EXHIBIT 99.1
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED
June 30, 1997 AND 1996
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1997 1996
(Unaudited) (Note)
Assets
Cash and cash equivalents:
Unrestricted $ 2,044 1,960
Restricted - tenant security deposits 593 554
Investments in limited partnerships -- 336
Accounts receivable 280 252
Escrow for taxes 813 678
Restricted escrows 637 1,420
Other assets 1,623 1,630
Investment properties:
Land 10,217 10,217
Building and related personal property 96,128 95,236
106,345 105,453
Less accumulated depreciation (73,154) (70,606)
33,191 34,847
$ 39,181 $ 41,677
Liabilities and Partners' Deficit
Accounts payable $ 254 $ 798
Tenant security deposits 591 611
Accrued taxes 600 313
Other liabilities 465 363
Mortgage notes 23,265 23,393
Master loan and interest payable 275,152 261,136
Partners' Deficit
General partner (2,611) (2,449)
Limited partners (258,535) (242,488)
(261,146) (244,937)
$ 39,181 $ 41,677
Note:The balance sheet at December 31, 1996, 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
b) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Revenues:
Rental income $ 4,824 $ 4,803 $ 9,601 $ 9,489
Interest income 25 41 60 56
Other income 305 410 626 680
Total revenues 5,154 5,254 10,287 10,225
Expenses:
Operating 2,006 1,876 3,851 3,935
General and administrative 275 210 527 367
Depreciation and amortization 1,316 1,343 2,614 2,662
Maintenance 910 802 1,541 1,630
Property taxes 317 337 642 673
Interest 8,629 7,868 17,321 15,723
Total expenses 13,453 12,436 26,496 24,990
Net loss $ (8,299) $ (7,182) $(16,209) $(14,765)
Net loss allocated
to general partner (1%) $ (83) $ (72) $ (162) $ (148)
Net loss allocated
to limited partners (99%) (8,216) (7,110) (16,047) (14,617)
$ (8,299) $ (7,182) $(16,209) $(14,765)
See Accompanying Notes to Consolidated Financial Statements
c) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
For the Six Months Ended June 30, 1997 and 1996
(in thousands)
General Limited
Partners Partners Total
Partners' deficit at
December 31, 1995 $ (2,159) $(213,815) $(215,974)
Net loss for the six months
ended June 30, 1996 (148) (14,617) (14,765)
Partners' deficit at
June 30, 1996 $ (2,307) $(228,432) $(230,739)
Partners' deficit at
December 31, 1996 $ (2,449) $(242,488) $(244,937)
Net loss for the six months
ended June 30, 1997 (162) (16,047) (16,209)
Partners' deficit at
June 30, 1997 $ (2,611) $(258,535) $(261,146)
See Accompanying Notes to Consolidated Financial Statements
d) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1997 1996
Cash flows from operating activities:
Net loss $(16,209) $(14,765)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 2,657 2,701
Change in accounts:
Restricted cash (39) 1
Accounts receivable (28) 94
Escrows for taxes (135) (229)
Other assets (102) 82
Accounts payable (544) (1,052)
Tenant security deposit liabilities (20) 13
Accrued taxes 287 276
Other liabilities 102 (86)
Interest on Master Loan 15,606 14,805
Net cash provided by operating activities 1,575 1,840
Cash flows from investing activities:
Property improvements and replacements (892) (2,164)
Deposits to restricted escrows (49) (36)
Withdrawals from restricted escrows 832 1,181
Distributions from investments in limited partnerships 336 73
Net cash provided by (used in)
investing activities 227 (946)
Cash flows from financing activities:
Advances on Master Loan -- 367
Principal payments on Master Loan (1,590) (175)
Principal payments on notes payable (128) (149)
Loan costs paid -- (1)
Net cash (used in) provided by
financing activities (1,718) 42
Net increase in cash and cash equivalents 84 936
Cash and cash equivalents at beginning of period 1,960 1,686
Cash and cash equivalents at end of period $ 2,044 $ 2,622
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,673 $ 815
See Accompanying Notes to Consolidated Financial Statements
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. ("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 month
periods ended June 30, 1997, are not necessarily indicative of the results that
may be expected for the fiscal year ending December 31, 1997.
Certain reclassifications have been made to the 1996 information to conform to
the 1997 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 six month periods ended June 30, 1997 and
1996. Fees paid to affiliates of Insignia during the six month periods ended
June 30, 1997 and 1996, are included in operating expenses on the consolidated
statements of operations and are reflected in the following table. 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. The General Partner and its current
affiliates received reimbursements for the six months ended June 30, 1997 and
1996, as reflected in the following table.
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. Advisory fees paid
pursuant to this agreement are reflected in the following table:
For the Six Months Ended
June 30,
1997 1996
(in thousands)
Property management fees $509 $500
Investment advisory fees 91 91
Reimbursement for services of affiliates
(included in general and administrative
and operating expenses and other assets) (1) 174 265
(1) Included in "Reimbursement for services of affiliates" for 1996 is
approximately $39,000 in reimbursements for construction oversight costs and
$26,000 of lease commissions.
In addition to the compensation and reimbursements described above, interest
payments are made to and loan advances are received from CCIP pursuant to the
Master Loan Agreement, which is described more fully in the 1996 Annual Report.
An interest payment of $862,000 was paid during the six months ended June 30,
1997. No interest payments were made during the six month period ended June 30,
1996. No advances were received under the Master Loan Agreement during the six
months ended June 30, 1997. Principal payments of approximately $1,590,000 were
made on the Master Loan during the six months ended June 30, 1997.
CCEP 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 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 June 30,
1997, and December 31, 1996, are approximately $275,152,000 and approximately
$261,136,000, respectively.
Terms of Master Loan Agreement
Under the terms of the Master Loan Agreement, 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 six month periods ended June 30, 1997 and 1996, was 12.5%. Payments are
currently payable quarterly in an amount equal to "Excess Cash Flow", generally
defined in the Master Loan Agreement 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 six months ended June 30, 1997, CCEP paid approximately $1,590,000 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 $388,000. Approximately $202,000
was due to an excess cash flow payment paid to CCIP as stipulated by the Master
Loan Agreement. CCEP also paid an additional $1,000,000 to CCIP as principal
payment on the Master Loan.