FORM 10-Q--QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 1999
[ ] 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 0-11002
CONSOLIDATED CAPITAL PROPERTIES IV
(Exact name of registrant as specified in its charter)
California 94-2768742
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
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 (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 IV
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
June 30, December 31,
1999 1998
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 8,059 $ 13,241
Receivables and deposits 1,835 2,246
Restricted escrows 2,072 2,743
Other assets 1,474 1,459
Investment properties:
Land 12,491 12,491
Buildings and related personal property 123,229 121,741
135,720 134,232
Less accumulated depreciation (105,351) (103,250)
30,369 30,982
$ 43,809 $ 50,671
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 333 $ 379
Tenant security deposit liabilities 568 568
Accrued property taxes 1,022 1,309
Other liabilities 1,208 1,045
Mortgage notes payable 70,553 70,775
73,684 74,076
Partners' Deficit
General partner (6,434) (6,175)
Limited partners (342,773 units issued
and outstanding at June 30, 1999
and December 31, 1998) (23,441) (17,230)
(29,875) (23,405)
$ 43,809 $ 50,671
Note: The balance sheet at December 31, 1998, has been derived from the
audited financial statements at that date but does not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements.
See Accompanying Notes to Consolidated Financial Statements
b)
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 7,029 $ 6,900 $14,117 $13,745
Other income 560 542 1,023 1,053
Casualty gain -- -- -- 227
Total revenues 7,589 7,442 15,140 15,025
Expenses:
Operating 2,833 3,234 5,551 6,307
General and administrative 263 227 1,024 647
Depreciation 1,049 1,170 2,101 2,318
Interest 1,419 1,457 2,840 2,929
Property taxes 487 413 950 902
Total expenses 6,051 6,501 12,466 13,103
Net income $ 1,538 $ 941 $ 2,674 $ 1,922
Net income allocated to general
partner (4%) $ 62 $ 38 $ 107 $ 77
Net income allocated to limited
partners (96%) 1,476 903 2,567 1,845
$ 1,538 $ 941 $ 2,674 $ 1,922
Net income per limited partnership unit $ 4.31 $ 2.64 $ 7.49 $ 5.38
Distributions per limited partnership unit $ -- $ -- $ 25.61 $ 6.16
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
c)
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited Total
Partnership General Limited Partners'
Units Partner Partners Deficit
Original capital contributions 343,106 $ 1 $171,553 $171,554
Partners' deficit at
December 31, 1997 342,773 $(6,174) $(17,204) $(23,378)
Net income for the six months
ended June 30, 1998 -- 77 1,845 1,922
Distribution to partners -- (92) (2,112) (2,204)
Partners' deficit at
June 30, 1998 342,773 $(6,189) $(17,471) $(23,660)
Partners' deficit at
December 31, 1998 342,773 $(6,175) $(17,230) $(23,405)
Net income for the six months
ended June 30, 1999 -- 107 2,567 2,674
Distribution to partners -- (366) (8,778) (9,144)
Partners' deficit at
June 30, 1999 342,773 $(6,434) $(23,441) $(29,875)
See Accompanying Notes to Consolidated Financial Statements
d)
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1999 1998
Cash flows from operating activities:
Net income $ 2,674 $ 1,922
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 2,101 2,318
Amortization of loan costs 158 157
Loss on disposition of investment property -- 27
Casualty gain -- (227)
Change in accounts:
Receivables and deposits 411 31
Other assets (173) 114
Accounts payable (46) 40
Tenant security deposit liabilities -- (6)
Accrued property taxes (287) (204)
Other liabilities 163 39
Net cash provided by operating activities 5,001 4,211
Cash flows from investing activities:
Property improvements and replacements (1,488) (1,774)
Net withdrawals from (deposits to) restricted escrows 671 (46)
Collections of note receivable -- 23
Net insurance proceeds from casualty gain -- 205
Net cash used in investing activities (817) (1,592)
Cash flows from financing activities:
Payments on mortgage notes payable (222) (214)
Distributions to partners (9,144) (2,204)
Loan costs paid -- (17)
Net cash used in financing activities (9,366) (2,435)
Net (decrease) increase in cash and cash equivalents (5,182) 184
Cash and cash equivalents at beginning of period 13,241 12,090
Cash and cash equivalents at end of period $ 8,059 $12,274
Supplement Disclosures of Cash Flow Information and Non-Cash Activities:
Cash paid for interest was approximately $2,684,000 and $2,773,000 for the six
months ended June 30, 1999 and 1998, respectively.
At June 30, 1998, accounts payable and property improvements and replacements
were each adjusted by approximately $37,000 and receivables and deposits were
adjusted by approximately $27,000 for non-cash activity.
See Accompanying Notes to Consolidated Financial Statements
e)
CONSOLIDATED CAPITAL PROPERTIES IV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties IV (the "Partnership") have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Article 10 of Regulation S-X.
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 and six month
periods ended June 30, 1999, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 1999. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Partnership's Annual Report on Form 10-K for the fiscal
year ended December 31, 1998.
Consolidation
The consolidated financial statements include the Partnership's majority
interest in a joint venture which owns South Port Apartments. The Partnership
has the ability to control the major operating and financial policies of the
joint venture. No minority interest has been reflected for the joint venture
because minority interests are limited to the extent of their equity capital,
and losses in excess of the minority interest equity capital are charged against
the Partnership's interest.
