0000928790-95-000084.txt : 19950821 0000928790-95-000084.hdr.sgml : 19950821 ACCESSION NUMBER: 0000928790-95-000084 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950811 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUTTON CONAM REALTY INVESTORS 81 CENTRAL INDEX KEY: 0000350023 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 133069026 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-10223 FILM NUMBER: 95561883 BUSINESS ADDRESS: STREET 1: 388 GREENWICH ST CITY: NEW YORK STATE: NY ZIP: 10013 BUSINESS PHONE: 2125263237 MAIL ADDRESS: STREET 1: 3 WORLD FINANCIAL CENTER STREET 2: 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 FORMER COMPANY: FORMER CONFORMED NAME: HUTTON CONAM PROPERTIES 81 DATE OF NAME CHANGE: 19810616 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 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 June 30, 1995 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: 0-10223 HUTTON/CONAM REALTY INVESTORS 81 (Exact name of registrant as specified in its charter) California 13-3069026 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3 World Financial Center, 29th Floor, New York, NY Attention: Andre Anderson 10285 (Address of principal executive offices) (Zip Code) (212) 526-3237 (Registrant's telephone number, including area code) 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 Consolidated Balance Sheets June 30, December 31, Assets 1995 1994 Investments in real estate: Land $ 5,255,820 $ 5,255,820 Buildings and improvements 28,473,477 28,473,477 ---------- ---------- 33,729,297 33,729,297 Less accumulated depreciation (14,445,021) (13,875,550) ---------- ---------- 19,284,276 19,853,747 Cash and cash equivalents 1,741,842 1,535,391 Restricted cash 584,312 659,076 Mortgage fees, net of accumulated amortization of $246,427 in 1995 and $202,797 in 1994 364,384 408,014 Other assets 10,264 41,055 ---------- ----------- Total Assets $ 21,985,078 $ 22,497,283 ========== ========== Liabilities and Partners' Capital Liabilities: Mortgages payable $ 15,528,942 $ 15,601,031 Distribution payable 173,978 173,978 Accounts payable and accrued expenses 229,005 183,869 Security deposits 125,123 141,408 Due to general partners and affiliates 45,405 44,814 ---------- ---------- Total Liabilities 16,102,453 16,145,100 ---------- ---------- Partners' Capital (Deficit): General Partners (1,352,927) (1,316,915) Limited Partners 7,235,552 7,669,098 ---------- ---------- Total Partners' Capital 5,882,625 6,352,183 ---------- ---------- Total Liabilities and Partners' Capital $ 21,985,078 $ 22,497,283 ========== ========== Consolidated Statement of Partners' Capital (Deficit) For the six months ended June 30, 1995 General Limited Partners Partners Total Balance at January 1, 1995 $ (1,316,915) $ 7,669,098 $ 6,352,183 Net loss (1,216) (120,386) (121,602) Cash distributions (34,796) (313,160) (347,956) --------- --------- --------- Balance at June 30, 1995 $ (1,352,927) $ 7,235,552 $ 5,882,625 ========= ========= ========= Consolidated Statements of Operations Three months ended Six months ended June 30, June 30, Income 1995 1994 1995 1994 Rental $ 1,203,702 $ 1,160,619 $ 2,432,492 $ 2,322,723 Interest 24,506 10,774 48,313 22,181 --------- --------- --------- --------- Total Income 1,228,208 1,171,393 2,480,805 2,344,904 --------- --------- --------- --------- Expenses Property operating 657,315 529,319 1,247,729 1,075,358 Interest 329,307 332,255 659,374 665,208 Depreciation and amortization 306,552 306,795 613,101 613,591 General and administrative 43,431 35,148 82,203 81,400 --------- --------- --------- --------- Total Expenses 1,336,605 1,203,517 2,602,407 2,435,557 --------- --------- --------- --------- Net Loss $ (108,397) $ (32,124) $ (121,602) $ (90,653) ========= ========= ========= ========= Net Loss Allocated: To the General Partners (1,084) (322) (1,216) (907) To the Limited Partners (107,313) (31,802) (120,386) (89,746) ------- ------ ------- ------ $ (108,397) $ (32,124) $ (121,602) $ (90,653) Per limited partnership unit (78,290 outstanding) $(1.37) $(.41) $(1.54) $(1.15) Consolidated Statements of Cash Flows For the six months