FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-13083
CONSOLIDATED CAPITAL PROPERTIES V
(Exact name of small business issuer as specified in its charter)
California 94-2918560
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 718
Restricted - tenant security deposits 77
Investments 104
Accounts receivable 43
Escrows for taxes 131
Restricted escrows 675
Other assets 341
Investment properties:
Land $ 1,969
Buildings and related personal property 18,645
20,614
Less accumulated depreciation (13,610) 7,004
$ 9,093
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 180
Tenant security deposits 76
Accrued taxes 359
Other liabilities 131
Mortgage notes payable 11,210
Partners' Deficit
General partner $ (20)
Special limited partners (53)
Limited partners (179,617 units (2,790)
issued and outstanding) (2,863)
$ 9,093
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $1,038 $1,006 $2,122 $1,984
Other income 46 66 111 97
Total revenues 1,084 1,072 2,233 2,081
Expenses:
Operating 364 389 766 756
General and administrative 45 80 86 136
Maintenance 127 141 332 240
Depreciation 270 285 538 567
Interest 204 244 410 493
Property taxes 91 62 201 176
Total expenses 1,101 1,201 2,333 2,368
Net loss $ (17) $ (129) $ (100) $ (287)
Net loss allocated to
general partner (.2%) $ -- $ -- $ -- $ (1)
Net loss allocated to
limited partners (99.8%) (17) (129) (100) (286)
Net loss $ (17) $ (129) $ (100) $ (287)
Net loss per limited
partnership unit: $ (.09) $ (.72) $ (.56) $(1.59)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
<TABLE>
<CAPTION>
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
<S> <C> <C> <C> <C> <C>
Original capital
contributions 180,037 $ 1 $ -- $45,009 $45,010
Partners deficit at
December 31, 1996 179,617 $ (20) $ (54) $(2,689) $(2,763)
Amortization of timing
difference (Note D) -- -- 1 (1) --
Net loss for the six months
ended June 30, 1997 -- -- -- (100) (100)
Partners' deficit at
June 30, 1997 179,617 $ (20) $ (53) $(2,790) $(2,863)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (100) $ (287)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 538 567
Amortization of lease commission, discounts and
loan costs 33 84
Change in accounts:
Restricted cash 16 3
Accounts receivable (13) (12)
Escrows for taxes 106 (10)
Other assets (57) 12
Tenant security deposit liabilities (19) (10)
Accounts payable 99 (140)
Accrued taxes (47) (6)
Other liabilities (16) (48)
Net cash provided by operating activities 540 153
Cash flows from investing activities:
Property improvements and replacements (252) (104)
Deposits to restricted escrows (68) (33)
Receipts from restricted escrows 297 --
Dividend received on investments 4 --
Net cash used in investing activities (19) (137)
Cash flows from financing activities:
Payments on mortgage notes payable (84) (111)
Repayment of mortgage note payable -- (700)
Loan costs paid (9) --
Net cash used in financing activities (93) (811)
Net increase (decrease) in unrestricted cash
and cash equivalents 428 (795)
Unrestricted cash and cash equivalents at
beginning of period 290 1,078
Unrestricted cash and cash equivalents at end of period $ 718 $ 283
Supplemental disclosure of cash flow information:
Cash paid for interest $ 402 $ 455
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CONSOLIDATED CAPITAL PROPERTIES V
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited financial statements of Consolidated Capital
Properties V (the "Partnership" or the "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of ConCap Equities, Inc. (the "General
Partner" or "CEI"), all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three and six months ended June 30, 1997, are not necessarily
indicative of the results that may be expected for the fiscal year ending
December 31, 1997. For further information, refer to the financial statements
and footnotes thereto included in the Partnership's annual report on Form 10-KSB
for the fiscal year ended December 31, 1996.
NOTE B - TRANSACTIONS WITH RELATED PARTIES
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all of the Partnership
activities, as provided for in the Partnership Agreement.
The Partnership pays property management fees based upon collected gross rental
revenues for property management services. Property management fees of
approximately $108,000 and $100,000 were paid to affiliates of the General
Partner for each of the six months ended June 30, 1997 and 1996, respectively.
These fees are included in operating expenses.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of
approximately $56,000 and $75,000 were paid to the General Partner and its
affiliates during each of the six months ended June 30, 1997 and 1996,
respectively. These reimbursements are included in general and administrative
expenses.
