UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
(mark one)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: September 30, 2000
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-16757
CONCORD MILESTONE PLUS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 52-1494615
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
150 EAST PALMETTO PARK ROAD
4TH FLOOR
BOCA RATON, FLORIDA 33432
(Address of Principal Executive Offices) (Zip Code)
(561) 394-9260
Registrant's Telephone Number, Including Area Code
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
BALANCE SHEETS
SEPTEMBER 30, 2000 (Unaudited) AND DECEMBER 31, 1999
Assets: September 30, 2000 December 31,1999
------------------ ----------------
Property:
Building and improvements, at cost $15,911,310 $15,744,707
Less: accumulated depreciation 7,051,603 6,605,544
------------ ----------
Building and improvements, net 8,859,707 9,139,163
Land, at cost 10,987,034 10,987,034
----------- ----------
Property, net 19,846,741 20,126,197
Cash and cash equivalents 557,434 561,737
Accounts receivable 238,261 209,899
Restricted cash 338,046 215,400
Debt financing costs, net 219,336 242,836
Prepaid expenses and other assets, net 86,280 67,306
------------ ------------
Total assets $21,286,098 $21,423,375
========== ==========
Liabilities:
Mortgage loans payable $16,183,374 $16,327,881
Accrued interest 110,123 114,809
Accrued expenses and other liabilities 373,537 265,943
Accrued expenses payable to affiliates 65,472 51,999
------------ ------------
Total liabilities 16,732,506 16,760,632
---------- ----------
Commitments and Contingencies
Partners' capital:
General partner (77,029) (75,937)
Limited partners:
Class A Interests, 1,518,800 4,630,621 4,738,680
Class B Interests, 2,111,072 0 0
---------------- ----------------
Total partners' capital 4,553,592 4,662,743
----------- -----------
Total liabilities and partners' capital $21,286,098 $21,423,375
========== ==========
See Accompanying Notes to Financial Statements
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CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF REVENUES AND EXPENSES
(Unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
September 30, 2000 September 30,1999
Revenues:
Rent $599,466 $604,559
Reimbursed expenses 157,559 152,689
Interest and other income 7,388 4,896
--------- --------
Total revenues 764,413 762,144
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Expenses:
Interest expense 338,023 342,022
Depreciation and amortization 159,903 159,181
Management and property expenses 238,871 211,894
Administrative and management fees to related party 40,446 29,987
Professional fees and other expenses 10,989 36,459
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Total expenses 788,232 779,543
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Net (loss) $(23,819) $(17,399)
======= =======
Net (loss) attributable to:
Limited partners $(23,581) $(17,225)
General partner (238) (174)
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Net (loss) $(23,819) $(17,399)
======= =======
(Loss) per weighted average
Limited Partnership 100 Class A
Interests outstanding $ (1.57) $ (1.14)
========= =========
Weighted average number of 100
Class A interests outstanding 15,188 15,188
======== ========
See Accompanying Notes to Financial Statements
-3-
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF REVENUES AND EXPENSES
(Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
September 30, 2000 September 30,1999
Revenues:
Rent $1,887,091 $1,924,426
Reimbursed expenses 343,482 362,734
Interest and other income 19,607 12,276
----------- ----------
Total revenues 2,250,180 2,299,436
--------- ---------
Expenses:
Interest expense 1,009,764 1,017,743
Depreciation and amortization 476,268 474,047
Management and property expenses 679,933 620,507
Administrative and management fees to related party 138,786 107,516
Professional fees and other expenses 54,581 74,840
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Total expenses 2,359,332 2,294,653
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Net (loss) income $(109,151) $ 4,783
======== ==========
Net (loss) income attributable to:
Limited partners (108,059) $ 4,735
General partner (1,092) 48
---------- ----------
Net (loss) income $(109,151) $ 4,783
======== =========
(Loss) income per weighted average
Limited Partnership 100 Class A
Interests outstanding $ (7.19) $ 0.31
========= =========
Weighted average number of 100
Class A interests outstanding 15,188 15,188
========= ==========
See Accompanying Notes to Financial Statements
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CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL
(Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
General Class A Class B
Total Partner Interests Interests
PARTNERS' CAPITAL (DEFICIT)
January 1, 2000 $4,662,743 $(75,937) $4,738,680 0
Net Loss (109,151) (1,092) (108,059) 0
--------- ------- --------- -
PARTNERS' CAPITAL (DEFICIT)
September 30, 2000 $4,553,592 $(77,029) $4,630,621 $0
========= ======= ========= =
See Accompanying Notes to Financial Statements
-5-
CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
STATEMENTS OF CASH FLOWS
(Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
September 30, 2000 September 30,1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $(109,151) $4,783
Adjustments to reconcile net (loss) income to net
cash provided by operating activities:
Depreciation and amortization 476,268 474,047