ended June 30, 1995 and 1994 Cash Flows from Operating Activities: 1995 1994 Net loss $ (121,602) $ (90,653) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 613,101 613,591 Increase (decrease) in cash arising from changes in operating assets and liabilities: Fundings to restricted cash (319,266) (286,549) Release of restricted cash to property operations 394,030 176,571 Other assets 30,791 28,084 Accounts payable and accrued expenses 45,136 41,292 Security deposits (16,285) 1,684 Due to general partners and affiliates 591 2,925 ------- ------- Net cash provided by operating activities 626,496 486,945 ------- ------- Cash Flows from Financing Activities: Distributions (347,956) (347,956) Mortgage principal payments (72,089) (66,255) ------- ------- Net cash used for financing activities (420,045) (414,211) ------- ------- Net increase in cash and cash equivalents 206,451 72,734 Cash and cash equivalents at beginning of period 1,535,391 1,418,054 Cash and cash equivalents at end of period $ 1,741,842 $ 1,490,788 ========= ========= Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 659,374 $ 665,208 ======= ======= Notes to the Consolidated Financial Statements The unaudited interim consolidated financial statements should be read in conjunction with the Partnership's annual 1994 consolidated financial statements within Form 10-K. The unaudited consolidated financial statements include all adjustments which are, in the opinion of management, necessary to present a fair statement of financial position as of June 30, 1995 and the results of operations and cash flows for the six months ended June 30, 1995 and 1994 and the statement of changes in partners' capital (deficit) for the six months ended June 30, 1995. Results of operations for the periods are not necessarily indicative of the results to be expected for the full year. The following significant events have occurred subsequent to fiscal year 1994, which require disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5): On July 20, 1995, the Partnership closed on the sale of Kingston Village and Cedar Bay Village to an institutional buyer, which is unaffiliated with the Partnership. Kingston Village and Cedar Bay Village were sold for $5,370,000 and $1,410,000, respectively. The transaction resulted in a gain on sale for Kingston Village and Cedar Bay Village of approximately $1,609,000 and $99,000, respectively which will be reflected in the Partnership's Form 10-Q for the period ended September 30, 1995. The Partnership used a portion of the sale proceeds to pay off the remaining principal balances on the Kingston Village and Cedar Bay Village mortgage payables in the amount of $2,832,729 and $683,762, respectively. The Partnership incurred prepayment penalties for early retirement of the Kingston Village and Cedar Bay Village mortgage payables in the amount of $97,412 and $23,513, respectively. Part 1, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources - ------------------------------- At June 30, 1995, the Partnership had cash and cash equivalents of $1,741,842, which were invested in unaffiliated money market funds. The $206,451 increase in the cash balance from December 31, 1994 was the result of the Partnership's generating cash flow from operations in excess of cash distributions and mortgage principal payments. The Partnership also maintains a restricted cash balance, which totaled $584,312 at June 30, 1995, composed of escrows required by the lender for property improvements, real estate taxes, and insurance. Pursuant to the terms of the loans, as costs are incurred for property improvements or when real estate taxes and insurance are due, reimbursements are made from the escrow accounts maintained by the lender to the Partnership. The General Partners expect sufficient cash to be generated from operations to meet the Partnership's current operating expenses and debt service requirements. Accounts payable and accrued expenses were $229,005 at June 30, 1995 compared to $183,869 at December 31, 1994. The increase is primarily due to the accrual of real estate taxes for the first and second quarters of 