UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 2002
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
(Exact name of registrant as specified in its charter)
California 0-10831 95-2744492
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification Number)
incorporation)
55 Beattie Place
Post Office Box 1089
Greenville, South Carolina 29602 29602
(Address of principal executive offices) (Zip Code)
(864) 239-1000
(Registrant's telephone number)
N/A
(Former Name or former address, if changed since last report)
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant hereby amends the following items, financial statements, exhibits or
other portions of its Current Report on Form 8-K, dated August 9, 2002 (filed
with the Securities and Exchange Commission on August 23, 2002), as set forth in
the pages attached hereto.
Item 7. Financial Statements and Exhibits
(a) and (b) FINANCIAL STATEMENTS OF PROPERTIES ACQUIRED AND PRO FORMA
FINANCIAL INFORMATION
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
Pro Forma Consolidated Balance Sheet
(Unaudited) as of June 30, 2002................................ 4
Pro Forma Consolidated Income Statement
(Unaudited) for the six months ended June 30, 2002............. 5
Pro Forma Consolidated Income Statement
(Unaudited) for the year ended December 31, 2001............... 6
Notes to Pro Forma Consolidated Financial Information.................. 7
Report of Independent Auditors....................................... 9
Combined Statements of Revenues and Certain Expenses for the six months
ended June 30, 2002 (unaudited) and the years ended
December 31, 2001, 2000 and 1999................................ 10
Notes to Consolidated Statements of Revenues and Certain Expenses...... 11
(c) EXHIBITS
None.
SIGNATURE
Pursuant to the requirements 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.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
By: ConCap Equities, Inc.
Its General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President and Director
Date: October 25, 2002
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
The unaudited pro forma consolidated balance sheet of Consolidated Capital
Institutional Properties ("CCIP" or the "Partnership") as of June 30, 2002 has
been prepared as if the Partnership's acquisition of the fee interest in the
four properties (Silverado Apartments, The Knolls Apartments, Indian Creek
Apartments, and Tates Creek Village Apartments) had been consummated on June 30,
2002. The unaudited pro forma consolidated income statements for the year ended
December 31, 2001 and the six months ended June 30, 2002 are presented as if the
Partnership's acquisition of the four properties occurred on January 1, 2001 and
the effect was carried forward through the year and the six month period.
On August 9, 2002, the general partner of CCIP executed and filed deeds in lieu
of foreclosure on three of the properties of Consolidated Capital Equity
Properties ("CCEP"): Silverado Apartments, The Knolls Apartments, and Indian
Creek Apartments. In addition, on August 13, 2002, the general partner of CCIP
executed and filed a deed in lieu of foreclosure on Tates Creek Village
Apartments.
The pro forma consolidated financial statements do not represent what the
Partnership's financial position or results of operations would have been
assuming the completion of the Partnership's acquisition of the four properties
had occurred on January 1, 2001 and period indicated, nor do they project the
Partnership's financial position or results of operations at any future date or
for any future period. These pro forma consolidated financial statements should
be read in conjunction with the Partnership's 2001 Annual Report on Form 10-K
and the Partnership's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2002.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2002
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
CCIP PARTNERSHIP
HISTORICAL ACQUISITION PROFORMA
(A) (B) ADJUSTED
Assets
Cash and cash equivalents $ 1,086 $ 293 $ 1,379
Receivables and deposits 363 64 427
Restricted escrows 417 516 933
Other assets 1,007 166 1,173
Investment in Master Loan to
affiliate 26,430 (11,561)(C) 14,869
Investment in affiliated partnerships -- 918 918
Investment properties:
Land 3,564 7,540 11,104
Building and related personal
property 39,760 30,160 69,920
43,324 37,700 81,024
Less: Accumulated depreciation (17,455) -- (17,455)
25,869 37,700 63,569
$55,172 $28,096 $83,268
Liabilities and Partners' Capital
Liabilities
Accounts Payable $ 126 $ 70 $ 196
Tenant security deposit liabilities 514 123 637
Accrued property taxes 46 233 279
Other liabilities 668 209 877
Mortgage notes payable 26,285 25,467 51,752
Total Liabilities 27,639 26,102 53,741
Partners' Capital
General Partner 119 114 233
Limited partners (199,045.02 units
issued and outstanding) 27,414 1,880 29,294
27,533 1,994 (D) 29,527
$55,172 $28,096 $83,268
The accompanying notes are an integral part of
these pro forma financial statements.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
