FORM 10-QSB.--QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
QUARTERLY OR TRANSITIONAL REPORT
U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 1997
[ ] 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, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
Assets
Cash and cash equivalents:
Unrestricted $ 1,428
Restricted -- tenant security deposits 78
Investments 302
Accounts receivable 29
Escrows for taxes and insurance 124
Restricted escrows 114
Prepaid and other assets 141
Investment properties:
Land $ 1,652
Buildings and personal property 15,062
16,714
Less accumulated depreciation (7,514) 9,200
$ 11,416
Liabilities and Partners' Capital
Liabilities
Accounts payable $ 57
Tenant security deposits 78
Accrued taxes 147
Other liabilities 244
Mortgage notes payable 10,129
Partners' (Deficit) Capital
General partner $ (6)
Special limited partner (57)
Limited partners (181,288 units issued
and outstanding) 824 761
$ 11,416
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
b) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Rental income $ 731 $ 793 $ 1,494 $ 1,539
Other income 75 64 142 134
Total revenues 806 857 1,636 1,673
Expenses:
Operating 266 297 598 604
General and administrative 42 58 80 96
Maintenance 56 108 150 222
Depreciation 183 176 365 349
Interest 251 232 486 442
Property tax 73 69 146 135
Total expenses 871 940 1,825 1,848
Net loss $ (65) $ (83) $ (189) $ (175)
Net loss allocated to
general partner (.2%) $ -- $ -- $ -- $ --
Net loss allocated to limited
partners (99.8%) (65) (83) (189) (175)
Net loss $ (65) $ (83) $ (189) $ (175)
Net loss per limited
partnership unit: $ (.36) $ (.46) $ (1.04) $ (.97)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</TABLE>
c) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
(in thousands, except unit data)
<TABLE>
<CAPTION>
Limited Special
Partnership General Limited Limited
Units Partner Partner Partners Total
<S> <C> <C> <C> <C> <C>
Original capital contributions 181,808 $ 1 $ -- $45,452 $45,453
Partners' (deficit) capital
at December 31, 1996 181,288 $ (6) $ (61) $ 1,017 $ 950
Amortization of
timing difference (Note D) -- -- 4 (4) --
Net loss for the six months
ended June 30, 1997 -- -- -- (189) (189)
Partners' (deficit) capital
at June 30, 1997 181,288 $ (6) $ (57) $ 824 $ 761
<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,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (189) $ (175)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation 365 349
Amortization of loan costs and discounts 114 115
Change in accounts:
Restricted cash 10 (8)
Accounts receivable -- 6
Escrows for taxes and insurance (17) (11)
Other assets (22) 181
Accounts payable (146) (137)
Tenant security deposit liabilities (10) 7
Accrued taxes 34 27
Other liabilities 16 (49)
Net cash provided by operating activities 155 305
Cash flows from investing activities:
Property improvements and replacements (50) (120)
Proceeds from sale of investments -- 34
Dividends received from investments 3 --
Deposits to restricted escrows (46) (49)
Receipts from restricted escrows -- 120
Net cash used in investing activities (93) (15)
Cash flows used in financing activities:
Payments on mortgage notes payable (112) (103)
Net (decrease) increase in unrestricted cash
and cash equivalents (50) 187
Unrestricted cash and cash equivalents at
beginning of period 1,478 1,311
Unrestricted cash and cash equivalents at
end of period $1,428 $1,498
Supplemental disclosure of cash flow information:
Cash paid for interest $ 359 $ 342
<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 the "Registrant") have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item 310(b)
of Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of ConCap Equities, Inc. (the "General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and six months ended June 30, 1997, are not necessarily indicative of the
results that may be expected for the fiscal year ending December 31, 1997. For
further information, refer to the consolidated financial statements and
footnotes thereto included in the Partnership's annual report on Form 10-KSB for
the fiscal year ended December 31, 1996.
Certain reclassifications have been made to the 1996 balances to conform to the
1997 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 no employees and is dependent on the General Partner and its
affiliates for the management and administration of all of the Partnership
activities, as provided in the Partnership agreement.
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, 1997 and 1996. Property management fees of approximately $79,000 and
$80,000 were paid to affiliates of the General Partner for the six months ended
June 30, 1997 and 1996, respectively. These property management fees are
included in operating expenses.
The Partnership Agreement also provides for reimbursement to the General Partner
and its affiliates for costs incurred in connection with the administration of
Partnership activities. Reimbursements for services of affiliates of
approximately $51,000 and $54,000 were paid to the General Partner and its
affiliates for the six months ended June 30, 1997 and 1996, respectively. These
reimbursements are primarily included in general and administrative expenses.