Change in operating assets and liabilities:
Increase in accounts receivable (28,362) (7,581)
Increase in prepaid expenses and other assets, net (23,642) (17,127)
(Decrease) increase in accrued interest (4,686) 6,279
Increase in accrued expenses and other liabilities 107,594 9,816
Increase in accrued expenses payable to affiliates 13,473 9,239
--------- --------
Net cash provided by operating activities 431,494 479,456
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property improvements (168,644) (100,143)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in restricted cash (122,646) (72,314)
Principal repayments on mortgage loans payable (144,507) (136,541)
Cash distributions to partners 0 (120,004)
----------- --------
Net cash used in financing activities (267,153) (328,859)
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NET (DECREASE) INCREASE
CASH AND CASH EQUIVALENTS (4,303) 50,454
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 561,737 436,256
------- -------
CASH AND CASH EQUIVALENTS,
END OF PERIOD $557,434 $486,710
======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for interest $1,014,450 $1,024,022
========= =========
See Accompanying Notes to Financial Statements
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INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors of
Concord Milestone Plus, L.P.
We have reviewed the accompanying balance sheet of Concord Milestone Plus, L.P.
(the "Partnership") as of September 30, 2000, and the related statements of
revenues and expenses, changes in partners' capital, and cash flows for the
three month and nine month periods then ended. These financial statements are
the responsibility of the management of the Partnership.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying September 30, 2000 financial statements for them to
be in conformity with generally accepted accounting principles.
/s/ Ahearn, Jasco + Company, P.A.
AHEARN, JASCO + COMPANY, P.A.
Certified Public Accountants
Pompano Beach, Florida
November 8, 2000
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CONCORD MILESTONE PLUS, L.P.
(a Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
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 management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. The
financial statements as of and for the periods ended September 30, 2000 and 1999
are unaudited. The financial statements for the periods ended September 30, 2000
have been reviewed by an independent public accountant pursuant to Rule 10-01(d)
of Regulation S-X and following applicable standards for conducting such
reviews, and the report of the accountant is included as part of this filing.
The results of operations for the interim periods shown in this report are not
necessarily indicative of the results of operations for the fiscal year. Certain
information for 1999 has been reclassified to conform to the 2000 presentation.
These interim financial statements should be read in conjunction with the annual
financial statements and footnotes included in the Partnership's financial
statements filed on Form 10-K for the year ended December 31, 1999.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations General
This Form 10-Q and documents incorporated herein by reference, if any,
contain forward-looking statements that have been made within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such forward-looking statements are
based on current expectations, estimates and projections about the Partnership's
(as defined below) industry, management beliefs, and certain assumptions made by
the Partnership's management and involve known and unknown risks, uncertainties
and other factors. Such factors include the following: general economic and
business conditions, which will, among other things, affect the demand for
retail space or retail goods, availability and creditworthiness of prospective
tenants, lease rents and the terms and availability of financing; risks of real
estate development and acquisition; governmental actions and initiatives; and
environmental and safety requirements. These statements are not guarantees of
future performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict; therefore, actual results may differ
materially from those expressed or forecasted in any such forward-looking
statements.
-8-
Organization and Capitalization
Concord Milestone Plus, L.P., a Delaware limited partnership (the
"Partnership"), was formed on December 12, 1986, for the purpose of investing in
existing income-producing commercial and industrial real estate. The Partnership
began operations on August 20, 1987, and currently owns and operates three
shopping centers located in Searcy, Arkansas; Valencia, California; and Green
Valley, Arizona.
The Partnership commenced a public offering on April 8, 1987 in order to
fund the Partnership's real property acquisitions. The Partnership terminated
its public offering on April 2, 1988 and was fully subscribed to with a total of
16,452 Bond Units and 15,188 Equity Units issued. Each Bond Unit consisted of
$1,000 principal amount of Bonds and 36 Class B Interests. The Partnership
redeemed all of the outstanding Bonds as of September 30, 1997 with the proceeds
of three new fixed rate mortgage loans. Each Equity Unit consists of 100 Class A
Interests and 100 Class B Interests. Capital contributions to the Partnership
consisted of $15,187,840 from the sale of the Equity Units and $592,272 which
represent the Class B Interests from the sale of the Bond Units.