The Partnership's consolidated financial statements also include the accounts of
the Partnership, its wholly-owned partnerships and its 99% limited partnership
interest in Briar Bay Apartments Associates, Ltd., Post Ridge Associates, Ltd.,
ConCap Rivers Edge Associates, Ltd., and ConCap Stratford Associates, Ltd. The
Partnership may remove the general partner of its 99%-owned partnerships;
therefore, these partnerships are controlled and consolidated by the
Partnership. All significant interpartnership balances have been eliminated.
NOTE B - TRANSFER OF CONTROL
Upon the Partnership's formation in 1981, Consolidated Capital Equities
Corporation ("CCEC"), a Colorado corporation, was the corporate general partner
and Consolidated Capital Management Company ("CCMC"), a California general
partnership, was the non-corporate general partner. In 1988, through a series
of transactions, Southmark Corporation ("Southmark") acquired a controlling
interest in CCEC. In December 1988, CCEC filed for reorganization under Chapter
11 of the United States Bankruptcy Code. In 1990, as part of its reorganization
plan, CEI acquired CCEC's general partner interests in the Partnership and in 15
other affiliated public limited partnerships (the "Affiliated Partnerships") and
CEI replaced CCEC as managing general partner in all 16 partnerships. The
selection of CEI as the sole managing general partner was approved by a majority
of the Limited Partners in the Partnership and in each of the affiliated
partnerships pursuant to a solicitation of the Limited Partners dated August 10,
1990. As part of this solicitation, the Limited Partners also approved an
amendment to the Partnership Agreement to limit changes of control of the
Partnership, and the conversion of CCMC from a general partner to a special
limited partner, thereby leaving CEI as the sole general partner of the
Partnership. On November 14, 1990, CCMC was dissolved and its special limited
partnership interest was divided among its former partners. All of CEI's
outstanding stock was owned by Insignia Properties Trust ("IPT") (See below).
Pursuant to a series of transactions which closed on October 1, 1998 and
February 26, 1999, Insignia and IPT merged into Apartment Investment and
Management Company ("AIMCO"), a publicly traded real estate investment trust,
with AIMCO being the surviving corporation (the "Insignia Merger"). As a
result, AIMCO acquired 100% ownership interest in the General Partner. The
General Partner does not believe that this transaction will have a material
effect on the affairs and operations of the Partnership.
NOTE C - 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 Partnership activities.
The Partnership Agreement provides for certain payments to affiliates for
services and as reimbursements of certain expenses incurred by affiliates on
behalf of the Partnership. The following transactions with the General Partner
and/or its affiliates were charged to expense for each of the six months ended
June 30, 1999 and 1998:
1999 1998
(in thousands)
Property management fees (included
in operating expenses) $765 $732
Reimbursement for services of affiliates,
(included in investment properties and general
and administrative and operating expenses) 286 324
Partnership management fee (included in general 555 190
and administrative expense)
During the six months ended June 30, 1999 and 1998, affiliates of the General
Partner were entitled to receive 5% of gross receipts from all of the
Partnership's properties as compensation for providing property management
services. The Partnership paid to such affiliates approximately $765,000 and
$732,000 for the six months ended June 30, 1999 and 1998, respectively.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $286,000 and $324,000 for the
six months ended June 30, 1999 and 1998, respectively. Included in such costs
for the six months ended June 30, 1999 and 1998, is approximately $8,000 and
$35,000, respectively, in reimbursement for construction oversight costs.
The Partnership Agreement provides for a special management fee equal to 9% of
the total distributions made to the limited partners from cash flow provided by
operations to be paid to the General Partner for executive and administrative
management services. The Partnership paid approximately $555,000 and $190,000
under this provision of the Partnership Agreement to the General Partner during
the six months ended June 30, 1999 and 1998, respectively.
In addition to reimbursement for services of affiliates in 1998, the Partnership
paid an affiliate of the General Partner approximately $7,000 for loan costs
related to the 1997 refinancing of South Port Apartments. These costs were
capitalized and are included in other assets on the consolidated balance sheets.
On May 13, 1999, AIMCO Properties, L.P., an affiliate of the Managing General
Partner commenced a tender offer to purchase up to 108,405.39 (31.63% of the
total outstanding units) units of limited partnership interest in the
Partnership for a purchase price of $148 per unit. The offer expired on July
30, 1999. Pursuant to the offer, AIMCO Properties, L.P. acquired 8,322.50
units. As a result, AIMCO and its affiliates currently own 114,480.5 units of
limited partnership interest in the Partnership representing 33.4% of the total
outstanding units. It is possible that AIMCO or its affiliate will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO.
NOTE D - CONTINGENCIES
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies of $500 per apartment unit owned by the
Partnership, or approximately $2,100,000. 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, totaling approximately $8,059,000 at June 30, 1999,
exceeded the Partnership's reserve requirements of approximately $2,100,000.
NOTE E - DISTRIBUTIONS
In January 1999, the General Partner declared and paid a distribution
attributable to cash flow from operations of approximately $6,422,000
(approximately $6,165,000 to the limited partners, $17.99 per limited
partnership unit) and approximately $2,722,000 (approximately $2,613,000 to the
limited partners, $7.62 per limited partnership unit) representing a return of
capital.
In March 1998, the General Partner declared and paid a distribution attributable
to cash flow from operations of approximately $2,204,000 (approximately
$2,112,000 to the limited partners, $6.16 per limited partnership unit).
Subsequent to June 30, 1999, the Partnership approved a distribution from
operations of $1,250,000.
