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 MARCH 31, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-15748
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Connecticut 06-1094176
(State of Organization) (I.R.S. Employer Identification No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Telephone Number: (860) 726-6000
Indicate by checkmark 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
1
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PART I - FINANCIAL INFORMATION
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
BALANCE SHEETS
<S> <C> <C>
MARCH 31, DECEMBER 31,
1996 1995
ASSETS (UNAUDITED) (AUDITED)
Property and improvements, at cost:
Land and improvements $ 2,533,388 $ 2,533,388
Buildings 11,904,091 11,904,091
Tenant improvements 3,006,343 2,872,782
--------------- ---------------
17,443,822 17,310,261
Less accumulated depreciation 6,926,458 6,783,301
--------------- ---------------
Net property and improvements 10,517,364 10,526,960
Equity investment in unconsolidated joint venture 2,684,879 2,679,392
Cash and cash equivalents 857,317 2,052,475
Accounts receivable (net of allowance of $8,889
in 1996 and $6,535 in 1995) 24,312 107,677
Prepaid expenses and other assets 42,533 27,971
Deferred charges, net 424,641 384,586
--------------- ---------------
Total $ 14,551,046 $ 15,779,061
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Accounts payable and accrued expenses (including $35,630
in 1996 and $32,837 in 1995 due to affiliates) $ 258,833 $ 161,220
Tenant security deposits 87,857 86,457
Unearned income 55,651 61,649
--------------- ---------------
Total liabilities 402,341 309,326
--------------- ---------------
Partners' capital (deficit):
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 166,928 165,478
Cumulative cash distributions (169,248) (167,140)
---------------- ----------------
(1,320) (662)
---------------- ----------------
Limited partners (39,236.25 Units):
Capital contributions, net of offering costs 35,602,279 35,602,279
Cumulative net income 3,844,069 3,700,536
Cumulative cash distributions (25,296,323) (23,832,418)
---------------- ----------------
14,150,025 15,470,397
--------------- ---------------
Total partners' capital 14,148,705 15,469,735
--------------- ---------------
Total $ 14,551,046 $ 15,779,061
=============== ===============
The Notes to Consolidated Financial Statements are an integral part of
these statements.
2
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CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<S> <C> <C>
1996 1995
---- ----
Income:
Base rental income $ 518,198 $ 542,356
Other operating income 53,763 48,430
Interest income 16,196 7,865
--------------- ---------------
588,157 598,651
--------------- ---------------
Expenses:
Property operating expenses 207,707 240,128
General and administrative 30,886 45,802
Fees and reimbursements to affiliates 41,696 59,082
Depreciation and amortization 168,372 187,438
--------------- ---------------
448,661 532,450
--------------- ---------------
Net partnership operating income 139,496 66,201
Other income:
Equity interest in joint venture net income 5,487 42,138
--------------- ---------------
Net income $ 144,983 $ 108,339
=============== ===============
Net income:
General Partner $ 1,450 $ 1,083
Limited partners 143,533 107,256
--------------- ---------------
$ 144,983 $ 108,339
=============== ===============
Net income per Unit $ 3.66 $ 2.73
=============== ===============
Cash distribution per Unit $ 37.31 $ 3.12
=============== ===============
The Notes to Consolidated Financial Statements are an integral part of
these statements.
3
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CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A DELAWARE LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
(Unaudited)
<S> <C> <C>
1996 1995
---- ----
Cash flows from operating activities:
Net income $ 144,983 $ 108,339
Adjustments to reconcile net income to net
cash provided by operating activities:
Deferred rent credits 5,955 11,837
Depreciation and amortization 168,372 187,438
Equity interest in joint venture net income (5,487) (42,138)
Accounts receivable 83,365 57,354
Accounts payable 99,417 64,563
Other, net (19,160) 47,018
---------------- ---------------
Net cash provided by operating activities 477,445 434,411
--------------- ---------------
Cash flows from investing activities:
Purchases of property and improvements (135,365) (73,534)
Payment of leasing commissions (71,225) (922)
---------------- ---------------
Net cash used in investing activities (206,590) (74,456)
---------------- ---------------
Cash flows from financing activities:
Cash distribution to limited partners (1,463,905) (122,417)
Cash distribution to General Partner (2,108) --
---------------- -------------
Net cash used in financing activities (1,466,013) (122,417)
---------------- ----------------
Net increase (decrease) in cash and cash equivalents (1,195,158) 237,538
Cash and cash equivalents, beginning of year 2,052,475 368,015
--------------- ---------------
Cash and cash equivalents, end of period $ 857,317 $ 605,553
=============== ===============
The Notes to Consolidated Financial Statements are an integral part of
these statements.
