FORM 10-QSB--QUARTERLY OR TRANSITIONAL 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 September 30, 1997
[ ] 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 0-13083
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)
(864) 239-1000
Issuer's telephone number
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)
September 30, 1997
Assets
Cash and cash equivalents:
Unrestricted $ 588
Restricted - tenant security deposits 65
Investments 104
Accounts receivable 58
Escrows for taxes 134
Restricted escrows 716
Other assets 323
Investment properties:
Land $ 1,969
Buildings and related personal property 18,797
20,766
Less accumulated depreciation (13,780) 6,986
$ 8,974
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 236
Tenant security deposits 65
Accrued taxes 312
Other liabilities 124
Mortgage notes payable 11,183
Partners' Deficit
General partner $ (20)
Special limited partners (53)
Limited partners (180,037 units
issued and 179,617 outstanding) (2,873) (2,946)
$ 8,974
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
Rental income $ 1,048 $ 1,008 $ 3,170 $ 2,992
Other income 45 27 156 124
Total revenues 1,093 1,035 3,326 3,116
Expenses:
Operating 377 343 1,143 1,099
General and administrative 39 60 125 196
Maintenance 134 139 466 379
Depreciation 278 286 816 853
Interest 204 233 614 726
Property taxes 104 96 305 272
Total expenses 1,136 1,157 3,469 3,525
Loss before loss on disposal of property
and extraordinary item (43) (122) (143) (409)
Loss on disposal of property (40) -- (40) --
Loss before extraordinary item (83) (122) (183) (409)
Extraordinary loss on refinancing -- (22) -- (22)
Net loss $ (83) $ (144) $ (183) $ (431)
Net loss allocated to
general partner (.2%) $ -- $ -- $ -- $ (1)
Net loss allocated to
limited partners (99.8%) (83) (144) (183) (430)
Net loss $ (83) $ (144) $ (183) $ (431)
Per limited partnership unit:
Loss before extraordinary item $ (.46) $ (.68) $(1.02) $(2.27)
Extraordinary item -- (.12) -- (.12)
Net loss $ (.46) $ (.80) $(1.02) $(2.39)
See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
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 nine months
ended September 30, 1997 -- -- -- (183) (183)
Partners' deficit at
September 30, 1997 179,617 $ (20) $ (53) $(2,873) $(2,946)
See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL PROPERTIES V
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1997 1996
Cash flows from operating activities:
Net loss $ (183) $ (431)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation 816 853
Amortization of lease commission, discounts,
loan costs and debt forgiveness (15) 69
Loss on disposal of property 40 --
Extraordinary loss on refinancing -- 22
Change in accounts:
Restricted cash 28 9
Accounts receivable (28) (7)
Escrows for taxes 103 9
Other assets (59) 18
Tenant security deposit liabilities (30) (16)
Accounts payable 155 (216)
Accrued taxes (94) (26)
Other liabilities (23) (39)
Net cash provided by operating activities 710 245
Cash flows from investing activities:
Property improvements and replacements (551) (155)
Deposits to restricted escrows (109) (213)
Receipts from restricted escrows 297 --
Proceeds from sale of investments -- 100
Dividend received on investments 4 --
Net cash used in investing activities (359) (268)
Cash flows from financing activities:
Payments on mortgage notes payable (44) (120)
Repayment of mortgage note payable -- (2,925)
Proceeds from long-term borrowing -- 2,800
Loan costs paid (9) (102)
Prepayment penalty -- (22)
Net cash used in financing activities (53) (369)
Net increase (decrease) in unrestricted cash
and cash equivalents 298 (392)
Unrestricted cash and cash equivalents at
beginning of period 290 1,078
Unrestricted cash and cash equivalents at end of period $ 588 $ 686
Supplemental disclosure of cash flow information:
Cash paid for interest $ 658 $ 729
See Accompanying Notes to Consolidated Financial Statements
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 nine months ended September 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 $153,000 and $152,000 were paid to affiliates of the General
Partner for each of the nine months ended September 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 $166,000 and $116,000 were paid to the General Partner and its
affiliates during each of the nine months ended September 30, 1997 and 1996,
respectively. Included in these numbers are approximately $14,000 and $2,000 of
construction oversight costs for the nine months ended September 30, 1997 and
1996, respectively. Also included in reimbursements for services of affiliates
for the nine months ended September 30, 1997, is approximately $72,000 for lease
commissions.
