SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
(Mark One)
[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 under Section 13 or 15(d) of the Exchange Act for the
transition period
From to
---------------------------- ---------------------------------
Commission file number 0-14752.
-------
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
(Exact name of Small Business Issuer as Specified in Its Charter)
DELAWARE 35-1665759
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
14160 Dallas Parkway, Suite 300, Dallas, Texas 75240
(Address of Principal Executive Offices)
(972) 770-5600
(Issuer's Telephone Number, Including Area Code)
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 ___
Transitional Small Business Disclosure Format Yes No X .
------ -------
<PAGE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
CAPITAL SENIOR LIVING COMMUNITIES, LP
CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1997 AND DECEMBER 31, 1996
-----------------------------------------
June 30, December 31,
1997 1996
(Unaudited) (Audited)
----------- ---------
ASSET
- -----
PROPERTY AND EQUIPMENT, Net $ 30,880,583 $ 12,576,523
OTHER ASSETS:
Cash and cash equivalents 12,545,226 10,463,887
Cash, restricted 169,046 206,376
Accounts receivable, net of
allowance for doubtful accounts
of $4,420,476 in 1997 and $164,822
in 1996 1,784,254 373,163
Prepaid expenses and other 150,411 92,302
Deferred charges, less accumulated
amortization of $375,551 in 1997
and $311,938 in 1996 137,828 201,440
Investment in limited partnerships
(Note 4) 9,621,412 8,275,920
----------- ------------
Total assets $55,288,760 $ 32,189,611
=========== ============
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
LIABILITIES:
Accrued expenses and other
liabilities $ 2,639,448 $ 1,303,833
Customer deposits 257,948 248,458
Notes payable 12,446,423 -
----------- ------------
Total liabilities 15,343,819 1,552,291
----------- ------------
See notes to financial statements
1
<PAGE>
DEFERRED INCOME (Note 4) - 3,400,684
MINORITY INTEREST 11,090,370 -
PARTNERS' CAPITAL:
General partner 98,313 72,526
Limited partner 1 1
Beneficial unit certificates,
1,264,000 issued and 1,117,692
outstanding 30,979,364 28,426,464
Repurchased beneficial unit
certificates (2,223,107) (1,262,355)
------------ ------------
Total partners' capital 28,854,571 27,236,636
------------ ------------
Total liabilities and partners'
capital $ 55,288,760 $ 32,189,611
============ ============
See notes to financial statements
2
<PAGE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
Three Months ended June 30,
1997 1996
---- ----
RENTAL AND OTHER INCOME
Multi-family $ - $ 323,838
Independent 1,899,952 1,811,293
Assisted Living 422,666 398,072
Nursing 3,044,773 1,222,782
Facility lease income 1,059,749 -
Other 221,215 221,555
----------- -----------
Total rental and other income 6,648,355 3,977,540
EXPENSES:
Salaries, wages and benefits 2,256,889 1,433,670
Operating and other administrative expenses 2,390,958 1,578,706
Depreciation and amortization 471,721 410,853
----------- -----------
Total expenses 5,119,568 3,423,229
----------- -----------
Income from operations 1,528,787 554,311
OTHER INCOME (EXPENSE):
Interest income 645,502 98,741
Interest expense (212,615) (56,385)
Income on investments - 433,520
Minority interest (156,275) -
---------- ----------
Total other income (expense) 276,612 475,876
---------- ----------
NET INCOME $1,805,399 $1,030,187
========== ==========
See notes to financial statements
3
<PAGE>
NET INCOME ALLOCATION:
General partner $ 18,054 $ 10,302
Beneficial unit certificate holders 1,787,345 1,019,885
---------- ----------
Total $1,805,399 $1,030,187
========== ==========
NET INCOME PER BENEFICIAL UNIT
CERTIFICATE $ 1.56 $ .83
========== ==========
OUTSTANDING BENEFICIAL UNIT
CERTIFICATES 1,117,692 1,226,708
========== ==========
See notes to financial statements
4
<PAGE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
Six Months ended June 30,
1997 1996
---- ----
RENTAL AND OTHER INCOME
Multi-family $ - $ 647,588
Independent 3,747,265 3,607,723
Assisted Living 853,078 804,820
Nursing 5,455,527 2,433,406
Facility lease income 2,157,973 -
Other 461,410 438,044
----------- -----------
Total rental and other income 12,675,253 7,931,581
EXPENSES:
Salaries, wages and benefits 4,506,782 2,889,453
Operating and other administrative expenses 4,652,228 3,181,565
Depreciation and amortization 943,443 818,314
----------- -----------
Total expenses 10,102,453 6,889,332
----------- -----------
Income from operations 2,572,800 1,042,249
OTHER INCOME (EXPENSE):
Interest income 787,696 204,539
Interest expense (386,347) (112,959)
Income on investments - 459,043
Minority interest (395,462) -
----------- -----------
Total other income (expense) 5,887 550,623
----------- -----------
NET INCOME $ 2,578,687 $ 1,592,872
=========== ===========
See notes to financial statements
5
<PAGE>
NET INCOME ALLOCATION:
General partner $ 25,787 $ 15,929
Beneficial unit certificate holders 2,552,900 1,576,943
----------- -----------
Total $ 2,578,687 $ 1,592,872
=========== ===========
NET INCOME PER BENEFICIAL UNIT
CERTIFICATE $ 2.23 $ 1.29
=========== ===========
OUTSTANDING BENEFICIAL UNIT
CERTIFICATES 1,117,692 1,226,708
=========== ===========
See notes to financial statements
6
<PAGE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
Repurchased
Beneficial Beneficial
Unit Unit Limited General
Certificates Certificates Partner Partner Total
BALANCE,
December 31, 1996 $ 28,426,464 $ (1,262,355) $ 1 $ 72,526 $27,236,636
Net Income 2,552,900 - - 25,787 2,578,687
Repurchased
Beneficial
Unit
Certificates - (960,752) - - (960,752)
------------ ------------ ------- -------- -----------
BALANCE,
June 30, 1997 $ 30,979,364 $ (2,223,107) $ 1 $ 98,313 $28,854,571
============ ============ ======= ======== ===========
See notes to financial statements
7
<PAGE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
For the Six Months
Ended June 30,
--------------
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,578,687 $ 1,592,872
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation 826,128 737,742
Amortization of deferred financing
charges 117,315 80,572
Provision for bad debt 28,061 16,500
Amortization of deferred income - (35,011)
Equity in earnings of investee - (398,508)
Minority interest 395,462 -
Changes in assets and liabilities,
net of effects of acquisitions:
Cash, restricted 37,330 -
Accounts receivable (644,918) 77,063
Prepaid expenses and other 27,186 (6,895)
Accrued expenses and other
liabilities 142,308 214,322
Customer Deposits 9,490 15,175
----------- ------------
NET CASH PROVIDED BY
OPERATING ACTIVITIES 3,517,049 2,293,832
----------- ------------
See notes to financial statements
8
<PAGE>
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired upon consolidation of HCP 8,995,455 -
Additions to property and equipment (553,533) (185,195)
Investments in limited partnerships (14,155,889) (2,599,229)
----------- ------------
NET CASH USED IN
INVESTING ACTIVITIES (5,713,967) (2,784,424)
----------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds on note 6,000,000 -
Payments on notes payable (760,991) (24,982)
Deferred charges - (20,352)
Repurchase of beneficial unit certificates (960,752) (447,504)
----------- ------------
NET CASH PROVIDED (USED) IN
FINANCING ACTIVITIES 4,278,257 (492,838)
----------- ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 2,081,339 (983,430)
CASH AND CASH EQUIVALENTS, Beginning of Period 10,463,887 9,743,330
----------- ------------
CASH AND CASH EQUIVALENTS, End of Period $12,545,226 $ 8,759,900
=========== ============
See notes to financial statements
9
<PAGE>
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
---------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
JUNE 30, 1997
-------------
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------
Principals of Consolidation
- ---------------------------
The accompanying consolidated balance sheet, as of June 30, 1997, includes the
accounts of the Partnership, its 99%-owned subsidiary, Retirement Partnership,
Ltd., and HealthCare Properties, L.P. (HCP). HCP includes the accounts of HCP
and its wholly owned subsidiaries, Danville Care, Inc., Foothills Care, Inc.,
Countryside Care, Inc., Countryside Care, L.P., and Cambridge Nursing Home
Limited Liability Company. All significant intercompany accounts and
transactions have been eliminated in consolidation. The 1% minority interest in
Retirement Partnership, Ltd. is not presented separately due to its
immateriality.
