-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, glJP2DXCHcLqlWBgc4iKVVIn8X+T2IFO2aPxc7zZM0SF7j8vuQyps+vooHcXw/56 X9q9jGI6ZyIIQ+F4EQIySA== 0000928790-95-000042.txt : 19950530 0000928790-95-000042.hdr.sgml : 19950530 ACCESSION NUMBER: 0000928790-95-000042 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUTTON CONAM REALTY INVESTORS 2 CENTRAL INDEX KEY: 0000357099 STANDARD INDUSTRIAL CLASSIFICATION: 6500 IRS NUMBER: 133100545 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11085 FILM NUMBER: 95538420 BUSINESS ADDRESS: STREET 1: 3 WORLD FINANCIAL CENTER 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 BUSINESS PHONE: 2125263237 MAIL ADDRESS: STREET 1: 3 WORLD FINANCIAL CENTER STREET 2: 29TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10285 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 March 31, 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: 0-11085 HUTTON/CONAM REALTY INVESTORS 2 (Exact name of registrant as specified in its charter) California 13-3100545 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3 World Financial Center, 29th Floor, New York, NY 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 March 31, December 31, Assets 1995 1994 Investments in real estate: Land $ 6,797,328 $ 6,797,328 Buildings and improvements 27,444,249 27,258,895 34,241,577 34,056,223 Less- accumulated depreciation (11,973,388) (11,699,378) 22,268,189 22,356,845 Cash and cash equivalents 914,405 1,183,787 Restricted cash 871,445 779,328 Other assets, net of accumulated amortization of $107,339 in 1995 and $88,397 in 1994 433,222 452,164 Total Assets $ 24,487,261 $ 24,772,124 Liabilities and Partners' Capital Liabilities: Mortgages payable $ 14,166,668 $ 14,218,948 Accounts payable and accrued expenses 197,225 106,337 Due to general partners and affiliates 29,634 40,523 Security deposits 133,813 133,210 Distributions payable 200,000 244,445 Total Liabilities 14,727,340 14,743,463 Partners' Capital (Deficit): General Partners (639,187) (618,500) Limited Partners 10,399,108 10,647,161 Total Partners' Capital 9,759,921 10,028,661 Total Liabilities and Partners' Capital $ 24,487,261 $ 24,772,124 Consolidated Statement of Partners' Capital (Deficit) For the three months ended March 31, 1995 General Limited Partners Partners Total Balance at January 1, 1995 $ (618,500) $ 10,647,161 $ 10,028,661 Net loss (687) (68,053) (68,740) Distributions (20,000) (180,000) (200,000) Balance at March 31, 1995 $ (639,187) $ 10,399,108 $ 9,759,921 Consolidated Statements of Operations For the three months ended March 31, 1995 and 1994 Income 1995 1994 Rental $ 1,198,104 $ 1,170,235 Interest 14,692 9,367 Total Income 1,212,796 1,179,602 Expenses Property operating 675,712 543,492 Depreciation and amortization 292,952 290,905 Interest 275,156 279,042 General and administrative 37,716 41,971 Total Expenses 1,281,536 1,155,410 Net Income (Loss) $ (68,740) $ 24,192 Net Income (Loss) Allocated: To the General Partners $ (687) $ 2,419 To the Limited Partners (68,053) 21,773 $ (68,740) $ 24,192 Per Limited Partnership unit (80,000 outstanding) $ (.85) $ .27 Consolidated Statements of Cash Flows For the three months ended March 31, 1995 and 1994 Cash Flows from Operating Activities: 1995 1994 Net income (loss) $ (68,740) $ 24,192 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 292,952 290,905 Increase (decrease) in cash arising from changes in operating assets and liabilities: Fundings to restricted cash (102,417) (99,801) Release of restricted cash 10,300 33,999 Other assets 0 1,418 Accounts payable and accrued expenses 90,888 86,792 Due to general partners and affiliates (10,889) (8,860) Security deposits 603 (364) Net cash provided by operating activities 212,697 328,281 Cash Flows from Investing Activities: Additions to real estate (185,354) (2,092) Net cash used for investing activities (185,354) (2,092) Cash Flows from Financing Activities: Distributions paid (244,445) 0 Mortgage principal payments (52,280) (48,393) Mortgage fees 0 (29,458) Net cash used for financing activities (296,725) (77,851) Net increase (decrease) in cash and cash equivalents (269,382) 248,338 Cash and cash equivalents at beginning of period 1,183,787 558,731 Cash and cash equivalents at end of period $ 914,405 $ 807,069 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 275,156 $ 279,042 Notes to the Consolidated Financial Statements The unaudited interim financial statements should be read in conjunction with the Partnership's annual 1994 audited financial statements within Form 10-K. The unaudited financial statements include all adjustments which are, in the opinion of management, necessary to present a fair statement of financial position as of March 31, 1995 and the results of operations and cash flows for the three months ended March 31, 1995 and 1994 and the statement of changes in partners' capital (deficit) for the three months ended March 31, 1995. Results of operations for the periods are not necessarily indicative of the results to be expected for the full year. No significant events have occurred subsequent to fiscal year 1994, and no material contingencies exist, which require disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5). Part 1, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At March 31, 1995, the Partnership had cash and cash equivalents of $914,405 which was invested