NOTE F - CASUALTY GAINS
In November 1997, Overlook Apartments had a fire which destroyed one apartment
unit and caused water and smoke damage in the remaining apartment units in the
building. Insurance proceeds of $200,000 were received during the six months
ended June 30, 1998, with approximately an additional $27,000 receivable from
the insurer. Repairs were made and the related costs were capitalized as a part
of the investment property. In accordance with generally accepted accounting
principles, the total insurance proceeds were recorded as a casualty gain of
approximately $227,000 during the six months ended June 30, 1998. Total
insurance proceeds received and receivable at June 30, 1998, approximated the
cost of replacement.
NOTE G - SEGMENT REPORTING
Description of the types of products and services from which the reportable
segment derives its revenues: The Partnership has one reportable segment:
residential properties. The Partnership's residential property segment consists
of seventeen apartment complexes located in ten states in the southeastern,
western and mid-western United States. The Partnership rents apartment units to
tenants for terms that are typically twelve months or less.
Measurement of segment profit or loss: The Partnership evaluates performance
based on net income. The accounting policies of the reportable segment are the
same as those of the Partnership as described in the Partnership's Annual Report
on Form 10-K for the year ended December 31, 1998.
Factors management used to identify the Partnership's reportable segments: The
Partnership's reportable segment consists of investment properties that offer
similar products and services. Although each of the investment properties are
managed separately, they have been aggregated into one segment as they provide
services with similar types of products and customers.
Segment information for the six months ended June 30, 1999 and 1998, is shown in
the tables below (in thousands). The "Other" column includes partnership
administration related items and income and expense not allocated to the
reportable segment.
1999
Residential Other Totals
Rental income $14,117 $ -- $14,117
Other income 931 92 1,023
Interest expense 2,840 -- 2,840
Depreciation 2,101 -- 2,101
General and administrative expense -- 1,024 1,024
Segment profit (loss) 3,606 (932) 2,674
Total assets 37,824 5,985 43,809
Capital expenditures for investment
properties 1,488 -- 1,488
1998
Residential Other Totals
Rental income $13,745 $ -- $13,745
Other income 812 241 1,053
Casualty gain 227 -- 227
Interest expense 2,929 -- 2,929
Depreciation 2,318 -- 2,318
General and administrative expense -- 647 647
Segment profit (loss) 2,328 (406) 1,922
Total assets 37,165 14,626 51,791
Capital expenditures for investment
properties 1,774 -- 1,774
NOTE H - LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc. and
entities which were, at the time, affiliates of Insignia ("Insignia Affiliates")
of interests in certain general partner entities, past tender offers by Insignia
Affiliates to acquire limited partnership units, the management of partnerships
by Insignia Affiliates as well as a recently announced agreement between
Insignia and AIMCO. The complaint seeks monetary damages and equitable relief,
including judicial dissolution of the Partnership. On June 25, 1998, the General
Partner filed a motion seeking dismissal of the action. In lieu of responding
to the motion, the plaintiffs filed an amended complaint. The General Partner
filed demurrers to the amended complaint which were heard during February 1999.
No ruling on such demurrers has been received. The General Partner does not
anticipate that costs associated with this case, if any, will be material to the
Partnership's overall operations.
The Partnership is unaware of any other pending or outstanding litigation that
is not of a routine nature arising in the ordinary course of business.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
The matters discussed in this Form 10-Q contain certain forward-looking
statements and involve risks and uncertainties (including changing market
conditions, competitive and regulatory matters, etc.) detailed in the
disclosures contained in this Form 10-Q and the other filings with the
Securities and Exchange Commission made by the Partnership from time to time.
The discussion of the Partnership's business and results of operations,
including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Partnership's business and
results of operation. Accordingly, actual results could differ materially from
those projected in the forward-looking statements as a result of a number of
factors, including those identified herein.
The Partnership's investment properties consist of seventeen apartment
complexes. The following table sets forth the average occupancy for each of its
properties for the six months ended June 30, 1999 and 1998:
Average Occupancy
1999 1998
The Apartments
Omaha, NE 93% 96%
Arbours of Hermitage Apartments
Nashville, TN 95% 96%
Briar Bay Racquet Club Apartments
Miami, FL 97% 97%
Chimney Hill Apartments
Marietta, GA 95% 89%
Citadel Apartments
El Paso, TX 94% 96%
Citadel Village Apartments
Colorado Springs, CO 98% 96%
Foothill Place Apartments
Salt Lake City, UT 97% 94%
Knollwood Apartments
Nashville, TN 96% 94%
Lake Forest Apartments
Omaha, NE 85% 92%
Nob Hill Villa Apartments
Nashville, TN 93% 94%
Overlook Apartments
Memphis, TN 92% 89%
Point West Apartments
Charleston, SC 97% 97%
Post Ridge Apartments
Nashville, TN 96% 96%
Rivers Edge Apartments
Auburn, WA 96% 97%
South Port Apartments
Tulsa, OK 95% 96%
Stratford Place Apartments
Austin, TX 93% 92%
Village East Apartments
Cimarron Hills, CO 98% 95%
Occupancy for The Apartments decreased due to a number of unexpected move-outs
during the first quarter of 1999. The increase in occupancy at Chimney Hill
Apartments is attributable to a stronger local market, a more aggressive
marketing plan over the last six months, and the completion of extensive
renovations at the property in 1998. The increase in occupancy at Foothill Place
Apartments and Overlook Apartments can be attributed to a more intensified
marketing campaign over the past year. Lake Forest Apartments experienced a
decrease in occupancy due to a number of units temporarily lost due to
structural repairs and to potential tenants lost to new home purchases as a
result of attractive mortgage interest rates. A stronger marketing campaign
combined with the offering of rental concessions contributed to an increase in
occupancy at Village East Apartments.
