EXHIBIT 99.1
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND 1997
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a)
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
1998 1997
(Unaudited) (Note)
Assets
Cash and cash equivalents $ 2,146 $ 1,439
Receivables and deposits 1,406 1,241
Restricted escrows 644 798
Other assets 1,490 1,550
Investment properties:
Land 10,217 10,217
Buildings and related personal property 97,881 97,598
108,098 107,815
Less accumulated depreciation (77,075) (75,746)
31,023 32,069
$ 36,709 $ 37,097
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 232 $ 426
Tenant security deposit liabilities 614 620
Accrued property taxes 384 116
Other liabilities 428 513
Mortgage notes and interest payable 23,065 23,133
Master loan and interest payable 297,986 289,783
322,709 314,591
Partners' Deficit
General partner (2,860) (2,775)
Limited partners (283,140) (274,719)
(286,000) (277,494)
$ 36,709 $ 37,097
<FN>
Note: The balance sheet at December 31, 1997, has been derived from the audited
financial statements at that date, but does not include all the information
and footnotes required by generally accepted accounting principles for
complete financial statements.
See Accompanying Notes to Consolidated Financial Statements
</FN>
b)
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1998 1997
Revenues:
Rental income $ 4,939 $ 4,678
Interest income 35 35
Other income 354 302
Total revenues 5,328 5,015
Expenses:
Operating 2,385 2,391
General and administrative 167 252
Depreciation 1,329 1,265
Property taxes 330 325
Interest 9,602 8,692
Bad debt expense, net 21 --
Total expenses 13,834 12,925
Net loss $ (8,506) $ (7,910)
Net loss allocated to general partner (1%) $ (85) $ (79)
Net loss allocated to limited partners (99%) (8,421) (7,831)
$ (8,506) $ (7,910)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
c)
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
For the Three Months Ended March 31, 1998 and 1997
(in thousands)
General Limited
Partner Partners Total
Partners' deficit at
December 31, 1996 $ (2,449) $(242,488) $(244,937)
Net loss for the three months
ended March 31, 1997 (79) (7,831) (7,910)
Partners' deficit at
March 31, 1997 $ (2,528) $(250,319) $(252,847)
Partners' deficit at
December 31, 1997 $ (2,775) $(274,719) $(277,494)
Net loss for the three months
ended March 31, 1998 (85) (8,421) (8,506)
Partners' deficit at
March 31, 1998 $ (2,860) $(283,140) $(286,000)
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
d)
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three Months Ended
March 31,
1998 1997
Cash flows from operating activities:
Net loss $ (8,506) $ (7,910)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 1,388 1,318
Bad debt expense, net 21 --
Change in accounts:
Receivables and deposits (186) 97
Other assets 1 (246)
Accounts payable (194) (548)
Tenant security deposit liabilities (6) (6)
Accrued property taxes 268 60
Other liabilities (85) 61
Accrued interest on Master Loan 8,578 8,266
Net cash provided by operating activities 1,279 1,092
Cash flows from investing activities:
Property improvements and replacements (283) (417)
Net receipts from restricted escrows 154 786
Distributions from investments in limited partnerships -- 336
Net cash (used in) provided by
investing activities (129) 705
Cash flows from financing activities:
Principal payments on Master Loan (375) (1,430)
Principal payments on notes payable (68) (63)
Net cash used in financing activities (443) (1,493)
Net increase in cash and cash equivalents 707 304
Cash and cash equivalents at beginning of period 1,439 1,961
Cash and cash equivalents at end of period $ 2,146 $ 2,265
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,006 $ 406
<FN>
See Accompanying Notes to Consolidated Financial Statements
</FN>
e)
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Consolidated
Capital Equity Partners, L.P. ("CCEP") have been prepared in accordance with
generally accepted accounting principles for interim financial information.
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 Holdings, 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 month period
ended March 31, 1998, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1998.
Certain reclassifications have been made to the 1997 information to conform to
the 1998 presentation.
Consolidation
CCEP owns a 75% interest in a limited partnership ("Western Can, Ltd.") which
owns 444 De Haro, an office building in San Francisco, California. CCEP's
investment in Western Can, Ltd. is consolidated in CCEP's financial statements.
No minority interest liability has been reflected for the 25% minority interest
because Western Can, Ltd. has a net capital deficit and no minority liability
exists with respect to CCEP.
NOTE B - RELATED PARTY TRANSACTIONS
CCEP has no employees and is dependent on the General Partner and its affiliates
for the management and administration of all partnership activities. CCEP paid
property management fees based upon collected gross rental revenues for property
management services in each of the three month periods ended March 31, 1998 and
1997. The Partnership Agreement ("Agreement") also provides for reimbursement
to the General Partner and its affiliates for costs incurred in connection with
the administration of CCEP activities.
Also, CCEP is subject to an Investment Advisory Agreement between CCEP and an
affiliate of the General Partner. This agreement provides for an annual fee,
payable in monthly installments, to an affiliate of the General Partner for
advising and consulting services for CCEP's properties. The following amounts
were paid or accrued to the General Partner and affiliates:
For the Three Months Ended
March 31,
1998 1997
(in thousands)
Property management fees $266 $253
Investment advisory fees 44 45
Lease commissions 2 35
Reimbursement for services of affiliates (1) 100 117
(1)Included in "reimbursements for services of affiliates" for the three months
ended March 31, 1998 and 1997, is approximately $15,000 and $20,000,
respectively, in reimbursements for construction oversight costs.
In addition to the compensation and reimbursements described above, interest
payments are made to and loan advances are received from Consolidated Capital
Institutional Properties ("CCIP") pursuant to the Master Loan Agreement (the
"Master Loan"), which is described more fully in the 1997 Annual Report.
Approximately $604,000 in interest payments were made during the three month
period ended March 31, 1998. No advances were received under the Master Loan
during the three months ended March 31, 1998. Principal payments of
approximately $375,000 were made on the Master Loan during the three months
ended March 31, 1998.
For the period January 1, 1997 to August 31, 1997, CCEP insured its properties
under a master policy through an agency affiliated with the General Partner with
an 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 master policy. The agent assumed the financial obligations to the
affiliate of the General Partner which receives payments on these obligations
from the agent. The amount of CCEP'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 - MASTER LOAN AND ACCRUED INTEREST PAYABLE
The Master Loan principal and accrued interest payable balances at March 31,
1998, and December 31, 1997, are approximately $297,986,000 and approximately
$289,783,000, respectively.
Terms of Master Loan Agreement
Under the terms of the Master Loan, interest accrues at a fluctuating rate per
annum adjusted annually on July 15 by the percentage change in the U.S.
Department of Commerce Implicit Price Deflator for the Gross National Product
subject to an interest rate ceiling of 12.5%. The interest rates for each of
the three month periods ended March 31, 1998 and 1997, were 12.5%. Payments are
currently payable quarterly in an amount equal to "Excess Cash Flow", generally
defined in the Master Loan as net cash flow from operations after third-party
debt service and capital expenditures. Any unpaid interest is added to
principal, compounded annually, and is payable at the loan's maturity. Any net
proceeds from sale or refinancing of any of CCEP's properties are paid to CCIP
under the terms of the Master Loan Agreement. The Master Loan Agreement matures
in November 2000.
During the three months ended March 31, 1998, CCEP paid approximately $375,000
to CCIP as principal payments on the Master Loan. Cash received on certain
investments by CCEP, which are required to be transferred to CCIP per the Master
Loan Agreement, accounted for approximately $79,000. Approximately $296,000 was
due to an excess cash flow payment paid to CCIP as stipulated by the Master
Loan.