-----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, CugR59auuLPX5mVx10ZUwnUWNib5Ab5j66BL/fOUs5HLAFpsWp9VUDpIxy8otXWR VHoKo8q7IG9rAWTWAfxxhQ== 0000928790-95-000114.txt : 19951017 0000928790-95-000114.hdr.sgml : 19951017 ACCESSION NUMBER: 0000928790-95-000114 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950831 FILED AS OF DATE: 19951016 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUTTON CONAM REALTY INVESTORS 3 CENTRAL INDEX KEY: 0000711389 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133176625 STATE OF INCORPORATION: CA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11769 FILM NUMBER: 95581056 BUSINESS ADDRESS: STREET 1: 3 WORLD FINANCIAL CENTER STREET 2: 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 August 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: 0-11769 HUTTON/CONAM REALTY INVESTORS 3 (Exact name of registrant as specified in its charter) California 13-3176625 (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) identification No.) 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 August 31, November 30, Assets 1995 1994 Investments in real estate: Land $ 5,817,668 $ 7,220,465 Buildings and improvements 22,058,284 26,508,961 27,875,952 33,729,426 Less accumulated depreciation (9,428,473) (10,629,776) 18,447,479 23,099,650 Cash and cash equivalents 1,260,981 4,213,148 Restricted cash 73,270 57,980 Other assets, net of accumulated amortization of $109,422 in 1995 and $77,160 in 1994 194,927 242,868 Total Assets $ 19,976,657 $ 27,613,646 Liabilities and Partners' Capital Liabilities: Mortgages payable $ 8,595,630 $ 11,598,519 Distribution payable 222,222 311,111 Accounts payable and accrued expenses 219,720 137,709 Due to general partners and affiliates 60,396 38,007 Security deposits 119,046 161,667 Total Liabilities 9,217,014 12,247,013 Partners' Capital (Deficit): General Partners (826,653) (773,514) Limited Partners 11,586,296 16,140,147 Total Partners' Capital 10,759,643 15,366,633 Total Liabilities and Partners' Capital $ 19,976,657 $ 27,613,646 Consolidated Statement of Partners' Capital (Deficit) For the nine months ended August 31, 1995 General Limited Partners Partners Total Balance at December 1, 1994 $ (773,514) $ 16,140,147 $ 15,366,633 Net income 13,527 46,149 59,676 Cash distributions (66,666) (4,600,000) (4,666,666) Balance at August 31, 1995 $ (826,653) $ 11,586,296 $ 10,759,643 Consolidated Statements of Operations Three months ended Nine months ended August 31, August 31, Income 1995 1994 1995 1994 Rental $ 977,296 $ 1,040,341 $ 3,131,082 $ 3,080,558 Interest 47,150 37,145 161,395 103,516 Total Income 1,024,446 1,077,486 3,292,477 3,184,074 Expenses Property operating 505,094 491,798 1,473,186 1,335,619 Depreciation and amortization 256,865 284,863 820,222 852,082 Interest 212,365 266,168 740,856 800,772 General and administrative 46,093 29,365 114,545 109,496 Total Expenses 1,020,417 1,072,194 3,148,809 3,097,969 Income from operations 4,029 5,292 143,668 86,105 Loss on sale of property (83,992) 0 (83,992) 0 Net Income (Loss) $ (79,963) $ 5,292 $ 59,676 $ 86,105 Net Income (Loss) Allocated: To the General Partners $ (437) $ 529 $ 13,527 $ 8,610 To the Limited Partners (79,526) 4,763 46,149 77,495 $ (79,963) $ 5,292 $ 59,676 $ 86,105 Per limited partnership unit (80,000 outstanding) $ (.99) $ .06 $ .58 $ .97 Consolidated Statements of Cash Flows For the nine months ended August 31, 1995 and 1994 Cash Flows from Operating Activities: 1995 1994 Net income $ 59,676 $ 86,105 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 820,222 852,082 Loss on sale of property 83,992 0 Increase (decrease) in cash arising from changes in operating assets and liabilities: Funding to restricted cash (114,829) (105,746) Release of restricted cash to property operations 99,539 93,888 Other assets 15,679 53,516 Accounts payable and accrued expenses 82,011 94,135 Due to general partners and affiliates 22,389 2,642 Security deposits (42,621) 15,978 Net cash provided by operating activities 1,026,058 1,092,600 Cash Flows from Investing Activities: Net proceeds from sale of property 3,832,290 0 Additions to real estate (52,071) (50,569) Net cash provided by (used for) investing activities 3,780,219 (50,569) Cash Flows from Financing Activities: Mortgage borrowings 0 5,500,000 Mortgage principal payments (3,002,889) (4,503,445) Distributions (4,755,555) (3,244,444) Refund of deposit on mortgage refinancing 0 55,000 Mortgage fees 0 (74,496) Net cash used for financing activities (7,758,444) (2,267,385) Net decrease in cash and cash equivalents (2,952,167) (1,225,354) Cash and cash equivalents at beginning of period 4,213,148 5,775,115 Cash and cash equivalents at end of period $ 1,260,981 $ 4,549,761 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 740,856 $ 800,772 Notes to the Consolidated Financial Statements The unaudited interim consolidated financial statements should be read in conjunction with the Partnership's annual 1994 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 August 31, 1995 and the results of operations and cash flows for the nine months ended August 31, 1995 and 1994 and the statement of changes in partners' capital (deficit) for the nine months ended August 31, 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 1994 which requires 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 Country Place Village II (the "Property"). The Property sold for $3,890,000 to an institutional buyer (the "Buyer"), which is unaffiliated with the Partnership. The selling price was determined by arm's length negotiations between the Partnership and the Buyer. The Partnership received net proceeds of $3,832,290. The transaction resulted in a loss on sale for the Property of $83,992 which is reflected in the Partnership's statement of operations for the period ending August 31, 1995. On August 22, 1995, the General Partners paid a special distribution of $4,000,000 to the limited partners. The special distribution was comprised of the net proceeds from the sale of the Property and $167,710 from the Partnership's cash reserves. On June 29, 1995, the Partnership paid $2,925,099, representing principal and interest, from cash reserves to fully satisfy its mortgage obligation on Country Place Village II. Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At August 31, 1995, the Partnership had cash and cash equivalents of $1,260,981, which were invested in unaffiliated money market funds. The Partnership also maintains a restricted cash balance, which totaled $73,270 at August 31, 1995, representing real estate tax escrows required under the terms of the Autumn Heights and Skyline Village loans. The Partnership expects sufficient cash to be generated from operations to meet its current operating expenses. On July 20, 1995, the Partnership closed on the sale of Country Place Village II for $3,890,000 to an institutional buyer. The Partnership received net proceeds of $3,832,290. On August 22, 1995, the General Partners made a special distribution of $4,000,000 or $50 per Unit from proceeds resulting from the sale and a portion of the Partnership's cash reserves. The General Partners declared a regular cash distribution of $2.50 per Unit for the quarter ended August 31, 1995 which will be paid to investors on or about October 16, 1995. As a result of the sale of Country Place Village II, security deposits payable declined from November 30, 1994 to August 31, 1995. Mortgages payable declined from $11,598,519 at November 30, 1994 to $8,595,630 at August 31, 1995 primarily due to a June 29, 1995 payment in the amount of $2,925,099, representing principal and interest, from cash reserves to fully satisfy the Partnership's mortgage obligation on Country Place Village II, plus normal amortization of the outstanding balance. Accounts payable and accrued expenses were $219,720 at August 31, 1995, compared with $137,709 at November 30, 1994. The increase is primarily attributable to accruals for real estate taxes to be paid later in the year. Results of Operations Partnership operations for the three and nine months ended August 31, 1995 resulted in a net loss of $79,963 and net income of $59,676, respectively, compared with net income of $5,292 and $86,105 for the corresponding periods in fiscal 1994. After adding back the loss recognized on the sale of Country Place Village II and depreciation and amortization, both non-cash expenses, and subtracting mortgage amortization and additions to real estate, operations generated cash flow of $144,681 and $809,005, respectively, for the three and nine months ended August 31, 1995, compared with cash flow of $246,803 and $795,388 for the corresponding periods in fiscal 1994. The decrease in net income is primarily attributable to a $83,992 loss recognized on the sale of Country Place Village II. Without the loss recognized on the sale of the property, income from operations for the nine-month period increased from 1994 to 1995, primarily as a result of an increase in rental and interest income, and a reduction in interest expense, partially offset by an increase in property operating expenses. The decline in cash flow for the three-month period is primarily attributable to an increase in property operating expense, partially offset by increases in rental and interest income. Rental income for the three and nine months ended August 31, 1995 totalled $977,296 and $3,131,082, respectively, compared with $1,040,341 and $3,080,558 for the corresponding periods in fiscal 1994. The increase for the nine-month period reflects higher rental income at the Partnership's three remaining properties during 1995, due to increased rental rates. Interest income for the three and nine months ended August 31, 1995 totalled $47,150 and $161,395, respectively, compared with $37,145 and $103,516 for the corresponding periods in fiscal 1994. Interest income rose due to an increase in the interest rates earned on the Partnership's cash balance. Total expenses for the three and nine months ended August 31, 1995 were $1,020,417 and $3,148,809, respectively, compared with $1,072,194 and $3,097,969 for the corresponding periods in fiscal 1994. The increase in total expenses for the nine-month period is due primarily to an increase in property operating expenses, in particular repair and maintenance expenses, which increased at two of the Partnership's properties. The largest increase was at Skyline Village, primarily reflecting the cost of pool and roof repairs. Partially offsetting the increase in property operating expense were reductions in depreciation and amortization due to the July 1995 sale of Country Place Village II and interest expense due to the June 1995 repayment of the Country Place Village II mortgage. For the three and nine months ended August 31, 1995 and 1994, average occupancy levels at each of the properties were as follows: Three Months Ended Nine Months Ended August 31, August 31, Property 1995 1994 1995 1994 Autumn Heights 96% 96% 96% 96% Ponte Vedra Beach Village II 94% 97% 93% 95% Skyline Village 94% 94% 94% 96% 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 On August 4, 1995, a Form 8-K was filed reporting the consummation of the sale of Country Place Village II for $3,890,000. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 3 BY: RI 3-4 Real Estate Services, Inc. General Partner Dated: October 16, 1995 BY: /S/ Paul L. Abbott Name: Paul L. Abbott Title: Director, President, Chief Executive Officer and Chief Financial Officer EX-27 2 RI-3 FINANCIAL DATA SCHEDULE FOR 1995 THIRD QTR 10-Q
5 9-MOS NOV-30-1995 AUG-31-1995 1,334,251 000 000 000 000 000 27,875,952 9,428,473 19,976,657 000 8,595,630 000 000 000 10,759,643 19,976,657 000 3,292,477 000 1,473,186 934,767 000 740,856 000 000 000 000 000 000 59,676 .58 .58
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