Results of Operations
The Partnership's net income for the six months ended June 30, 1999, totaled
approximately $2,674,000 as compared to net income of approximately $1,922,000
for the corresponding period of 1998. The Partnership's net income for the
three months ended June 30, 1999, totaled approximately $1,538,000 as compared
to net income of approximately $941,000 for the corresponding period in 1998.
The increase in net income is attributable to a decrease in total expenses
combined with an increase in total revenues. Total expenses decreased due to
decreases in operating expenses and, to a lesser extent, decreases in
depreciation and interest expense. The decrease in operating expenses is
primarily attributable to a decrease in maintenance expense as the result of the
completion during the six months ended June 30, 1998, of exterior building
improvements including painting, landscaping, parking lot repairs, maintenance
supplies, interior improvements, and sewer repair costs at a number of the
Partnership's investment properties. Depreciation decreased in 1999 due to major
assets at several of the Partnership's investment properties becoming fully
depreciated during 1998. Interest expense decreased due to the pay off in 1998
of two first-lien mortgages associated with a previously sold property and to
the expected increase in the amount of debt service payments applied to the
principal portion of the Partnership's debt rather than charged to interest.
Partially offsetting these decreases in expense is an increase in general and
administrative and property tax expenses. The increase in general and
administrative expense is primarily attributable to an increase in the special
9% management fee related to distributions from operating cash flows paid to the
limited partners. Distributions from operations paid to the limited partners
increased by approximately $4,055,000 during the six months ended June 30, 1999,
as compared to the same period of 1998. Included in general and administrative
expenses at both June 30, 1999 and 1998, are reimbursements to the General
Partner allowed under the Partnership Agreement associated with its management
of the Partnership. In addition, costs associated with the quarterly and annual
communications with investors and regulatory agencies and the annual audit
required by the Partnership Agreement are also included. Property tax expense
increased due to the fact that no refunds were received in 1999 as opposed to
the tax refunds received in 1998 for the Partnership's Foothill Place property
as a result of tax appeals during the previous year and minor increases due to
increased tax billings at several of the Partnership's properties.
Total revenues increased due to an increase in rental income. For the six
months ended June 30, 1999, such increase was partially offset by decreases in
other income and casualty gains. The increase in rental income is primarily due
to increased rental rates at all of the Partnership's investment properties
accompanied by increased occupancy levels at a number of the properties which
more than offset occupancy decreases at other properties (see occupancy
discussion above). The decrease in other income is attributable to lower
average cash balances maintained in interest-bearing accounts during the last
twelve months. There was no casualty gain recognized during the six months ended
June 30, 1999 as was during the six months ended June 30, 1998. In November
1997, Overlook Apartments had a fire which destroyed one apartment unit and
caused water and smoke damage in the remaining apartment units in the building.
Insurance proceeds of $200,000 were received during the six months ended June
30, 1998, with approximately an additional $27,000 receivable from the insurer.
Repairs were made and the related costs were capitalized as a part of the
investment property. In accordance with generally accepted accounting
principles, the total insurance proceeds were recorded as a casualty gain of
approximately $227,000 during the six months ended June 30, 1998. Total
insurance proceeds received and receivable at June 30, 1998, approximated the
cost of replacement.
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.
Liquidity and Capital Resources
At June 30, 1999, the Partnership held cash and cash equivalents of
approximately $8,059,000, compared to approximately $12,274,000 at June 30,
1998. Cash and cash equivalents decreased approximately $5,182,000 for the six
months ended June 30, 1999 from the Partnership's year ended December 31, 1998.
This net decrease was comprised of approximately $9,366,000 of net cash used in
financing activities and approximately $817,000 of cash used in investing
activities, partially offset by net cash provided by operating activities of
approximately $5,001,000. Cash used in financing activities consisted primarily
of distributions to partners and, to a lesser extent, payments made on the
mortgages encumbering the Partnership's investment properties. Cash provided by
investing activities consisted of property improvements and replacements
partially offset by net withdrawals from escrow accounts maintained by mortgage
lenders. The Partnership invests its working capital reserves in money market
accounts.
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 properties to adequately maintain the physical
assets and meet other operating needs of the Partnership and to comply with
Federal, state, and local legal and regulatory requirements. Capital
improvements planned for each of the Partnership's properties are detailed
below.
The Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $117,000 for capital improvements at the property, consisting
primarily of carpet and vinyl replacement, landscaping, air conditioning
upgrades, and other improvements. These improvements were funded from
Partnership reserves and operating cash flow. Based on a report received from an
independent third party consultant analyzing necessary exterior improvements and
estimates made by the General Partner on interior improvements, it is estimated
that the property requires approximately $260,000 of capital improvements over
the next few years. The Partnership has budgeted, but is not limited to,
capital improvements of approximately $313,000 for 1999 at this property which
include certain of the required improvements and consist of carpet and vinyl
replacement, air conditioning units, landscaping, roof replacement, and other
building improvements.
