.1 million for the nine months ended September 30,
1994 and 1993, respectively. See supplemental information with respect to
related party transactions in Note 2 of the financial statements.
(b) Costs and expenses include $432,000 and $225,000 to related parties for the
three months ended September 30, 1994 and 1993, respectively, and $1.5
million and $573,000 for the nine months ended September 30, 1994 and 1993,
respectively. See supplemental information with respect to related party
transactions in Note 2 of the financial statements.
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-14-
<PAGE>
CONSOLIDATED CAPITAL EQUITY PARTNERS L.P.
STATEMENTS OF PARTNERS' DEFICIT
(unaudited)
For the Nine Months Ended September 30, 1994 and 1993
(in thousands)
<TABLE>
<CAPTION>
TOTAL
GENERAL LIMITED PARTNERS'
PARTNER PARTNERS DEFICIT
------- -------- ---------
<S> <C> <C> <C>
Balance at December 31, 1992...... $(1,225) $ (121,258) $ (122,483)
Net loss.......................... (180) (17,869) (18,049)
------- ---------- ----------
Balance at September 30, 1993..... $(1,405) $ (139,127) $ (140,532)
======= ========== ==========
Balance at December 31, 1993...... $(1,507) $ (149,178) $ (150,685)
Net loss.......................... (206) (20,441) (20,647)
------- ---------- ----------
Balance at September 30, 1994..... $(1,713) $ (169,619) $ (171,332)
======= ========== ==========
</TABLE>
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-15-
<PAGE>
CONSOLIDATED CAPITAL EQUITY PARTNERS L.P.
STATEMENTS OF CASH FLOWS
(unaudited)
Increase (Decrease) in Cash and Cash Equivalents
(in thousands)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
---------------------
1994 1993
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Cash received from tenants........................... $ 16,976 $ 13,403
Cash paid to suppliers (a)........................... (11,336) (8,286)
Interest received.................................... 50 167
Interest paid (b).................................... (1,837) (4,421)
Property taxes paid.................................. (915) (351)
-------- --------
Net cash provided by operating activities............. 2,938 512
-------- --------
Cash flows from investing activities:
Additions to real estate............................. (1,736) (410)
Purchase of United States Treasury Notes............. (195) -
Proceeds from sale of real estate.................... 130 -
------- --------
Net cash used in investing activities................. (1,801) (410)
------- --------
Cash flows from financing activities:
Advances on Master Loan.............................. 40 340
Principal payments on notes payable.................. (480) (459)
------- --------
Net cash used in financing activities................. (440) (119)
------- --------
Net increase (decrease) in cash and cash equivalents.. 697 (17)
Cash and cash equivalents, at beginning of period..... 2,429 998
------- --------
Cash and cash equivalents, at end of period........... $ 3,126 $ 981
======= ========
</TABLE>
(a) Payments to related parties totaling $1.5 million and $573,000 for the
nine months ended September 30, 1994 and 1993, respectively, are included in
cash paid to suppliers.
(b) Payments to related parties totaling $1.5 million and $4 million for the
nine months ended September 30, 1994 and 1993, are included in interest
paid.
See supplemental information with respect to related party
transactions in Notes 2 and 3 of the financial statements.
The financial information included herein has been prepared by management
without audit by independent public accountants.
The accompanying notes are an integral part of the financial statements.
-16-
<PAGE>
CONSOLIDATED CAPITAL EQUITY PARTNERS L.P.
Notes to Financial Statements
September 30, 1994
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
- - ------------------------------
The financial statements reflect all adjustments necessary for a fair
presentation of the financial position of Consolidated Capital Equity Partners,
L.P. ("CCEP") and the results of its operations. All adjustments were of a
normal recurring nature. However, the results of operations for the nine months
ended September 30, 1994, are not necessarily indicative of the results to be
expected for the year ending December 31, 1994.
The financial statements should be read in conjunction with the financial
statements contained in Consolidated Capital Institutional Properties' ("CCIP")
Annual Report on Form 10-K for the year ended December 31, 1993 (the "1993
Annual Report"), and the notes thereto, as filed with the Securities and
Exchange Commission, which is available upon request by writing to CCIP's
general partner, ConCap Equities, Inc. ("CEI"), Investor Relations, 5520 LBJ
Freeway, Suite 430, Dallas, Texas 75240.
Presentation of Accounts
- - ------------------------
Certain prior period amounts within the accompanying financial statements have
been reclassified to conform with current presentation.
NOTE 2 - RELATED PARTY TRANSACTIONS
- - -----------------------------------
CCEP has paid property management fees equal to 5% of collected gross rental
revenues ("Rental Revenues") for property management services in each of the
nine month periods ended September 30, 1994 and 1993. A portion of such
property management fees equal to 4% of Rental Revenues has been paid to the
property management companies performing day-to-day property management services
and the portion equal to 1% of Rental Revenues has been paid to Partnership
Services, Inc. ("PSI") for advisory services related to day-to-day property
operations. Prior to July 1993, day-to-day property management services were
provided to CCEP's properties by unaffiliated management companies. In July
1993, Coventry Properties, Inc. ("Coventry"), an affiliate of CCEP's general
partner, ConCap Holdings, Inc. ("CHI"), assumed day-to-day property management
responsibilities for two of CCEP's properties under the same management fee
arrangement as the unaffiliated management companies. Coventry assumed day-to-
day property management responsibilities for two additional CCEP properties in
January 1994. The management fee arrangements with Coventry and the
unaffiliated management companies also provide for the payment of leasing
commissions to the management companies as compensation for their services in
connection with obtaining new or renewed leases with tenants of the commercial
office buildings. Fees paid to PSI and Coventry have been reflected in the
table below as compensation to related parties.
