UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
Commission file number 0-14466
CONNECTICUT GENERAL REALTY INVESTORS III
LIMITED PARTNERSHIP (Exact name of
registrant as specified in its charter)
Connecticut 06-1115374
(State of Organization) (I.R.S. Employer Identification No.)
900 Cottage Grove Road, South Building
Bloomfield, Connecticut 06002
(Address of principal executive offices)
Registrant's telephone number, including area code: (860) 726-6000
Securities registered pursuant to Section
12(b) of the Act:
None
(Title of Each Class)
Securities registered pursuant to Section
12(g) of the Act:
Units of Limited Partnership Interest
(Title of Class)
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
State the aggregate market value of the voting stock held by non-affiliates of
the registrant. Not applicable.
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TABLE OF CONTENTS
<S> <C> <C>
PART I PAGE
Item 1. Business 3
Item 2. Properties 7
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8
PART II
Item 5. Market for Registrant's Common Equity and Related Security Holder Matters 8
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 10
Item 8. Financial Statements and Supplementary Data 15
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure 31
PART III
Item 10. Directors and Executive Officers of the Registrant 31
Item 11. Executive Compensation 33
Item 12. Security Ownership of Certain Beneficial Owners and Management 34
Item 13. Certain Relationships and Related Transactions 34
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K 35
SIGNATURES 39
</TABLE>
2
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PART I
ITEM 1. BUSINESS
The registrant, Connecticut General Realty Investors III Limited
Partnership (the "Partnership"), was formed on April 12, 1984, under the Uniform
Limited Partnership Act of the State of Connecticut to invest in primarily
residential and, to a lesser extent, commercial real properties. On July 2,
1984, the Partnership commenced an offering of $25,000,000 (subject to increase
up to $50,000,000) of Limited Partnership Interests (the "Units") at $1,000 per
Unit, pursuant to a Registration Statement on Form S-11 under the Securities Act
of 1933 (Registration No. 2-90944).
The General Partner of the Partnership is CIGNA Realty Resources, Inc.-
Fifth (the "General Partner"), which is an indirect wholly owned subsidiary of
CIGNA Corporation ("CIGNA"), a publicly held corporation whose stock is traded
on the New York Stock Exchange.
A total of 24,856 Units was sold to the public prior to the offering's
termination on July 1, 1986. The holders of 6,480 Units were admitted to the
Partnership in 1984; the holders of 11,519 Units were admitted to the
Partnership in 1985; the holders of the remaining 6,857 Units were admitted to
the Partnership in 1986. From the 24,856 Units sold, the Partnership received
net proceeds of $22,408,052. The holders of Units ("Unit Holders" or "Limited
Partners") of the Partnership will share in the ownership of the Partnership's
real property investments according to the number of Units held. Subsequent to
admittance to the Partnership, no Unit Holder has made any additional capital
contribution. The Partnership is engaged solely in the business of real estate
investment. A presentation of information about industry segments is not
applicable.
The Partnership is engaged in passive activities and therefore investors
are subject to the applicable provisions of the Internal Revenue Code and
Regulations. Losses from "passive activities" (which include any rental
activity) may only offset income from "passive activities". Investors' passive
losses in excess of passive income from all sources are suspended and are
carried over to future years when they may be deducted against passive income
generated by the Partnership in such year (including gain recognized on the sale
of the Partnership's assets) or against passive income derived by investors from
other sources. Any suspended losses remaining subsequent to Partnership
dissolution may be used by investors to offset ordinary income.
The Partnership acquired four residential complexes located in Ohio,
Oklahoma, Louisiana, and Illinois and one shopping center located in Florida. In
order to acquire these properties, the Partnership invested $16,372,438 in cash,
took or assumed $35,684,061 in mortgages, incurred $3,673,982 in acquisition
fees and expenses, established reserves for improvements of $720,000 and
established working capital reserves of $1,242,800.
Pursuant to the Partnership Agreement, the Partnership is required to
terminate on or before December 31, 2017. The Partnership anticipated that prior
to its termination and dissolution, some or all of the Partnership's properties
would be sold, the retention or sale of any property dependent, in part, on the
anticipated remaining economic benefits of continued ownership. It was expected
that most sales would occur after a period of ownership extending from five to
ten years. The Partnership sold the Florida shopping center, Promenades Plaza,
on September 22, 1994. The Partnership is expecting to complete a sale of its
Illinois apartment complex in April 1996. The Partnership estimates that the
remainder of the Partnership's properties will be sold during the next two to
three years. Upon the sale of a particular property, the net proceeds, if any,
are generally distributed, reinvested in existing properties, or held in
Partnership cash reserves rather than invested in acquiring additional
properties.
In December 1993, the Partnership refinanced the first and second mortgages
encumbering the Waterford Apartments property. The first mortgage, funded with
multifamily housing revenue bonds issued by the Tulsa County Home Finance
Authority, and the second mortgage were replaced with a new first mortgage. The
replacement financing was also funded with newly issued multifamily housing
revenue bonds issued by the Tulsa County Home Finance Authority. As a
requirement of the new financing, the Waterford property had to be classified as
single asset ownership. Since the Partnership owns multiple properties, a new
partnership was created to house the Waterford property as its sole real estate
asset. Waterford Partnership, a general partnership, was organized in the
3
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State of Connecticut with the Partnership as its managing general partner (99.9%
interest) and the General Partner (0.1% interest) as the other general partner.
The interest of the General Partner in the new partnership is held in trust for
the benefit of The Tulsa Corporation, a newly organized Delaware corporation,
the stock of which is 100% owned by the Partnership. The Tulsa Corporation was
created with the sole purpose of acting as the beneficiary of the General
Partner's ownership interest in the Waterford Partnership. The new structure has
no economic effect on the Partners nor does it require any changes in financial
reporting for the Partnership.
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The Partnership has made the real property investments set forth in the
following table:
<S> <C> <C> <C> <C> <C>
==================================================================================================================================
Versailles Promenades Waterford Stonebridge Stewart's Glen
Village Plaza Shopping Apartments Manor Apartments
Apartments Center Tulsa, Oklahoma Apartments Phase III
Forest Park, Port Charlotte, New Orleans, Willowbrook,
Ohio Florida (c) Louisiana Illinois (d)
==================================================================================================================================
Purchase $5,920,000 $10,486,000 $17,130,000 $11,326,014 $7,194,485
Price (a)
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Cash $2,120,000 $5,463,052 $3,441,666 $3,278,235 $2,069,485
Investment
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Initial $3,800,000 $5,022,948 $13,688,334 $8,047,779 $5,125,000
Mortgage
Financing (b)
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Acquisition $433,986 $1,194,469 $806,350 $742,782 $496,395
Fees and
Expenses
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Size 180 units 230,268 sq. ft. 344 units 264 units 104 units
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Date of 02/06/85 04/15/85 (sold 10/31/85 11/26/85 07/24/87
Purchase 09/22/94)
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Type of Fee ownership Fee ownership Fee ownership Fee ownership Fee ownership
Ownership subject to subject to subject to subject to subject to
Mortgage Mortgage Mortgage Mortgage Mortgage
==================================================================================================================================
<FN>
(a) Excludes all broker fees paid at closing. Amounts shown do not reflect
reductions for discounts on related debt or sellers' guarantees which are
adjustments to the recorded purchase price.
(b) Reference is made to the Notes to Financial Statements included in this
annual report for details on debt modifications, the current outstanding
principal balances and a description of the long-term indebtedness secured
by the Partnership's real property investments and to Schedule III for
additional information.
(c) Promenades Plaza added 14,624 square feet subsequent to acquisition, see
Item 7. This property was sold September 22, 1994. Reference is made to the
Notes to Financial Statements for a description of the sale.
(d) In July 1987, the Partnership acquired a 33% interest in the Phase III
Apartment Venture, a joint venture with the General Partner, which was
established as a temporary vehicle for providing the Partnership with the
means to acquire the property without finalized mortgage arrangements, and,
thereby, avoid being in default under the terms of the purchase agreement.
On December 10, 1987 the Partnership received a commitment for permanent
mortgage financing which was acceptable to CIGNA Realty Resources, Inc.-
Fifth. At that time, in accordance with the terms of the joint venture
agreement, the General Partner exercised its right to require the
Partnership to purchase General Partner's entire interest in the joint
venture. Funding of the purchase took place in January 1988. The
information shown represents the Partnership's 100% ownership of the
property.
</TABLE>
4
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Versailles Village Apartments is located in Forest Park, Ohio, part of
Hamilton County in the northwest section of Greater Cincinnati, approximately 14
miles outside downtown. The unemployment rate for Greater Cincinnati remains
lower than the national average and employment growth continues to outperform
the nation. A stable, diverse local economy keeps the Greater Cincinnati area
from experiencing dramatic fluctuations in job figures. The region has
experienced expansion in the retail and service sectors while losing some of its
traditionally higher paying manufacturing base. The Greater Cincinnati economy
is expected to remain stable with incremental improvements. The City of Forest
Park is 35 to 40 years old with a population of approximately 21,000. Forest
Park is an integrated and diversified middle class community with an average
household income of $46,000. Since 1990, average household income and the median
price of a home rose 22% and 17%, respectively. The northwest apartment market
contains approximately 12,000 units, with 250 to 300 units added to the market
in 1994 and 1995. The Versailles Village submarket contains approximately 2,600
units of direct and secondary competitors. Although the property's competition
is mostly newer, Versailles Village competes well with similar Class C and B
properties in the submarket. Versailles Village is well maintained with
competitive rents and emphasizes tenant service. The property offers amenities
similar to the competition but has much larger floor plans. The property's
ability to achieve rate increases depends primarily on the general trends of the
market. The market for apartments in Greater Cincinnati appears to have
stabilized, and rental rates at Versailles are planned to increase 2.2% in 1996.
Waterford Apartments is located in South Tulsa, Oklahoma. Employment and
personal income in Tulsa have continued to grow ahead of the national average,
with expansion in the services and government sectors accounting for much of the
growth. While expanding, Tulsa's growth is at a slower pace than other regional
cities, although Tulsa is beginning to attract interest as a region with strong
potential. Unemployment is down over the last year, per capita income is higher
than the national average and the cost of living is lower than the national
average. Multifamily construction had been at a virtual standstill since 1990
until 1994 when 288 units came into the market in anticipation of an increased
demand. There are approximately 18,400 units in the southeast submarket where
Waterford is located. Approximately 600 new units are expected to come online in
1996. Occupancy in the market was 92% for 1995. During the year, Waterford's
occupancy averaged 94%, up from 90% in 1994. Waterford is located only five
miles outside the central business district in a well-maintained, vintage
neighborhood. The property is a Class "A" luxury apartment complex and holds an
advantage over the Tulsa luxury apartment market due to its superior location.
While the size of its units are somewhat smaller than the competition, it
compensates with mature landscaping, a variety of amenities and a focus on the
upkeep of the units. Updates were made in 1995 to many of the common areas
including a renovation to the club house, models, and pool area as well as
landscaping and structural maintenance throughout the property. Rents at the
property during 1995 averaged $435 per month versus $382 per month for the
market. The property not only competes with other luxury apartments in the
market, but with single family home purchases as well since monthly mortgage
payments are comparable to apartment rents. Rents at the property are scheduled
to increase slowly at 2.4% in 1996.