On June 30, 1997, the Partnership had increased its ownership in HCP to 55%. In
the accompanying consolidated financial statements, HCP is consolidated as
though a controlling financial interest in HCP had been acquired by the
Partnership at January 1, 1997. At December 31, 1996 the Partnership owned
approximately 31% of HCP's limited partner units and accounted for its
investment in HCP on the equity method. Preacquisition earnings for 1997
applicable to HCP are included in minority interest. HCP is a Delaware limited
partnership established for the purpose of acquiring, leasing, and operating
existing or newly constructed long-term health care properties. One property is
operated by HCP and seven properties are leased to qualified operators who
provide specialized health care services. Capital Realty Group Senior Housing,
Inc. (CRGSH) is the general partner.
The financial information has been prepared in accordance with the Partnership's
customary accounting practices and has not been audited. In the opinion of
management, the information presented reflects all adjustments necessary for a
fair statement of interim results. All such adjustments are of a normal and
recurring nature. The financial statements should be read in conjunction with
the consolidated financial statements and the footnotes thereto included in the
Partnership's annual report filed in Form 10-KSB for the year ended December 31,
1996.
Property and Equipment
- ----------------------
The Partnership provides for depreciation and amortization on property and
equipment using the straight-line method by charges to operations in amounts to
allocate the cost of the property and equipment over their estimated useful
lives.
The carrying value of property and equipment is reviewed if the facts and
circumstances suggest that it may be impaired. The consolidation of HCP at
January 1, 1997 includes a reserve for impaired value of $2,185,381. For the six
months ending June 30, 1997, no additional reserve for impaired value has been
provided.
Cash Equivalents
- ----------------
The Partnership considers investments with original maturities of three months
or less to be cash equivalents.
Revenue Recognition
- -------------------
Revenue from the four retirement living communities is recognized in the period
in which the unit rental and/or food services relate.
10
<PAGE>
Revenue from the two Projects (Towne Centre and Canton Regency) which offer
assisted living, intermediate, and skilled health care (in addition to
retirement living), is recognized as services are performed. The Towne Centre
health care center (the "Center") is a provider of services under the Indiana
Medicaid program. Accordingly, the Center is entitled to reimbursement under the
foregoing program at rates which are lower than private pay rates. Patient
service revenue for Medicaid patients is recorded at the reimbursement rates.
The Towne Centre and Canton Regency health care centers (the "Centers") are also
providers of services under the Medicare program.
The Centers are entitled to reimbursement under the foregoing program in amounts
which approximate the lower of cost or charges for caring for these patients.
During the period, the Centers received payments from this program on an
estimated basis. Any differences between estimated and actual reimbursements are
recognized in the subsequent year.
2. COMMITMENTS AND CONTINGENCIES:
-----------------------------
The Partnership had $19,046 and $56,376 in certificates of deposit at June 30,
1997 and December 31, 1996 respectively, restricted for utility deposits. The
certificates of deposit mature one year from the original purchase date.
In conjunction with the Partnership's increased mortgage loan commitment on June
30, 1995 (see LIQUIDITY AND CAPITAL RESOURCES), a compensating balance of
$150,000 was established with the mortgage company.
3. TRANSACTIONS WITH RELATED PARTIES:
---------------------------------
In accordance with the Partnership Agreement, the general partner, Retirement
Living Communities, L.P. ("RLC"), does not receive any fees from the Partnership
but may be reimbursed by the Partnership for any actual costs and expenses
incurred in connection with the operations of the Partnership. In addition, an
affiliate of RLC is managing the assets of the Partnership and of HCP. CRGSH, an
affiliate of RLC, also receives reimbursements and fees from HCP.
In addition, the Partnership and HCP has no employees. An affiliate of RLC makes
gross payroll deposits and health insurance premium payments on behalf of the
properties owned by the Partnership and HCP, which are reimbursed by the
Partnership, and is required to fund any excess health insurance claims not
covered by the Partnership's health premiums or related insurance policy.
Reimbursements and fees paid to the general partner and affiliates of the
general partner from the Partnership and HCP are as follows:
Six months ended Six months ended
June 30, 1997 June 30, 1996
Salary and benefit reimbursements $ 4,259,624 2,692,041
Administrative reimbursements 280,329 193,574
Asset management fees 222,289 -
Property management fees 683,677 501,607
General partner management fees 45,802 -
------------ ------------
$ 5,491,721 3,387,222
============ ============
In connection with the extension of the Silver Lakes mortgage, an affiliate of
RLC received a 1% financing fee of $20,352 in the first quarter of 1996.
In the second quarter of 1997, the Partnership received a loan from two
affiliates of the general partner totaling $500,000. The loan was repaid in the
second quarter of 1997 and paid accrued interest at 10% of $3,014.