PRO FORMA CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 2002
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
CCIP PARTNERSHIP
HISTORICAL ACQUISITION PROFORMA PROFORMA
(A) (B) ADJUSTMENTS ADJUSTED
Revenues
Rental income $5,387 $3,296 $ -- $8,683
Interest income on
investment in Master Loan
to affiliate 386 -- (386)(C) --
Other income 405 320 -- 725
Total revenues 6,178 3,616 (386) 9,408
Expenses
Operating 2,372 1,418 -- 3,790
General and administrative 389 -- 176(D) 565
Depreciation 1,486 -- 500(E) 1,986
Interest 934 998 -- 1,932
Property taxes 416 211 -- 627
Total expenses 5,597 2,627 676 8,900
Net income (loss) $ 581 $ 989 $(1,062) $ 508
Net income (loss) allocated
to general partner (1%) 6 10 (11) 5
Net income (loss) allocated
to limited partners (99%) 575 979 (1,051) 503
Net income (loss) $ 581 $ 989 $(1,062) $ 508
Net income (loss) per limited
partnership unit $ 2.89 $ 4.92 $ (5.28) $ 2.53
The accompanying notes are an integral part of
these pro forma financial statements.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
PRO FORMA CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2001
(UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
CCIP PARTNERSHIP
HISTORICAL ACQUISITION PROFORMA PROFORMA
(A) (B) ADJUSTMENTS ADJUSTED
Revenues
Rental income $11,305 $ 7,061 $ -- $18,366
Interest income on
investment in Master Loan
to affiliate 3,280 -- (3,280)(C) --
Reduction of provision for
impairment loss 3,176 -- (3,176)(D) --
Other income 899 587 -- 1,486
Total revenues 18,660 7,648 (6,456) 19,852
Expenses
Operating 5,168 2,942 -- 8,110
General and administrative 720 -- 268(E) 988
Depreciation 2,980 -- 1,000(F) 3,980
Interest 1,889 2,036 -- 3,925
Property taxes 825 411 -- 1,236
Total expenses 11,582 5,389 1,268 18,239
Net income (loss) $ 7,078 $ 2,259 $(7,724) $ 1,613
Net income (loss) allocated
to general partner (1%) 71 23 (77) 16
Net income (loss) allocated
to limited partners (99%) 7,007 2,236 (7,647) 1,597
Net income (loss) $ 7,078 $ 2,259 $(7,724) $ 1,613
Net income (loss) per
limited partnership unit $ 35.20 $ 11.23 $(38.42) $ 8.02
The accompanying notes are an integral part of
these pro forma financial statements.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 2002
(A) Reflects the consolidated balance sheet of CCIP reported on the Quarterly
Report Form 10-Q at June 30, 2002.
(B) Reflects the assets and liabilities valuation of the four properties
(Silverado Apartments, The Knolls Apartments, Indian Creek Apartments and
Tates Creek Apartments) at June 30, 2002.
(C) The write off of the portion of the investment in the Master Loan to CCEP
related to the four properties foreclosed on by the Partnership.
(D) Reflects gain on foreclosure as a result of recording the assets and
liabilities of the four properties at their respective fair values.
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE
SIX MONTHS ENDED JUNE 30, 2002
(A) Reflects the consolidated statement of income of CCIP for the six month
period ended June 30, 2002 as reported on the Partnership's Quarterly
Report on Form 10-Q.
(B) Reflects the historical operations of the four properties for the six
months ended June 30, 2002.
(C) Reflects elimination of Master Loan balance and related interest income
due to the acquisition through foreclosure on the collateral for the loan.
All interest income was eliminated due to the impending foreclosure of the
remaining properties which serve as collateral for the loan.
(D) Reflects General Partner Reimbursements for the four properties.
(E) Reflects straight line depreciation for Silverado Apartments, The Knolls
Apartments, Indian Creek Apartments and Tates Creek Village Apartments
based on estimated useful lives of 30 years, for buildings and five years
for furniture, fixtures and equipment.
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE
YEAR ENDED DECEMBER 31, 2001
(A) Reflects the consolidated statement of income of CCIP for the year ended
December 31, 2001 as reported on the Partnership's Annual Report on Form
10-K.
(B) Reflects the historical operations of the four properties for the year
ended December 31, 2001.
(C) Reflects elimination of Master Loan balance and related interest income
due to the acquisition through foreclosure on the collateral for the loan.
All interest income was eliminated due to the impending foreclosure of the
remaining properties which serve as collateral for the loan.
(D) Reflects elimination of reduction of provision for impairment loss on the
Master Loan as all of the properties which serve as collateral for the
Master Loan have either been foreclosed upon or the foreclosure
proceedings are in process.
CONSOLIDATED CAPITAL INSTITUTIONAL PROPERTIES
NOTES TO PRO FORMA CONSOLIDATED INCOME STATEMENT FOR THE
YEAR ENDED DECEMBER 31, 2001
(E) Reflects General Partner Reimbursements for the four properties.
(F) Reflects straight line depreciation for Silverado Apartments, The Knolls
Apartments, Indian Creek Apartments and Tates Creek Village Apartments
based on estimated useful lives of 30 years for buildings and five years
for furniture, fixtures and equipment.