Stonebridge Manor Apartments is located in the Parish of Jefferson in
Gretna, Louisiana. Gretna is located just south of the Mississippi River across
from New Orleans in an area known as the Westbank. Linked to the Central
Business District by two bridges, the Westbank supports the majority of
commercial and industrial activity. Jefferson Parish enjoys a diversified
employment base which supports many industries including retail, wholesale trade
and tourism. The gaming industry in Jefferson has proved very profitable with
the two major casinos providing approximately $180,000,000 in revenues during
1995. Multifamily construction levels remained low, with only 65 permits issued
in 1995. The Stonebridge submarket remains stable with no new construction and
slow increases in occupancy and rental rates. Based on current conditions,
occupancy should remain essentially unchanged and rental rates should continue
to grow moderately. Physical occupancy at Stonebridge averaged 97% for 1995
while the market was 95%. The property was also able to exceed market with rents
averaging $514 per month versus $436 in the market. The property is well
positioned within its submarket of approximately 5,000 units. Stonebridge
benefits from an excellent location near the airport and major highway arteries,
with easy access to downtown New Orleans via the two connector bridges.
Competition stems mainly from a switch to home ownership where a typical
mortgage can approximate monthly rent.
5
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Stewart's Glen III is the third phase (104 units) of a three phase, 488
unit Class "A" apartment complex, located in Willowbrook, Illinois, a township
in Dupage County. Dupage County has seen rapid population and employment growth
over the last six years and this trend is expected to continue. The county's
unemployment percentage for 1995 was 3.7%, the same as in 1994 and one of the
lowest in the state. The median income of Willowbrook, an affluent and
professional township, is $57,000, one of the highest in the state. The five
mile radius encompassing Stewart's Glen contains the majority of its direct
competitors, defined as the submarket. The submarket contains approximately
3,600 units. Stewart's Glen has a strategic advantage because of its convenient
location and access to major routes. Due to the extremely strong rental market
in the Dupage County, several new multifamily properties, approximately 1,500
units, are either under construction or expected to begin construction in 1996.
Although most are not located in the submarket and do not compete directly with
Stewart's Glen, the interest in the area supports the positive outlook for
Dupage County. For Stewart's Glen to maintain its market position, the property
is continuing to renovate and upgrade common areas such as landscaping,
clubhouse, hallways and laundry rooms, as the new construction projects will
have expanded amenities such as attached garages, washer and dryers in the
units, gated entrances and alarms. Lower interest rates continue to make home
ownership in the County an attractive alternative to renting and represented
competition for Stewart's Glen in 1995. Rents at the property averaged $786 per
month, ahead of the market average. The occupancy average at Stewart's Glen was
95% in 1995, down from the prior year but slightly ahead of the market. The
property is expected to be sold in the first quarter of 1996, prior to debt
maturity, capitalizing on the current strong investor interest in the Chicago
area.
Approximate occupancy levels for the properties on a quarterly basis are
set forth in the table in Item 2.
The Partnership itself has no employees; however, the unaffiliated property
managers engaged by CIGNA Investments, Inc. ("CII", formerly CIGNA Capital
Advisers, Inc.) on behalf of the Partnership maintain on-site staff. For a
description of asset management services provided by CII and the terms of
transactions between the Partnership and affiliates of the General Partner, see
Item 13 and the Notes to Financial Statements.
The following list details gross revenues from operations for each of the
Partnership's investment properties as a percentage of the Partnership's total
gross revenues during 1993, 1994, and 1995. In each year, interest income
accounted for the balance of gross revenues from operations.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
1993 1994 1995
---- ---- ----
1. Versailles Village Apartments
Forest Park, OH 16% 18% 20%
2. Promenades Plaza Shopping Center
Port Charlotte, FL (a) 20% 14% N/A
3. Waterford Apartments
Tulsa, OK 26% 27% 31%
4. Stonebridge Manor Apartments
New Orleans, LA 22% 24% 28%
5. Stewart's Glen Apartments Phase III
Willowbrook, IL 15% 16% 18%
<FN>
An "N/A" indicates the property was not owned by the Partnership during the
year.
(a) Promenades Plaza was sold on September 22, 1994.
</TABLE>
6
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ITEM 2. PROPERTIES
The Partnership owns directly (subject to existing first mortgage loans and
purchase money notes) the properties described in Item 1 herein. The
Partnership's residential properties generally have lease terms of one year or
less. In the opinion of the General Partner, the Partnership's properties
continue to be adequately insured.
The following list compares approximate occupancy levels by quarter for the
Partnership's investment properties during 1991, 1992, 1993, 1994 and 1995:
<TABLE>
<S> <C> <C> <C> <C> <C>
===============================================================================================================================
VERSAILLES VILLAGE PROMENADES WATERFORD STONEBRIDGE STEWART'S GLEN
APARTMENTS PLAZA SHOPPING APARTMENTS MANOR APTS. PHASE III
FOREST PARK, OH CENTER TULSA, OK APARTMENTS WILLOWBROOK, IL
PORT CHARLOTTE, FL NEW ORLEANS, LA
(A)
===============================================================================================================================
- -------------------------------------------------------------------------------------------------------------------------------
1991
- ----------------
AT 03/31 96% 91% 95% 95% 98%
AT 06/30 98% 91% 94% 93% 95%
AT 09/30 97% 91% 98% 97% 93%
AT 12/31 95% 91% 92% 96% 98%
- -------------------------------------------------------------------------------------------------------------------------
1992
- ----------------
AT 03/31 98% 97% 96% 95% 94%
AT 06/30 98% 96% 92% 95% 99%
AT 09/30 93% 96% 98% 98% 97%
AT 12/31 96% 95% 95% 97% 95%
- -------------------------------------------------------------------------------------------------------------------------------
1993
- ----------------
AT 03/31 94% 85% 96% 94% 99%
AT 06/30 97% 84% 95% 95% 99%
AT 09/30 94% 84% 95% 96% 97%
AT 12/31 96% 82% 95% 95% 98%
- -------------------------------------------------------------------------------------------------------------------------------
1994
- ----------------
AT 03/31 94% 82% 88% 96% 100%
AT 06/30 97% 82% 93% 97% 99%
AT 09/30 99% N/A 94% 95% 93%
AT 12/31 96% N/A 83% 97% 98%
- -------------------------------------------------------------------------------------------------------------------------------
1995
- ----------------
AT 03/31 97% N/A 90% 96% 96%
AT 06/30 99% N/A 96% 97% 89%
AT 09/30 96% N/A 98% 96% 98%
AT 12/31 94% N/A 92% 98% 97%
===============================================================================================================================
<FN>
An "N/A" indicates that the property was not owned by the Partnership at the end
of the quarter.
(a) Promenades Plaza was sold on September 22, 1994.
</TABLE>
7
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ITEM 3. LEGAL PROCEEDINGS
Neither the Partnership nor its properties are party to or the subject of
any legal proceedings involving any material exposure.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5.MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SECURITY HOLDER MATTERS
As of December 31, 1995, there were approximately 1,199 record Unit
Holders. There is no established public trading market for Units. The General
Partner will not redeem or repurchase the Units.
The Revenue Act of 1987 contains provisions which have an adverse impact on
investors in a "publicly traded partnership" ("PTP"). A PTP is a partnership
whose interests are traded on an established securities market or readily
tradable on a secondary market (or the substantial equivalent thereof). If the
Partnership were classified as a PTP, (i) the Partnership may be taxed as a
corporation and (ii) the passive activity rules of section 469 are applied
separately with respect to items attributable to each publicly traded
partnership. On November 29, 1995, the Internal Revenue Service ("IRS") issued
the Final PTP Regulations under section 1.7704-1. The Final PTP Regulations are
effective for the tax years beginning after December 31, 1995. However, a
transition rule exists for partnerships that were engaged in an activity before
December 4, 1995 and that do not add a substantial new line of business after
that date. The Partnership qualifies for the transition rule and may continue to
rely on Notice 88-75 for guidance through the end of 2005. In Notice 88-75, the
IRS established alternative safe harbors that allow interests in a partnership
to be transferred or redeemed in certain circumstances without causing the
partnership to be characterized as a PTP. Units of the Partnership are not
listed or quoted for trading on an established securities exchange. However,
CIGNA Financial Partners ("CFP") will, upon request, provide a Limited Partner
desiring to sell or transfer Units with a list of secondary market firms which
may provide a means for matching potential sellers with potential buyers of
Units, if any. Frequent sales of Units utilizing these services could cause the
Partnership to be deemed a PTP. The Partnership has adopted a policy prohibiting
transfers of Units in secondary market transactions unless, notwithstanding such
transfers, the Partnership will satisfy at least one of the safe harbors.
Although such a restriction could impair the ability of an investor to liquidate
its investment, the service provided by CFP described above should allow a
certain number of transfers to be made in compliance with the safe harbor.
The Partnership made no cash distributions to its Partners in 1995 or 1994.
The Partnership suspended quarterly distributions to Partners as of the fourth
quarter of 1988 to enable it to fund operating deficits from certain of its
properties. Reference is made to the Notes to Financial Statements for a
description of payments to the State of Connecticut on behalf of limited
partners that were charged to Limited Partner capital accounts.
There are no material legal restrictions upon the Partnership's ability to
make distributions in accordance with the provisions of the Partnership
Agreement. The Partnership intends to renew its policy of making quarterly
distributions of distributable cash from operations once the Partnership cash
reserves exclusive of working capital reserves have sufficient funds to retire
the Partnership's $3,400,000 recourse promissory note.
8
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ITEM 6. SELECTED FINANCIAL DATA (A)
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<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
DECEMBER 31, 1995, 1994, 1993, 1992 AND 1991
(NOT COVERED BY REPORT OF INDEPENDENT ACCOUNTANTS)
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Total income $ 5,818,941 $ 6,392,361 $ 6,629,216 $ 6,649,929 $ 6,339,690
Net loss (b) (210,876) (706,274) (5,783,253) (625,366) (2,275,638)
Net loss per Unit (b) (8.40) (29.12) (233.39) (24.91) (90.64)
Total assets 30,739,260 31,005,057 37,830,318 45,600,754 46,558,357
Notes and mortgages payable 29,347,622 29,487,591 35,334,863 37,221,143 37,622,020
<FN>
(a) The above selected financial data should be read in conjunction with the
financial statements and the related notes appearing herein. Reference is
made to the Notes to Financial Statements for a description of payments to
the State of Connecticut on behalf of limited partners. These amounts are
charged to limited partner capital accounts and have not been included in
the above data.
(b) Included in 1994 is a $24,837 gain on sale of property (100% to the General
Partner); included in 1993 is a $5,000,000 loss due to impairment of assets
($199.15 per Unit) and $76,417 gain on sale of property (100% to the
General Partner); included in 1991 is a $700,000 loss due to impairment of
assets ($27.88 per Unit).
</TABLE>
9
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
On July 2, 1984, the Partnership commenced an offering of $25,000,000
(subject to an increase up to $50,000,000) of limited partnership interests
pursuant to a Registration Statement on Form S-11 under the Securities Act of
1933. The offering terminated on July 1, 1986 and a total of 24,856 Units were
issued by the Partnership and assigned to the public at $1,000 per interest.