11
<PAGE>
In addition, a 50% shareholder of the general partner of RLC is chairman of the
board of a bank where the Partnership holds the majority of its operating cash
accounts.
The general partner and managing agent of NHP Retirement Housing Partners I,
L.P. is an affiliate of RLC. See Note 4.
As of July 8, 1997, the Partnership entered into an asset purchase agreement
with an affiliate of RLC pursuant to which the Partnership has agreed to sell
substantially all of its assets, other than working capital, to such affiliate
conditioned upon, among other things, the funding of such affiliate's initial
public offering. (See LIQUIDITY AND CAPITAL RESOURCES)
4. ACQUISITION OF INVESTMENTS
--------------------------
During 1997, 1996 and 1995, the Partnership made various purchases of limited
partnership interests in HCP and paid $4,925,267, $3,200,685 and $308,825,
respectively. At June 30, 1997, the Partnership was committed to purchase
$397,312 in additional limited partnership interests of HCP. As of June 30,
1997, the Partnership has cumulatively paid and committed $8,832,089 for a 55%
ownership in HealthCare Properties, L.P.
In the second quarter of 1996, 9.36% in limited partnership interests in
HealthCare Properties, L.P. was purchased from CRGSH, who had acquired the
interests in 1993. The Partnership paid $1,269,077 to such affiliate, who
recognized a $878,592 gain on the transaction. Because of this purchase, the
Partnership exceeded 20% ownership and changed its method of accounting from the
cost method to the equity method. In June 1997, the Partnership exceeded 50%
ownership of HCP and changed its method of accounting from the equity method to
a consolidated basis, effective January 1, 1997.
During 1997, 1996 and 1995, the Partnership made various purchases of
outstanding Pension Notes of NHP Retirement Housing Partners I, L.P. and paid
$8,833,310, $199,158 and $587,580, respectively. As of June 30, 1997, the
Partnership has cumulatively paid $9,620,048 for a 27.9% ownership of
outstanding Pension Notes of NHP Retirement Housing Partners I, L.P. NHP
Retirement Housing Partners I, L.P. owns a portfolio of 5 independent living
retirement facilities. The Pension Notes bear simple interest at 13% per annum.
Interest of 7% is paid quarterly, with the remaining 6% interest deferred.
Deferred interest and principal matures on December 31, 2001. The Partnership
accrued interest on the Pension Notes at 7% through March 31, 1997 and at 10.5%
from April 1, 1997 through June 30, 1997, due to uncertainties regarding their
ultimate realization. The ultimate realization of the Pension Notes is expected
to be based primarily upon the value of the underlying properties. During 1996,
the Partnership paid $1,364 for a 3.1% ownership of limited partnership
interests in NHP Retirement Housing Partners I, L.P.
5. DISPOSITION OF PROPERTY
-----------------------
On November 5, 1996, the Partnership sold the Lakeridge and Silver Lakes
Apartments to an unrelated party at a combined sales price of $4,793,000, paid
in cash. After payment of the mortgage loan on the Silver Lakes Apartments and
refund of its escrow balance, the Partnership received cash of approximately
$2,549,000 on the sale. Due to the sale of Silver Lakes and Lakeridge,
Partnership total revenues for the six months ended June 30, 1997 would have
decreased approximately $647,588, and there would not have been a significant
impact to net income.
Item 2. MANAGEMENT'S DISCUSSION AND OR PLAN OF OPERATIONS
This discussion should be read in conjunction with the financial statements of
Capital Senior Living Communities, L.P. (the "Partnership") included in this
Report.
As of June 30, 1997, the Partnership's assets included four retirement projects
(Harrison, Cottonwood Village, Canton Regency, and Towne Centre), a 3% interest
in Encore Limited Partnership, a 55% limited partnership interest in HealthCare
Properties, L.P., 27.9% of the outstanding pension notes of NHP Retirement
Housing Partners I, L.P., a 3.1% limited partnership interest in NHP Retirement
Housing Partners I, L.P., and a 99% interest in Retirement Partnership, Ltd.
(the "Partnership Subsidiary").
12
<PAGE>
RESULTS OF OPERATIONS
- ---------------------
The Partnership's primary source of funds is net rental income from the
ownership and management of the four real estate projects owned by the
Partnership.