The Partnership insures 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, totaling approximately $1,808,000, are less than the
reserve requirement of approximately $2,266,000 at June 30, 1997. 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 Special Limited Partners transferred portions
of their interests to CEI so that CEI now holds a .2% interest in all allocable
items of income, loss and distribution. The difference between the Special
Limited 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.
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, 1997 and 1996:
1997 1996
Celina Plaza Apartments
El Paso, Texas 88% 91%
Colony of Springdale Apartments
Springdale, Ohio 89% 91%
The Partnership realized a net loss of approximately $65,000 for the three
months ended June 30, 1997, and a net loss of approximately $189,000 for the six
months ended June 30, 1997, compared to net losses of approximately $83,000 for
the three months ended June 30, 1996, and approximately $175,000 for the six
months ended June 30, 1996.
The increase in net loss for the six months ended June 30, 1997, compared to the
six months ended June 30, 1996, is primarily due to a decrease in rental
revenues and an increase in interest expense. The increase in net loss was
partially offset by a decrease in maintenance expense. Rental income decreased
due to a decrease in occupancy at the investment properties. Interest expense
increased due to an increase in interest paid on a wrap note secured by Celina
Plaza Apartments. Interest payments are based on cash flow, which increased in
the first six months of 1997, compared to the corresponding period in 1996.
Maintenance expenses decreased due to decreases in interior painting and
contract cleaning at Celina Plaza Apartments.
Included in maintenance expenses for the six months ended June 30, 1997, is
approximately $10,000 of major repairs and maintenance comprised primarily of
repairs to one unit at Celina Plaza Apartments due to minor fire damage, which
was not covered by insurance. For the six months ended June 30, 1996,
approximately $32,000 of repairs and maintenance comprised primarily of major
landscaping and interior and exterior building improvements are included in
maintenance expense.
At June 30, 1997, the Partnership held unrestricted cash and cash equivalents of
approximately $1,428,000 compared to approximately $1,498,000 at June 30, 1996.
Net cash provided by operating activities decreased primarily due to an increase
in other assets, which resulted from increases in prepaid insurance due to the
down-payment that was required at the policy renewal in May 1997. This decrease
was partially offset by an increase in other liabilities due to the timing of
payments. Net cash used in investing activities increased due primarily to
decreases in receipts from restricted escrows and due to no investment sales in
1997. These increases in cash uses were partially offset by a decrease in
property improvements and replacements. Net cash used in financing activities
increased primarily due to an increase in payments of principal on mortgage
notes.
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.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are currently
thought to be sufficient for any near-term needs of the Partnership. The
mortgage indebtedness of approximately $10,129,000, net of discounts, matures in
July 1997 and May 2001 with balloon payments of $9,813,000 due at maturity, at
which time the properties will either be sold or the mortgages refinanced.
Future cash distributions will depend on the levels of cash generated from
operations, capital expenditure requirements, property sales and the
availability of cash reserves. The mortgage indebtedness of approximately
$5,690,000, net of discount, secured by Celina Plaza Apartments, matured in July
1997. Subsequent to June 30, 1997, the General Partner obtained a sixty day
extension, with the stipulation that the Partnership make a $113,500 payment
towards the principal balance on this note. In addition to the sixty day
extension, which expires September 30, 1997, the Partnership will have two
thirty day options requiring additional principal payments of $56,750 at each
option. All other terms of the note remain the same. Because the Partnership
is currently negotiating to sell the property, the extension was granted by the
lender in order to allow the Partnership additional time to consummate a sale.
However, there can be no assurance that a sale will be consummated. If by the
final maturity date of November 28, 1997, the General Partner is not successful
in selling Celina Plaza Apartments, the property could be lost through
foreclosure. No cash distributions were declared or paid during the first six
months of 1997 or 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 filed during the three months ended June 30, 1997.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CONSOLIDATED CAPITAL PROPERTIES 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 4, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Consolidated
Capital Properties VI 1997 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-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,428
<SECURITIES> 0
<RECEIVABLES> 29
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 16,714
<DEPRECIATION> 7,514
<TOTAL-ASSETS> 11,416
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 10,129
0
0
<COMMON> 0
<OTHER-SE> 761
<TOTAL-LIABILITY-AND-EQUITY> 11,416
<SALES> 0
<TOTAL-REVENUES> 1,636
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,825
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 486
<INCOME-PRETAX> (189)
<INCOME-TAX> 0
<INCOME-CONTINUING> (189)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (189)
<EPS-PRIMARY> (1.04)<F2>
<EPS-DILUTED> 0
<FN>
<F1>Registrant has an unclassified balance sheet.
<F2>Multiplier is 1.
</FN>
</TABLE>