Subsequent to the termination of the offering, no Unit Holder has made any
additional capital contribution. The Partnership does not expect to seek
additional capital contributions.
After deduction of selling expenses and other offering costs, the
Partnership had $22,408,052 with which to make investments in real properties,
to pay legal fees and other costs (including acquisition fees) related to such
investments for working capital reserves and for capital expenditure reserves. A
portion of the proceeds was utilized to acquire the properties described in Item
1 herein.
At December 31, 1995, the Partnership had $2,481,123 in cash and cash
equivalents available for working capital requirements and Partnership cash
reserves. The source of capital for both short-term and long-term future
liquidity and distributions is expected to be through cash generated by the
investment properties and from the sale of such properties. During 1995, the
Partnership's four wholly owned apartment investment properties generated net
operating income of $3,310,000 and, in addition, the Partnership level net
income was $38,000 for a total of $3,348,000 available for debt service and
capital expenditures. For 1995, cash flow from operations of the Partnership
netted to $663,000 after debt service of $2,472,000, inclusive of refinance
costs for the Stonebridge Manor mortgage debt, and capital improvements of
$213,000. The 1995 net cash flow from operations were added to the Partnership's
cash reserves.
The Partnership's property operational forecasts for 1996 have estimated
stable net operating income with considerable increases in capital spending.
Stonebridge Manor will be increasing capital expenditures from $70,000 to
$300,000 due to a roof replacement project. Based on the property operational
forecasts, the Partnership anticipates that 1996 property net operating income
will be sufficient to cover planned 1996 capital improvements, debt service and
Partnership expenses.
The Partnership's mortgage obligations are nonrecourse. As such, the
mortgage note holders can only look to the property pledged as security for
repayment of the related indebtedness. During the period from December 1993 to
March 1995, the Partnership refinanced each property's mortgage loan in
anticipation of debt maturities and a Partnership liquidation strategy. Based on
current property operations and operational forecasts, the Partnership
anticipates that proceeds from the sales of the Partnership's investment
properties will be sufficient to satisfy the Partnership nonrecourse mortgage
obligations. As a result of a $2,500,000 expansion project at the Partnership's
shopping center property, Promenades Plaza, and a 1990 refinance of the then
outstanding mortgage on Stonebridge Manor Apartments, the Partnership arranged
$3,400,000 of unsecured borrowings. The recourse promissory note has been
guaranteed by an affiliate of the General Partner for an annual fee. On
September 22, 1994, the Partnership sold Promenades Plaza and after payment of
the first mortgage and funding of the property's 1994 operating deficits, the
Partnership netted approximately $78,000 from the sale. The Partnership was
unable to repay the portion of the unsecured borrowings related to Promenades
Plaza from the sale of the property. The Partnership currently plans to repay
the $3,400,000 promissory note in 1996 from the net proceeds of a sale of the
Stewart's Glen III apartments, together with funds from the Partnership's cash
reserves. The sale of the Stewart's Glen III apartments is discussed herein.
On March 31, 1995, the Partnership completed a refinance for the
Stonebridge Manor mortgage debt with Hibernia National Bank. The new loan is in
the principal amount of $5,300,000 at an interest rate of 10.15% with a term of
three years and monthly payments of principal and interest based upon twenty
year amortization. Prepayment is closed for the first year, open at 1% during
the second year and open without penalty during the third year. The new loan
amount approximated the principal balance of the loan which it replaced.
Origination fees and closing costs
10
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totalled approximately $105,000 which was paid from 1995 operating cash flow.
The Partnership plans to sell Stonebridge Manor to repay the mortgage obligation
prior to debt maturity. Based on current projections, cash will be available to
distribute to Unit Holders upon the sale of Stonebridge Manor after repayment of
the outstanding mortgage obligation.
In November 1994, the Partnership obtained a modification of the maturity
date and interest rate on the mortgage debt for Stewart's Glen III. The maturity
date was extended from February 1995 to April 1996 and the interest rate was
lowered to 8.5%. The cost of the modifications was minimal. The Partnership
marketed the property for sale beginning in the fourth quarter of 1995 and
several offers have been received. A purchase and sale agreement is in the
process of negotiation and a sale is expected to be completed by April 1996. The
Stewart's Glen III mortgage lender has agreed to extend the mortgage note
maturity date, at no cost, to July 1, 1996 to allow the Partnership to complete
a sale. Based on an estimated gross selling price of approximately $7,900,000,
the Partnership expects to net approximately $2,900,000 after closing costs and
repayment of the mortgage debt. The Partnership will record a gain on the sale
for both book and tax purposes. The Partnership will utilize the net sales
proceeds and approximately $500,000 of cash reserves to retire the Partnership's
$3,400,000 recourse promissory note.
On March 30, 1994, the Partnership refinanced the Versailles Village
mortgage loan with the existing lender. The terms include a principal balance of
$4,200,000 for seven years at 8% based on a 25 year amortization schedule. The
loan is assumable with approval and payment of a 1% transfer fee. The loan is
pre-payable over the term of the loan at the greater of yield maintenance, tied
to treasuries, or 1% of the outstanding loan balance. The net refinance proceeds
of $138,505 was added to the Partnership's reserves. The Partnership has
estimated a sale of the Versailles Village property in approximately two years,
possibly subject to the assumable financing. Based on the current projections,
cash will be available to distribute to Unit Holders from the property sale.
The Waterford property's first mortgage and purchase money note were
refinanced on December 17, 1993 with $11,755,000 in industrial revenue bonds
issued by the Tulsa County Home Finance Authority and credit enhanced by AXA
Reassurance, SA. The new financing is similar to the bond financing which it
replaced and was issued by the same county housing authority. The bond issue
consists of $11,355,000 of tax exempt bonds (Series A Bonds) which mature on
December 1, 2018, and $400,000 in taxable bonds (Series B Bonds) which mature
December 1, 1998. The interest rates on both series are fixed at 5.355% and
5.9455% (inclusive of Trustee fees and administrative costs) for the Series A
and Series B bonds, respectively. The AXA insurance policy expires on December
1, 2004, however, the Partnership is required to obtain a new credit enhancer by
December 1, 2003. The bonds can be prepaid in 2001 at 102% and at par in 2002
and thereafter.
In order to facilitate the low-interest bond backed financing, the
Partnership set up a new ownership structure for the property, with no financial
statement impact on the Partnership. Reference is made to Item 1 for a
description.
The Series A issue has been designed with a cash collateral account rather
than a sinking fund. Upon closing, a $100,000 contribution was made to the cash
collateral account representing a quasi debt service reserve. The cash
collateral account was created to meet lender guidelines which required that 10%
of the bond issue be amortized by the end of the ten year credit enhancement
period. By utilizing a cash collateral account, the Partnership is able to
retain the full amount of the tax-exempt bond issue which may increase the value
of a premium if the property is sold prior to the bonds maturity. Contributions
to the cash collateral account are scheduled to begin on December 1, 1998.
Under the new bond structure, interest only payments of $52,541 were made
monthly to the trustee to service the semi-annual payments due on the bonds
until December 1995 when principal payments began on the Series B bonds. The
$400,000 principal will fully amortize, based on a schedule of bond maturities,
by December 1998.
The Partnership's liquidation strategy includes a sale of the Waterford
property late in 1998 prior to required contributions to the Series A cash
collateral account. Based on current estimates, a sale inclusive of the bond
financing in late 1998 will provide net cash flow to the Partnership for
distribution to Unit Holders.
11
<PAGE>
As a result of a general downturn in the economy and especially real estate
markets during the latter part of the 1980's and early 1990's, the Partnership
has held its investment properties longer than originally anticipated in order
to maximize the recovery of its investments and any potential for return
thereon. The economy has improved and real estate markets have begun to recover
in most regions. The Partnership has entered the liquidation phase of the
Partnership which includes completing sales of the investment properties by
1998. Based on the current position of the Partnership, it appears that the
Partnership's objective of capital appreciation will not be achieved. Although
the Partnership expects to distribute from the sales proceeds a portion of the
Unit Holders' original capital, the return will be significantly less than their
original investment.
RESULTS OF OPERATIONS
Partnership net operating income (total revenue less property operating
expenses, general and administrative expenses, fees and reimbursements to
affiliates and provision for doubtful accounts) was approximately $3,348,000 for
1995, a decrease from approximately $3,631,000 in 1994.
Net operating income at Promenades Plaza was approximately $506,000 in
1994. The property was sold on September 22, 1994.
Versailles Village net operating income increased approximately $53,000 in
1995 compared with 1994. The main contributors to the increase were rental rate
increases and lower utility expenses. In addition, a nonrecurring real estate
tax consulting fee was incurred in 1994.
Stonebridge Manor net operating income increased approximately $73,000 in
1995 from 1994, generally as a result of an increase in rental rates. The
increase in income was partially offset by an increase in payroll.
Increased revenue at Waterford Apartments was partially offset by an
increase in landscaping expenses, payroll and advertising expenses. Net
operating income increased approximately $48,000 in 1995 over 1994.
At Stewart's Glen, increases in nonroutine maintenance and payroll expenses
were partially offset by an increase in rental income from a modest rise in
rental rates. Net operating income decreased by approximately $67,000 in 1995
from 1994.
The balance of the change in the Partnership's 1995 net operating income
compared with 1994 resulted from an increase in interest income earned on short
term investments and on trust accounts associated with Waterford's bond
financing. In addition, the Partnership collected approximately $40,000 of
percentage rents in 1995 in excess of the recorded 1994 receivable from tenants
of Promenades Plaza.
RESULTS - 1995 COMPARED WITH 1994
Generally, decreases in the income statement accounts are the result of the
Promenades Plaza sale on September 22, 1994. For the year ended December 31,
1994, Promenades Plaza accounted for approximately $804,000 of rental income,
$117,000 of other income, $303,000 of property operating expenses, $87,000 of
general and administrative expenses, $25,000 of provision for doubtful accounts,
$538,000 of interest expense and $250,000 of depreciation and amortization.
Rental income increased approximately $218,000 for the year ended December
31, 1995, as compared with 1994. Stonebridge Manor rental income increased
approximately $96,000 and Versailles Village rental income increased
approximately $34,000 for the year as a result of rental rate increases.
Stewart's Glen's rental rate increases offset a nominal decline in average
occupancy producing a net increase in rental income of approximately $26,000.
Rental income increased $62,000 at Waterford Apartments due to weak occupancy in
the fourth quarter of 1994.
12
<PAGE>
The increase in other income for the year ended December 31, 1995, as
compared with 1994, resulted from collecting approximately $40,000 in excess of
the 1994 receivable relating to 1994 expense recapture and percentage rent from
tenants at Promenades Plaza.
The increase in interest income for the year ended December 31, 1995, as
compared with 1994, was the result of an increase in interest rates on short
term investments combined with higher average cash balances. In addition,
Waterford earned higher rates on the trust accounts associated with its bond
related financing.
Overall, property operating expenses increased for the year ended December
31, 1995, as compared with 1994, due to a rise in insurance costs at each of the
properties. In addition, Waterford incurred nonroutine maintenance expenditures
for extensive landscaping work and Stewart's Glen completed an exterior staining
project and a greater number of carpet replacements. Stonebridge incurred costs
for dryer vent replacements and fireplace cleaning. Increased costs at
Stonebridge were partially offset by fewer carpet replacements and higher
utility reimbursements from corporate tenants. Expenses decreased at Versailles
as a result of a nonrecurring real estate tax consulting fee in 1994 as well as
a drop in utility usage in 1995 due to the milder winter and a repair of a water
leak.