Arbours of Hermitage Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $93,000 for capital improvements at the property, consisting
primarily of appliance replacement, carpet and flooring replacement, air
conditioning upgrades, and other building improvements. These improvements were
funded from the Partnership's operating cash flow. Based on a report received
from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the General Partner on interior improvements,
it is estimated that the property requires approximately $516,000 of capital
improvements over the next few years. The Partnership has budgeted, but is not
limited to, capital improvements of approximately $560,000 for 1999 at this
property which include certain of the required improvements and consist of
carpet and vinyl replacement, air conditioning units, landscaping, roof
replacement, swimming pool repairs, painting, structural and other building
improvements.
Briar Bay Racquet Club Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $42,000 for capital improvements at the property, consisting
primarily of parking lot repairs, plumbing upgrades, and carpet and vinyl
replacement. These improvements were funded from Partnership reserves and
operating cash flows. Based on a report received from an independent third
party consultant analyzing necessary exterior improvements and estimates made by
the General Partner on interior improvements, it is estimated that the property
requires approximately $114,000 of capital improvements over the next few years.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $139,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, electrical
upgrades, landscaping, and parking lot improvements.
Chimney Hill Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $103,000 for capital improvements at the property, consisting
primarily of floor covering replacement, cabinet replacements, and other
building improvements. These improvements were funded from the Partnership
reserves and operating cash flow. Based on a report received from an independent
third party consultant analyzing necessary exterior improvements and estimates
made by the General Partner on interior improvements, it is estimated that the
property requires approximately $180,000 of capital improvements over the next
few years. The Partnership has budgeted, but is not limited to, capital
improvements of approximately $252,000 for 1999 at this property which include
certain of the required improvements and consist of interior and exterior
building improvements.
Citadel Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $92,000 for capital improvements at the property, consisting
primarily of floor covering, landscaping, air conditioning upgrades, and
appliance replacements. These improvements were funded from the Partnership's
operating cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
General Partner on interior improvements, it is estimated that the property
requires approximately $227,000 of capital improvements over the next few years.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $256,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, air
conditioning units, electrical upgrades, landscaping, roof replacement, and
parking lot improvements.
Citadel Village Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $150,000 for capital improvements at the property, consisting
primarily of floor covering, roof replacement, and other improvements. These
improvements were funded from the Partnership's operating cash flow. Based on a
report received from an independent third party consultant analyzing necessary
exterior improvements and estimates made by the General Partner on interior
improvements, it is estimated that the property requires approximately $301,000
of capital improvements over the next few years. The Partnership has budgeted,
but is not limited to, capital improvements of approximately $216,000 for 1999
at this property which include certain of the required improvements and consist
of carpet and vinyl replacement, roof replacement, landscaping, and other
improvements.
Foothill Place Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $101,000 for capital improvements at the property, consisting
primarily of floor covering, appliance replacements, and landscaping
improvements. These improvements were primarily funded from Partnership
reserves. Based on a report received from an independent third party consultant
analyzing necessary exterior improvements and estimates made by the General
Partner on interior improvements, it is estimated that the property requires
approximately $273,000 of capital improvements over next few years. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $362,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, electrical
upgrades, landscaping, parking lot repairs, roof replacement, appliance
replacement, and structural improvements.
Knollwood Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $79,000 for capital improvements at the property, consisting
primarily of floor covering, air conditioning upgrades, counter tops, and
appliance replacements. These improvements were funded from the Partnership's
operating cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
General Partner on interior improvements, it is estimated that the property
requires approximately $584,000 of capital improvements over the next few years.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $626,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, electrical
upgrades, parking lot repairs, roof replacement, and structural and other
building improvements.
Lake Forest Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $233,000 for capital improvements at the property, consisting
primarily of structural and other repairs. These improvements were primarily
funded from Partnership reserves. Based on a report received from an independent
third party consultant analyzing necessary exterior improvements and estimates
made by the General Partner on interior improvements, it is estimated that the
property requires approximately $267,000 of capital improvements over the next
few years. The Partnership has budgeted, but is not limited to, capital
improvements of approximately $522,000 for 1999 at this property which include
certain of the required improvements and consist of carpet and vinyl
replacement, air conditioning units, landscaping, parking lot repairs, and other
improvements.
Nob Hill Villa Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $68,000 for capital improvements at the property, consisting
primarily of carpet and vinyl replacement, appliance replacement and other
building improvements. These improvements were primarily funded from
Partnership reserves. Based on a report received from an independent third
party consultant analyzing necessary exterior improvements and estimates made by
the General Partner on interior improvements, it is estimated that the property
requires approximately $275,000 of capital improvements over the next few years.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $292,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, air
conditioning units, electrical upgrades, roof replacement, and other
improvements.
Overlook Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $61,000 for capital improvements at the property, consisting
primarily of floor covering, appliance replacements, and other building
improvements. These improvements were funded from the Partnership's operating
cash flow. Based on a report received from an independent third party consultant
analyzing necessary exterior improvements and estimates made by the General
Partner on interior improvements, it is estimated that the property requires
approximately $557,000 of capital improvements over the next few years. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $238,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, roof
replacement, and other improvements.
Point West Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $18,000 for capital improvements at the property, consisting
primarily of carpet and vinyl replacement, structural repairs, and appliance
replacement. These improvements were funded from the Partnership's operating
cash flow. Based on a report received from an independent third party
consultant analyzing necessary exterior improvements and estimates made by the
General Partner on interior improvements, it is estimated that the property
requires approximately $132,000 of capital improvements over the next few years.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $119,000 for 1999 at this property which include certain of the
required improvements and consist of carpet replacement and landscaping.
