EXHIBIT 28.1
CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED
JUNE 30, 1995 AND 1994
1
EXHIBIT 28.1 (Continued)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
a) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
BALANCE SHEET
(Unaudited)
(in thousands)
June 30, December 31,
1995 1994
Assets
Cash $ 4,638 $ 3,393
Securities available for sale -- 195
Prepaid expenses and other assets 2,246 1,254
Investments in limited partnerships 2,508 2,508
Investment properties:
Land 10,831 10,831
Building and related personal
equipment 94,622 93,660
105,453 104,491
Less accumulated depreciation (65,842) (63,288)
39,611 41,203
Real estate assets of property
in-substance foreclosed 21,081 20,722
Less accumulated depreciation (1,638) (1,122)
19,443 19,600
$ 68,446 $ 68,153
Liabilities and Partners' Deficit
Accounts payable and accrued expenses $ 3,029 $ 2,038
Mortgage notes and interest payable 4,414 4,700
Master loan and interest payable 253,599 238,486
Due to affiliates 51 969
261,093 246,193
Partners' Deficit
General partner (1,926) (1,780)
Limited partners (190,721) (176,260)
(192,647) (178,040)
$ 68,446 $ 68,153
See Accompanying Notes to Financial Statements
2
EXHIBIT 28.1 (Continued)
b) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except unit data)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
Revenues:
Rental income $ 6,075 $ 5,606 $ 12,129 $ 11,198
Interest and distribution
income on investments 43 9 58 16
Total revenues 6,118 5,615 12,187 11,214
Expenses:
Property operations 3,768 3,686 7,619 7,537
Depreciation and
amortization 1,630 1,504 3,207 2,979
Interest 6,523 6,875 15,330 13,684
Administrative 458 147 674 389
Total expenses 12,379 12,212 26,830 24,589
Loss on disposition (2) -- (9) --
Casualty gain -- -- 45 --
Net loss $(6,263) $(6,597) $(14,607) $(13,375)
Net loss allocated
to general partner (1%) $ (63) $ (66) $ (146) $ (133)
Net loss allocated
to limited partners (99%) (6,200) (6,531) (14,461) (13,242)
$(6,263) $(6,597) $(14,607) $(13,375)
See Accompanying Notes to Financial Statements
3
EXHIBIT 28.1 (Continued)
c) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
For the Six Months Ended June 30, 1995 and 1994
(in thousands)
General Limited
Partners Partners Total
Partners' deficit at
December 31, 1993 $ (1,507) $(149,178) $(150,685)
Net loss for the six months
ended June 30, 1994 (133) (13,242) (13,375)
Partners' deficit at
June 30, 1994 $ (1,640) $(162,420) $(164,060)
Partners' deficit at
December 31, 1994 $ (1,780) $(176,260) $(178,040)
Net loss for the six months
ended June 30, 1995 (146) (14,461) (14,607)
Partners' deficit at
June 30, 1995 $ (1,926) $(190,721) $(192,647)
See Accompanying Notes to Financial Statements
4
EXHIBIT 28.1 (Continued)
d) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended
June 30,
1995 1994
Cash flows from operating activities:
Net loss $(14,607) $(13,375)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 3,210 2,982
Loss on disposal of property 9 --
Casualty gain (45) --
Change in accounts:
Prepaid expenses and other assets (1,047) (170)
Accounts payable and accrued expenses 1,049 229
Interest on master loan 15,113 12,528
Due to affiliates (918) (586)
Interest payable 11 --
Net cash provided by operating
activities 2,775 1,608
Cash flows from investing activities:
Property improvements and replacements (1,429) (938)
Proceeds from sale of securities available
for sale 195 --
Net cash used in investing
activities (1,234) (938)
Cash flows used in financing activities:
Payments on notes payable (296) (320)
Net increase in cash 1,245 350
Cash at beginning of period 3,393 2,429
Cash at end of period $ 4,638 $ 2,779
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 1,121 $ 1,722
See Accompanying Notes to Financial Statements
5
EXHIBIT 28.1 (Continued)
e) CONSOLIDATED CAPITAL EQUITY PARTNERS, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited financial statements 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 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 six month periods ended
June 30, 1995, are not necessarily indicative of the results that may be
expected for the fiscal year ending December 31, 1995.
Certain reclassifications have been made to the 1994 information to
conform to the 1995 presentation.