The increase in general and administrative expense for the year ended
December 31, 1995, as compared with 1994, was the result of increased payroll
related costs at Waterford, Stonebridge and Stewart's Glen. In addition,
advertising costs were increased at Waterford in an effort to increase
occupancy.
The decrease in interest expense for the year ended December 31, 1995, as
compared with 1994, was the result of the November 1, 1994 Stewart's Glen
refinance which decreased the interest rate from 9.94% to 8.55%. In addition,
the March 30, 1994 Versailles Village first mortgage refinance lowered the
interest rate from 10% to 8%.
The increase in depreciation and amortization for the year ended December
31, 1995, as compared with 1994, was primarily the result of amortizing
financing costs of the April 1, 1995 Stonebridge Manor first mortgage refinance.
RESULTS - 1994 COMPARED WITH 1993
Generally, decreases in the income statement accounts are the result of the
sale of Promenades Plaza on September 22, 1994. For the fourth quarter of 1993,
Promenades Plaza accounted for approximately $258,000 of rental income, $47,000
of other income, $99,000 of property operating expenses, $45,000 of general and
administrative expenses, $143,000 of interest expense and $123,000 of
depreciation and amortization.
Excluding the loss of fourth quarter 1994 rental income from the sale of
Promenades Plaza, rental income increased approximately $23,000 for the year
ended December 31, 1994, as compared with 1993. Rental rate increases
implemented in 1993 and 1994 at Stonebridge Manor increased rental income
approximately $80,000 for the year ended December 31, 1994, as compared with
1993. Decreased average occupancy at Promenades Plaza for the six months ended
June 30, 1994, as compared with the same period of 1993, coupled with the loss
of rental income from the sale date through September 30, 1994, decreased rental
income approximately $92,000 for the applicable periods. Rental rate increases
in 1994 at Versailles Village and Stewart's Glen, coupled with a slight increase
in average occupancy at Versailles, resulted in increased rental income at each
property for 1994 of approximately $23,000 and $16,000 respectively. A slight
decrease in average occupancy at Waterford for 1994 resulted in an approximately
$4,000 decrease in rental income compared with 1993.
The increase in interest income for the year ended December 31, 1994, as
compared with 1993, was the result of interest earned on trust accounts
associated with Waterford's bond financing.
Property operating expenses increased at Stonebridge for the year ended
December 31, 1994, as compared with 1993, due to a greater number of carpet and
tile replacements and an exterior painting project. At Waterford
13
<PAGE>
Apartments, property operating expenses increased as a result of higher utility
and insurance costs and parking lot repairs. Expense savings in 1994 at
Versailles due to a 1993 painting project, partially offset the 1994 increases
at Stonebridge and Waterford.
The decrease in general and administrative expense for the year ended
December 31, 1994, as compared with 1993, was the result of payroll savings in
1994 at Waterford and Stewart's Glen due to staffing changes and the absence of
non-recurring legal fees recorded in the second and third quarters of 1993 at
Promenades. The decrease was partially offset by increased advertising
expenditures at Waterford in 1994.
The provision for doubtful accounts was primarily the result of
collectibility problems at Promenades Plaza.
Mortgage litigation fees incurred in 1993 were related to the resolution of
Waterford's second mortgage litigation.
The increase in interest expense for the year ended December 31, 1994, as
compared with 1993, was the result of a default rate of interest on the
Promenades first mortgage between the June 1, 1994 default and the September 22,
1994 property sale. In addition, a low effective interest rate in 1993 on
Waterford's variable rate bond financing versus 1994's fixed rate bond financing
contributed to the increase. Offsetting a portion of the increase were: savings
from the lower rates on the Promenades and Stonebridge promissory notes
refinanced during the first quarter of 1994; the Versailles Village first
mortgage March 30, 1994 refinance, lowering the interest rate from 10% to 8%;
and the Stewart's Glen November 1, 1994 refinance, decreasing the interest rate
from 9.94% to 8.55%.
The decrease in depreciation and amortization for the year ended December
31, 1994, as compared with 1993, was the result of the impairment loss for
Promenades and the amortization of the surety fee related to Waterford's
variable rate bond financing in the fourth quarter of 1993. The decrease was
partially offset by the write-off of the unamortized leasing commissions
relating to vacated tenants at Promenades.
The 1994 gain on sale of property was the result of the sale at Promenades
Plaza in September 1994. The 1993 gain on sale of property was the result of an
outparcel sale at Promenades Plaza in January 1993.
INFLATION
With inflation at a low rate during 1995, 1994 and 1993, the effect of
inflation and changing prices on current revenue and income from operations has
been minimal.
Any significant inflation in future periods is likely to increase rental
rates (from leases to new tenants or renewals of leases to existing tenants)
assuming no major changes in market conditions. At the same time, it is
anticipated that property operating expenses will be similarly affected.
Assuming no major changes in occupancy levels, increases in rental income are
expected to cover inflation driven increases in the cost of operating the
properties and in property taxes. Inflation may also result in capital
appreciation of the Partnership's investment properties over a period of time as
rental rates and replacement costs of properties increase.
14
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
INDEX
<S> <C>
PAGE
Report of Independent Accountants 16
Financial Statements:
Balance Sheets, December 31, 1995 and 1994 17
Statements of Operations, For the Years Ended December 31, 1995, 1994 and 1993 18
Statements of Partners' Capital (Deficit), For the Years Ended December 31, 1995, 1994 and 1993 19
Statements of Cash Flows, For the Years Ended December 31, 1995, 1994 and 1993 20
Notes to Financial Statements 21
Schedules:
III - Real Estate and Accumulated Depreciation, December 31, 1995 29
Schedules not filed:
All schedules other than those indicated in the index have been omitted as
the required information is inapplicable or the information is presented in the
financial statements or related notes.
</TABLE>
15
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Connecticut General Realty Investors III
Limited Partnership
In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of Connecticut
General Realty Investors III Limited Partnership at December 31, 1995 and 1994,
and the results of its operations and its cash flows for each of the three years
in the period ended December 31, 1995, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Partnership's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Hartford, Connecticut
February 13, 1996
16
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
<S> <C> <C>
ASSETS 1995 1994
------ ---- ----
Property and improvements, at cost:
Land and land improvements $ 6,119,148 $ 6,029,006
Buildings 30,577,342 30,507,857
Furniture and fixtures 2,206,128 2,113,119
--------------- ---------------
38,902,618 38,649,982
Less accumulated depreciation 12,770,211 11,629,808
--------------- ---------------
Net property and improvements 26,132,407 27,020,174
Cash and cash equivalents 2,481,123 1,662,708
Accounts receivable (net of allowance of $8,671 in 1995 and
$10,353 in 1994) 7,694 87,264
Escrow deposits 281,236 171,265
Prepaid insurance -- 44,265
Other asset 1,000 97,371
Deferred charges, net 1,329,140 1,415,350
Escrowed debt service funds 506,660 506,660
--------------- ---------------
Total $ 30,739,260 $ 31,005,057
=============== ===============
LIABILITIES AND PARTNERS' CAPITAL (DEFICIT)
Liabilities:
Notes and mortgages payable $ 29,347,622 $ 29,487,591
Accounts payable and accrued expenses (including $10,001
in 1995 and $8,067 in 1994 due to affiliates) 361,508 270,002
Accrued interest payable (including $17,000 in 1995
and 1994 due to affiliates) 72,946 72,946
Tenant security deposits 169,396 169,144
Unearned income 25,973 25,693
--------------- ---------------
Total liabilities 29,977,445 30,025,376
--------------- ---------------
Partners' capital (deficit):
General Partner:
Capital contributions 1,000 1,000
Cumulative net loss (102,765) (100,657)
Cumulative cash distributions (13,355) (13,355)
--------------- ---------------
(115,120) (113,012)
--------------- ---------------
Limited partners (24,856 Units):
Capital contributions, net of offering costs 22,408,052 22,408,052
Cumulative net loss (20,197,967) (19,989,199)
Cumulative cash distributions (1,333,150) (1,326,160)
--------------- ---------------
876,935 1,092,693
--------------- ---------------
Total partners' capital 761,815 979,681
--------------- ---------------
Total $ 30,739,260 $ 31,005,057
=============== ===============
The Notes to Financial Statements are an integral
part of these statements.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<S> <C> <C> <C>
1995 1994 1993
---- ---- ----
Income:
Rental income $ 5,470,498 $ 6,057,080 $ 6,291,623
Other income 189,499 252,860 299,690
Interest income 158,944 82,421 37,903
------------- -------------- ---------------
5,818,941 6,392,361 6,629,216
------------- -------------- ---------------
Expenses:
Property operating expenses 1,565,854 1,792,651 1,856,855
General and administrative 773,405 824,771 908,046
Fees and reimbursements to affiliates 108,330 93,147 87,747
Provision for doubtful accounts 23,304 50,347 43,444
Mortgage litigation fees -- -- 175,129
Interest expense (includes $68,000 for 1995,
$66,313 for 1994 and $61,250 for 1993 to affiliates) 2,227,301 2,833,940 2,520,418
Depreciation and amortization 1,331,623 1,528,616 1,897,247
Loss due to impairment of assets -- -- 5,000,000
------------- -------------- ---------------
6,029,817 7,123,472 12,488,886
------------- -------------- ---------------
Loss from operations (210,876) (731,111) (5,859,670)
Gain on sale of property -- 24,837 76,417
------------- -------------- ---------------
Net loss $ (210,876) $ (706,274) $ (5,783,253)
============= ============== ===============
Net income (loss):
General Partner $ (2,108) $ 17,526 $ 17,820
Limited partners (208,768) (723,800) (5,801,073)
------------- -------------- ---------------
$ (210,876) $ (706,274) $ (5,783,253)
============= ============== ===============
Net loss per Unit $ (8.40) $ (29.12) $ (233.39)
============= ============== ===============
The Notes to Financial Statements are an integral
part of these statements.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<S> <C> <C> <C>
General Limited
Partner Partners Total
Balance (deficit) at December 31, 1992 $ (148,358) $ 7,622,921 $ 7,474,563
Distributions -- (1,683) (1,683)
Net income (loss) 17,820 (5,801,073) (5,783,253)
------------ ------------- -------------
Balance (deficit) at December 31, 1993 (130,538) 1,820,165 1,689,627
Distributions -- (3,672) (3,672)
Net income (loss) 17,526 (723,800) (706,274)
------------ ------------- -------------
Balance (deficit) at December 31, 1994 (113,012) 1,092,693 979,681
Distributions -- (6,990) (6,990)
Net loss (2,108) (208,768) (210,876)
------------- -------------- --------------
Balance (deficit) at December 31, 1995 $ (115,120) $ 876,935 $ 761,815
============ ============= =============
The Notes to Financial Statements are an integral
part of these statements.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<S> <C> <C> <C>
1995 1994 1993
---- ---- ----
Cash flows from operating activities:
Net loss $ (210,876) $ (706,274) $ (5,783,253)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Loss due to impairment of assets -- -- 5,000,000
Gain on sale of property -- (24,837) (76,417)
Depreciation and amortization 1,331,623 1,528,616 1,897,247
Provision for doubtful accounts 23,304 50,347 43,444
Deferred interest payable -- -- 61,026
Accounts receivable 56,266 68,687 (109,354)
Escrow deposits (109,971) (105,835) (45,680)
Accounts payable 48,897 (170,032) 9,415
Accrued interest payable -- (65,577) (51,369)
Other, net 141,168 (182,709) 42,404
--------------- ---------------- ---------------
Net cash provided by operating activities 1,280,411 392,386 987,463
--------------- ---------------- ---------------
Cash flows from investing activities:
Purchases of property and improvements (213,345) (198,797) (295,231)
Payment of leasing commissions -- (72,502) (13,009)
Proceeds from sale of property -- 6,572,000 452,500
Payment of closing costs related to sale of property -- (307,206) --
--------------- ---------------- ---------------
Net cash provided by (used in)
investing activities (213,345) 5,993,495 144,260
--------------- ---------------- ---------------
Cash flows from financing activities:
Proceeds from notes and mortgage loans 5,300,000 4,200,000 11,755,000
Repayment of notes and mortgage loans (5,439,969) (10,047,272) (13,702,306)
Proceeds from debt service escrow funds -- -- 2,552,457
Contributions to debt escrow service funds -- -- (506,660)
Payment of financing costs (105,010) (24,251) (1,534,083)
Distribution for limited partners (3,672) (1,683) (1,592)
--------------- ---------------- ---------------
Net cash used in financing activities (248,651) (5,873,206) (1,437,184)
--------------- ---------------- ---------------
Net increase (decrease) in cash and cash equivalents 818,415 512,675 (305,461)
Cash and cash equivalents, beginning of year 1,662,708 1,150,033 1,455,494
--------------- ---------------- ---------------
Cash and cash equivalents, end of year $ 2,481,123 $ 1,662,708 $ 1,150,033
=============== ================ ===============
Supplemental disclosure of cash information:
Interest paid during period $ 2,227,301 $ 2,899,517 $ 2,470,605
=============== ================ ===============
Supplemental disclosure of non-cash information:
Accrued purchases of property and improvements $ 45,941 $ 6,650 $ --
=============== ================ ===============
The Notes to Financial Statements are an integral
part of these statements.
