10-Q 1 tenq.txt FORM 10-Q FOR COMMUNITY INVESTMENT PARTNERS III UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended JUNE 30, 2001 Commission file number 000-23037 COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP ----------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) MISSOURI 43-1790352 ----------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 12555 Manchester Road St. Louis, Missouri 63131 ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (314) 515-2000 ------------------- 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 --- --- 1 COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP INDEX Page Number Part I. FINANCIAL INFORMATION Item 1. Financial Statements Schedule of Portfolio Investments...........................3 Statement of Financial Condition............................6 Statement of Income.........................................7 Statement of Cash Flows ....................................8 Statement of Changes in Partnership Capital.................9 Notes to Financial Statements .............................10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ......................11 Part II. OTHER INFORMATION Item 1. Legal Proceedings..........................................13 Item 6. Exhibits and Reports on Form 8-K...........................13 Signatures.................................................14 2 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP SCHEDULE OF PORTFOLIO INVESTMENTS AS OF JUNE 30, 2001 (UNAUDITED)

5 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP STATEMENT OF FINANCIAL CONDITION

6 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP STATEMENT OF INCOME (UNAUDITED)

7 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP STATEMENT OF CASH FLOWS (UNAUDITED)

8 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL (UNAUDITED)

9 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP NOTES TO FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION Community Investment Partners III, L.P., LLLP (CIP III) is a limited liability limited partnership, established July 23, 1997, which has elected to be a business development company under the Investment Company Act of 1940, as amended. As a business development company, the partnership is required to invest at least 70% of its total assets in qualifying investments as specified in the Investment Company Act. CIP Management, L.P., LLLP (Management), a limited liability limited partnership, is the Managing General Partner of CIP III. Management is responsible for making all decisions regarding CIP III's investment portfolio. All portfolio investments are carried at cost until significant developments affecting an investment provide a basis for revaluation. Thereafter, portfolio investments will be carried at fair value as obtained from outside sources or at a value determined quarterly by the Managing General Partner under the supervision of the Independent General Partners. Due to the inherent uncertainty of valuation, those estimated values for portfolio investments carried at cost may differ significantly from the values that would have been used had a ready market for the investment existed, and the differences could be material to the financial statements. Investments in securities traded on a national securities exchange will be valued at the latest reported sales price on the last business day of the period. If no sale has taken place, the securities will be valued at the last bid price. If no bid price has been reported, or if no exchange quotation is available, the securities will be valued at the quotation obtained from an outside broker. Investment transactions are recorded on a trade date basis. Income is recorded on an accrual basis. The financial information included herein is unaudited. However, in the opinion of management, such information includes all adjustments, consisting solely of normal recurring accruals, which are necessary for a fair presentation of the results of interim operations. The results of operations for the six months ended June 30, 2001 and June 30, 2000 are not necessarily indicative of the results to be expected for the full year. 10 Part I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP MANAGEMENT'S FINANCIAL DISCUSSION RESULTS OF OPERATIONS QUARTER ENDED JUNE 30, 2001 VERSUS QUARTER ENDED JUNE 30, 2000 Net loss for the three months ended June 30, 2001 was $128,620, compared to net income of $165,552 for the three months ended June 30, 2000. Realized losses for the three months ended June 30, 2001 were $100,000, compared to realized gains of $145,7412 during the same period last year. The $100,000 loss is the result of a write-off of the total investment in Partner Communications. The shareholders of Partner Communications voted to dissolve the company on May 30, 2001. The $145,742 gain for the period ended June 30, 2000 represents a realized gain on the sale of United Therapeutics common stock. Unrealized losses for the three months ended June 30, 2001 were $14,230, compared to unrealized gains of $32,073 for the same period last year. The unrealized losses for the three months ended June 30, 2001 are the result of decreases in the share prices of AtheroGenics, Inc., Intelliworxx, Inc. and United Therapeutics during the second quarter of 2001. Total expenses for the three months ended June 30, 2001 decreased $3,390 (19%) compared to the three months ended June 30, 2000. The decrease was caused by decreases in both management and professional fees. SIX MONTHS ENDED JUNE 30, 2001 VERSUS SIX MONTHS ENDED JUNE 30, 2000 Net loss for the six months ended June 30, 2001 was $181,216, compared to net income of $785,632 for the six months ended June 30, 2000. Interest income decreased $15,026 (99%) due to a decrease in funds held in a money market account. The funds represented capital contributions to the Partnership which were subsequently used to purchase portfolio investments. Realized losses for the six months ended June 30, 2001 were $100,000, compared to realized gains of $1,279,452 during the same period last year. The gains for the six months ended June 30, 2000 were the result of the sale of 19,500 shares of United Therapeutics common stock. There were no investment sales during the first six months of 2001 and the $100,000 realized loss is due to the write-off of Partner Communications discussed above. Unrealized losses were $54,679 for the six months ended June 30, 2001, compared to unrealized losses of $474,666 for the six months ended June 30, 2000. The losses in 2001 were caused by a reversal of unrealized gains on United Therapeutics at the time of the sale of common stock. Total expenses decreased $7,643 (22%) due to a significant decrease in management fees. Management fees are based on total asset value, which has decreased year over year primarily due to the sale of the majority of the United Therapeutics common stock and subsequent cash distribution to unit holders during 2000. There were no cash distributions during the first six months of 2001. During the first quarter of 2000, a distribution in the amount of $1,372,225 was made, which represented a return of the initial capital contribution made by unitholders. 11 Part I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations LIQUIDITY AND CAPITAL RESOURCES As of June 30, 2001 the Partnership's total capital of $984,347 consisted of $1,003,981 in limited partner capital and $(19,634) in general partner capital. Net loss for the current period was allocated to the limited partners in the amount of $163,094 and to the general partners in the amount of $18,122. At June 30, 2001 the Partnership had $41,011 in cash. 12 Part II. OTHER INFORMATION COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP Item 1: Legal Proceedings The partnership is not a party to any material pending legal proceedings. Item 6: Exhibits and Reports on Form 8-K (a) Exhibits None (b) Reports on Form 8-K No reports were filed on Form 8-K for the quarter ended June 30, 2001. 13 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. COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP By: CIP Management, L.P., LLLP, its Managing General Partner By: CIP Management, Inc., its Managing General Partner /s/ Daniel A. Burkhardt --------------------------- President, Treasurer and Director August 10, 2001 Daniel A. Burkhardt /s/ Ray L. Robbins, Jr. --------------------------- Vice-President and Director August 10, 2001 Ray L. Robbins, Jr. 14

COMMUNITY INVESTMENT PARTNERS III LP LLP 10-Q