Post Ridge Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $45,000 for capital improvements at the property, consisting
primarily of floor covering, plumbing repairs, and roof replacements. These
improvements were primarily funded from Partnership reserves. Based on a report
received from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the General Partner on interior improvements,
it is estimated that the property requires approximately $345,000 of capital
improvements over the next few years. The Partnership has budgeted, but is not
limited to, capital improvements of approximately $347,000 for 1999 at this
property which include certain of the required improvements and consist of
carpet and vinyl replacement, roof replacement, and parking lot repairs.
Rivers Edge Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $32,000 for capital improvements at the property, consisting
primarily of carpet and vinyl replacement, appliance replacement, landscaping
improvements, and other building improvements. These improvements were funded
from the Partnership's reserves and operating cash flow. Based on a report
received from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the General Partner on interior improvements,
it is estimated that the property requires approximately $115,000 of capital
improvements over the next few years. The Partnership has budgeted, but is not
limited to, capital improvements of approximately $129,000 for 1999 at this
property which include certain of the required improvements and consist of
carpet replacement, appliance replacements, and landscaping.
South Port Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $92,000 for capital improvements at the property, consisting
primarily of carpet and vinyl replacement, appliance replacement, and other
structural upgrades. These improvements were funded from Partnership reserves
and operating cash flow. Based on a report received from an independent third
party consultant analyzing necessary exterior improvements and estimates made by
the General Partner on interior improvements, it is estimated that the property
requires approximately $222,000 of capital improvements over the next few years.
The Partnership has budgeted, but is not limited to, capital improvements of
approximately $231,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, appliance
replacements, landscaping, other structural improvements, and fencing upgrades.
Stratford Place Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $51,000 for capital improvements at the property, consisting
primarily of floor covering, and appliance replacement, air conditioning,
landscaping, and cabinet and countertop replacements. These improvements were
funded from Partnership reserves and operating cash flow. Based on a report
received from an independent third party consultant analyzing necessary exterior
improvements and estimates made by the General Partner on interior improvements,
it is estimated that the property requires approximately $1,077,000 of capital
improvements over the next few years. The Partnership has budgeted, but is not
limited to, capital improvements of approximately $579,000 for 1999 at this
property which include certain of the required improvements and consist of
landscaping, plumbing upgrades, and other structural improvements.
Village East Apartments
During the six months ended June 30, 1999, the Partnership expended
approximately $111,000 for capital improvements at the property, consisting
primarily of interior remodeling, roof replacement structural improvements.
These improvements were funded from Partnership reserves and operating cash
flow. Based on a report received from an independent third party consultant
analyzing necessary exterior improvements and estimates made by the General
Partner on interior improvements, it is estimated that the property requires
approximately $156,000 of capital improvements over the next few years. The
Partnership has budgeted, but is not limited to, capital improvements of
approximately $181,000 for 1999 at this property which include certain of the
required improvements and consist of carpet and vinyl replacement, parking lot
repairs, and roof replacement.
The additional capital expenditures will be incurred only if cash is available
from operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are currently thought to be sufficient for any near-
term needs (exclusive of capital improvements) of the Partnership. The mortgage
indebtedness of approximately $70,553,000 matures at various dates between 1999
and 2005. The mortgage note payable on Overlook Apartments matured in March
1999, however, the Partnership negotiated an extension of the note until
September 1, 1999. Should the Partnership not be able to obtain permanent
financing or obtain additional extensions, the lender may choose to foreclose on
the property. Since the note is non-recourse and the mortgage balance exceeds
the book value of the property, no loss is expected. The General Partner will
attempt to refinance such remaining indebtedness and/or sell the properties
prior to such maturity dates. If the properties cannot be refinanced or sold
for a sufficient amount, the Partnership will risk losing such properties
through foreclosure.
The Partnership is required by the Partnership Agreement to maintain working
capital reserves for contingencies of $500 per apartment unit owned by the
Partnership, or approximately $2,100,000. 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, totaling approximately $8,059,000 at June 30, 1999,
exceeded the Partnership's reserve requirements of approximately $2,100,000.
Cash distributions from operations of approximately $6,422,000 (approximately
$6,165,000 to the limited partners, $17.99 per limited partnership unit) and
approximately $2,722,000 (approximately $2,613,000 to the limited partners,
$7.62 per limited partnership unit) representing a return of capital were
declared and paid during the six months ended June 30, 1999. During the six
months ended June 30, 1998, the General Partner declared and paid a distribution
attributable to cash flow from operations totaling approximately $2,204,000
(approximately $2,112,000 to the limited partners, $6.16 per limited partnership
unit). Subsequent to June 30, 1999, the Partnership approved a distribution
from operations of $1,250,000. The Partnership's distribution policy will be
reviewed on a quarterly basis. Future cash distributions will depend on the
levels of net cash generated from operations, the availability of cash reserves,
and the timing of debt maturities, refinancings and/or property sales. There
can be no assurance, however, that the Partnership will generate sufficient
funds from operations, after planned capital improvement expenditures, to permit
any additional distributions to its partners in 1999 or subsequent periods.
Tender Offer
On May 13, 1999, AIMCO Properties, L.P., an affiliate of the Managing General
Partner commenced a tender offer to purchase up to 108,405.39 (31.63%% of the
total outstanding units) units of limited partnership interest in the
Partnership for a purchase price of $148 per unit. The offer expired on July
30, 1999. Pursuant to the offer, AIMCO Properties, L.P. acquired 8,322.50
units. As a result, AIMCO and its affiliates currently own 114,480.5 units of
limited partnership interest in the Partnership representing 33.4% of the total
outstanding units. It is possible that AIMCO or its affiliate will make one or
more additional offers to acquire additional limited partnership interests in
the Partnership for cash or in exchange for units in the operating partnership
of AIMCO.