</TABLE>
20
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(A CONNECTICUT LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND BASIS OF ACCOUNTING
The general partner of Connecticut General Realty Investors III Limited
Partnership (the "Partnership") is CIGNA Realty Resources, Inc. - Fifth (the
"General Partner"), an indirect, wholly owned subsidiary of CIGNA Corporation.
The Partnership is a Connecticut limited partnership which owns and operates
four residential complexes located in Ohio, Oklahoma, Louisiana and Illinois.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
In December 1993, the Partnership refinanced the first and second mortgages
encumbering the Waterford Apartments property. The first mortgage, funded with
multifamily housing revenue bonds issued by the Tulsa County Home Finance
Authority, and the second mortgage were replaced with a new first mortgage. The
replacement financing was also funded with newly issued multifamily housing
revenue bonds issued by the Tulsa County Home Finance Authority. As a
requirement of the new financing, the Waterford property had to be classified as
single asset ownership. Since the Partnership owns multiple properties, a new
partnership was created for the Waterford property as its sole real estate
asset. Waterford Partnership, a general partnership, was organized in the State
of Connecticut with the Partnership as its managing general partner (99.9%
interest) and the General Partner (0.1% interest) as the other general partner.
The interest of the General Partner in the new partnership is held in trust for
the benefit of The Tulsa Corporation, a newly organized Delaware corporation,
the stock of which is 100% owned by the Partnership. The Tulsa Corporation was
created with the sole purpose of acting as the beneficiary of the General
Partner's ownership interest in Waterford Partnership. The new structure has no
economic effect on the Partners nor does it require any changes in financial
reporting for the Partnership.
The Partnership's records are maintained on the accrual basis of accounting
for financial reporting purposes and are adjusted for federal income tax
reporting. The net effects of the adjustments as of December 31, 1995, 1994 and
1993, principally relating to the accounting for property impairment, and
differences in depreciation methods, are summarized as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1995 1994 1993
----------------------------- ---------------------------- ------------------------------
Financial Tax Financial Tax Financial Tax
Reporting Reporting Reporting Reporting Reporting Reporting
Total assets $ 30,739,260 $ 25,385,321 $ 31,005,057 $ 26,055,282 $ 37,830,318 $ 37,931,007
Partners' capital
(deficit):
General Partner (115,120) (179,085) (113,012) (172,937) (130,538) (114,881)
Limited partners 876,935 (4,387,493) 1,092,693 (3,771,899) 1,820,165 1,979,274
Net income (loss) (a):
General Partner (2,108) (6,147) 17,526 (58,056) 17,820 102,225
Limited partners (208,768) (608,609) (723,800) (5,747,501) (5,801,073) (1,383,633)
Net loss per Unit (a) (8.40) (24.48) (29.12) (231.23) (233.39) (55.67)
21
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
<FN>
(a) Included in 1994 is a $24,837 gain on sale of property (100% to the General
Partner) for financial reporting and a loss on sale of $4,503,525 ($179.37
per Unit) for tax reporting; included in 1993 is a $5,000,000 loss due to
impairment of assets ($199.15 per Unit) for financial reporting only, and a
gain on sale of property of $76,417 (100% to General Partner) for financial
reporting purposes and $116,201 (100% to General Partner) for tax
reporting.
</TABLE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) PROPERTY AND IMPROVEMENTS: Property and improvements are carried at cost
less accumulated depreciation. The cost represents the initial purchase
price and subsequent capitalized costs and adjustments, including certain
acquisition expenses and impairment losses. Depreciation of property and
improvements is calculated on the straight-line method based on the
estimated useful lives of the various components (5 to 30 years).
Maintenance and repair expenses are charged to operations as incurred.
Amounts received under the guarantee agreements from the sellers of the
Waterford Apartments, Stonebridge Manor and Stewart's Glen Apartments Phase
III were treated as a reduction of property purchase price.
As a result of inherent changes in market values of real estate property and
improvements, the Partnership reviews potential impairment annually. The
undiscounted future cash flow for each property, as estimated by the
Partnership, is compared to the net book value. If the carrying value is
greater than the sum of the estimated future undiscounted cash flows, and
deemed other than temporary, an impairment loss is recorded. 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").
Under the Statement, entities should continue to compare the sum of the
expected undiscounted future net cash flows to the carrying value of the
asset. If an impairment exists, the Statement requires a write-down to fair
value. 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 will adopt this Statement in the
first quarter of 1996; and the effect on the Partnership's results of
operations, liquidity and financial condition is not expected to be
material.
B) CASH AND CASH EQUIVALENTS: Short-term investments with a maturity of three
months or less at the time of purchase are generally reported as cash
equivalents.
C) ESCROW DEPOSITS AND ESCROWED DEBT SERVICE FUNDS: Escrow deposits generally
consist of funds held to pay property taxes and insurance, required by the
first mortgage lenders for the Partnership's properties, and maintenance
escrows, required by the Stonebridge Manor and Waterford mortgage lenders.
Escrow deposits also include a utility deposit for Stonebridge Manor.
Escrowed debt service funds relate to Waterford and include a debt service
reserve and cash collateral reserve.
D) OTHER ASSET: The Partnership's investment in The Tulsa Corporation is
reported as other asset. In 1994, a standby cash deposit related to the
debt refinancing of Stewart's Glen Apartments was reported as other asset.
The cash deposit was returned to the Partnership in January 1995.
E) DEFERRED CHARGES: Deferred charges consist of costs incurred in obtaining
financing for certain of the Partnership's properties which are amortized
over the lives of the respective loans.
F) PARTNERS' CAPITAL: Offering costs comprised of sales commissions and other
issuance expenses have been
22
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
charged to the partners' capital accounts as incurred.
G) INCOME TAXES: No provision for income taxes has been made as the liability
for such taxes is that of the partners rather than the Partnership.
H) BASIS OF PRESENTATION: Certain amounts in the 1994 and 1993 financial
statements have been reclassified to conform to the 1995 presentation.
3. INVESTMENT PROPERTIES
The Partnership purchased four apartment complexes located in Ohio,
Oklahoma, Louisiana and Illinois and one shopping center located in Florida. At
December 31, 1995, the Partnership owned four residential properties which were
operating with leases in effect generally for a term of one year or less. At
December 31, 1995, the Partnership was holding the Illinois property, Stewart's
Glen, for sale. The Partnership plans to sell Stewart's Glen prior to its debt
maturity date of July 1, 1996. On September 22, 1994, the Partnership completed
the sale of the shopping center. Each investment property is pledged as security
for its respective non-recourse long-term debt.
On January 27, 1993, the Partnership sold an outparcel at the Promenades
Plaza Shopping Center with a net book value of $376,083 for a sales price of
$500,000, netting the Partnership $452,500 after commission and closing costs.
The Partnership recognized a gain on the sale of $76,417 in 1993.
In 1993, the General Partner determined that the Partnership would sell
Promenades Plaza. The General Partner expected that the net proceeds realized
from a sale would be significantly less than the carrying value of the property
and accordingly, the Partnership recorded a loss of $5,000,000 due to impairment
of assets as of December 31, 1993. On September 22, 1994, the Partnership
completed the sale of Promenades Plaza for a gross sales price of $6,572,000.
The property had a carrying value of $6,239,957 (net of impairment losses of
$5,000,000 in 1993 and $700,000 in 1991). After deducting closing costs of
$307,206, the Partnership recorded a gain of $24,837.
4. DEFERRED CHARGES
Deferred charges at December 31, 1995 and 1994 consist of the following:
<TABLE>
<S> <C> <C>
1995 1994
---- ----
Surety fee - Waterford financing $ 963,910 $ 963,910
Costs of obtaining financing 845,127 740,117
------------- -------------
1,809,037 1,704,027
Accumulated amortization (479,897) (288,677)
------------- -------------
$ 1,329,140 $ 1,415,350
============= =============
</TABLE>
5. LEASES
The Promenades Plaza Shopping Center, sold on September 22, 1994, was
leased under leases which were accounted for as operating leases and had lease
terms ranging from less than one year to nine years.
Certain of the commercial leases provided for additional rents based upon a
percentage of tenant sales over a specified amount. Amounts earned by the
Partnership for such rents in 1995, 1994 and 1993 were $39,433, $71,669
23
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
and $60,505, respectively. Certain of these leases also contained escalation and
expense recapture clauses which provided that tenants pay their pro rata share
of any increases in common area maintenance, taxes and operating expenses over
base period amounts. The Partnership earned $113,031 in 1994 and $175,060 in
1993 as a result of such provisions.
