FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Quarterly or Transitional Report
(As last amended by 34-32231, eff. 6/3/93.)
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period.........to.........
Commission file number 0-14099
CONSOLIDATED CAPITAL PROPERTIES VI
(Exact name of small business issuer as specified in its charter)
California 94-2940204
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED BALANCE SHEET
(Unaudited)
(in thousands, except unit data)
June 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 1,498
Restricted - tenant security deposits 102
Investments 356
Accounts receivable 4
Escrows for taxes and insurance 167
Restricted escrows 67
Prepaid and other assets 156
Investment properties:
Land $ 1,652
Buildings and personal property 14,773
16,425
Less accumulated depreciation (6,800) 9,625
$11,975
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 40
Tenant security deposits 102
Accrued taxes 139
Other liabilities 235
Mortgage notes payable 10,131
Partners' Capital (Deficit)
General partner $ (5)
Special limited partners (66)
Limited partners (181,288 units issued
and outstanding) 1,399 1,328
$11,975
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 793 $ 766 $1,539 $1,559
Other income 64 89 134 156
Total revenues 857 855 1,673 1,715
Expenses:
Operating 297 250 604 500
General and administrative 58 87 96 519
Maintenance 108 117 222 189
Depreciation 176 164 349 326
Interest 232 179 442 417
Property tax 69 81 135 142
Total expenses 940 878 1,848 2,093
Net loss $ (83) $ (23) $ (175) $ (378)
Net loss allocated to
general partner (.2%) $ -- $ -- $ -- $ (1)
Net loss allocated to
limited partners (99.8%) (83) (23) (175) (377)
$ (83) $ (23) $ (175) $ (378)
Net loss per limited
partnership unit: $ (.46) $ (.13) $ (.97) $(2.08)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
For the Six Months Ended June 30, 1996
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
<S> <C> <C> <C> <C>
Original capital
contributions 181,808 $ 1 $ -- $ 45,452 $45,453
Partners' capital (deficit)
at December 31, 1995 181,288 $ (5) $ (70) $ 1,578 $ 1,503
Amortization of
timing difference (Note D) -- -- 4 (4) --
Net loss for the six months
ended June 30, 1996 -- -- -- (175) (175)
Partners' capital (deficit)
at June 30, 1996 181,288 $ (5) $ (66) $ 1,399 $ 1,328
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (175) $ (378)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation 349 326
Amortization of loan costs and discounts 115 112
Change in accounts:
Restricted cash (8) (38)
Accounts receivable 6 (7)
Escrows for taxes and insurance (11) 85
Prepaid and other assets 181 51
Accounts payable (137) 91
Tenant security deposit liabilities 7 (2)
Accrued taxes 27 (120)
Other liabilities (49) (31)
Net cash provided by operating activities 305 89
Cash flows from investing activities:
Property improvements and replacements (120) (74)
Purchase of investments -- (4,462)
Proceeds from sale of investments 34 5,007
Deposits to restricted escrows (49) (43)
Receipts from restricted escrows 120 --
Net cash (used in) provided by
investing activities (15) 428
Cash flows from financing activities:
Payments on mortgage notes payable (103) (95)
Distributions to partners -- (275)
Net cash used in
financing activities (103) (370)
Net increase in cash and cash equivalents 187 147
Cash and cash equivalents at beginning of period 1,311 414
Cash and cash equivalents at end of period $1,498 $ 561
Supplemental disclosure of cash flow information:
Cash paid for interest $ 342 $ 350
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
e) CONSOLIDATED CAPITAL PROPERTIES VI
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties VI ("the Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the General Partner, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six months ended
June 30, 1996, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Partnership's annual report on Form 10-KSB for the fiscal year ended
December 31, 1995.
Certain reclassifications have been made to the 1995 information to conform to
the 1996 presentation.
Investments
Investments consisting primarily of U.S. Treasury Notes with original maturities
of more than ninety days, are considered to be held-to-maturity securities.
Note B - Transactions with Affiliated Parties
The Partnership has paid property management fees based upon collected gross
rental revenues for property management services in each of the six months ended
June 30, 1996 and 1995. Property management fees of approximately $80,000 and
$81,000 were paid to affiliates of the General Partner for the six months ended
June 30, 1996 and 1995, respectively. These fees are included in operating
expenses.
The Limited Partnership Agreement ("Partnership Agreement") provides for a
special management fee equal to 9% of the total distributions made to the
limited partners to be paid to the General Partner for executive and
administrative management services. The Partnership paid approximately $24,000
to affiliates of the General Partner for the six months ended June 30, 1995,
under this provision of the Partnership Agreement. No such fees were paid or
accrued for the six months ended June 30, 1996.
Note B - Transactions with Affiliated Parties - (continued)
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of
approximately $56,000 and $83,000 were paid to the General Partner and
affiliates for the six months ended June 30, 1996 and 1995, respectively.
In July 1995, the Partnership began insuring its properties under a master
policy through an agency and insurer unaffiliated with the General Partner. An
affiliate of the General Partner acquired, in the acquisition of a business,
certain financial obligations from an insurance agency which was later acquired
by the agent who placed the current year's master policy. The current agent
assumed the financial obligations to the affiliate of the General Partner who
receives payment on these obligations from the agent. The amount of the
Partnership's insurance premiums accruing to the benefit of the affiliate of
the General Partner by virtue of the agent's obligations is not significant.
Note C - Commitment
The Partnership is required to maintain working capital reserves for
contingencies of not less than 5% of Net Invested Capital as defined in the
Partnership Agreement. In the event expenditures are made from these reserves,
operating revenue shall be allocated to such reserves to the extent necessary
to maintain the foregoing level. Cash and cash equivalents, tenant security
deposits and investments, totalling approximately $1,955,000, are less than the
reserve requirement of approximately $2,266,000 at June 30, 1996. The
Partnership intends to replenish working capital reserves from cash flow from
operations after consideration of any capital improvement needs of the
properties. The working capital requirement must be met prior to any
consideration for distributions to the partners.