in unaffiliated money market funds, compared with $1,183,787 at December 31, 1994. The decrease is primarily attributable to cash used for distributions, mortgage payments and additions to real estate exceeding net cash provided by operating activities. The Partnership also maintained a restricted cash balance of $871,445 at March 31, 1995, compared with $779,328 at December 31, 1994. The restricted cash balance represents escrows for insurance, real estate taxes, and property replacements and repairs, required under the terms of the current mortgage loans. The General Partners expect sufficient cash flow to be generated from operations to meet its current operating expenses and debt service requirements. Accounts payable and accrued expenses were $197,225 at March 31, 1995 compared to $106,337 at December 31, 1994. The increase reflects the accrual of real estate taxes for the first three months of 1995. Cash distributions to the limited partners were suspended from the first quarter of 1992 through the second quarter of 1994 in consideration of the costs related to the refinancing of the Partnership's four mortgage loans. Although the loans were refinanced in October 1993, cash outlays associated with the refinancing substantially depleted the Partnership's cash reserve, and cash distributions remained suspended until the third quarter of 1994, at which time the General Partners determined that the cash reserve had increased to a level considered adequate to meet anticipated funding needs. Accordingly, quarterly cash distributions to investors were reinstated commencing with the third quarter 1994 distribution in the amount of $2.75 per Unit. The Partnership's 1995 first quarter cash distribution, in the amount of $2.25 per Unit, was credited to your brokerage account or sent directly to you on May 16, 1995. Cumulative cash distributions have totaled $301.44 per $500 Unit including $200 per Unit in return of capital payments. The 50 cent reduction in the quarterly distribution level is due to a projected decline of approximately 15% in the Partnership's 1995 cash flow versus 1994. The decline is primarily the result of greater capital expenditures, and to a lesser extent the anticipated sale of Country Place Village I. The level and timing of future distributions will be evaluated on a quarterly basis. As discussed in the Partnership's 1994 annual report on Form 10-K, the General Partners have been marketing Country Place Village I and expect to enter into a sales contract in the very near future. Should the sale close, investors would receive a return of capital from net sale proceeds. The majority of the increase in capital expenditures is attributable to Creekside Oaks. Pursuant to the refinancing of the Creekside Oaks loan, the lender escrowed funds for various repairs including roofing work and exterior painting. Upon completion of all work, which is expected to occur sometime in the second or third quarter, the balance of the repair escrow ($395,338) will be refunded to the Partnership. Results of Operations Partnership operations for the quarter ended March 31, 1995 resulted in a net loss of $68,740, compared with net income of $24,192 in 1994. After adding back depreciation and amortization, both non-cash expenses, and subtracting mortgage amortization, operations generated cash flow of $171,932 for the quarter ended March 31, 1995, compared with cash flow of $266,704 for the same period in 1994. The decrease in cash flow and change from net income to net loss in 1995 is primarily the result of increased property operating expenses. Rental income totaled $1,198,104 for the quarter ended March 31, 1995 compared with $1,170,235 for the same period in 1994. The 2% increase in 1995 reflects higher rental income at four of the properties, primarily due to rental rate increases instituted over the past year, partially offset by lower occupancy rates. Property operating expenses totaled $675,712 for the quarter ended March 31, 1995, compared with $543,492 for the same period in 1994. The increase primarily reflects higher repair and maintenance expenses at Creekside Oaks and Rancho Antigua due to exterior painting work. Interest expense totaled $275,156 for the quarter ended March 31, 1995, compared with $279,042 for the quarter ended March 31, 1994. The decrease is due to the amortization of the loan balance. For the three months ended March 31, 1995 and 1994, average occupancy levels at each of the properties were as follows: Three Months Ended March 31, Property 1995 1994 Country Place Village I 98% 99% Creekside Oaks 90% 97% Ponte Vedra Beach Village I 97% 96% Rancho Antigua 95% 97% Village at the Foothills I 95% 97% 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 month period covered by this report. 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 2 BY: RI2 REAL ESTATE SERVICES INC. General Partner Date: May 12, 1995 BY: /s/ Paul L. Abbott Name: Paul L. Abbott Title: Director, President, Chief Executive Officer and Chief Financial Officer EX-27 2 RI2 FINANCIAL DATA SCHEDULE FOR 1Q'95 10-Q
5 3-MOS DEC-31-1995 MAR-31-1995 1,785,850 000 000 000 000 000 34,241,577 11,973,388 24,487,261 000 14,166,668 000 000 000 9,759,921 24,487,261 000 1,212,796 000 675,712 330,668 000 275,156 000 000 000 000 000 000 (68,740) (.85) (.85)
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