Report of Ernst & Young LLP, Independent Auditors
The Partners
Consolidated Capital Institutional Properties
We have audited the accompanying combined statements of revenues and certain
expenses of The Knolls Apartments, Indian Creek Village Apartments, Tates Creek
Village Apartments and Silverado Apartments as described in Note 1 for the years
ended December 31, 2001, 2000 and 1999. These financial statements are the
responsibility of the Properties' management. Our responsibility is to express
an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statement. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying combined statements of revenues and certain expenses was
prepared using the basis of accounting described in Note 1 for the purposes of
complying with the rules and regulations of the Securities and Exchange
Commission for inclusion in Form 8-K/A of Consolidated Capital Institutional
Properties, and are not intended to be a complete presentation of the
Properties' revenues and expenses.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the revenues and certain expenses of the Properties, as
described in Note 1 for the years ended December 31, 2001, 2000 and 1999, in
conformity with accounting principles generally accepted in the United States.
/s/Ernst & Young LLP
October 15, 2002
Greenville, South Carolina
The Knolls Apartments, Indian Creek Village Apartments,
Tates Creek Village Apartments and Silverado Apartments
Combined Statements of Revenues and Certain Expenses
Years Ended December 31, 2001, 2000 and 1999 and Unaudited
Six Months Ended June 30, 2002
(In thousands)
Six Months Ended Year ended December 31
June 30,2002 2001 2000 1999
(Unaudited)
Revenues:
Rental income $ 3,296 $ 7,061 $ 6,795 $ 6,706
Other income 320 587 550 453
Total revenue 3,616 7,648 7,345 7,159
Certain expenses:
Advertising 63 139 154 152
Utilities 328 661 596 571
Management fees 187 401 373 367
Salaries and benefits 299 730 767 768
Repairs and maintenance 316 565 563 556
Insurance 96 164 125 122
Other operating expenses 129 282 276 249
Interest expense 998 2,036 1,136 848
Property tax expense 211 411 311 365
Loss on refinancing - - 730 -
Total expenses 2,627 5,389 5,031 3,998
Revenues in excess of certain
expenses $ 989 $ 2,259 $ 2,314 $ 3,161
See accompanying notes.
The Knolls Apartments, Indian Creek Village Apartments,
Tates Creek Village Apartments and Silverado Apartments
Notes to Combined Statements of Revenues and Certain Expenses
Years Ended December 31, 2001, 2000 and 1999 and Unaudited
Six Months Ended June 30, 2002
1. Basis of Presentation
The accompanying combined statements of revenues and certain expenses relates to
the operations of The Knolls Apartments, Indian Creek Village Apartments, Tates
Creek Village Apartments and Silverado Apartments (the "Properties"). The
financial statements have been prepared in accordance with the applicable rules
and regulations of the Securities and Exchange Commission for the acquisition of
real estate properties. Accordingly, the combined statements of revenues and
certain expenses exclude certain items that may not be comparable to the
proposed future operations of the Properties, primarily depreciation expense.
Consequently, the financial statements are not representative of the actual
operations of the Properties for the periods presented, nor are they indicative
of future operations.
2. Summary of Significant Accounting Policies
Revenue Recognition
The Properties generally lease apartment units for twelve-month terms or less.
Rental Income attributable to leases is recognized monthly as it is earned. The
properties will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area.
Concessions are charged to income as earned.
Advertising
The Properties expense the cost of advertising as incurred.
Use of Estimates
The preparation of combined statements of revenues and certain expenses in
conformity with accounting principles generally accepted in the United States
requires management to make estimates and assumptions that affect the amounts
reported in the statement of revenues and certain expenses and accompanying
notes. Actual results could differ from those estimates.
The Knolls Apartments, Indian Creek Village Apartments,
Tates Creek Village Apartments and Silverado Apartments
Notes to Combined Statements of Revenues and Certain Expenses
Years Ended December 31, 2001, 2000 and 1999 and Unaudited
Six Months Ended June 30, 2002
3. Interim Unaudited Financial Information
The financial statement for the six months ended June 30, 2002 is unaudited;
however, in the opinion of management, all adjustments (consisting solely of
normal recurring adjustments) necessary for a fair presentation of the financial
statement for the interim period have been included. The results of the interim
period are not necessarily indicative of the results to be obtained for a full
fiscal year.
4. Refinancings/Financings
During 2000, the mortgage indebtedness for The Knolls Apartments, Indian Creek
Village Apartments and Tates Creek Village Apartments was refinanced or new
indebtedness was placed on the properties. The refinancings replaced
indebtedness of $12,009,000 with new indebtedness of $22,875,000. In addition,
financing was obtained for Silverado Apartments in the amount of $3,525,000. The
indebtedness carries stated interest rates of 7.78% to 7.87%. Principal and
interest payments are due on the indebtedness monthly until maturity in 2010, at
which time balloon payments are due. A loss on refinancing was recorded
associated with these Properties of approximately $730,000, due to write-off of
unamortized loan costs and prepayment penalties.
5. Related Party Transactions
Affiliates of the Properties are entitled to receive 5% of gross receipts from
the Properties for providing property management services. The Properties paid
to such affiliates approximately $401,000, $373,000 and $367,000 for the years
end December 31, 2001, 2000 and 1999, respectively and approximately $187,000
for the six months ended June 30, 2002.