6. NOTES AND MORTGAGES PAYABLE
Except as noted, the Partnership's debt is non-recourse to the Partnership
and is secured by the investment properties. Notes and mortgages payable at
December 31, 1995 and 1994 consist of the following:
<TABLE>
December 31
-----------
<S> <C> <C>
1995 1994
---- ----
8% mortgage note for Versailles Village Apartments. Principal and interest of
$32,416 payable monthly from May 1, 1994 until April 1, 2001, when the balance
of $3,704,876 will be due. $ 4,100,806 $ 4,159,177
Mortgage notes for Waterford Apartments at interest rates as stated on bonds
issued by lender to fund loan. Series 1993 A Bonds; $11,355,000; 5.35%; interest
only payments of $50,624 12/1/93 to 12/1/2018 due monthly; 10% of bond principal
required in cash collateral account by the end of the surety period, 12/1/2003;
cash collateral set up at closing with $100,000; contributions to collateral
begin 12/1/98; bond maturity, 12/1/2018. Series 1993 B Bonds; $400,000; 5.75%;
interest only payments of $1,917 due monthly 12/1/93 to 12/1/95, principal and
interest of $12,750 due monthly 12/1/95 to 6/1/96, $11,605 6/1/96 to 12/1/96,
$12,984 12/1/96 to 6/1/97, $11,816 6/1/97 to 12/1/97, $12,338 12/1/97 to 6/1/98,
$12,002 6/1/98 to 12/1/98; fully amortized by 12/1/98. 11,744,167 11,755,000
8.55% mortgage note for Stewart's Glen Apartments Phase III. Interest only at
9.94% payable monthly until February 1, 1991. Principal and interest of $47,306
payable monthly from March 1, 1991, until November 1, 1994, when the note was
modified to 8.55% interest only payments of $34,639 payable monthly from
December 1, 1994 until April 1, 1996, the extended maturity date. Subsequent to
December 31, 1995, the note was extended to July 1, 1996 in order for the
Partnership to complete a sale of the property. 4,861,583 4,861,583
Partnership recourse promissory note dated March 25, 1994 and due March 25,
1997. Interest only payments at 6.6% for the first two years with no prepayment
provision. The interest only payments for the third year will be at a floating
rate equal to Mellon Bank's prime rate. During the third year, the note can be
prepaid in full at any time. The note is guaranteed by an affiliate of the
General Partner. 3,400,000 3,400,000
24
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
December 31
-----------
1995 1994
---- ----
10.15% mortgage note for Stonebridge Manor Apartments. Principal and interest of
$52,172 payable monthly from May 1, 1995 until March 1, 1998. The balance of all
outstanding principal and unpaid interest will be due at maturity on April 1,
1998. 5,241,066 --
10.12% mortgage note for Stonebridge Manor Apartments. Interest only payable
monthly until April 1, 1992. Principal and interest of $47,868 payable monthly
from May 1, 1992 until April 1, 1995. The balance of $5,305,661 was refinanced
on March 31, 1995. -- 5,311,831
--------------- --------------
Total notes and mortgages payable $ 29,347,622 $ 29,487,591
=============== ===============
</TABLE>
The Waterford property's first mortgage debt was financed with $11,755,000
in industrial revenue bonds issued by the Tulsa County Home Finance Authority
and credit enhanced by AXA Reassurance, SA. The AXA insurance policy expires on
December 1, 2004. The bonds can be prepaid in 2001 at 102% and at par in 2002
and thereafter. The Series A issue has been designed with a cash collateral
account rather than a sinking fund. Upon closing a $100,000 contribution was
made to the cash collateral account representing a quasi debt service reserve.
The cash collateral account was created to meet surety guidelines which required
that 10% of the bond issue be amortized by the end of the ten year credit
enhancement period. Contributions to the cash collateral account are scheduled
to begin on December 1, 1998. Under the new bonds, interest only payments of
$52,541 were made monthly to the trustee to service the semi-annual payments due
on the bonds until December 1995 when principal payments began on the series B
bonds. The $400,000 principal will fully amortize by December 1998, based on a
schedule of bond maturities.
On March 31, 1995, the Partnership refinanced the Stonebridge Manor
Apartment's first mortgage note which was scheduled to mature on April 1, 1995.
The new mortgage note is in the amount of $5,300,000 with a term of three years
and monthly payments at 10.15% interest, twenty year amortization and a
scheduled maturity of April 1, 1998. Prepayment is closed for the first year,
open at 1% during the second year and open without penalty during the third
year.
Five year maturities of long-term debt are summarized as follows:
1996 $ 5,149,230
1997 3,712,549
1998 5,235,859
1999 80,299
2000 86,963
Thereafter 15,082,722
25
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying amounts and estimated fair values
of the Partnership's financial instruments at December 31, 1995. Statements of
Financial Accounting Standards No. 107, "Disclosures about Fair Value of
Financial Instruments", defines the fair value of a financial instrument as the
amount at which the instrument could be exchanged in a current transaction
between willing parties.
<TABLE>
<S> <C> <C>
Carrying Fair
Amount Value
ASSETS:
Cash and cash equivalents $2,481,123 $2,481,123
Accounts receivable, net 7,694 7,694
Escrow deposits 281,236 281,236
Escrowed debt service funds 506,660 506,660
LIABILITIES:
Notes and mortgages payable $29,347,622 $29,897,245
Accounts payable and accrued expenses 361,508 361,508
Accrued interest payable 72,946 72,946
<FN>
The carrying amounts shown in the table are included in the balance sheet
under the indicated captions.
The following methods and assumptions were used to estimate the fair value
of each class of financial instruments:
Cash, Accounts receivable, Escrow deposits, Escrowed debt service
funds, Accounts payable and accrued expenses and Accrued interest
payable: The carrying amounts approximate fair value because of the
short maturity of those instruments.
Notes and mortgages payable: The fair value of the Partnership's
long-term debt is estimated based on the quoted market prices for
similar issues or by discounting expected cash flows at the rates
currently offered on debt with similar terms and remaining maturities.
</TABLE>
8. TRANSACTIONS WITH AFFILIATES
Fees and other expenses incurred by the Partnership related to the General
Partner or its affiliates during the periods ended December 31, 1995, 1994 and
1993 are as follows:
<TABLE>
<S> <C> <C> <C>
1995 1994 1993
---- ---- ----
Property management fees(a) $ 44,461 $ 45,631 $ 37,351
Printing 10,823 6,150 5,622
Reimbursement (at cost) for
out-of-pocket expenses 53,046 41,366 44,774
----------- ----------- -----------
$ 108,330 $ 93,147 $ 87,747
=========== =========== ===========
<FN>
(a) Does not include property management fees earned by independent property management companies of $235,974,
26
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
$290,347 and $297,806 for 1995, 1994 and 1993, respectively. Certain
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.
</TABLE>
In addition, the Partnership's recourse promissory note is guaranteed by an
affiliate of the General Partner for an annual fee of 2% of the outstanding
balance.
9. PARTNERS' CAPITAL
During 1991, the State of Connecticut enacted income tax legislation, a
part of which affects partnerships. The portfolio income allocations made by the
Partnership to the limited partners are considered Connecticut based income and
subject to Connecticut tax. The Partnership has elected to pay the tax due on
the limited partners' share of portfolio income and, therefore, paid tax due of
$3,672 directly to the State of Connecticut in April 1995 for the 1994 Form CT-G
Connecticut Group Income Tax Return. The Partnership also accrued the 1995
estimated payment of $6,990 as of December 31, 1995. These amounts were treated
as reductions of partners' capital and reported as distributions in the
accompanying financial statements.
10. PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement as amended January 1,
1988, net income or loss and cash distributions from operations, as well as any
net losses arising from the sale or disposition of investment properties, are to
be allocated 1% to the General Partner and 99% to the Limited Partners. Cash
distributions are allocated to the Partners following the receipt by an
affiliate of the General Partner of a partnership management fee of 9% of
"Adjusted Cash From Operations", as defined in the Partnership Agreement.
Distributable cash from the sale or disposition of investment properties
is to be generally allocated in the following order:
o To the Limited Partners up to the amount of their Original Invested
Capital;
o To the General Partner, an additional amount depending upon the
percentage of Gross Proceeds committed to investment in properties;
o To the Limited Partners in an amount, which when added to prior
distributions from operations, equals an 8% cumulative noncompounded
return on their adjusted invested capital;
o To an affiliate of the General Partner as a subordinated disposition
fee; and
o With respect to the remainder, 85% to the Limited Partners and 15% to
the General Partner.
Generally, income from the sale or disposition of investment property is
allocated as follows:
o To each Partner having a deficit balance in the same ratio of such
balance to the aggregate balance of all Partners;
27
<PAGE>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP
(a Connecticut limited partnership)
Notes to Financial Statements - Continued
o To each Partner to the extent of cash distributed from the sale; and
o Any remaining gain, 1% to the General Partner and 99% to the Limited
Partners.
28
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP SCHEDULE III
(A CONNECTICUT LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
=======================================================================================================================
Costs
Capitalized
Initial Cost to Partnership (B)(C) Subsequent
to Acquisition
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Description of Apartment Land, Building
Complexes by Property Land and Land Furniture and Improvements and
Location Encumbrances (A) Improvements Buildings Fixtures Furniture & Fixtures
- -----------------------------------------------------------------------------------------------------------------------
Versailles Village Apts. $ 4,100,806 $ 562,000 $ 4,857,554 $ 406,800 $ 772,444
Forest Park, OH
Waterford Apts. 11,744,167 2,085,826 11,343,875 492,765 80,836
Tulsa, OK
Stonebridge Manor Apts. 5,241,066 1,145,579 8,639,666 624,600 310,868
New Orleans, LA
Stewart's Glen Apts. 4,861,583 1,888,214 5,307,646 220,993 162,952
Phase III
Willowbrook, IL
- -----------------------------------------------------------------------------------------------------------------------
Totals $ 25,947,622 $ 5,681,619 $ 30,148,741 $ 1,745,158 $ 1,327,100
=======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Gross Amount at Which Carried at Close of Period (D)(E)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Description of Apartment
Complexes by Property Land and Land
Location Improvements Buildings Furniture and Fixtures Total
- ----------------------------------------------------------------------------------------------------------------------
Versailles Village Apts. $ 766,821 $ 5,115,532 $ 716,445 $ 6,598,798
Forest Park, OH
Waterford Apts. 2,085,826 11,381,775 535,701 14,003,302
Tulsa, OK
Stonebridge Manor Apts. 1,253,218 8,749,468 718,027 10,720,713
New Orleans, LA
Stewart's Glen Apts. 2,013,283 5,330,567 235,955 7,579,805
Phase III
Willowbrook, IL
- ----------------------------------------------------------------------------------------------------------------------
Total $6,119,148 $30,577,342 $2,206,128 $38,902,618
======================================================================================================================
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
CONNECTICUT GENERAL REALTY INVESTORS III LIMITED PARTNERSHIP SCHEDULE III
(A CONNECTICUT LIMITED PARTNERSHIP)
REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)
DECEMBER 31, 1995
==================================================================================================================
<S> <C> <C> <C> <C>
Life on Which
Description of Depreciation in Latest
Apartment Statement of
Complexes by Accumulated Date of Operations is
Property Location Depreciation (F) Construction Date Acquired Computed
- ------------------------------------------------------------------------------------------------------------------
Versailles Village Apts. $2,521,090 1970 02/06/85 5-30 years
Forest Park, OH
Waterford Apts. 4,371,992 1984 10/31/85 5-30 years
Tulsa, OK
Stonebridge Manor Apts. 3,622,877 1985 11/26/85 5-30 years
New Orleans, LA
Stewart's Glen Apts. 2,254,252 1987 07/24/87 7-27.5 years
Phase III
Willowbrook, IL
- ------------------------------------------------------------------------------------------------------------------
Totals $12,770,211
==================================================================================================================
<FN>
(A) Encumbrances, which are secured by the Partnership's properties are net of
discounts and include accrued interest payable at maturity (See Notes to
Financial Statements).