4
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CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Readers of this quarterly report should refer to the CONNECTICUT GENERAL
EQUITY PROPERTIES-I LIMITED PARTNERSHIP'S ("the Partnership") audited financial
statements for the year ended December 31, 1995 which are included in the
Partnership's 1995 Annual Report, as certain footnote disclosures which would
substantially duplicate those contained in such audited financial statements
have been omitted from this report.
1. BASIS OF ACCOUNTING AND SIGNIFICANT ACCOUNTING POLICIES
A) BASIS OF PRESENTATION: The accompanying financial statements were prepared
in accordance with generally accepted accounting principles, and reflect
management's estimates and assumptions that affect the reported amounts. It
is the opinion of management that the financial statements presented
reflect all the adjustments necessary for a fair presentation of the
financial condition and results of operations.
B) RECENT ACCOUNTING PRONOUNCEMENT: In 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" (the "Statement"). The Statement requires a
writedown to fair value when long-lived assets to be held and used are
impaired. Long-lived assets to be disposed of, including real estate held
for sale, must be carried at the lower of cost or fair value less costs to
sell. In addition, the Statement prohibits depreciation of long-lived
assets to be disposed. The Partnership adopted this Statement in the first
quarter of 1996; there was no effect on the Partnership's results of
operations, liquidity and financial condition.
C) CASH AND CASH EQUIVALENTS: Short-term investments with a maturity of
three months or less at the time of purchase are reported as cash
equivalents.
2. UNCONSOLIDATED JOINT VENTURE - SUMMARY INFORMATION
The Partnership owns a 26.08% interest in the Westford Office Venture (the
"Venture") which owns the Westford Corporate Center in Westford, Massachusetts.
The general partner of the Partnership's joint venture partner is an affiliate
of the General Partner.
Venture operations information: Three Months Ended
March 31,
1996 1995
Total income of venture $418,573 $498,665
Net income of venture $21,037 $161,572
Venture balance sheet information: March 31, December 31,
1996 1995
Total assets $11,295,030 $11,280,276
Total liabilities $745,716 $751,999
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<CAPTION>
CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS - CONTINUED
(Unaudited)
3. DEFERRED CHARGES
<S> <C> <C>
Deferred charges consist of the following:
March 31, December 31,
1996 1995
Deferred leasing commissions $ 1,059,613 $ 988,388
Accumulated amortization (653,409) (628,194)
---------------- ----------------
406,204 360,194
Deferred rent credits 18,437 24,392
--------------- ---------------
$ 424,641 $ 384,586
=============== ===============
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4. TRANSACTIONS WITH AFFILIATES
Fees and other expenses incurred by the Partnership related to the General
Partner or its affiliates are as follows:
Three Months Ended Unpaid at
March 31, March 31,
--------- ---------
<S> <C> <C> <C>
1996 1995 1996
---- ---- ----
Partnership management fee (a) $ 14,876 $ 35,147 $ 14,876
Property management fee (b)(c) 12,061 12,885 8,203
Reimbursement (at cost) of
out-of-pocket expenses 14,759 11,050 12,551
------------- -------------- -------------
$ 41,696 $ 59,082 $ 35,630
============= ============== =============
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(a) Includes management fees attributable to the Partnership's 26.08% interest
in the Westford Office Venture.
(b) Does not include management fees of $3,504 and $7,350 attributable to the
Partnership's 26.08% interest in the Westford Office Venture for the three
months ended March 31, 1996 and 1995, respectively.