Year 2000 Compliance
General Description of the Year 2000 Issue and the Nature and Effects of the
Year 2000 on Information Technology (IT) and Non-IT Systems
The Year 2000 issue is the result of computer programs being written using two
digits rather than four digits to define the applicable year. The Partnership
is dependent upon the General Partner and its affiliates for management and
administrative services ("Managing Agent"). Any of the computer programs or
hardware that have date-sensitive software or embedded chips may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result
in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities.
Over the past two years, the Managing Agent has determined that it will be
required to modify or replace significant portions of its software and certain
hardware so that those systems will properly utilize dates beyond December 31,
1999. The Managing Agent presently believes that with modifications or
replacements of existing software and certain hardware, the Year 2000 issue can
be mitigated. However, if such modifications and replacements are not made, or
not completed in time, the Year 2000 issue could have a material impact on the
operations of the Partnership.
The Managing Agent's plan to resolve Year 2000 issues involves four phases:
assessment, remediation, testing, and implementation. To date, the Managing
Agent has fully completed its assessment of all the information systems that
could be significantly affected by the Year 2000, and has begun the remediation,
testing and implementation phases on both hardware and software systems.
Assessments are continuing in regards to embedded systems. The status of each
is detailed below.
Status of Progress in Becoming Year 2000 Compliant, Including Timetable for
Completion of Each Remaining Phase
Computer Hardware:
During 1997 and 1998, the Managing Agent identified all of the computer systems
at risk and formulated a plan to repair or replace each of the affected systems.
In August 1998, the main computer system used by the Managing Agent became fully
functional. In addition to the main computer system, PC-based network servers,
routers and desktop PCs were analyzed for compliance. The Managing Agent has
begun to replace each of the non-compliant network connections and desktop PCs
and, as of June 30, 1999, had completed approximately 90% of this effort.
The total cost to the Managing Agent to replace the PC-based network servers,
routers and desktop PCs is expected to be approximately $1.5 million of which
$1.3 million has been incurred to date. The remaining network connections and
desktop PCs are expected to be upgraded to Year 2000 compliant systems by
September 30, 1999. The completion of this process is scheduled to coincide
with the release of a compliant version of the Managing Agent's operating
system.
Computer Software:
The Managing Agent utilizes a combination of off-the-shelf, commercially
available software programs as well as custom-written programs that are designed
to fit specific needs. Both of these types of programs were studied, and
implementation plans written and executed with the intent of repairing or
replacing any non-compliant software programs.
In April, 1999 the Managing Agent embarked on a data center consolidation
project that unifies its core financial systems under its Year 2000 compliant
system. The estimated completion date for this project is October, 1999.
During 1998, the Managing Agent began converting the existing property
management and rent collection systems to its management properties Year 2000
compliant systems. The estimated additional costs to convert such systems at all
properties, is $200,000, and the implementation and testing process was
completed in June, 1999.
The final software area is the office software and server operating systems.
The Managing Agent has upgraded all non-compliant office software systems on
each PC and has upgraded 90% of the server operating systems. The remaining
server operating systems are planned to be upgraded to be Year 2000 compliant by
September, 1999. The completion of this process is scheduled to coincide with
the release of a compliant version of the Managing Agent's operating system.
Operating Equipment:
The Managing Agent has operating equipment, primarily at the property sites,
which needed to be evaluated for Year 2000 compliance. In September 1997, the
Managing Agent began taking a census and inventory of embedded systems
(including those devices that use time to control systems and machines at
specific properties, for example elevators, heating, ventilating, and air
conditioning systems, security and alarm systems, etc.).
The Managing Agent has chosen to focus its attention mainly upon security
systems, elevators, heating, ventilating and air conditioning systems, telephone
systems and switches, and sprinkler systems. While this area is the most
difficult to fully research adequately, management has not yet found any major
non-compliance issues that put the Managing Agent at risk financially or
operationally.
A pre-assessment of the properties by the Managing Agent has indicated no Year
2000 issues. A complete, formal assessment of all the properties by the
Managing Agent is in process and will be completed in September, 1999. Any
operating equipment that is found non-compliant will be repaired or replaced.
The total cost incurred for all properties managed by the Managing Agent as of
June 30, 1999 to replace or repair the operating equipment was approximately
$75,000. The Managing Agent estimates the cost to replace or repair any
remaining operating equipment is approximately $125,000.
The Managing Agent continues to have "awareness campaigns" throughout the
organization designed to raise awareness and report any possible compliance
issues regarding operating equipment within its enterprise.
Nature and Level of Importance of Third Parties and Their Exposure to the Year
2000
The Managing Agent continues to conduct surveys of its banking and other vendor
relationships to assess risks regarding their Year 2000 readiness. The Managing
Agent has banking relationships with three major financial institutions, all of
which have indicated their compliance efforts will be complete before July,
1999. The Managing Agent has updated data transmission standards with all of the
financial institutions. The Managing Agent's contingency plan in this regard is
to move accounts from any institution that cannot be certified Year 2000
compliant by September 1, 1999.
