-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F3RgCAtnyRbvp9AnrDe+RYiFkjpoQu0fnVI8FttGefs09w8tYJcEzgmlndgVrFuc wRUUUYaz3pS0xk3qpx4U4g== 0000928790-96-000157.txt : 19960816 0000928790-96-000157.hdr.sgml : 19960816 ACCESSION NUMBER: 0000928790-96-000157 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUTTON CONAM REALTY INVESTORS 2 CENTRAL INDEX KEY: 0000357099 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [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: 96612686 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 June 30, 1996 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 I.R.S. Employer Identification No. of Incorporation or Organization 3 World Financial Center, 29th Floor, New York, NY Attn.: 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 At June 30, At December 31, 1996 1995 Assets ---------- ---------- Investments in real estate: Land $ 5,744,972 $ 5,744,972 Buildings and improvements 23,486,402 23,442,403 ---------- ---------- 29,231,374 29,187,375 Less accumulated depreciation (11,402,234) (10,931,382) ---------- ---------- 17,829,140 18,255,993 Cash and cash equivalents 1,108,807 710,686 Restricted cash 398,969 651,661 Other assets, net of accumulated amortization of $166,718 in 1996 and $135,458 in 1995 275,199 312,359 ---------- ---------- Total Assets $19,612,115 $19,930,699 ========== ========== Liabilities and Partners' Capital Liabilities: Mortgages payable $11,871,023 $11,968,504 Accounts payable and accrued expenses 231,899 121,445 Due to general partners and affiliates 31,842 33,949 Security deposits 106,796 106,218 Distribution payable 210,000 200,000 ---------- ---------- Total Liabilities 12,451,560 12,430,116 Partners' Capital (Deficit): General Partners (519,106) (485,103) Limited Partners 7,679,661 7,985,686 ---------- ---------- Total Partners' Capital 7,160,555 7,500,583 ---------- ---------- Total Liabilities and Partners' Capital $19,612,115 $19,930,699 ========== ========== Consolidated Statement of Partners' Capital (Deficit) For the six months ended June 30, 1996 Limited General Partners Partners Total --------- -------- --------- Balance at December 31, 1995 $7,985,686 $(485,103) $7,500,583 Net income 53,975 5,997 59,972 Distributions (360,000) (40,000) (400,000) --------- -------- --------- Balance at June 30, 1996 $7,679,661 $(519,106) $7,160,555 ========= ======== ========= Consolidated Statements of Operations Three months Six months ended June 30, ended June 30, 1996 1995 1996 1995 Income --------- --------- --------- --------- Rental $1,078,453 $1,154,727 $2,142,991 $2,352,831 Interest 24,773 7,684 35,632 22,376 Other 3,244 - 3,244 - --------- --------- --------- --------- Total Income 1,106,470 1,162,411 2,181,867 2,375,207 Expenses Property operating 528,915 750,986 1,055,119 1,426,698 Depreciation and amortization 251,166 294,642 502,112 587,594 Interest 230,638 274,135 462,217 549,291 General and administrative 54,698 41,535 102,447 79,251 --------- --------- --------- --------- Total Expenses 1,065,417 1,361,298 2,121,895 2,642,834 --------- --------- --------- --------- Net Income (Loss) $ 41,053 $ (198,887) $ 59,972 $ (267,627) ========= ========= ========= ========= Net Income (Loss) Allocated: To the General Partners $ 4,105 $ (1,989) $ 5,997 $ (2,676) To the Limited Partners 36,948 (196,898) 53,975 (264,951) --------- --------- --------- --------- $ 41,053 $ (198,887) $ 59,972 $ (267,627) ========= ========= ========= ========= Per limited partnership unit (80,000 outstanding) $.46 $(2.46) $.67 $(3.31) Consolidated Statements of Cash Flows For the six months ended June 30, 1996 1995 Cash Flows From Operating Activities: ------- -------- Net income (loss) $ 59,972 $(267,627) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 502,112 587,594 Increase (decrease) in cash arising from changes in operating assets and liabilities: Fundings to restricted cash (159,236) (192,996) Release of restricted cash 411,928 56,176 Other assets 5,900 - Accounts payable and accrued expenses 110,454 133,026 Due to general partners and affiliates (2,107) (852) Security deposits 578 (2,667) ------- ------- Net cash provided by operating activities 929,601 312,654 Cash Flows From Investing Activities: Additions to real estate (43,999) (199,476) ------- ------- Net cash used for investing activities (43,999) (199,476) Cash Flows From Financing Activities: Distributions (390,000) (464,445) Mortgage principal payments (97,481) (105,579) ------- ------- Net cash used for financing activities (487,481) (570,024) Net increase (decrease) in cash and cash equivalents 398,121 (456,846) --------- --------- Cash and cash equivalents, beginning of period 710,686 1,183,787 --------- --------- Cash and cash equivalents, end of period $1,108,807 $ 726,941 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 462,217 $ 549,291 Notes to the Consolidated Financial Statements The unaudited consolidated financial statements should be read in conjunction with the Partnership's annual 1995 audited 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, 1996 and the results of operations and cash flows for the six months ended June 30, 1996 and 1995 and the statement of partner's capital (deficit) for the six months ended June 30, 1996. 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 1995 and no material contingencies exist, which would require disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5). Part I, Item 2 . Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At June 30, 1996, the Partnership had cash and cash equivalents of $1,108,807, which were invested in unaffiliated money market funds, an increase from $710,686 at December 31, 1995. The increase is attributable to cash provided by operating activities exceeding cash used for distributions, mortgage principal payments, and additions to real estate. The Partnership also maintains a restricted cash balance, which totaled $398,969 at June 30, 1996, representing escrows for insurance, and real estate taxes required under the terms of the current mortgage loans. Pursuant to the refinancing of the Creekside Oaks loan, the lender required funds escrowed for various repairs including roofing work and exterior painting. Following an inspection of the completed work by the lender, the balance of the repair escrow, which totaled $354,675 was returned to the Partnership. The Partnership expects sufficient cash to be generated from operations to meet its current operating expenses and debt service requirements. The General Partners continue to perform various improvements at the properties. These improvements include unit interior repairs at each of the four properties, as well as asphalt repairs at Creekside Oaks, and roof repairs at Ponte Vedra Beach Village I and Rancho Antigua. Thus far, the asphalt repairs at Creekside Oaks are complete, with the other work currently underway. It is expected that this work will be finished by the end of the year. The General Partners declared a cash distribution of $2.25 per Unit for the six months ended June 30, 1996 which will be paid to investors on or about August 15, 1996. The level of future distributions will be evaluated on a quarterly basis and will depend on the Partnership's operating results and future cash needs. Accounts payable and accrued expenses were $231,899 at June 30, 1996 compared to $121,445 at December 31, 1995 primarily reflecting accruals for real estate taxes for the two Florida properties for the first six months of 1996. Results of Operations Partnership operations for the three and six months ended June 30, 1996, resulted in net income of $41,053 and $59,972, respectively, compared with net losses of $198,887 and $267,627, respectively, for the corresponding periods in 1995. The change from net loss to net income is due primarily to reductions in property operating expense, depreciation and amortization, and interest expense, partially offset by a decrease in rental income, all resulting primarily from the sale of Country Place Village I in July 1995. Net cash provided by operating activities was $929,601 for the six months ended June 30, 1996, an increase from $312,654 for the same period in 1995. The increase is primarily attributable to the increase in net income as discussed above and the release of the remaining funds from Creekside Oak's replacement reserve upon completion of certain improvements required by the mortgagee. Rental income for the three and six months ended June 30, 1996 was $1,078,453 and $2,142,991, respectively, compared with $1,154,727 and $2,352,831 respectively, for the corresponding periods in 1995. The decrease reflects the sale of Country Place Village I, partially offset by increases in rental income at three of the four remaining properties, as a result of increased occupancy and rental rates. Property operating expenses for the three and six months ended June 30, 1996 were $528,915 and $1,055,119, respectively, compared with $750,986 and $1,426,698, respectively, for the same periods in 1995. The decreases are primarily due to the July 1995 sale of Country Place Village I and a decrease in repairs and maintenance expense at Creekside Oaks and Rancho Antigua, partially offset by an increase in repairs and maintenance expense at Ponte Vedra Beach Village I. Depreciation and amortization decreased to $251,166 and $502,112, respectively for the three and six months ended June 30, 1996 from $294,642 and $587,594, respectively, for the corresponding periods in 1995 due to the sale of Country Place Village I. Interest expense also declined to $230,638 and $462,217, respectively, for the three and six months ended June 30, 1996 from $274,135 and $549,291, respectively, for the same periods in 1995. The decline is primarily due to the assumption of the Country Place Village I mortgage by the buyer at the time the sale closed. For the three and six months ended June 30, 1996, general and administrative expenses increased to $54,698 and $102,447, respectively, from $41,535 and $79,251, respectively for the corresponding periods ending June 30, 1995 primarily as a result of increased legal fees and higher Partnership administrative expenses. During the first six months of 1996 and 1995, average occupancy levels at each of the properties were as follows: Property 1996 1995 Creekside Oaks 95% 92% Ponte Vedra Beach Village I 96% 95% Rancho Antigua 95% 92% Village at the Foothills I 92% 94% Part II Other Information Items 1-5 Not applicable. Item 6 Exhibits and reports on Form 8-K. (a) Exhibits - (27) Financial Data Schedule (b) Reports on Form 8-K - No reports on Form 8-K were filed during the quarter ended June 30, 1996. 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: August 13, 1996 BY:/s/ Paul L. Abbott Director, President, Chief Executive Officer and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE FOR SECOND QUARTER 10-Q HUTTON/CONAM REALTY INVESTORS 2
5 6-mos Dec-31-1996 Jun-30-1996 1,507,776 0 0 0 0 0 29,231,374 11,402,234 19,612,115 580,537 11,871,023 0 0 0 7,160,555 19,612,115 0 2,181,867 0 1,055,119 604,559 0 462,217 0 0 0 0 0 0 59,972 .67 .67
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