FIRST SIX MONTHS OF 1997 COMPARED WITH FIRST SIX MONTHS OF 1996
- ---------------------------------------------------------------
Rental and other income for the six months ended June 30, 1997 and 1996 was
$12,675,253 and $7,931,581, respectively. Rental and other income increased
$4,743,672, or 59.8% from the six months ended June 30, 1996 to 1997. The
inclusion of HCP revenues in 1997 from January 1, 1997 contributed $4,653,268,
or 58.7% of this increase, as HCP was not consolidated in 1996. Of this amount,
$2,495,295 in nursing income and $2,157,973 in facility lease income was
attributable to the HCP consolidation. Multi-family income of $647,588 decreased
from 1996 to 1997 due to the sale of the Silver Lakes and Lakeridge Apartments
in November 1996. Independent, assisted living, and other income increased from
1996 to 1997 due to higher rents and increased occupancies at the Partnership's
properties. Apart from consolidated HCP income, nursing income increased
$526,826 from 1996 to 1997 and was mainly attributable to prior year Medicare
cost report settlements. Interest income for the six months ended June 30, 1997
and 1996, was $787,696 and $204,539, respectively. Interest income increased
$583,457 from the six months ended June 30, 1996 to 1997 primarily as a result
of $163,635 attributable to the consolidation of HCP and $419,822 associated
with the Partnership's increased investment in NHP Pension Notes and its accrual
of a portion of deferred interest on these Notes. No income was recorded for
income on investments for the six months ended June 30, 1997 due to the
consolidation of HCP. During the six months ended June 30, 1996, income on
investment of $459,043 was recognized, of which $25,523 was received from the
Partnership's investment in Encore Limited Partnership and $433,520 recognized
on equity participation and amortization of deferred income relating to the
Partnership's investment in HealthCare Properties, L.P. Operating expenses are
maintained by property and by natural expense classification, but are not
allocated by revenue type. Salaries, wages, and benefits of $4,506,782 and
$2,889,453 were paid by the Partnership for the six months ended June 30, 1997
and 1996, respectively. The increase in such payments of $1,617,329, or 56% from
1996 to 1997 was attributable to $1,633,039 of HCP salary costs upon
consolidation and a decrease of $15,710 in Partnership salaries, wages and
benefits for the six months ended June 30, 1997. Operating and other
administrative expenses increased $1,470,663 from 1996 to 1997, or 46.2%, and
was mainly attributable to $1,496,364 of HCP operating expenses upon
consolidation and a decrease of $25,701 in Partnership operating and other
administrative expenses for the six months ended June 30, 1997. Depreciation and
amortization for 1997 was $943,443 and $818,314 in 1996. The increase in
depreciation and amortization expense of $125,129, or 15.3% from 1996 to 1997
was due to $553,011 of HCP depreciation expense upon consolidation and a
decrease of $427,882 in Partnership depreciation resulting from the sale of the
Silver Lakes and Lakeridge Apartments in November, 1996. Interest expense
increased $273,388 from 1996 to 1997, of which $343,823 was HCP interest expense
upon consolidation and a decrease of $70,435 in Partnership interest expense
resulting from the sale of the Silver Lakes Apartments in November 1996.
Minority interest of $395,462 for the six months ended June 30, 1997 is the
result of consolidation of HCP.
For the three months ended June 30, 1997 as compared with the three months ended
June 30, 1996, the Partnership's revenue was impacted by the same shifts of
revenue as discussed above with the exception of other income decreasing $340
for the comparable period from 1996 to 1997. Similarly, a comparison of second
quarter 1997 operating expenses versus second quarter 1996 reflects the same
variances as discussed above.
The Partnership expects its future operating results will depend in large part
on its operating costs and occupancy levels in its facilities. If the operating
costs increase or occupancy levels decline, the Partnership's operating results
will be adversely affected.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The General Partner believes cash and cash equivalents of $12,545,226 at June
30, 1997 is adequate for the working capital needs of the Partnership. These
reserves will be used to support ongoing working capital needs, pay existing
debt obligations, meet the capital and marketing improvements necessary to
succeed in a competitive atmosphere, and fund future acquisitions or development
of real estate projects.
The Partnership's business is no longer the ownership of tax-exempt bonds.
Instead, since 1991 the Partnership has held and operated real properties. This
has adversely impacted the tax-exempt nature of the Partnership's operations in
that it caused the operations of the Partnership to be fully taxable for federal
income tax purposes and will require the individual BUC holders to report their
respective shares of any taxable income of the Partnership. Moreover, as a
result of federal tax law changes in 1986, BUC holders will not be able to use
losses from any other source, other than " passive activity" losses, to offset
their share of the Partnership's taxable income.