(B) The cost to the Partnership represents the initial purchase price of the properties including certain acquisition fees
and expenses, net of discounts on related debt.
(C) The Partnership recorded $774,493, $1,172,310 and $108,912 under the
guarantee agreements from the sellers of the Waterford, Stonebridge Manor
and Stewart's Glen Apartments Phase III, respectively, which were treated
as a reduction of initial cost.
(D) The aggregate cost of real estate owned at December 31, 1995 for federal income tax purposes is $39,217,821.
(E) Reconciliation of real estate owned:
</TABLE>
<TABLE>
<S> <C> <C> <C>
=================================================================================================
Description 1995 1994 1993
=================================================================================================
Balance at beginning of period $ 38,649,982 $ 47,529,957 $ 52,748,645
Additions during period 252,636 205,447 233,977
Reductions during period (G) -- (9,085,422) (5,452,665)
- -------------------------------------------------------------------------------------------------
Balance at end of period $ 38,902,618 $ 38,649,982 $ 47,529,957
=================================================================================================
<FN>
(F) Reconciliation of accumulated depreciation:
</TABLE>
<TABLE>
<S> <C> <C> <C>
=================================================================================================
Description 1995 1994 1993
=================================================================================================
Balance at beginning of period $ 11,629,808 $ 13,252,478 $ 11,786,429
Additions during period 1,140,403 1,328,700 1,542,631
Reductions during period (H) -- (2,951,370) (76,582)
- -------------------------------------------------------------------------------------------------
Balance at end of period $ 12,770,211 $ 11,629,808 $ 13,252,478
=================================================================================================
<FN>
(G) Includes sale of Promenades Plaza in 1994 and sale of an outparcel at Promenades Plaza and $5,000,000 impairment of assets
in 1993.
(H) Includes sale of Promenades Plaza in 1994 and sale of an outparcel at Promenades Plaza in 1993.
</TABLE>
30
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The General Partner of the Partnership, CIGNA Realty Resources, Inc.-
Fifth, a Delaware corporation, is an indirectly, wholly owned subsidiary of
CIGNA Corporation, a publicly held corporation whose stock is traded on the New
York Stock Exchange. The General Partner has responsibility for and control over
the affairs of the Partnership.
The directors and executive officers of the General Partner as of February
15, 1996 are as follows:
<TABLE>
<CAPTION>
Name Office Served Since
<S> <C> <C>
R. Bruce Albro Director May 2, 1988
David Scheinerman Director July 25, 1995
Philip J. Ward Director May 2, 1988
John D. Carey President, Controller September 7, 1993
September 4, 1990
Verne E. Blodgett Vice President, Counsel April 2, 1990
Joseph W. Springman Vice President, Assistant Secretary September 7, 1993
David C. Kopp Secretary September 29, 1989
Marcy F. Blender Treasurer August 1, 1994
</TABLE>
There is no family relationship among any of the foregoing directors or
officers. There are no arrangements or understandings between or among said
officers or directors and any other person pursuant to which any officer or
director was selected as such.
The foregoing directors and officers are also officers and/or directors of
various affiliated companies of CIGNA Realty Resources, Inc. - Fifth, including
CIGNA Financial Partners, Inc. (the parent of CIGNA Realty Resources, Inc. -
Fifth), CIGNA Investments, Inc., CIGNA Corporation (the parent of CIGNA
Investments, Inc.), Connecticut General Corporation (the parent of CIGNA
Financial Partners, Inc.).
The business experience of each of the directors and executive officers of
the General Partner of the Partnership is as follows:
31
<PAGE>
R. BRUCE ALBRO - DIRECTOR
Mr. Albro, age 53, a Senior Managing Director of CIGNA Investment
Management (CIM), joined Connecticut General's Investment Operations in 1971 as
a Securities Analyst in Paper, Forest Products, Building and Machinery.
Subsequently, he served as a Research Department Unit Head, as an Assistant
Portfolio Manager, then as Director of Equity Research and a member of the
senior staff of CIGNA Investment Management Company and as a Portfolio Manager
in the Fixed Income area. He then headed the Marketing and Merchant Banking area
for CII. Prior to his current assignment of Division Head, Portfolio Management
Division, he was an insurance portfolio manager, and prior to that, he was
responsible for Individual Investment Product Marketing. In addition, Mr. Albro
currently serves as President of the CIGNA Funds Group and other CIGNA
affiliated mutual funds. Mr. Albro received a Master of Arts degree in Economics
from the University of California at Berkeley and a Bachelor of Arts degree in
Economics from the University of Massachusetts at Amherst.
DAVID SCHEINERMAN - DIRECTOR
Mr. Scheinerman, age 35, was appointed Chief Financial Officer of CIGNA
Individual Insurance, a division with more than $77 billion of life insurance in
force, in July of 1995. Mr. Scheinerman has served in various actuarial and
business management capacities with CIGNA. In 1991 he was appointed Vice
President and Pricing Actuary for CIGNA HealthCare. He has more than 12 years of
financial management experience and has served as Chief Financial Officer of
Crusader Insurance PLC, a CIGNA subsidiary life company in the United Kingdom.
Mr. Scheinerman holds a BA in Mathematics from Rice University and an MBA from
the University of Pennsylvania Wharton School of Business. He is a fellow of the
Society of Actuaries and a member of the American Academy of Actuaries.
PHILIP J. WARD - DIRECTOR
Mr. Ward, age 47, is Senior Managing Director and Division Head of CIGNA
Investment Management (CIM), in charge of the Real Estate Investment Division of
CIM. He was appointed to that position in December 1985. Mr. Ward joined
Connecticut General's Mortgage and Real Estate Department in 1971 and became an
officer in 1976. Since joining the company he has held real estate investment
assignments in Mortgage and Real Estate Production and in Portfolio Management.
Prior to his current position, Mr. Ward held assignments in CIGNA Investments
Inc., responsible for the Real Estate Production area, CIGNA Realty Advisors,
Inc. and Congen Realty Advisory Company, all wholly-owned subsidiaries of CIGNA
Corporation and/or Connecticut General. Mr. Ward has held various positions with
the General Partner. His experience includes all forms of real estate
investments, with recent emphasis on acquisitions and joint ventures. Mr. Ward
is a 1970 graduate of Amherst College with a Bachelor of Arts degree in
Economics. He is a member of the Society of Industrial and Office Realtors, the
National Association of Industrial and Office Parks, the Urban Land Institute
and the International Council of Shopping Centers. He is a member of the Board
of Directors of DeBartolo Realty Corporation.
JOHN D. CAREY - PRESIDENT, CONTROLLER
Mr. Carey, age 32, joined CIGNA Investment Management-Real Estate as
Controller of Tax Advantaged Investments in 1990. In September 1993, Mr. Carey
was appointed President. Prior to joining CIGNA Investment Management, he held
the position of manager at KPMG Peat Marwick LLP in the audit department and was
a member of the Real Estate Focus Group. His experiences include accounting and
financial reporting for public and private real estate limited partnership
syndications. Mr. Carey is a graduate of Central Connecticut State University
with a Bachelor of Science Degree and is a Certified Public Accountant.
32
<PAGE>
VERNE E. BLODGETT - VICE PRESIDENT, COUNSEL
Mr. Blodgett, age 58, is an Assistant General Counsel of CIGNA Corporation.
He joined Connecticut General Life Insurance Company in 1975 as an investment
attorney and has held various positions in the Legal Division of Connecticut
General Life Insurance Company prior to his appointment as Assistant General
Counsel in 1981. Mr. Blodgett received a Bachelor of Arts degree from Yale
University and graduated with honors from the University of Connecticut School
of Law. He is a member of the Connecticut and the American Bar Associations.
JOSEPH W. SPRINGMAN - VICE PRESIDENT, ASSISTANT SECRETARY
Mr. Springman, age 54, is Managing Director and department head responsible
for asset management. He joined CIGNA's Real Estate operations in 1970. He has
held positions as an officer or director of several real estate affiliates of
CIGNA. His past real estate assignments have included Development and
Engineering, Property Management, Director, Real Estate Operations, Portfolio
Management and Vice President, Real Estate Production. Prior to assuming his
asset management post, Mr. Springman was responsible for production of real
estate and mortgage investments. He received a Bachelor of Science degree from
the U.S. Naval Academy.
DAVID C. KOPP - SECRETARY
Mr. Kopp, age 50, is Secretary of CII, Corporate Secretary of Connecticut
General Life Insurance Company and Assistant Corporate Secretary and Assistant
General Counsel, Insurance and Investment Law of CIGNA Corporation. He also
serves as an officer of various other CIGNA Companies. In August of 1995, he
also assumed responsibility as chief compliance officer for CIGNA HealthCare, a
division of CIGNA Corporation. He joined Connecticut General Life Insurance
Company in 1974 as a commercial real estate attorney and held various positions
in the Legal Department of Connecticut General Life Insurance Company prior to
his appointment as Corporate Secretary in 1977. Mr. Kopp is an honors graduate
of Northern Illinois University and served on the law review at the University
of Illinois College of Law. He is a member of the Connecticut Bar Association
and is Past President of the Hartford Chapter, American Society of Corporate
Secretaries.
MARCY F. BLENDER - TREASURER
Marcy F. Blender, age 39, is Assistant Vice President, Bank Resources of
CIGNA Corporation. In this capacity she is responsible for bank relationship
management, bank products and services, bank compensation and control, and bank
exposure management. Marcy joined Insurance Company of North America (INA) in
1979. She has held a variety of financial and investment positions with INA and
later with the merged CIGNA Corporation before assuming her current
responsibilities in 1992. She received a B.A. degree from Rutgers University and
an M.B.A.from Drexel University. She is a Certified Public Accountant.
ITEM 11. EXECUTIVE COMPENSATION
Officers and directors of the General Partner receive no current or
proposed direct compensation from the Partnership in such capacities. However,
certain officers and directors of the General Partner received compensation from
the General Partner and/or its affiliates (but not from the Partnership) for
services performed for various affiliated entities, which may include services
performed for the Partnership, but such compensation was not material in the
aggregate.
33
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
No person or group is known by the Partnership to own beneficially more
than 5% of the outstanding Units of interest of the Partnership.
There exists no arrangement, known to the Partnership, the operation of
which may at a subsequent date result in a change in control of the Partnership.
As of February 15, 1996, the individual directors and the directors and
officers, as a group, of the General Partner beneficially owned Partnership
Units and shares of the common stock of CIGNA, parent of the General Partner, as
set forth in the following table:
<TABLE>
<S> <C> <C> <C>
Units Shares
Beneficially Beneficially Percent
Name Owned(a) Owned(b) of Class
R. Bruce Albro (c) 0 6,653 *
David Scheinerman 0 0 *
Philip J. Ward (d) 0 16,491 *
All directors and officers
Group (8) (e) 0 29,994 *
* Less than 1% of class
<FN>
(a) No officer or director of the General Partner possesses a right to acquire
beneficial ownership of additional Units of interest of the Partnership.