(c) Does not include on-site property management fees earned by independent
management companies of $25,720 and $26,555 for the three months ended
March 31, 1996 and 1995, respectively. On-site property management services
have been contracted by an affiliate of the General Partner on behalf of
the Partnership and are paid directly by the Partnership to the third party
companies.
5. SUBSEQUENT EVENTS
On May 15, 1996, the Partnership paid a distribution of $182,451 to limited
partners and $1,504 to the General Partner.
6
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CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1996, the Partnership's cash and cash equivalents and the
Partnership's share of cash and cash equivalents from the Westford Office
Venture totaling $857,317 and $321,122, respectively, were available for working
capital requirements, cash reserves and distributions to partners. The
Partnership paid the first quarter 1996 cash distribution of $182,451 or $4.65
per Unit on May 15, 1996, representative of the quarter's adjusted cash from
operations, inclusive of adjustments to cash reserves. The Partnership's
distributions from operations for the remainder of the year should reflect
actual operating results subject to changes in reserves for liabilities or
leasing risk.
Lake Point's adjusted cash from operations for the first quarter of 1996
totaled approximately $137,000 after $11,900 of capital improvements and a net
$75,000 addition to cash reserves for leasing costs. Based on the level of
leasing activity planned at the start of the year, 1996 tenant improvements and
leasing commissions will approximate $312,000. Additionally, building
improvements are budgeted at $68,000. Leasing costs and building improvements
for the year are expected to be funded by cash from operations. The 1996 leasing
plan includes renewals representing 23,799 square feet and new leases
representing 7,565 square feet. During the first quarter, a new lease
representing 2,160 square feet was executed. The planned renewal activity is
anticipated to be completed by the end of the third quarter. The property was
100% occupied at March 31, 1996.
Woodlands Plaza generated $28,000 of adjusted cash from operations for the
first quarter of 1996 after approximately $193,000 of leasing costs and a
reduction to cash reserves of $104,000. Mosby Yearbook, 14,048 square feet,
signed a lease during December 1995 and took occupancy during February 1996.
Leasing costs incurred during the first quarter was predominately the result of
the Mosby lease. Lease expirations during 1996 comprise two tenants for a total
of 16,590 square feet, or 23% of net rentable area. Both tenants are expected to
renew.
At Westford Corporate Center, adjusted cash from operations for the first
quarter was $208,000 ($54,000 attributable to the Partnership's interest). The
property remains 100% occupied. No capital expenditures have been planned for
the year. During the quarter, a portion of the 1995 capital expenditures was
reimbursed by the tenants. In addition, adjustments were made to reduce other
income (and the portion of account receivable representing 1995 tenant
reimbursement billings) based on the final calculation of actual 1995 tenant
reimbursable operating expenses. As was the case in 1995, the 1996 estimated
billings for tenant expense reimbursement are based on the annual budget.
RESULTS OF OPERATIONS
Generally, decreases in the income statement accounts are the result of the
sales of the remaining buildings of Westside Industrials. Buildings #3, 4 and 5,
sold on December 26, 1995, were fully occupied in the first quarter of 1995.
Building #6, sold on April 27, 1995, was vacant in 1995. For the first quarter
of 1995, Westside Industrials accounted for approximately $51,000 of rental
income, $5,000 of other income, $29,000 of property operating expenses, $6,000
of general and administrative expenses and $12,000 of depreciation and
amortization. The following analytical comments have been limited to the
Partnership's remaining properties.
Rental income increased by approximately $26,000 for the three months ended
March 31, 1996, as compared with the same period in 1995. Rental income at Lake
Point increased approximately $43,000 due to the timing of tenant occupancies
during the first quarter of 1995 versus 1996, and the renewal of a tenant in the
fourth quarter of 1995 with new terms, including a higher base rental rate and a
lower expense reimbursement requirement. Offsetting the increase at Lake Point
was a decrease at Woodlands Plaza due to the timing of tenant turnover. Space
occupied by a tenant during the entire first quarter of 1995 was occupied for
only a portion of the first quarter of 1996.