Results of Operations
Comparison of Three Months Ended September 30, 2000 to Three Months Ended
September 30, 1999
The Partnership recognized net loss of $23,819 for the three months ended
September 30, 2000 as compared to net loss of $17,399 for the same period in
1999.The change is primarily due to the following factors:
An increase in management and property expenses of $26,977, or 12.7%, to
$238,871 for the three months ended September 30, 2000 as compared to $211,894
for the three months ended September 30, 1999 primarily due to the following:
(i) an increase in real estate taxes at each of the three properties and (ii) an
increase in common area maintenance expenses.
An increase in administrative and management fees to related party of
$10,459 or 34.9%, to $40,446 for the three months ended September 30, 2000 as
compared to $29,987 for the three months ended September 30, 1999 due to an
increase in administrative costs.
Results of Operations
Comparison of Nine Months Ended September 30, 2000 to Nine Months Ended
September 30, 1999
The Partnership recognized a net loss of $109,151 for the nine months ended
September 30, 2000 as compared to net income of $4,783 for the same period in
1999. The change is primarily due to the following factors:
-9-
A decrease in revenues of $49,256 or 2.1%, to $2,250,180 for the nine
months ended September 30, 2000 as compared to $2,299,436 for the nine months
ended September 30, 1999 primarily due to a decrease in base rent and tenant
reimbursements revenues at both the Green Valley Property due to Abco, a
principal anchor tenant, vacating its space during May 1999, and at the Valencia
Property due to a vacancy in the first quarter of 2000.
An increase in management and property expenses of $59,426, or 9.5%, to
$679,933 for the nine months ended September 30, 2000 as compared to $620,507
for the nine months ended September 30, 1999 primarily due to an increase in
real estate taxes and common area expenses at each of the three properties.
An increase in administrative and management fees to related party of
$31,270, or 29.1% to $138,786 for the nine months ended September 30, 2000 as
compared to $107,516 for the nine months ended September 30, 1999 primarily due
to an increase in administrative costs.
Liquidity and Capital Resources
The General Partner believes that the Partnership's expected revenue and
working capital is sufficient to meet the Partnership's current operating
requirements for the next 12 months. Nevertheless, because the cash receipts and
disbursements of the Partnership will depend on future facts and circumstances
relating the Partnership's properties, as well as market and other conditions
beyond the control of the Partnership, a possibility exists that cash flow
deficiencies may occur.
During February 1999, the Partnership received notice from Abco, a principal
anchor tenant at the Green Valley Property, that Abco would not be renewing its
lease at the expiration of its current term on July 31, 1999. Abco vacated its
space in May, 1999. No replacement tenant has yet been identified, however, the
Partnership has retained a large regional real estate brokerage firm to help
market the space. The brokerage firm has shown the space to several qualified
prospective tenants. Many of the other tenants at the Green Valley Property have
short term leases. It is not possible to determine the long-term effects of the
vacancy of the Abco space. However, this vacancy could have a material adverse
effect on the results of operations at the Green Valley Property by impairing
the Partnership's ability to obtain new tenants, retain current tenants or renew
leases with current tenants on favorable terms due to reduced traffic at the
Property and by negatively affecting percentage rents. In addition, the
Partnership will incur expenses in leasing the space vacated by Abco to a new
tenant, and the Partnership cannot predict how soon such space will be leased
and the terms of such new lease. Currently, approximately $150,000 of the
Partnership's working capital is being held in escrow in connection with the
refinancing by the holder of the first mortgage on the Green Valley Property
(the "Lender") pending the resolution of the vacant anchor tenant space created
by the departure of Abco.
The Partnership periodically makes distributions to its Partners. A 1998
fourth quarter distribution of $50,001 was paid during February 1999. Also, a
first quarter 1999 distribution of $50,001 was paid during May 1999 and a second
quarter 1999 distribution of $20,002 was paid during August 1999. Distributions
were suspended after the second quarter of 1999 following the departure of Abco
from the Green Valley Property, which created vacant anchor tenant space. The
Partnership expects to incur estimated capital costs of $20,000 in the near term
related to roof work at the Searcy Property. The Partnership will evaluate the
amount of future distributions, if any, on a quarter by quarter basis. No
assurances can be given as to the timing or amount of any future distributions
by the Partnership.