(b) The directors and officers have sole voting and investment power over all
the shares of CIGNA common stock they own beneficially.
(c) Shares beneficially owned includes options to acquire 4,487 shares and
1,432 shares which are restricted as to disposition.
(d) Shares beneficially owned includes options to acquire 8,826 shares and
2,400 shares which are restricted as to disposition.
(e) Shares beneficially owned by directors and officers include 15,318 shares
of CIGNA common stock which may be acquired upon exercise of stock options
and 8,126 shares which are restricted as to disposition.
</TABLE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The General Partner of the Partnership is generally entitled to receive 1%
of cash distributions, when and as cash distributions are made to the limited
partners, and is generally allocated 1% of profits or losses. In 1995, the
Partnership distributed no cash from operations. The General Partner was
allocated a share of Partnership loss in 1995 of $2,108. Reference is also made
to the Notes to Financial Statements included in this annual report for a
description of such distributions and allocations. The relationship of the
General Partner (and its directors and officers) to its affiliates is set forth
in Item 10 above.
34
<PAGE>
CII provided asset management services to the Partnership during 1995 at
fees calculated at 5% of gross revenues from the Versailles Village Apartments,
Waterford Apartments, Stonebridge Manor Apartments and Stewart's Glen Apartments
less amounts earned by independent third party property management companies
contracted by CII on behalf of the Partnership. In 1995, such affiliate earned
asset management fees amounting to $44,461 for such services, of which $7,679
was unpaid as of December 31, 1995. Non-affiliated third party independent
property managers contracted by CII earned $235,974 of management fees, of which
$9,095 was unpaid as of December 31, 1995.
CFP provided partnership management services for the Partnership at fees
calculated at 9% of adjusted cash from operations in any one year. CFP did not
earn or receive partnership management fees in 1995.
The Partnership recourse promissory note carries a corporate guarantee by
CIGNA Corporation. The Partnership incurred a guarantee fee of $68,000 for 1995,
of which $17,000 was unpaid at December 31, 1995.
The General Partner and its affiliates may be reimbursed for their direct
expenses incurred in the administration of the Partnership. In 1995, the General
Partner and its affiliates were entitled to reimbursement for such out of pocket
expenses in the amount of $63,869, of which $2,322 was unpaid as of December 31,
1995.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements. See Index to Financial Statements in Item 8.
2. Financial Statement Schedules
(a) Real Estate and Accumulated Depreciation. See Index to
Financial Statements in Item 8.
3. Exhibits
3 Partnership Agreement, incorporated by reference to Exhibit
A to the Prospectus of Registrant, dated July 2, 1984, filed
pursuant to Rule 424(b) under the Securities Act of 1933,
File No. 2-90944.
3(a) Amendment to Partnership Agreement, dated as of July 1,
1985, incorporated by reference to Exhibit 3(a) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1984.
4 Certificate of Limited Partnership, dated April 16, 1984,
incorporated by reference to Exhibit 4 to Form S-11
Registration Statement under the Securities Act of 1933,
File No. 2-90944.
10(a) Acquisition and Disposition Services Agreement, dated July
2, 1984, between Connecticut General Realty Investors III
Limited Partnership and CIGNA Capital Advisers, Inc.,
incorporated by reference to exhibit 10(a) to Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
(b) Supervisory Property Management Agreement, dated July 2,
1984, between Connecticut General Realty Investors III
Limited Partnership and CIGNA Capital Advisers, Inc.,
incorporated by reference to exhibit 10(b) to Registrants
Annual Report on Form 10-K for the fiscal year ended
December 31, 1987.
35
<PAGE>
(c) Agreements concerning Certain Capital Contributions, between
Connecticut General Management Resources, Inc. and CIGNA
Realty Resources, Inc.-Fifth, incorporated by reference to
exhibit 10(c) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
(d) Purchase and Sale Agreement, dated as of January 17, 1985,
relating to the Acquisition of Versailles Village
Apartments, incorporated by reference to Exhibit 10(d) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1984.
(e) Bill of Sale and Assignment between Stonebridge Manor, a
Louisiana Partnership in Commendam, and Connecticut General
Realty Investors III Limited Partnership, dated November 26,
1985, relating to the acquisition of the Stonebridge Manor
Apartments, incorporated by reference to Exhibit 10(h) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1985.
(f) Act of Credit Sale and Assumption of Mortgage between
Stonebridge Manor, a Louisiana Partnership in Commendam, and
Connecticut General Realty Investors III Limited Partnership
dated November 26, 1985, relating to the acquisition of the
Stonebridge Manor Apartments, incorporated by reference to
Exhibit 10(i) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1985.
(g) Purchase and Sale Agreement between Waterford, LTD. and
Connecticut General Realty Investors III Limited
Partnership, dated October 31, 1985, relating to the
acquisition of the Waterford Apartments, incorporated by
reference to Exhibit 10(k) to Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1985.
(h) Promissory Note between Connecticut General Realty Investors
III Limited Partnership, as Maker, and Waterford, LTD., as
Payee, dated October 31, 1985, relating to the acquisition
of the Waterford Apartments, incorporated by reference to
Exhibit 10(l) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1985.
(i) Purchase and Sale Agreement between First Capital Income
Properties Limited, Series V, and Connecticut General Realty
Investors III Limited Partnership, relating to the
acquisition of the Promenades Plaza Shopping Center,
incorporated by reference to Exhibit 10(m) to Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1985.
(j) Mortgage Consolidation and Modification Agreement between
Connecticut General Realty Investors III Limited Partnership
and The Equitable Life Assurance Society of the United
States, dated as of December 10, 1986, relating to the
Promenades Plaza Shopping Center, incorporated by reference
to Exhibit 10(n) to Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1986.
(k) Real Estate Purchase Agreement between Willowbrook
Associates II and CIGNA Financial Partners, Inc., relating
to Stewart's Glen Apartments Phase III, dated as of April
14, 1987, incorporated by reference to Exhibit 10(p) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987.
(l) Amendment to Real Estate Purchase Agreement, dated July 20,
1987, between Willowbrook Associates II and Phase III
Apartment Venture, relating to the acquisition of Stewart's
Glen Apartments Phase III, incorporated by reference to
Exhibit 10(s) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987.
36
<PAGE>
(m) Management and Leasing Agreement between Phase III Apartment
Venture and Chasewood Properties, effective as of July 24,
1987, incorporated by reference to Exhibit 10(t) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1987.
(n) Mortgage, Security Agreement and Financing Statement and
Promissory Note between Connecticut General Realty Investors
III Limited Partnership and Massachusetts Mutual Life
Insurance Company, dated January 25, 1988, relating to
Stewart's Glen Apartments Phase III, incorporated by
reference to Exhibit 10(v) to Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987.
(o) Mortgage Note between Connecticut General Realty Investors
III Limited Partnership and the John Hancock Mutual Life
Insurance Co., dated as of August 12, 1988, relating to
Versailles Village Apartments, incorporated by reference to
Exhibit 10(w) to Registrant's Annual Report on Form 10-K for
the fiscal year ended December 31, 1988.
(p) Promissory Note between Connecticut General Realty Investors
III Limited Partnership and Aetna Life Insurance Company,
dated March 28, 1990, relating to Stonebridge Manor
Apartments incorporated by reference to Exhibit 10 (p) to
Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989.
(q) Promissory Note between Connecticut General Realty Investors
III Limited Partnership and Mellon Bank National
Association, dated March 28, 1990, relating to Stonebridge
Manor Apartments incorporated by reference to Exhibit 10 (q)
to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989.
(r) Mortgage and Note Modification Agreement between Connecticut
General Realty Investors III Limited Partnership and The
Equitable Life Assurance Society of the United States, dated
June 30, 1989, relating to Promenades Plaza Shopping Center
incorporated by reference to Exhibit 10 (r) to Registrant's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1989.
(s) Promissory Note between Connecticut General Realty Investors
III Limited Partnership and Barnett Bank of Southwest
Florida, dated June 30, 1989, relating to Promenades Plaza
Shopping Center incorporated by reference to Exhibit 10 (s)
to Registrant's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989.
(t) Promissory Note between Registrant and John Hancock Mutual
Life Insurance Company, dated March 24, 1994, relating to
Versailles Village Apartments incorporated by reference to
Form 10-Q for the quarter ended March 31, 1994.
(u) Documents and Agreements concerning the December 17, 1993
debt refinance of the Registrant's Waterford Apartments
property with industrial revenue bonds issued by the Tulsa
County Home Finance Authority and credit enhanced by AXA
Reassurance, SA incorporated by reference to Form 10-Q for
the quarter ended March 31, 1994.
(v) Consolidation, Extension, Modification, and Restatement of
Promissory Notes between Registrant and Mellon Bank, N.A.,
dated March 25, 1994 relating to Stonebridge Manor
Apartments and Promenades Plaza Shopping Center incorporated
by reference to Form 10-Q for the quarter ended March 31,
1994.
37
<PAGE>
(w) Contract for Purchase and Sale dated July 19, 1994, First
Amendment to Contract for Purchase and Sale dated August 18,
1994, and Second Amendment to Contract for Purchase and Sale
dated September 21, 1994 between the Registrant and Sterling
Promenades Limited Partnership, a Florida limited
partnership incorporated by reference to Form 8-K dated
September 22, 1994.
(x) Loan Modification Agreement between Connecticut General
Realty Investors III Limited Partnership and Massachusetts
Mutual Life Insurance Company, dated November 1, 1994,
relating to Stewart's Glen Apartments.
(y) Loan Agreement between Connecticut General Realty Investors
III Limited Partnership and Hibernia National Bank, dated
March 29, 1995, relating to Stonebridge Manor Apartments.
27 Financial Data Schedules.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the last quarter of the fiscal
year.
38
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 REALTY INVESTORS III
LIMITED PARTNERSHIP
By: CIGNA Realty Resources, Inc. - Fifth,
General Partner
Date: March 21, 1996 By: /s/ John D. Carey
-------------------
John D. Carey, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities (with respect to the General Partner) and on the date
indicated.
/s/ R. Bruce Albro Date: March 21, 1996
------------------------------------------
R. Bruce Albro, Director
/s/ David Scheinerman Date: March 21, 1996
------------------------------------------
David Scheinerman, Director
/s/ Philip J. Ward Date: March 21, 1996
------------------------------------------
Philip J. Ward, Director
/s/ John D. Carey Date: March 21, 1996
------------------------------------------
John D. Carey, President, Controller
(Principal Executive Officer)
(Principal Accounting Officer)
/s/ Marcy F. Blender Date: March 21, 1996
------------------------------------------
Marcy F. Blender, Treasurer
(Principal Financial Officer)
39
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> Year
<CASH> 2,481,123
<SECURITIES> 0
<RECEIVABLES> 16,365
<ALLOWANCES> 8,671
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 38,902,618
<DEPRECIATION> 12,770,211
<TOTAL-ASSETS> 30,739,260
<CURRENT-LIABILITIES> 0
<BONDS> 29,347,622
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 30,739,260
<SALES> 0
<TOTAL-REVENUES> 5,818,941
<CGS> 0
<TOTAL-COSTS> 2,447,589
<OTHER-EXPENSES> 3,558,924
<LOSS-PROVISION> 23,304
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> (210,876)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (210,876)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