On July 29, 1994, the Partnership obtained a $12,000,000 open-end mortgage loan
commitment from a non-affiliated mortgage company, and pledged the Cottonwood,
Harrison, Towne Centre and Canton Regency Retirement Community as collateral. On
June 30, 1995, the Partnership increased its mortgage loan commitment from
$12,000,000 to $17,500,000. The Partnership borrowed $5,500,000 under this loan
commitment in the second quarter of 1997, which was repaid on July 1, 1997. At
June 30, 1997, mortgage loans for HCP amounted to $6,946,423. These mortgage
loans bear interest ranging from 6.8% to 10.75% and mature from 1997 to 2012.
One note, with a balance outstanding of $686,542, was due on June 30, 1997. HCP
is currently negotiating the extension of this note until December 1, 2001.
On June 30, 1997, the Partnership entered into a $77,000,000 mortgage loan
agreement with Lehman Brothers and pledged the Cottonwood, Harrison, Towne
Centre, and Canton Regency retirement communities and its investment in HCP and
NHP as collateral. The loan agreement matures December 31, 1997. On July 1,
1997, $70,000,000 became outstanding under this loan agreement; $5,500,000 was
used to repay an outstanding mortgage loan commitment and $64,500,000 was used
to fund the liquidity requirement under the loan agreement through the purchase
of three-month U.S. Treasury bills. The U.S. Treasury bills were sold under a
repurchase agreement with a term equal to their maturity. Interest costs are
based on 30-day LIBOR plus 50 basis points.
As of July 8, 1997, the Partnership entered into an asset purchase agreement
with an affiliate of RLC pursuant to which the Partnership has agreed to sell
substantially all of its assets, other than working capital, to an affiliate.
This sale is conditional, among other things, upon the funding of such
affiliate's initial public offering. The purchase price should be the appraised
value of the assets being purchased, which purchase price should be paid
primarily through assumption of the Partnership's loan with Lehman Brothers. If
this agreement is consummated, this could result in substantial gain to the
Buckholders.
PARTNERSHIP PROPERTIES
The following table sets forth summary information concerning the four
income-producing real properties owned by the Partnership as of June 30, 1997.
As discussed above, the Lakeridge and Silver Lakes Apartments were sold on
November 5, 1996.
Number of Units At Occupancy
Project Name/Location June 30, 1997 06/30/96 06/30/97
--------------------- ------------- -------- --------
Cottonwood Retirement 65 - residential 94% 100%
Community
Cottonwood, Arizona
The Harrison Retirement 124 - residential 84% 92%
Community
Indianapolis, Indiana
Towne Centre Retirement 147 - residential 94% 94%
Community 34 - assisted living
Merrillville, Indiana 64 - nursing
Canton Regency Retirement 147 - residential 97% 97%
Community 34 - assisted living
Canton, Ohio 50 - nursing
PART II OTHER INFORMATION
Item 6. (a) Exhibits and Reports on Form 8-K
Exhibit No. Description of Exhibit
27 Financial Data Schedule required by Item 601 of
Regulation S-B filed herewith.
(b) No reports on Form 8-K have been filed by the registrant during
the quarter ended June 30, 1997.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
By: RETIREMENT LIVING COMMUNITIES, L.P.
General Partner
By: CAPITAL RETIREMENT GROUP, INC.
General Partner
Date: August 13, 1997 By: /s/ Keith Johannessen
-----------------------------
Keith Johannessen
President
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
CAPITAL SENIOR LIVING COMMUNITIES, L.P.
By: RETIREMENT LIVING COMMUNITIES, L.P.
General Partner
By: CAPITAL RETIREMENT GROUP, INC.
General Partner
Date: August 13, 1997 By: /s/ Keith Johannessen
-----------------------------
Keith Johannessen
President
17
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 0000789283
<NAME> Capital Senior Living Communities, L.P.
<MULTIPLIER> 1
<CURRENCY> 1.00
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1.00
<CASH> 12,714,272
<SECURITIES> 9,621,412
<RECEIVABLES> 6,204,730
<ALLOWANCES> (4,420,476)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 52,697,194
<DEPRECIATION> (21,816,611)
<TOTAL-ASSETS> 55,288,760
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 28,854,571
<TOTAL-LIABILITY-AND-EQUITY> 55,288,760
<SALES> 0
<TOTAL-REVENUES> 13,462,949
<CGS> 0
<TOTAL-COSTS> 10,102,453
<OTHER-EXPENSES> 8,395,462
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 386,347
<INCOME-PRETAX> 2,578,687
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,578,687
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>