1995. The sales of Kingston Village and Cedar Bay Village were completed on July 20, 1995. The Partnership received gross sales proceeds of $6,780,000 and will recognize a gain on sale of approximately $1,708,000 in the third quarter. A portion of the sale proceeds was used to prepay the mortgages, totalling $3,516,491, collateralized by each property. Net sale proceeds received by the Partnership were approximately $3,010,000. Following an analysis of the Partnership's projected capital requirements, the General Partners intend to distribute the remaining sales proceeds to the Limited Partners as a return of capital. The Partnership's 1995 second quarter distribution, in the amount of $2.00 per Unit, will be paid on August 15, 1995. The General Partners currently anticipate that the current level of distributions will be maintained through year end. Cash distributions, however, will be determined on a quarterly basis and will be based on cash flow generated by the Partnership. Results of Operations - --------------------- Partnership operations for the three and six months ended June 30, 1995 resulted in net losses of $108,397 and $121,602, respectively, compared with net losses of $32,124 and $90,653 for the three and six months ended June 30, 1994. After adding back depreciation and amortization, both noncash expenses, and subtracting mortgage amortization, operations generated cash flow of $161,730 and $419,410, respectively, for the three and six months ended June 30, 1995, compared with cash flow of $241,194 and $456,683 for the corresponding periods in 1994. The increased net losses and reduced cash flow in 1995 are primarily attributable to an increase in property operating expense. Rental income for the three and six months ended June 30, 1995, was $1,203,702 and $2,432,492, respectively, compared with $1,160,619 and $2,322,723 for the corresponding periods in 1994. The increases in 1995 reflect higher rental income at all the Partnership's properties, particularly at the Las Colinas property, due primarily to rental rate increases implemented over the past year, partially offset by lower occupancy rates at the Arizona properties. Interest income totaled $24,506 and $48,313, respectively, for the three and six months ended June 30, 1995 compared with $10,774 and $22,181 for the corresponding periods in 1994. The increases are due to the Partnership's higher cash balance and higher interest rates in 1995. Total expenses for the three and six months ended June 30, 1995 were $1,336,605 and $2,602,407, respectively, compared with $1,203,517 and $2,435,557 for the corresponding periods in 1994. Property operating expenses increased from $529,319 and $1,075,358 respectively in 1994, to $657,315 and $1,247,729 in the corresponding periods in 1995, reflecting higher repair and maintenance expenses primarily at the Las Colinas property. All other major expense components remained in line with 1994 levels. For the three and six month periods ended June 30, 1995 and 1994, average occupancy levels at each of the properties were as follows: Three Months Ended Six Months Ended June 30, June 30, Property 1995 1994 1995 1994 Cedar Bay Village 93% 91% 95% 94% Tierra Catalina 91% 97% 93% 96% Las Colinas I & II 91% 97% 93% 96% Ridge Park 98% 94% 96% 96% Kingston Village 97% 96% 97% 96% PART II OTHER INFORMATION Items 1-5 Not applicable Item 6 Exhibits and Reports on Form 8-K. (a) Exhibits - None (b) Reports on Form 8-K - No reports on Form 8-K were filed during the three months ended June 30, 1995. 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. HUTTON/CONAM REALTY INVESTORS 81 BY: RI81 REAL ESTATE SERVICES INC. General Partner Date: August 11, 1995 BY: /s/Paul L. Abbott ------------------------- Name: Paul L. Abbott Title: Director, President, Chief Executive Officer and Chief Financial Officer EX-27 2 RI81 FINANCIAL DATA SCHEDULE FOR 2Q'95 10-Q
5 6-MOS DEC-31-1995 JUN-30-1995 2,326,154 000 000 000 000 000 33,729,297 14,445,021 21,985,078 000 15,528,942 000 000 000 5,882,625 21,985,078 000 2,480,805 000 1,247,729 695,304 000 659,374 000 000 000 000 000 000 (121,602) (1.54) (1.54)