-10-
Management is not aware of any other significant trends, events, commitments
or uncertainties that will or are likely to materially impact the Partnership's
liquidity.
The cash on hand at September 30, 2000 may be used to fund (a) costs
associated with releasing the Abco space should the costs of releasing exceed
the $150,000 already held in escrow by the Lender for this purpose and (b)
material capital costs in the near term related to roof work at the Valencia
Property and (c) other general Partnership purposes.
Net cash provided by operating activities of $431,494 for the nine months
ended September 30, 2000 included (i) net loss of $109,151 (ii) non-cash
adjustments of $476,268 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $64,377.
Net cash provided by operating activities of $479,456 for the nine months
ended September 30, 1999 included (i) net income of $4,783, (ii) non-cash
adjustments of $474,047 for depreciation and amortization expense and (iii) a
net change in operating assets and liabilities of $626.
Net cash used in investing activities of $168,644 for the nine months ended
September 30, 2000 was for capital expenditures for property improvements.
Net cash used in investing activities of $100,143 for the nine months ended
September 30, 1999 was for capital expenditures for property improvements.
Net cash used in financing activities of $267,153 for the nine months ended
September 30, 2000 include (i) principal repayments on mortgage loans payable of
$144,507 and (ii) an increase in restricted cash of $122,646.
Net cash used in financing activities of $328,859 for the nine months ended
September 30, 1999 included (i) principal repayments on mortgage loans payable
of $136,541, (ii) an increase in restricted cash of $72,314 and (iii) cash
distributions to partners of $120,004.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Partnership, in its normal course of business, is theoretically exposed
to interest rate changes as they relate to real estate mortgages and the effect
of such mortgage rate changes on the values of real estate. However, for the
Partnership, all of its mortgage debt is at fixed rates, is for extended terms,
and would be unaffected by any sudden change in interest rates. The
Partnership's possible risk is from increases in long-term real estate mortgage
rates that may occur over a decade or more, as this may decrease the overall
value of real estate. Since the Partnership has the intent to hold its existing
mortgages to maturity (or until the sale of a Property), there is believed to be
no interest rate market risk on the Partnership's results of operations or its
working capital position.
The Partnership's cash equivalents and short-term investments, if any,
generally bear variable interest rates. Changes in the market rates of interest
available will affect from time-to-time the interest earned by the Partnership.
Since the Partnership does not rely on its interest earnings to fund working
capital needs, changes in these interest rates will not have an impact on the
Partnership's results of operations or working capital position.
-11-
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit:
Number Description of Document
3.1 Amended and Restated Agreement of Limited Partnership of Concord Milestone
Plus, L.P. Incorporated herein by reference to Exhibit A to the
Registrant's Prospectus included as Part I of the Registrant's
Post-Effective Amendment No. 3 to the Registrant's Registration Statement
on Form S-11 (the "Registration Statement") which was declared effective on
April 3, 1987.
3.2 Amendment No. 1 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P., included as Exhibit 3.2 to Registrant's Form
10-K for the fiscal year ended December 31, 1987 ("1987 Form 10-K"), which
is incorporated herein by reference.
3.3 Amendment No. 2 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.3 to the 1987 form 10-K,
which is incorporated herein by reference.
3.4 Amendment No. 3 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.4 to the 1987 Form 10-K,
which is incorporated herein by reference.
3.5 Amendment No. 4 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.5 to the 1987 Form 10-K,
which is incorporated herein by reference.
3.6 Amendment No. 5 to Amended and Restated Agreement of Limited Partnership of
Concord Milestone Plus, L.P. included as Exhibit 3.6 to Registrant's Form
10-K for the fiscal year ended December 31, 1988, which is incorporated
herein by reference.
27 Financial Data Schedule is included.
(b) Reports:
No reports on form 8-K were filed during the quarter covered by this Report.
-12-
SIGNATURES
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.
DATE: November 8, 2000 CONCORD MILESTONE PLUS, L.P.
----------------------------------- ----------------------------
(Registrant)
BY: CM PLUS CORPORATION
General Partner
By: /S/ Robert Mandor
Robert Mandor
Director and Vice President
By: /S/ Patrick Kirse
Patrick Kirse
Treasurer and Controller
-13-