-----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, H/e2BLw4+2Jx37xxqQxKZVG/aA9nDACGhyxjCvBXBPvzeavRwrLRTSrT0euPYu28 YZawc/PbTde4aow/+eG3PA== 0000928790-97-000160.txt : 19971016 0000928790-97-000160.hdr.sgml : 19971016 ACCESSION NUMBER: 0000928790-97-000160 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971015 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: SEC FILE NUMBER: 000-11769 FILM NUMBER: 97696077 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, 1997 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 State or Other Jurisdiction of 13-3176625 Incorporation or Organization I.R.S. Employer 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 At August 31, At November 30, 1997 1996 Assets Investments in real estate: Land $ 5,817,668 $ 5,817,668 Buildings and improvements 22,679,876 22,326,780 28,497,544 28,144,448 Less accumulated depreciation (11,167,982) (10,510,777) 17,329,562 17,633,671 Cash and cash equivalents 895,283 1,084,483 Restricted cash 122,944 84,934 Other assets, net of accumulated amortization of $195,454 in 1997 and $163,192 in 1996 113,180 173,569 Total Assets $18,460,969 $18,976,657 Liabilities and Partners' Capital Liabilities: Mortgages payable $ 8,329,609 $ 8,434,843 Distribution payable 133,333 222,222 Accounts payable and accrued expenses 225,244 156,786 Due to general partners and affiliates 14,745 15,808 Security deposits 103,333 118,601 Total Liabilities 8,806,264 8,948,260 Partners' Capital (Deficit): General Partners (937,146) (899,777) Limited Partners 10,591,851 10,928,174 Total Partners' Capital 9,654,705 10,028,397 Total Liabilities and Partners' Capital $18,460,969 $18,976,657 Consolidated Statement of Partners' Capital (Deficit) For the nine months ended August 31, 1997 General Limited Partners Partners Total Balance at November 30, 1996 $ (899,777) $10,928,174 $10,028,397 Net income 2,631 23,677 26,308 Cash distributions (40,000) (360,000) (400,000) Balance at August 31, 1997 $ (937,146) $10,591,851 $ 9,654,705 Consolidated Statements of Operations Three months ended Nine months ended August 31, August 31, 1997 1996 1997 1996 Income Rental $ 881,207 $ 908,718 $2,677,955 $2,745,501 Interest and other 7,864 11,184 28,965 46,543 Total Income 889,071 919,902 2,706,920 2,792,044 Expenses Property operating 432,699 386,867 1,313,253 1,100,374 Depreciation and amortization 231,094 227,444 689,467 680,828 Interest 183,714 186,710 553,449 562,242 General and administrative 35,812 41,969 124,443 121,105 Total Expenses 883,319 842,990 2,680,612 2,464,549 Net Income $ 5,752 $ 76,912 $ 26,308 $ 327,495 Net Income Allocated: To the General Partners $ 575 $ 7,691 $ 2,631 $ 32,750 To the Limited Partners 5,177 69,221 23,677 294,745 $ 5,752 $ 76,912 $ 26,308 $ 327,495 Per limited partnership unit: (80,000 outstanding) $.07 $.87 $.30 $3.68 Consolidated Statements of Cash Flows For the nine months ended August 31, 1997 1996 Cash Flows From Operating Activities: Net income $ 26,308 $ 327,495 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 689,467 680,828 Increase (decrease) in cash arising from changes in operating assets and liabilities: Fundings to restricted cash (119,936) (116,782) Release of restricted cash to property operations 81,926 82,314 Other assets 28,127 (19,198) Accounts payable and accrued expenses 68,458 41,676 Due to general partners and affiliates (1,063) (72) Security deposits (15,268) 6,020 Net cash provided by operating activities 758,019 1,002,281 Cash Flows From Investing Activities: Additions to real estate (353,096) (120,387) Net cash used for investing activities (353,096) (120,387) Cash Flows From Financing Activities: Mortgage principal payments (105,234) (96,441) Distributions (488,889) (666,666) Net cash used for financing activities (594,123) (763,107) Net increase (decrease) in cash and cash equivalents (189,200) 118,787 Cash and cash equivalents, beginning of period 1,084,483 1,060,348 Cash and cash equivalents, end of period $ 895,283 $1,179,135 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 553,449 $ 562,242 Notes to the Consolidated Financial Statements The unaudited interim consolidated financial statements should be read in conjunction with the Partnership's annual 1996 audited consolidated financial statements within Form 10-K. The unaudited interim consolidated financial statements include all normal and reoccurring adjustments which are, in the opinion of management, necessary to present a fair statement of financial position as of August 31, 1997 and the results of operations for the three and nine months ended August 31, 1997 and 1996, cash flows for the nine months ended August 31, 1997 and 1996, and the statement of partners' capital (deficit) for the nine months ended August 31, 1997. Results of operations for the periods are not necessarily indicative of the results to be expected for the full year. Certain prior year amounts have been reclassified in order to conform to the current year's presentation. No significant events have occurred subsequent to fiscal year 1996, and no material contingencies exist, which would require disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5). On August 29, 1997 ConAm Property Services IV, Ltd. ("CPS IV"), a co-general partner of the Partnership, executed a contract to acquire RI 3-4 Real Estate Services Inc.'s co-general partner interest in the Partnership. As a result, upon the closing of this transaction, CPS IV will become the sole general partner of the Partnership. See Part II, Item 5 of this 10-Q for additional information. Part I, Item 2 . Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources At August 31, 1997, the Partnership had cash and cash equivalents of $895,283 that were invested in unaffiliated money market funds, a decrease from $1,084,483 at November 30, 1996. The decrease is primarily attributable to a decrease in net cash provided by operating activities, as well as an increase in additions to real estate, as discussed below. The Partnership also maintains a restricted cash balance, which totaled $122,944 at August 31, 1997, an increase from $84,934 at November 30, 1996. The increase in restricted cash is attributable to payments made for real estate tax escrows required under the terms of the Autumn Heights and Skyline Village loans. Accounts payable and accrued expenses totaled $225,243 at August 31,1997, an increase from $156,786 at November 30, 1996. The increase is primarily due to real estate tax accruals for Ponte Vedra Beach Village II and Skyline Village. The Partnership expects sufficient cash to be generated from operations to meet its current operating expenses. The General Partners continue to perform various improvements at the properties which include roof repairs at Autumn Heights and Ponte Vedra Beach Village II and exterior painting at Skyline Village. It is expected that work at both properties will be finished by the end of the year. The General Partners will evaluate the need for additional improvement work at the properties on an ongoing basis. The General Partners declared a cash distribution of $1.50 per Unit for the quarter ended August 31, 1997 which will be paid to investors on or about October 22, 1997. 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. Results of Operations Partnership operations for the three and nine months ended August 31, 1997 resulted in net income of $5,752 and $26,308, respectively, compared with $76,912 and $327,495, for the corresponding periods in fiscal 1996. The decreases in net income for both periods are due primarily to a decrease in rental income and an increase in property operating expenses. Rental income for the three and nine months ended August 31, 1997 was $881,207 and $2,677,955, respectively, compared with $908,718 and $2,745,501, in the corresponding periods in fiscal 1996. The decrease primarily reflects lower occupancy at all three properties. Interest and other income totaled $7,864 and $28,965 for the three and nine months ended August 31, 1997, respectively, compared to $11,184 and $46,543 for the corresponding periods in fiscal 1996. The decrease is the result of the Partnership maintaining a lower cash balance in the 1997 periods compared to the 1996 periods. Property operating expenses for the three and nine months ended August 31, 1997 were $432,699 and $1,313,253, respectively, compared with $386,867 and $1,100,374, in the corresponding periods in 1996. The increase is primarily attributable to an increase in repair and maintenance work in connection with the roof repairs at Ponte Vedra Beach Village II and Autumn Heights. During the first nine months of fiscal 1997 and 1996, average occupancy levels at each of the properties were as follows: Property 1997 1996 Autumn Heights 94% 96% Ponte Vedra Beach Village II 94% 96% Skyline Village 90% 92% Part II Other Information Items 1-4 Not applicable. Item 5 Other Information ConAm Property Services IV, Ltd. ("CPS IV") and RI 3-4 Real Estate Services Inc.'s ("RI 3-4") have served as co-general partners of the Partnership since its inception. On August 29, 1997, CPS IV executed a contract to acquire RI 3-4's co-general partner interest in the Partnership. As a result, upon the closing of this transaction CPS IV will become the sole general partner of the Partnership. 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 August 31, 1997. 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 3 BY: RI 3-4 Real Estate Services, Inc. General Partner Date: October 15, 1997 BY: /s/ Doreen D. Odell --------------------------- Director, President, Chief Executive Officer and Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE FOR THIRD QUARTER 10-Q HUTTON/CONAM REALTY INVESTORS 3
5 9-mos Nov-30-1997 Aug-31-1997 1,018,227 0 0 0 0 0 28,497,544 11,167,982 18,460,969 476,655 8,329,609 0 0 0 9,654,705 18,460,969 0 2,706,920 0 1,313,253 813,910 0 553,449 0 0 0 0 0 0 26,308 .30 .30
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