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the General
Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which was later acquired by the agent who
placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the General Partner who receives
payment on these obligations from the agent. The amount of the Partnership's
insurance premiums accruing to the benefit of the affiliate of the General
Partner by virtue of the agent's obligations is not significant.
NOTE C - COMMITMENT
The Partnership is required to maintain working capital reserves for normal
repairs, replacements, working capital and contingencies of not less than 5% of
Net Invested Capital, as defined in the Partnership Agreement. In the event
expenditures are made from these reserves, operating revenue shall be allocated
to such reserves to the extent necessary to maintain the foregoing level. Cash
and cash equivalents, tenant security deposits and investments totaling
approximately $899,000, are less than the reserve requirement of approximately
$1,761,000 at June 30, 1997. The Partnership intends to replenish the working
capital reserve from cash flow from operations after consideration of any
capital improvement needs of the properties. The Partnership's recent cash
flows from operations, however, have not been sufficient to replenish the
reserve and there is no assurance that future levels of cash flow from
operations will be adequate to accomplish this objective. The working capital
requirement must be met prior to any consideration for distributions to the
partners.
NOTE D - CHANGE IN STATUS OF NON-CORPORATE GENERAL PARTNER
In the year ended December 31, 1991, the Partnership Agreement was amended to
convert the General Partner interests held by the non-corporate General Partner,
Consolidated Capital Group ("CCG"), to that of a special limited partner
("Special Limited Partners"). The Special Limited Partners do not have a vote
and do not have any of the other rights of a Limited Partner except the right to
inspect the Partnership's books and records; however, the Special Limited
Partners will retain the economic interest in the Partnership which they
previously owned as general partner. CEI became the sole general partner of the
Partnership effective December 31, 1991. In connection with CCG's conversion, a
special allocation of gross income was made to the Special Limited Partners in
order to eliminate their tax basis negative capital accounts.
After the conversion, the various owners of interests in the Special Limited
Partners transferred portions of their interests to CEI so that CEI now holds a
.2% interest in all allocable items of income, loss and distribution. The
difference between the Special Limited Partners' capital accounts for financial
statement and tax reporting purposes is being amortized as the components of the
timing differences which created the balance reverse.
NOTE E - DEBT RESTRUCTURING
The Partnership restructured the mortgage debt secured by the 51 North High
Street Building and made a principal prepayment (without penalty) of $700,000
in January 1996. In addition to this payment, the lender reduced the note's
face amount by an additional $700,000 and the stated interest rate of the note
was reduced from 13.5% to 9%. The maturity date of June 1, 2004, was
unchanged.
The debt restructuring was accounted for as a modification of terms. The total
future cash payments under the restructured loan exceed the carrying value of
the loan as of the date of restructure. Consequently, the carrying amount of
the loan was reduced only by the $700,000 principal prepayment actually paid
with no gain being recognized on the restructuring. Interest on the
restructured debt accrues at an imputed rate of 4%, the rate required to equate
the present value of the total future cash payments under the new terms to the
carrying amount of the loan at the date of restructure.
NOTE F - REFINANCING OF MORTGAGE NOTES PAYABLE
In September 1996, the mortgage note encumbering Sutton Place Apartments was
refinanced. Under the terms of the refinancing agreement, the new $2,800,000
mortgage note, which bears interest at 9.125% and matures in October 2003,
replaced the previous mortgage note of approximately $2,200,000, which carried
a stated interest rate of 10.25%.
In November 1996, the Partnership refinanced the mortgage encumbering Aspen
Ridge Apartments. The total mortgage indebtedness of approximately $5,016,000
on the previous note was carried at a stated interest rate of 9.88%. The new
mortgage indebtedness of $5,750,000 carries a stated interest rate of 7.33%,
with a balloon payment due November 1, 2003.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes and
one commercial property. The following table sets forth the average occupancy
of the properties for the six months ended June 30, 1997 and 1996:
1997 1996
Aspen Ridge Apartments
Chicago, Illinois 95% 93%
Sutton Place Apartments
Corpus Christi, Texas 95% 92%
51 North High Street Building
Columbus, Ohio 94% 88%
The increase in occupancy at Aspen Ridge Apartments is primarily due to rental
concessions offered during 1996, which increased occupancy throughout 1996 and
the first six months of 1997. The increase in occupancy at Sutton Place
Apartments resulted from additional military troops being re-located to Corpus
Christi, as well as improved curb appeal of the property. The improved appeal
resulted from the exterior building improvements completed at the property. The
increase in occupancy at the 51 North High Street Building is due to existing
tenants leasing additional space and the addition of a new tenant.
