-----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, SzjalzQ44RGnLIiAfWwZhHFuczXWF/6/rEr3TJFYBYHFxD8OXpCvjjV++QH6ey5W 3B0NVcvZSTMOV/54W/hnJQ== 0000928790-97-000199.txt : 19971117 0000928790-97-000199.hdr.sgml : 19971117 ACCESSION NUMBER: 0000928790-97-000199 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAM REALTY INVESTORS 4 L P CENTRAL INDEX KEY: 0000722745 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 112685746 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13329 FILM NUMBER: 97721519 BUSINESS ADDRESS: STREET 1: 176F4 SAN DIEGO AVE CITY: SAN DIEGO STATE: CA ZIP: 92110 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 REALTY INVESTORS 4 DATE OF NAME CHANGE: 19920703 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 September 30, 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: 0-13329 CONAM REALTY INVESTORS 4, L.P. formerly known as HUTTON/CONAM REALTY INVESTORS 4 (Exact name of registrant as specified in its charter) California 11-2685746 State or Other Jurisdiction of I.R.S Employer Identification No. Incorporation or Organization 1764 San Diego Avenue 92110-1906 San Diego, CA 92110 Attn.: Robert J. Svatos Zip Code Address of Principal Executive Offices (619) 297-6771 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 September 30, At December 31, 1997 1996 Assets Property: Land $ 2,153,238 $ 5,627,763 Buildings and improvements 11,015,879 20,448,021 13,169,117 26,075,784 Less accumulated depreciation (5,447,126) (9,754,730) 7,721,991 16,321,054 Property held for disposition 8,013,991 7,358,300 Cash and cash equivalents 9,462,551 2,314,876 Other assets 3,300 15,370 Total Assets $ 25,201,833 $ 26,009,600 Liabilities and Partners' Capital Liabilities: Accounts payable and accrued expenses $ 352,528 $ 108,269 Due to affiliates 14,211 20,443 Distribution payable 7,579,842 533,792 Security deposits payable 102,963 144,220 Total Liabilities 8,049,544 806,724 Partners' Capital: General Partners _ _ Limited Partners 17,152,289 25,202,876 Total Partners' Capital 17,152,289 25,202,876 Total Liabilities and Partners' Capital $ 25,201,833 $ 26,009,600 Consolidated Statement of Partners' Capital For the nine months ended September 30, 1997 General Limited Partners Partners Total Balance at December 31, 1996 $ - $ 25,202,876 $ 25,202,876 Net Income 160,138 436,701 596,839 Cash Distributions (160,138) (8,487,288) (8,647,426) Balance at September 30, 1997 $ - $ 17,152,289 $ 17,152,289 Consolidated Statements of Operations Three months ended Nine months ended September 30, September 30, 1997 1996 1997 1996 Income Rental $ 998,355 $ 1,185,400 $ 3,425,855 $3,557,572 Interest 87,496 26,750 142,643 80,122 Other 1,436 _ 6,741 4,295 Total Income 1,087,287 1,212,150 3,575,239 3,641,989 Expenses Property operating 675,756 624,697 1,994,347 1,877,876 Depreciation 196,464 293,002 589,322 890,415 General and administrative 37,115 58,543 144,787 134,924 Total Expenses 909,335 976,242 2,728,456 2,903,215 Income from operations 177,952 235,908 846,783 738,774 Loss on sale of property (249,944) _ (249,944) _ Net Income (Loss) $ (71,992) $ 235,908 $ 596,839 $ 738,774 Net Income (Loss) Allocated: To the General Partners $ 53,379 $ 53,379 $ 160,138 $ 160,137 To the Limited Partners (125,371) 182,529 436,701 578,637 $ (71,992) $ 235,908 $ 596,839 $ 738,774 Per limited partnership unit (128,110 outstanding) Income from operations $.97 $ 1.42 $5.36 $ 4.51 Loss on sale of property (1.95) _ (1.95) _ Net Income (Loss) $(.98) $ 1.42 $3.41 $4.51 Consolidated Statements of Cash Flows For the nine months ended September 30, 1997 1996 Cash Flows From Operating Activities: Net income $ 596,839 $ 738,774 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 589,322 890,415 Loss on sale of property 249,944 _ Increase (decrease) in cash arising from changes in operating assets and liabilities: Other assets 12,070 (3,513) Accounts payable and accrued expenses 244,259 352,225 Security deposits payable (41,257) 1,121 Due to affiliates (6,232) 240 Net cash provided by operating activities 1,644,945 1,979,262 Cash Flows From Investing Activities: Net proceeds from sale of properties 7,108,356 _ Additions to real estate (4,250) (63,655) Net cash provided by (used for) investing activities 7,104,106 (63,655) Cash Flows From Financing Activities: Distributions (1,601,376) (1,654,754) Net cash used for financing activities (1,601,376) (1,654,754) Net increase in cash and cash equivalents 7,147,675 260,853 Cash and cash