Consolidation
Consolidated Capital Equity Partners, L.P. ("Partnership") owns a 75%
interest in a limited partnership ("Western Can, Ltd.") which owns 444
De Haro, an office building in San Francisco, California. The
Partnership's investment in Western Can, Ltd. is consolidated in the
Partnership'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 the Partnership.
The assets and liabilities at June 30, 1995, and December 31, 1994,
and operations for the six months ended June 30, 1995 and 1994, of
Carlton House are consolidated in the Partnership's financial statements
pursuant to accounting guidelines regarding notes receivable in-
substance foreclosed.
Investments in Limited Partnerships
The investments in limited partnerships represent certain interest in
four affiliated limited partnerships that were contributed by EP's
general partners to the Partnership. These investments are stated at
the lower of estimated fair value of the interests at the time of
contribution to the Partnership or the current estimated fair value of
the interests.
Note B - Related Party Transactions
The Partnership paid property management fees based upon collected
gross rental revenues for property management services in each of the
six month periods ended June 30, 1995 and 1994. For the six months
ended June 30, 1994, a portion of such property management fees were
paid to the property management companies performing day-to-day property
management services and the portion was paid to Partnership Services,
Inc. ("PSI") for advisory services related to day-to-day property
operations. Coventry Properties, Inc. ("Coventry"), an affiliate of the
General Partner, provided day-to-day
6
EXHIBIT 28.1 (Continued)
Note B - Related Party Transactions (continued)
property management responsibilities for four of the Partnership's
properties under the same management fee arrangement as the unaffiliated
management companies. In late December 1994, an affiliate of Insignia
assumed day-to-day property management responsibilities for all of the
Partnership's properties. Fees paid to affiliates of Insignia during
the six months ended June 30, 1995, and fees paid to Coventry and PSI
for the six months ended June 30, 1994, are reflected in the following
table.
Also, the Partnership is subject to an Investment Advisory Agreement
between the Partnership and an affiliate of ConCap Holdings, Inc.
("CHI"). This agreement provides for an annual fee, payable in monthly
installments, to an affiliate of CHI for advising and consulting
services for the Partnership's properties. Advisory fees paid pursuant
to this agreement are reflected in the following table:
For the Six Months Ended
June 30,
1995 1994
(in thousands)
Property management fees $615 $329
Investment advisory fees 129 129
Property management fees increased for the six months ended June 30,
1995, compared to the six months ended June 30, 1994, due to the fact
that all but four of the Partnership's investment properties were
managed by unaffiliated management companies during the six months ended
June 30, 1994. All of the Partnership's investment properties were
managed by an affiliate of Insignia during the six months ended June 30,
1995.
The Partnership Agreement ("Agreement") also provides for
reimbursement to the General Partner and its affiliates for costs
incurred in connection with the administration of Partnership
activities. The General Partner and its current and former affiliates,
which includes Coventry, received reimbursements for the six months
ended June 30, 1995 and 1994, as reflected in the following table:
For the Six Months Ended
June 30,
1995 1994
(in thousands)
Reimbursement for services of affiliates $300 $142
7
EXHIBIT 28.1 (Continued)
Note B - Related Party Transactions (continued)
Reimbursements for services of affiliates increased during the six
months ended June 30, 1995, compared to the six months ended June 30,
1994, due to increased expense reimbursements related to the combined
efforts of the Dallas and Greenville offices during the transition
period for the six months ended June 30, 1995. These increased costs
related to the transition efforts which were incurred to minimize any
disruption in the year-end reporting function including the financial
reporting and K-1 preparation and distribution. The General Partner
expects administrative expenses to be reduced beginning in the third
quarter of 1995 as the transition efforts are now complete.
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
New Master Loan Agreement, which is described more fully in the 1994
Annual Report. Such interest payments totalled approximately $918,000
and approximately $1.5 million for the six months ended June 30, 1995
and 1994, respectively. The Partnership received advances under the New
Master Loan Agreement totalling $40,000 in February 1994. (See further
discussion in Note C). No advances under the new Master Loan Agreement
were made during the six months ended June 30, 1995.
Note C - Master Loan and Accrued Interest Payable
The Master Loan and accrued interest payable balances at June 30,
1995, and December 31, 1994, are $253.6 million and $238.5 million,
respectively.