Also, CCEP is subject to an Investment Advisory Agreement between CCEP and an
affiliate of CHI. This agreement provides for an annual fee, payable in monthly
installments, to an affiliate of CHI for advising and consulting services for
CCEP's properties. Advisory fees paid pursuant to this agreement are reflected
in the following table:
-17-
<PAGE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
---------------------------
COMPENSATION 1994 1993
- - ------------ ---------- ----------
(in thousands)
<S> <C> <C>
Charged to other assets:
Lease commissions........................ $ 70 $ -
Charged to property operations expenses:
Property management fees................. 326 160
Charged to administrative expenses:
Investment advisory fee.................. 193 172
---------- ----------
$ 589 $ 332
========== ==========
</TABLE>
The New Partnership Agreement, as defined in the 1993 Annual Report, provides
for reimbursement to the general partner and its affiliates for costs incurred
in connection with administration of CCEP's activities and for reimbursement to
Coventry for expenses related to property operations (primarily salaries and
related costs for on-site property personnel). CHI and its affiliates, including
Coventry, received reimbursements included in the following table:
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30,
---------------------------
REIMBURSEMENT 1994 1993
- - ------------- ---------- ----------
(in thousands)
<S> <C> <C>
Charged to property operations:
Reimbursement of direct property expense.. $ 632 $ 63
Charged to administrative expenses:
Reimbursement of administrative expenses
(including payroll reimbursements)....... 227 178
---------- ----------
$ 859 $ 241
========== ==========
</TABLE>
In addition to the compensation and reimbursements described above, interest
payments are made to and loan advances are received from CCIP pursuant to the
New Master Loan Agreement, which is described more fully in the 1993 Annual
Report. Such interest payments totaled $1.5 million and $4 million in the nine
months ended September 30, 1994 and 1993, respectively. CCEP received advances
under the New Master Loan Agreement totaling $40,000 and $340,000 in the nine
months ended September 30, 1994 and 1993, respectively.
NOTE 3 - MASTER LOAN AND ACCRUED INTEREST PAYABLE
- - -------------------------------------------------
In February 1994, CCIP advanced $40,000 to CCEP as an advance on the Master
Loan. CCEP then advanced $40,000 to New Carlton House Partners as an advance on
the note receivable secured by the Carlton House Apartment and Office Building
("Carlton House") to pay the remaining balance of Carlton House's 1993 property
taxes that were due.
NOTE 4 - NOTE RECEIVABLE DEEMED IN-SUBSTANCE FORECLOSED
- - -------------------------------------------------------
As more fully described in the 1993 Annual Report, the Carlton House Note is
deemed in-substance foreclosed. Summarized below are the assets, liabilities and
partner's equity of New Carlton House Partners as of September 30, 1994 and
December 31, 1993, and the results of its operations for the nine month period
ended September 30, 1994, prepared on the same basis as CCEP's financial
statements. Results of operations for the nine month period ended September 30,
1993, have not been presented below as Carlton House was not deemed in-substance
foreclosed until September 30, 1993. Any intercompany balances between CCEP and
Carlton House have been eliminated in CCEP's consolidated financial statements
and the summarized financial statements set forth below:
-18-
<PAGE>
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
ASSETS 1994 1993
------ ------------- ------------
(in thousands)
<S> <C> <C>
Real estate:
Land.................................. $ 3,805 $ 3,805
Buildings and improvements............ 16,753 16,205
------------- ------------
20,558 20,010
Less: Accumulated depreciation....... (874) (202)
------------- ------------
19,684 19,808
Cash and cash equivalents............... 1,001 997
United States Treasury Notes at cost
(market - $195)........................ 195 -
Prepaid expenses and other assets...... 143 149
------------- ------------
$ 21,023 $ 20,954
============= ============
<CAPTION>
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
<S> <C> <C>
Note and interest payable............... $ 20 $ 58
Other liabilities....................... 229 474
------------- ------------
Total liabilities....................... 249 532
------------- ------------
Partners' equity........................ 20,774 20,422
------------- ------------
Total liabilities and partners' equity. $ 21,023 $ 20,954
============= ============
</TABLE>
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1994
--------------------------
(in thousands)
<S> <C>
Rental revenue.......................... $ 3,498
--------
Costs and expenses:
Property operations.................... 3,136
Depreciation........................... 672
Interest............................... 3
Administrative......................... 25
--------
Total costs and expenses................ 3,836
--------
Net loss................................ $ (338)
========
</TABLE>
-19-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements of Consolidated Capital Institutional Properties/2 as filed
in the Partnership's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1994 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1
<CASH> 1,314
<SECURITIES> 9,769
<RECEIVABLES> 91,838
<ALLOWANCES> (39,730)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 10,686
<DEPRECIATION> 2,339
<TOTAL-ASSETS> 71,985
<CURRENT-LIABILITIES> 310
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 71,675
<TOTAL-LIABILITY-AND-EQUITY> 71,985
<SALES> 0
<TOTAL-REVENUES> 2,686
<CGS> 0
<TOTAL-COSTS> 2,447
<OTHER-EXPENSES> (44)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 275
<INCOME-TAX> 0
<INCOME-CONTINUING> 275
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 275
<EPS-PRIMARY> .30
<EPS-DILUTED> 0
</TABLE>
