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 September 30, 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)
September 30, 1996
Assets
Cash and cash equivalents:
Unrestricted $ 1,485
Restricted - tenant security deposits 94
Investments 306
Accounts receivable 15
Escrows for taxes and insurance 215
Restricted escrows 46
Other assets 141
Investment properties:
Land $ 1,652
Buildings and personal property 14,931
16,583
Less accumulated depreciation (6,980) 9,603
$11,905
Liabilities and Partners' Capital (Deficit)
Liabilities
Accounts payable $ 79
Tenant security deposits 94
Accrued taxes 209
Other liabilities 215
Mortgage notes payable 10,128
Partners' Capital (Deficit)
General partner $ (5)
Special limited partners (64)
Limited partners (181,288 units issued
and outstanding) 1,249 1,180
$11,905
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 Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Revenues:
Rental income $ 780 $ 745 $2,319 $2,304
Other income 59 90 193 246
Total revenues 839 835 2,512 2,550
Expenses:
Operating 294 278 898 778
General and administrative 40 62 136 580
Maintenance 175 309 397 499
Depreciation 179 167 528 493
Interest 228 208 670 625
Property tax 71 70 206 212
Total expenses 987 1,094 2,835 3,187
Net loss $ (148) $ (259) $ (323) $ (637)
Net loss allocated to
general partner (.2%) $ -- $ -- $ -- $ (1)
Net loss allocated to
limited partners (99.8%) (148) (259) (323) (636)
$ (148) $ (259) $ (323) $ (637)
Net loss per limited
partnership unit: $ (.82) $(1.43) $(1.78) $(3.51)
See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT)
(Unaudited)
For the Nine Months Ended September 30, 1996
(in thousands, except unit data)
Limited Special
Partnership General Limited Limited
Units Partner Partners Partners Total
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) -- -- 6 (6) --
Net loss for the nine months
ended September 30, 1996 -- -- -- (323) (323)
Partners' capital (deficit)
at September 30, 1996 181,288 $ (5) $ (64) $ 1,249 $ 1,180
<FN>
See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL PROPERTIES VI
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
1996 1995
Cash flows from operating activities:
Net loss $ (323) $ (637)
Adjustments to reconcile net loss
to net cash provided by operating activities:
Depreciation 528 493
Amortization of loan costs and discounts 172 170
Change in accounts:
Restricted cash 1 (99)
Accounts receivable (5) (13)
Escrows for taxes and insurance (59) 32
Prepaid and other assets 190 (3)
Accounts payable (98) 438
Tenant security deposit liabilities (1) (2)
Accrued taxes 97 (52)
Other liabilities (68) 47
Net cash provided by operating activities 434 374
Cash flows from investing activities:
Property improvements and replacements (278) (345)
Purchase of investments -- (5,713)
Proceeds from sale of investments 84 7,519
Deposits to restricted escrows (72) (58)
Receipts from restricted escrows 163 --
Net cash (used in) provided by
investing activities (103) 1,403
Cash flows from financing activities:
Payments on mortgage notes payable (157) (140)
Distributions to partners -- (275)
Net cash used in
financing activities (157) (415)
Net increase in cash and cash equivalents 174 1,362
Cash and cash equivalents at beginning of period 1,311 414
Cash and cash equivalents at end of period $1,485 $1,776
Supplemental disclosure of cash flow information:
Cash paid for interest $ 514 $ 464
<FN>
See Accompanying Notes to Consolidated Financial Statements
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 "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 nine month periods ended September 30, 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 based upon collected gross
rental revenues for property management services in each of the nine months
ended September 30, 1996 and 1995. Property management fees of approximately
$121,000 were paid to affiliates of the General Partner for each of the nine
months ended September 30, 1996 and 1995, respectively. These fees are included
in operating expenses.
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. Under this provision, the Partnership paid
approximately $24,000 to affiliates of the General Partner for the nine months
ended September 30, 1995. No such fees were paid or accrued for the nine months
ended September 30, 1996.
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 $89,000 and $94,000 were paid to the General Partner and
affiliates for the nine months ended September 30, 1996 and 1995, respectively.
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 $1,885,000, are less than the
reserve requirement of approximately $2,266,000 at September 30, 1996. 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 of 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 special limited
partners ("Special Limited Partners"). The Special Limited Partners do not have
a vote and do 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 Partners will retain the economic interest in the Partnership which they
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 Partners in order to eliminate their tax basis negative
capital accounts.
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 differences between the Special
Limited Partners' capital accounts for financial statement and tax reporting
purposes are 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 nine months ended September 30,
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 nine
months ended September 30, 1996 and 1995:
Average Occupancy
1996 1995
Celina Plaza Apartments
El Paso, Texas 91% 91%
Colony of Springdale Apartments
Springdale, Ohio 92% 90%
The Partnership realized a net loss of approximately $148,000 for the three
months ended September 30, 1996, and a net loss of approximately $323,000 for
the nine months ended September 30, 1996, compared to a net loss of
approximately $259,000 for the three months ended September 30, 1995, and a net
loss of approximately $637,000 for the nine months ended September 30, 1995. The
decreased net loss is due primarily to decreased general and administrative and
maintenance expenses, partially offset by a decrease in other income and
increased operating expenses.
Other income decreased due to the non-recurring nature of dividends received on
the Partnership's investment in Southmark Preferred Stock during the second
quarter of 1995, and due to reduced interest income resulting from lower cash
balances available for investment. 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. Administrative expenses decreased due to
prior year amounts being unusually high due to legal costs associated with the
Partnership's required responses to various tender offers in 1995 and
approximately $53,000 of 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 six months ended June 30, 1995,
due to a special management fee of approximately $24,000 related to the
distribution made to the limited partners in March 1995. Maintenance expenses
decreased as a result of 1995 amounts being unusually high due to exterior
painting done at both of the Partnership's properties during the third and
fourth quarters of 1995 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 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.
At September 30, 1996, the Partnership held cash and cash equivalents of
approximately $1,485,000 compared to approximately $1,776,000 at September 30,
1995. Net cash provided by operating activities increased primarily due to the
decreased administrative costs discussed above partially offset by increased
operating expenses. Net cash provided by investing activities decreased as a
result of the Partnership investing in shorter term cash equivalents during 1996
rather than longer term securities. Net cash used in financing activities
decreased due to the absence of partner distributions during 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 $10,128,000 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, reserve requirements, capital expenditure requirements,
property sales and the availability of cash reserves. During the first nine
months of 1995, distributions of approximately $275,000 were declared and paid.
No cash distributions were declared or paid during the first nine 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
Robert D. Long, Jr.
Vice President/CAO
Date: November 4, 1996