7
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CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The increase in other income for the three months ended March 31, 1996, as
compared with the same period of 1995, was the result of the timing of tenant
occupancies at Lake Point during the first quarter of 1995 versus 1996. New
tenants taking occupancy during the first quarter of 1995 moved in later during
the quarter than the new tenants taking occupancy during the first quarter of
1996.
Interest income increased for the three months ended March 31, 1996, as
compared with the same period in 1995, due to a higher average cash balance from
the sale of the Westside buildings on December 26, 1995. The sales proceeds were
distributed to limited partners on February 15, 1996.
The decrease in general and administrative for the three months ended March
31, 1996, as compared with the same period of 1995, was the result of a net
decrease in the provision for doubtful accounts.
The decrease in fees and reimbursements to affiliates for the three months
ended March 31, 1996, as compared with the same period of 1995, was due to a
decrease in partnership management fees as a result of a drop in adjusted cash
from operations for the quarter. Adjusted cash from operation for the first
quarter of 1996 was impacted by a higher level of leasing costs.
Depreciation and amortization decreased for the three months ended March
31, 1996, as compared with the same period in 1995, due to accelerated
depreciation and amortization of assets associated with vacated tenants at
Woodlands in 1995. Partially offsetting the decrease was an increase in
depreciation and amortization at Lake Point due to new tenant improvements and
leasing commissions incurred during the second quarter of 1995.
The joint venture net income decreased for the three months ended March 31,
1996, as compared with the same period in 1995. Revenue declined as the result
of a lower base rental rate for the replacement tenant of a tenant that vacated
in December 1995. In addition, an adjustment was made in the first quarter of
1996 which reduced other income, as the actual recovery of operating expenses
and taxes from tenants for 1995 was lower than estimated. Property operating
expenses increased due to a harsh winter causing snow removal, maintenance and
utility costs to increase. In addition, a landscaping project that was
previously capitalized was reclassed to an expense account.
8
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CONNECTICUT GENERAL EQUITY PROPERTIES-I LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
OCCUPANCY
The following is a listing of approximate physical occupancy levels by
quarter for the Partnership's investment properties:
<S> <C> <C> <C> <C> <C>
1995 1996
------------------------------------------------- -------
At 3/31 At 6/30 At 9/30 At 12/31 At 3/31
------- ------- ------- -------- -------
1. Woodlands Plaza II
Office Building
St. Louis, Missouri 94% 90% 79% 75% 95%
2. Westside Industrials
(formerly Interpark)
Phoenix, Arizona (a) 80% 100% 100% N/A N/A
3. Lake Point I, II, III
Service Center
Orlando, Florida 100% 100% 100% 98% 100%
4. Westford Corporate Center
Westford, Massachusetts (b) 100% 100% 100% 100% 100%
</TABLE>
An "N/A" indicates the property was not owned by the Partnership at the end of
the quarter.
(a) On April 27, 1995, Westside Industrials sold building #6, reducing square
footage from 63,080 to 50,480. The remaining three buildings were sold on
December 26, 1995.
(b) The partnership owns a 26.08% interest in the Westford Office Venture which
owns the Westford Corporate Center.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
27 Financial Data Schedules
(b) No Form 8-Ks were filed during the three months ended March 31, 1996.
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONNECTICUT GENERAL EQUITY PROPERTIES-I
LIMITED PARTNERSHIP
By: Connecticut General Realty Resources,
Inc. - Third, General Partner
Date: May 10, 1996 By: /s/ John D. Carey
------------ -----------------
John D. Carey, President and Controller
(Principal Executive Officer)
(Principal Accounting Officer)
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<PERIOD-TYPE> 3-MOS
<CASH> 857317
<SECURITIES> 0
<RECEIVABLES> 33201
<ALLOWANCES> (8889)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 17443822
<DEPRECIATION> 6926458
<TOTAL-ASSETS> 14551046
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 14551046
<SALES> 0
<TOTAL-REVENUES> 588157
<CGS> 0
<TOTAL-COSTS> 280289
<OTHER-EXPENSES> 162885
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 144983
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 144983
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