The Partnership realized a net loss of approximately $17,000 and $100,000 for
the three and six months ended June 30, 1997, respectively, compared to a net
loss of approximately $129,000 and $287,000 for the three and six months ended
June 30, 1996, respectively. The decrease in net loss resulted primarily from
increased rental income and decreased general and administrative and interest
expense. These decreased expenses were partially offset by increased
maintenance expense.
The increase in rental income is due to rental rate increases at the
Partnership's investment properties and due to higher occupancy levels at all of
the Partnership's investment properties, as discussed above. General and
administrative costs decreased due to decreased audit and tax return fees.
There were additional fees in 1996 in connection with the sale of Fourth and
Race Tower in December 1995. General and administrative fees were further
reduced by a decrease in legal costs resulting from additional legal fees in
1996 relating to the loan modification of the 51 North High Street Building (See
"Note E"). The decrease in interest expense is due to a principal payment of
$700,000 on the debt secured by the 51 North High Street Building in January
1996. Additionally, the imputed interest rate on the debt was reduced to 4%.
Also, the mortgage notes secured by Sutton Place Apartments and Aspen Ridge
Apartments were refinanced during the third and fourth quarters of 1996,
respectively, at lower interest rates (See "Note E" and "Note F"). The increase
in maintenance expense is primarily due to the exterior building improvements
and parking lot repairs project at Sutton Place Apartments.
Included in maintenance expense for the six months ended June 30, 1997, is
approximately $88,000 of major repairs and maintenance comprised primarily of
gutter repairs, exterior building improvements and exterior painting at Sutton
Place Apartments. For the six months ended June 30, 1996, approximately $16,000
of major repairs and maintenance comprised primarily of exterior painting and
building improvements, major landscaping and swimming pool repairs are included
in maintenance expense.
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.
At June 30, 1997, the Partnership held unrestricted cash and cash equivalents of
approximately $718,000 compared to approximately $283,000 at June 30, 1996. Net
cash provided by operating activities increased due to (1) the timing of
withdrawals from tax escrows, (2) the timing of payment of operating expenses
out of accounts payable, and (3) due to the decreased net loss, as discussed
above. Net cash used in investing activities decreased as a result of receipts
from the capital improvement escrow for Sutton Place Apartments for exterior
capital improvements to the property. A related increase in property
improvements and replacements partially offset the impact of the escrow
receipts. Net cash used in financing activities decreased as a result of the
non-recurring nature of the $700,000 debt reduction on the debt secured by 51
North High Street Building during January 1996 (see "Note E"). Additionally, as
a result of the refinancing of Aspen Ridge Apartments and Sutton Place
Apartments in 1996, the payments on the mortgage notes decreased due to the
reduction of the monthly payments. The Partnership incurred an additional
$9,000 of loan costs related to the refinance of the mortgage debt secured by
Aspen Ridge Apartments in November 1996 (see "Note F").
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 other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of approximately $11,210,000, net of discount, matures
from October 2003 until June 2004 with balloon payments of $10,446,000 due at
maturity, at which time the properties will either be sold or the mortgages
refinanced. Future cash distributions will depend on the levels of net cash
generated from operations, capital expenditure requirements, property sales and
the availability of cash reserves. During the six months ended June 30, 1997,
and June 30, 1996, no distributions were declared or paid.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a)Exhibits.
Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report.
(b)Reports on Form 8-K.
None filed during the quarter ended June 30, 1996.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES V
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Bill Jarrard
Bill Jarrard
President
By: /s/Ron Uretta
Ron Uretta
Vice President/Treasurer
Date: August 4, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties V 1997 Second Quarter 10-QSB and is qualified in its entirety
by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000725614
<NAME> CONSOLIDATED CAPITAL PROPERTIES V
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 718
<SECURITIES> 0
<RECEIVABLES> 43
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 20,614
<DEPRECIATION> 13,610
<TOTAL-ASSETS> 9,093
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 11,210
0
0
<COMMON> 0
<OTHER-SE> (2,863)
<TOTAL-LIABILITY-AND-EQUITY> 9,093
<SALES> 0
<TOTAL-REVENUES> 2,233
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,333
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 410
<INCOME-PRETAX> (100)
<INCOME-TAX> 0
<INCOME-CONTINUING> (100)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (100)
<EPS-PRIMARY> (.56)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