The Partnership does not rely heavily on any single vendor for goods and
services, and does not have significant suppliers and subcontractors who share
information systems (external agent). To date the Partnership is not aware of
any external agent with a Year 2000 compliance issue that would materially
impact the Partnership's results of operations, liquidity, or capital resources.
However, the Partnership has no means of ensuring that external agents will be
Year 2000 compliant.
The Managing Agent does not believe that the inability of external agents to
complete their Year 2000 remediation process in a timely manner will have a
material impact on the financial position or results of operations of the
Partnership. However, the effect of non-compliance by external agents is not
readily determinable.
Costs to Address Year 2000
The total cost of the Year 2000 project to the Managing Agent is estimated at
$3.5 million and is being funded from operating cash flows. To date, the
Managing Agent has incurred approximately $2.9 million ($0.7 million expensed
and $2.2 million capitalized for new systems and equipment) related to all
phases of the Year 2000 project. Of the total remaining project costs,
approximately $0.5 million is attributable to the purchase of new software and
operating equipment, which will be capitalized. The remaining $0.2 million
relates to repair of hardware and software and will be expensed as incurred.
The Partnership's portion of these costs are not material.
Risks Associated with the Year 2000
The Managing Agent believes it has an effective program in place to resolve the
Year 2000 issue in a timely manner. As noted above, the Managing Agent has not
yet completed all necessary phases of the Year 2000 program. In the event that
the Managing Agent does not complete any additional phases, certain worst case
scenarios could occur. The worst case scenarios could include elevators,
security and heating, ventilating and air conditioning systems that read
incorrect dates and operate with incorrect schedules (e.g., elevators will
operate on Monday as if it were Sunday). Although such a change would be
annoying to residents, it is not business critical.
In addition, disruptions in the economy generally resulting from Year 2000
issues could also adversely affect the Partnership. The Partnership could be
subject to litigation for, among other things, computer system failures,
equipment shutdowns or failure to properly date business records. The amount of
potential liability and lost revenue cannot be reasonably estimated at this
time.
Contingency Plans Associated with the Year 2000
The Managing Agent has contingency plans for certain critical applications and
is working on such plans for others. These contingency plans involve, among
other actions, manual workarounds and selecting new relationships for such
activities as banking relationships and elevator operating systems.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership is exposed to market risks from adverse changes in interest
rates. In this regard, changes in U.S. interest rates affect the interest earned
on the Partnership's cash and cash equivalents as well as interest paid on its
indebtedness. As a policy, the Partnership does not engage in speculative or
leveraged transactions, nor does it hold or issue financial instruments for
trading purposes. The Partnership is exposed to changes in interest rates
primarily as a result of its borrowing activities used to maintain liquidity and
fund business operations. To mitigate the impact of fluctuations in U.S.
interest rates, the Partnership maintains its debt as fixed rate in nature by
borrowing on a long-term basis. Based on interest rates at June 30, 1999, a 1%
increase or decrease in market interest rate would not have a material impact on
the Partnership.
The following table summarizes the Partnership's debt obligations at December
31, 1998, the Partnership's latest fiscal year end. The interest rates
represent the weighted-average rates. The fair value of the debt obligations
approximated the recorded value as of December 31, 1998.
Long-term Debt
Principal amount by expected maturity: Fixed Rate Debt Average Interest Rate
(in thousands)
1999 $ 2,238 7.75%
2000 12,474 7.56%
2001 191 7.25%
2002 208 7.25%
2003 8,976 7.25%
Thereafter 46,688 7.23%
Total $70,775
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. in the Superior Court of the State of California
for the County of San Mateo. The plaintiffs named as defendants, among others,
the Partnership, the General Partner and several of their affiliated
partnerships and corporate entities. The complaint purports to assert claims on
behalf of a class of limited partners and derivatively on behalf of a number of
limited partnerships (including the Partnership) which are named as nominal
defendants, challenging the acquisition by Insignia Financial Group, Inc. and
entities which were, at the time, affiliates of Insignia ("Insignia Affiliates")
of interests in certain general partner entities, past tender offers by Insignia
Affiliates to acquire limited partnership units, the management of partnerships
by Insignia Affiliates as well as a recently announced agreement between
Insignia and AIMCO. The complaint seeks monetary damages and equitable relief,
including judicial dissolution of the Partnership. On June 25, 1998, the General
Partner filed a motion seeking dismissal of the action. In lieu of responding
to the motion, the plaintiffs filed an amended complaint. The General Partner
filed demurrers to the amended complaint which were heard during February 1999.
No ruling on such demurrers has been received. The General Partner does not
anticipate that costs associated with this case, if any, will be material to the
Partnership's overall operations.
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 filed during the quarter ended June 30, 1999.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES IV
By: CONCAP EQUITIES, INC.
General Partner
By: /s/ Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/ Carla R. Stoner
Carla R. Stoner
Senior Vice President Finance
and Administration
Date: August 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties IV 1999 Second Quarter 10-QSB and is qualified in its
entirety by refernce to such 10-QSB filing.
</LEGEND>
<CIK> 0000355804
<NAME> CONSOLIDATED CAPITAL PROPERTIES IV
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 8,059
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 135,720
<DEPRECIATION> (105,351)
<TOTAL-ASSETS> 43,809
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 70,553
0
0
<COMMON> 0
<OTHER-SE> (29,875)
<TOTAL-LIABILITY-AND-EQUITY> 43,809
<SALES> 0
<TOTAL-REVENUES> 15,140
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,626
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,840
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,674
<EPS-BASIC> 7.49<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