Note D - Change in Status of Non-Corporate General Partner
During the year ended December 31, 1991, the Partnership Agreement was amended
to convert the General Partner interests held by the non-corporate General
Partner, Consolidated Capital Group II ("CCG"), to that of a special limited
partner ("Special Limited Partner"). The Special Limited Partner does not have
a vote and does not have any of the other rights of a Limited Partner except
the right to inspect the Partnership's books and records; however, the Special
Limited Partner will retain the economic interest in the Partnership which it
previously owned as general partner. ConCap Equities, Inc. ("CEI") became the
sole general partner of the Partnership effective December 31, 1991. In
connection with CCG's conversion, a special allocation of gross income was made
to the Special Limited Partner in order to eliminate its tax basis negative
capital account.
After the conversion, the various owners of interests in the Special Limited
Partner transferred portions of their interests to CEI so that CEI now holds a
.2% interest in all allocable items of income, loss and distribution. The
difference between the Special Limited Partner's capital accounts for financial
statement and tax reporting purposes is being amortized to the Limited Partners'
capital account as the components of the timing differences which created the
balance reverse.
Note E - Distributions
In March 1995, the Partnership declared and paid distributions, attributable to
cash flow from operations, totalling approximately $275,000 to the partners. No
distributions were declared or paid during the six months ended June 30, 1996.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Partnership's investment properties consist of two apartment complexes. The
following table sets forth the average occupancy of the properties for the six
months ended June 30, 1996 and 1995:
Average Occupancy
1996 1995
Celina Plaza Apartments
El Paso, Texas 91% 93%
Colony of Springdale Apartments
Springdale, Ohio 91% 91%
The decrease in occupancy at the Celina Plaza Apartments is due to a decline in
the El Paso market resulting from military spending cuts and the relocation of
military personnel which has created increased competition from similar
apartment complexes in the area. Ongoing property improvements at Celina Plaza,
resulting in improved consumer appeal, are expected to positively impact rental
rates and occupancy.
The Partnership realized a net loss of approximately $83,000 for the three
months ended June 30, 1996, and a net loss of approximately $175,000 for the
six months ended June 30, 1996, compared to net loss of approximately $23,000
for the three months ended June 30, 1995, and a net loss of approximately
$378,000 for the six months ended June 30, 1995. The decreased net loss is due
primarily to decreased general and administrative expenses, partially offset by
a decrease in other income and increased operating and maintenance expenses.
Other income decreased due to the non-recurring nature of dividends received on
the Partnership's investment in Southmark Preferred Stock during the second
quarter of 1995. The increase in property operating expenses is due primarily
to higher concessions being granted to attract tenants to the Celina Plaza
Apartments in El Paso. Administrative expenses decreased due to prior year
amounts being unusually high due to approximately $340,000 of legal costs
associated with the Partnership's required responses to various tender offers
in 1995 and approximately $53,000 of expense reimbursements related to the
efforts of the Dallas partnership administration staff during the transition
period in 1995. Administrative expenses were also higher for the six months
ended June 30, 1995, due to a special management fee of approximately $24,000
related to the distribution made to the Limited Partners in March 1995.
Maintenance expenses increased due to additional expenditures made for interior
and exterior repairs in efforts to improve the curb appeal of the Partnership's
properties.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, due to changing market
conditions, which can result in the use of rental concessions and rental
reductions to offset softening market conditions, there is no guarantee that
the General Partner will be able to sustain such a plan.
At June 30, 1996, the Partnership held cash and cash equivalents of
approximately $1,498,000 compared to approximately $561,000 at June 30, 1995.
Net cash provided by operating activities increased primarily due to the
decreased legal costs discussed above partially offset by increased operating
expenses and slightly lower revenues. Net cash provided by investing
activities decreased as a result of the Partnership investing in shorter term
cash equivalents during 1996 rather than longer term securities. Net cash used
in financing activities decreased due to the absence of partner distributions
during 1996.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the property to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of approximately $10,124,000, matures at various times
with balloon payments due at maturity at which time the properties will either
be refinanced or sold. Future cash distributions will depend on the levels of
cash generated from operations, capital expenditure requirements, property
sales and the availability of cash reserves. During the first six months of
1995 distributions of approximately $275,000 were declared and paid. No cash
distributions were declared or paid during the first six months of 1996.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
Exhibit 27, Financial Data Schedule is filed as an exhibit to this report.
(b) Reports on Form 8-K.
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
CONSOLIDATED CAPITAL PROPERTIES VI
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Carroll D. Vinson
Carroll D. Vinson
President
By: /s/Robert D. Long
Robert D. Long, Jr.
Vice President/CAO
Date: August 6, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties VI 1996 Second Quarter 10-QSB and is qualified in its
entirety by reference to such 10-QSB filing.
</LEGEND>
<CIK> 0000755908
<NAME> CONSOLIDATED CAPITAL PROPERTIES VI
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,498
<SECURITIES> 356
<RECEIVABLES> 4
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 16,425
<DEPRECIATION> 6,800
<TOTAL-ASSETS> 11,975
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 10,131
0
0
<COMMON> 0
<OTHER-SE> 1,328
<TOTAL-LIABILITY-AND-EQUITY> 11,975
<SALES> 0
<TOTAL-REVENUES> 1,673
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,848
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 442
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (175)
<EPS-PRIMARY> (.97)<F2>
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
<F2>Multipler is 1.
</FN>
</TABLE>
