10-Q 1 tenq.txt COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP FORM 10-Q 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 SEPTEMBER 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

2 Part I. FINANCIAL INFORMATION Item 1. Financial Statements COMMUNITY INVESTMENT PARTNERS III, L.P., LLLP SCHEDULE OF PORTFOLIO INVESTMENTS AS OF SEPTEMBER 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 nine months ended September 30, 2001 and September 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 SEPTEMBER 30, 2001 VERSUS QUARTER ENDED SEPTEMBER 30, 2000 Net loss for the three months ended September 30, 2001 was $70,627, compared to net income of $162,551 for the three months ended September 30, 2000. CIP III experienced a significant realized gain in the third quarter of 2000. There were no realized gains or losses from the sale of investments for the three months ended September 30, 2001, compared to realized gains of $453,910 for the three months ended September 30, 2000. The $453,910 gains for the three months ended September 30, 2000 are the result of the sale of 4,000 shares of United Therapeutics (UTHR) common stock. Unrealized losses for the three months ended September 30, 2001 were $57,065, compared to $272,652 for the three months ended September 30, 2000. The unrealized losses for the three months ended September 30, 2001 were the result of decreases in the share prices of AtheroGenics, Inc., Intelliworxx, Inc. and United Therapeutics during the third quarter of 2001. The $272,652 unrealized losses for the three months ended September 30, 2000 consist of the reversal of $421,400 of unrealized gains on the 4,000 share of UTHR sold, a $38,483 unrealized loss on the 1,833 remaining shares of UTHR and a $187,331 unrealized gain on AtheroGenics, Inc. common stock. Total expenses for the three months ended September 30, 2001 were $13,562, a 32% decrease compared to $19,945 for the three months ended September 30, 2000. The decrease was caused by decreases in both management and professional fees. NINE MONTHS ENDED SEPTEMBER 30, 2001 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2000 Net loss for the nine months ended September 30, 2001 was $251,843, compared to net income of $948,184 for the nine months ended September 30, 2000. Interest income decreased $16,264 (99%) due to a decrease in funds held in a money market account. The funds represented capital contributions to the Partnership which were used to purchase portfolio investments. Realized losses for the nine months ended September 30, 2001 were $100,000, compared to realized gains of $1,733,362 during the same period last year. The $100,000 realized loss is due to the write-off of the total investment in Partner Communications. Partner Communications voted to dissolve the company on May 30, 2001. The gains for the nine months ended September 30, 2000 were the result of the sale of 23,500 shares of United Therapeutics common stock. Unrealized losses were $111,744 for the nine months ended September 30, 2001, compared to unrealized losses of $747,318 for the nine months ended September 30, 2000. From December 31, 2000 to September 30, 2001, the share prices of AtherGenics, Inc., Intelliworxx, Inc. and United Therapeutics decreased, 9%, 91% and 15%, respectively. The losses in 2000 were caused by a reversal of unrealized gains on United Therapeutics at the time of the sale of common stock. Total expenses for the nine months ended September 30, 2001 were $40,298, a 26% decrease compared to $54,323 for the nine months ended September 30, 2000. The decrease is due to a decrease in 11 Part I. FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations both management and professional fees. Management fees are based on total asset value, which has decreased year over year 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 nine 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 unit holders. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 2001 the Partnership's total capital of $913,720 consisted of $940,417 in limited partner capital and $(26,697) in general partner capital. Net loss for the current period was allocated to the limited partners in the amount of $226,658 and to the general partners in the amount of $25,185. At September 30, 2001 the Partnership had $22,960 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 September 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 November 12, 2001 Daniel A. Burkhardt /s/ Ray L. Robbins, Jr. -------------------- Vice-President and Director November 12, 2001 Ray L. Robbins, Jr.

COMMUNITY INVESTMENT PARTNERS III LP LLP 10-Q