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 March 31, 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)
March 31, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 1,426
Restricted - tenant security deposits 99
Investments 390
Accounts receivable 5
Escrows for taxes and insurance 176
Restricted escrows 42
Prepaid and other assets 150
Investment properties:
Land $ 1,652
Buildings and personal property 14,728
16,380
Less accumulated depreciation (6,624) 9,756
$12,044
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 43
Tenant security deposits 97
Accrued taxes 124
Other liabilities 237
Mortgage notes payable 10,132
Partners' Capital (Deficit)
General partner $ (5)
Special limited partners (68)
Limited partners (181,288 units issued
and outstanding) 1,484 1,411
$12,044
See Accompanying Notes to Consolidated Financial Statements
b) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended
March 31,
1996 1995
Revenues:
Rental income $ 746 $ 793
Other income 70 67
Total revenues 816 860
Expenses:
Operating 307 250
General and administrative 38 432
Maintenance 114 72
Depreciation 173 162
Interest 210 238
Property tax 66 61
Total expenses 908 1,215
Net loss $ (92) $ (355)
Net loss allocated to general
partner (.2%) $ -- $ (1)
Net loss allocated to limited
partners (99.8%) (92) (354)
$ (92) $ (355)
Net loss per limited partnership
unit: $ (.51) $(1.95)
See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
For the Three Months Ended March 31, 1996
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
<S> <C> <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) -- -- 2 (2) --
Net loss for the three months
ended March 31, 1996 -- -- -- (92) (92)
Partners' capital (deficit)
at March 31, 1996 181,288 $ (5) $ (68) $ 1,484 $ 1,411
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
d) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (92) $ (355)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation 173 162
Amortization of loan costs and discounts 57 49
Change in accounts:
Restricted cash (5) --
Accounts receivable 6 (7)
Escrows for taxes and insurance (21) 118
Prepaid and other assets 192 47
Accounts payable (134) 183
Tenant security deposit liabilities 2 (8)
Accrued taxes 12 (150)
Other liabilities (46) 234
Net cash provided by operating activities 144 273
Cash flows from investing activities:
Property improvements and replacements (74) (44)
Purchase of investments -- (1,502)
Proceeds from sale of investments -- 1,656
Deposits to restricted escrows (24) (15)
Receipts from restricted escrows 120 --
Net cash provided by
investing activities 22 95
Cash flows from financing activities:
Payments on mortgage notes payable (51) (43)
Distributions to partners -- (275)
Net cash used in
financing activities (51) (318)
Net increase in cash and cash equivalents 115 50
Cash and cash equivalents at beginning of period 1,311 414
Cash and cash equivalents at end of period $1,426 $ 464
Supplemental disclosure of cash flow information:
Cash paid for interest $ 191 $ 171
<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") 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 three month period ended March 31, 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 equal to 5% of collected gross
rental revenues for property management services in each of the three months
ended March 31, 1996 and 1995. Fees paid to affiliates of the General Partner
for the three months ended March 31, 1996 and 1995, are presented below. These
property management fees are included in operating expenses.
For the Nine Months Ended
March 31,
1996 1995
(in thousands)
Property management fees $39 $41
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 three months ended March 31, 1995,
under this provision of the Partnership Agreement. No such fees were paid or
accrued for the three months ended March 31, 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. The General Partner and its affiliates received
reimbursements as reflected in the following table:
For the Three Months Ended
March 31,
1996 1995
(in thousands)
Reimbursement for services of affiliates $25 $43
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 $1.9 million, are less than
the reserve requirement of approximately $2.3 million at March 31, 1996. The
Partnership intends to replenish working capital reserves from cash flow from
operations. The working capital requirement must be met prior to any
consideration for distributions to the partners.
Note D - Change in Status of Non-Corporate General Partner
In the year ended December 31, 1991, the Partnership Agreement was amended to
convert the General Partner interests held by the non-corporate General Partner,
Consolidated Capital Group 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 Note D - Change in Status of Non-Corporate General Partner -
(continued) 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 three months ended March 31,
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 three
months ended March 31, 1996 and 1995:
Occupancy for the Three Months Ended
March 31,
1996 1995
Celina Plaza Apartments
El Paso, Texas 88% 94%
Colony of Springdale Apartments
Springdale, Ohio 88% 92%
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. In 1995, the managing agent evaluated the
tenant base at the Colony of Springdale Apartments and identified several
tenants with large delinquent balances. In an effort to improve rent
collectability, the tenants who did not pay their outstanding balances were
evicted, thereby decreasing the property's occupancy level. This occupancy
decrease is expected to be short-term as capital improvements were made in the
fourth quarter of 1995 which are expected to increase the curb appeal of the
property and enhance the property's ability to attract higher quality tenants.
Ongoing property improvements at both locations, resulting in improved consumer
appeal, are expected to positively impact rental rates and occupancy.
The Partnership realized a net loss of approximately $92,000 for the three
months ended March 31, 1996, compared to net loss of approximately $355,000 for
the three months ended March 31, 1995. The decreased net loss is due primarily
to decreased general and administrative expenses, partially offset by decreased
rental income and increased operating and maintenance expenses.
Administrative expenses decreased due to prior year operations being unfavorably
impacted by approximately $340,000 in legal costs associated with the
Partnership's required responses to various tender offers in 1995 and $27,000 in
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 three months ended March 31, 1995, due to a
special management fee of approximately $24,000 incurred in conjunction with the
distribution made to the Limited Partners in March 1995. Rental income
decreased due to lower occupancy levels at the Partnership's properties
resulting from declining conditions and increased competition as noted above.
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. 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 expense. 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.
As of March 31, 1996, the Partnership held cash and cash equivalents of
approximately $1,426,000 compared to approximately $464,000 at March 31, 1995.
Net cash provided by operating activities decreased primarily to reduced rental
income, increased operating expenses and the timing of tax payments. Net cash
provided by investing activities decreased due to increased property
improvements and replacements and a decrease in the proceeds from the sale of
investments partially offset by an increase in receipts from restricted
escrows. Net cash used in financing activities decreased due to the absence of
partner distributions during the first quarter of 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 $10.1 million, 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 three months of
1995 distributions of approximately $275,000 were declared and paid. No cash
distributions were declared or paid during the first three 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, Jr.
Robert D. Long, Jr.
Vice President/CAO
Date: May 10, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties VI 1996 First 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 1,426
<SECURITIES> 390
<RECEIVABLES> 5
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 16,380
<DEPRECIATION> 6,624
<TOTAL-ASSETS> 12,044
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 10,132
0
0
<COMMON> 0
<OTHER-SE> 1,411
<TOTAL-LIABILITY-AND-EQUITY> 12,044
<SALES> 0
<TOTAL-REVENUES> 816
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 908
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 210
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (92)
<EPS-PRIMARY> (.51)
<EPS-DILUTED> 0
<FN>
<F1>The Partnership has an unclassified balance sheet.
</FN>
</TABLE>