Terms of Master Loan Agreement
Under the terms of the New 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
Delator for the Gross National Product subject to an interest rate
ceiling of 12.5%. The interest rates for each of the three and six
month periods ended June 30, 1995 and 1994 was 12.5%. Interest payments
are currently payable quarterly in an amount equal to "Excess Cash
Flow", generally defined in the New Master Loan Agreement as net cash
flow from operations after third-party debt service. If such Excess
Cash Flow payments are less than the current accrued interest during the
quarterly period, the unpaid interest is added to principal, compounded
annually, and is payable at the loan's maturity. If such Excess Cash
Flow payments are greater than the currently payable interest, the
excess amount is applied to the principal balance of the loan. Any net
proceeds from sale or refinancing of any of the Partnership's properties
are paid to CCIP under the terms of the New Master Loan Agreement. The
New Master Loan Agreement matures in November 2000.
Effective January 1, 1993, the Partnership and CCIP amended the New
Master Loan Agreement to stipulate that Excess Cash Flow would be
computed net of capital improvements. Such expenditures were formerly
funded from advances on the Master Loan from CCIP to the Partnership.
This amendment and change in the definition of Excess Cash Flow will
have the effect of reducing Master Loan payments to CCIP by the amount
of the Partnership's capital expenditures since such amounts were
previously excluded from Excess Cash Flow. The amendment will have no
effect on the computation of interest expense on the Master Loan for
the Partnership.
8
EXHIBIT 28.1 (Continued)
Note C - Master Loan and Accrued Interest Payable - continued
In February 1994, the Partnership advanced approximately $589,000 to
New Carlton House Partners ("NCHP"), as an advance on the note
receivable ("Carlton House Note") secured by a deed of trust on the
Carlton House Apartment and Office Building ("Carlton House"), to pay
Carlton House's 1994 property taxes. In February 1994, CCIP advanced
$40,000 to the Partnership as an advance on the Master Loan. CCEP then
advanced $40,000 to NCHP as an advance on the Carlton House Note to pay
the remaining balance of 1993 property taxes. The notes payable are all
nonrecourse, collateralized by deeds of trust on the real property. The
notes payable bear interest at rates ranging from 8.0% to 10.5% per
annum and mature between 1998 and 2007.
Note D - Note Receivable Deemed In-Substance Foreclosed
The Partnership holds the Carlton House Note which is secured by a
deed of trust on Carlton House with a scheduled maturity in 1995.
According to the note terms, interest accrues at 10% and compounds
monthly on principal plus accrued but unpaid interest. The note
receivable has been in default since 1991. As described more fully in
the 1994 Annual Report, the required debt service payments were reduced
to only the amount of net cash flow from the Carlton House. In 1995 and
1994 no interest income was recognized as no cash related to the note
receivable was received by the Partnership.
As more fully described in the 1994 Annual Report, the Carlton House
Note is deemed in-substance foreclosed. Summarized below are the
assets, liabilities, partner's equity and the results of operations of
the Carlton House that are included in the Partnership's financial
statements for the six months ended June 30, 1995 and 1994, prepared on
the same basis as the Partnership's financial statements. Any
intercompany balances between the Partnership and the Carlton House have
been eliminated in the Partnership's consolidated financial statements
and the summarized financial statements set forth below:
June 30, December 31,
1995 1994
Assets
Cash $ 1,577 $ 1,519
Securities available for sale -- 195
Prepaid expenses and other assets 616 103
Real estate:
Land 3,805 3,805
Building and improvements 17,276 16,917
21,081 20,722
Less accumulated depreciation (1,638) (1,122)
19,443 19,600
Total assets $ 21,636 $ 21,417
9
EXHIBIT 28.1 (Continued)
Note D - Note Receivable Deemed In-Substance Foreclosed - continued
June 30, December 31,
1995 1994
Liabilities and Partners' Deficit
Master loan and interest payable $ 17 $ 16
Due to affiliates 763 763
Other liabilities 591 467
Total liabilities 1,371 1,246
Partners' equity 20,265 20,171
Total liabilities and partners' equity $ 21,636 $ 21,417
For the Six Months ended
June 30,
1995 1994
Revenues:
Rental revenue $ 2,908 $ 2,253
Interest income on investments 14 --
Total revenues 2,922 2,253
Expenses:
Property operations 2,217 2,013
Depreciation and amortization 517 434
Interest 1 2
Administrative 93 22
Total expenses 2,828 2,471
Net income (loss) $ 94 $ (218)
10