For the period from January 1, 1996, to August 31, 1997, the Partnership insured
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 master policy. The
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 that accrued to the benefit of the affiliate of
the General Partner by virtue of the agent's obligations was 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 $757,000, are less than the reserve requirement of approximately
$1,761,000 at September 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%. As a result of the refinancing, the
Partnership realized a $22,000 prepayment penalty resulting in an extraordinary
loss on refinancing.
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 nine months ended September 30, 1997 and 1996:
1997 1996
Aspen Ridge Apartments
Chicago, Illinois 95% 94%
Sutton Place Apartments
Corpus Christi, Texas 95% 93%
51 North High Street Building
Columbus, Ohio 94% 89%
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 nine 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 $83,000 and $183,000 for
the three and nine months ended September 30, 1997, respectively, compared to a
net loss of approximately $144,000 and $431,000 for the three and nine months
ended September 30, 1996, respectively. The decrease in the net loss resulted
primarily from increased rental income and other income and decreased general
and administrative, depreciation and interest expenses. These decreased
expenses were partially offset by increased maintenance and operating expenses.
Rental income increased 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. Other income increased
due to increases in interest income. Interest income increased primarily as a
result of interest earned on the capital improvement escrows for the Aspen Ridge
Apartments. General and administrative costs decreased due to decreased audit
and tax return fees due to 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 interest rate on the debt was reduced. 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 F"). The decrease in depreciation expense is
primarily due to assets totaling approximately $5,000,000 becoming fully
depreciated in 1996. The increase in maintenance expense is primarily due to the
exterior building improvements and parking lot repairs project at Sutton Place
Apartments and flooring repairs to replace damaged tile floors at the Aspen
Ridge Apartments. The increase in operating expenses is primarily due to an
increase in referral fees and concessions at Sutton Place Apartments in order to
attract the additional military personnel that relocated there.
The decreased net loss for the three and nine months ended September 30, 1997,
is partially offset by a loss of approximately $40,000 on the disposition of
property due to roof replacements at the Aspen Ridge Apartments in September
1997. An extraordinary loss of approximately $22,000 on refinancing of the
mortgage note encumbering Sutton Place Apartments (See "Note F") in the third
quarter of 1996 partially offset this loss on disposition of property. This
extraordinary loss is due to pre-payment penalties.
Included in maintenance expense for the nine months ended September 30, 1997, is
approximately $96,000 of major repairs and maintenance comprised primarily of
gutter repairs, exterior building improvements and exterior painting at Sutton
Place Apartments. For the nine months ended September 30, 1996, approximately
$19,000 of major repairs and maintenance comprised primarily of exterior
building improvements and major landscaping, 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 September 30, 1997, the Partnership held unrestricted cash and cash
equivalents of approximately $588,000 compared to approximately $686,000 at
September 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) the decreased net loss, as
discussed above. Net cash used in investing activities increased primarily due
to an increase in property additions at the Aspen Ridge Apartments for the roof
replacements and for the installation of an alarm system. There was also an
increase in property additions at the Sutton Place Apartments for exterior
capital improvements to the property. This increase in property additions was
partially offset by receipts from the capital improvement escrow for capital
improvements. 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"). These uses of
cash were somewhat offset by the net refinancing proceeds received on the debt
secured by Sutton Place Apartments. Loan costs of approximately $102,000 were
incurred during the nine months ended September 30, 1996, relating to the
refinancing of the debt secured by Sutton Place Apartments. Additionally, in
1996, the Partnership incurred $22,000 in pre-payment penalties. The
Partnership incurred an additional $9,000 of loan costs in 1997 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 $11,183,000 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 nine months ended September 30, 1997,
and September 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 September 30, 1997.
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/William H. Jarrard, Jr.
William H. Jarrard, Jr.
President
By: /s/Ronald Uretta
Ron Uretta
Vice President/Treasurer
Date: November 10, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties V 1997 Third 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 588
<SECURITIES> 0
<RECEIVABLES> 58
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 20,766
<DEPRECIATION> 13,780
<TOTAL-ASSETS> 8,974
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 11,183
0
0
<COMMON> 0
<OTHER-SE> (2,946)
<TOTAL-LIABILITY-AND-EQUITY> 8,974
<SALES> 0
<TOTAL-REVENUES> 3,326
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,469
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 614
<INCOME-PRETAX> (183)
<INCOME-TAX> 0
<INCOME-CONTINUING> (183)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (183)
<EPS-PRIMARY> (1.02)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