equivalents, beginning of period 2,314,876 2,436,356 Cash and cash equivalents, end of period $ 9,462,551 $ 2,697,209 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 adjustments consisting of only normal recurring accruals which are, in the opinion of management, necessary to present a fair statement of financial position as of September 30, 1997 and the results of operations for the three and nine months ended September 30, 1997 and 1996, cash flows for the nine months ended September 30, 1997 and 1996 and the statement of partners' capital for the nine months ended September 30, 1997. Results of operations for the period are not necessarily indicative of the results to be expected for the full year. Certain prior year amounts have been reclassified to conform to the current year's presentation. The following significant events occurred subsequent to fiscal year 1996 which require disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5). On August 6, 1997, the Partnership sold River Hill Apartments to an unaffiliated institutional buyer for a sales price of $7,275,000. The Partnership received net proceeds from the sale totaling $7,108,356 and the transaction resulted in a loss of $249,944, which is reflected in the Partnership's consolidated statements of operations for the nine months ended September 30, 1997. On October 31, 1997, the General Partners paid a special distribution to Limited Partners representing the net proceeds from the sale. The Partnership has entered into a contract for the sale of Pelican Landing Apartments. Accordingly, Pelican Landing has been reclassified on the Partnership's balance sheet as "Property held for disposition" at its net book value. ConAm Property Services IV, Ltd. ("CPS IV") and RI 3-4 Real Estate Services, Inc. ("RI 3-4") have served as co-general partners of Hutton/ConAm Realty Investors 4, (the "Partnership") since its inception. On October 8, 1997, CPS IV acquired RI 3-4 Real Estate Services, Inc.'s co-general partner interest in the Partnership pursuant to a Purchase Agreement between CPS IV and RI 3-4 dated August 29, 1997. As a result, upon the closing of this transaction, CPS IV will now serve as the sole general partner of the Partnership. In conjunction with this transaction, the name of the Partnership has been changed from Hutton/ConAm Realty Investors 4 to ConAm Realty Investors 4, L.P. The purchase of RI 3-4's interest by CPS IV will not affect the Partnership's operations. See Part II, Item 5 contained herein for addition information. Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Given the performance of the Partnership's properties, and the improvement in the real estate capital markets which has increased demand by potential buyers, the General Partners determined that it is in the best interest of the Partnership to attempt to sell the remaining properties in an orderly manner over the next few years. However, meeting this objective will be dependent upon a variety of factors, many of which are not within the Partnership's control. Consequently, there can be no assurance that any specific property or all the properties can be sold, that particular prices will be achieved, or that all the properties can be sold within this time frame. We are pleased to report that the Partnership has entered into a contract for the sale of Pelican Landing. The sale is expected to close on or before December 31, 1997. Accordingly, Pelican Landing has been reclassified on the Partnership's balance sheet at September 30, 1997 as "Property held for disposition." While the General Partners believe that the sale will be completed, as is customary, the buyer has several opportunities to cancel the transaction during this period and accordingly, there is no guarantee that the sale will close. In keeping with this objective, on August 6, 1997 the Partnership sold River Hill Apartments to an unaffiliated institutional buyer for a sales price of $7,275,000. The Partnership received net proceeds from the sale totaling $7,108,356 and the transaction resulted in a loss of $249,944. At September 30, 1997, the Partnership had cash and cash equivalents of $9,462,551, which were invested in unaffiliated money market funds, compared with $2,314,876 at December 31, 1996. The increase is primarily attributable to net proceeds received on the sale of River Hill Apartments. The Partnership expects sufficient cash to be generated from operations to meet its current operating expenses. On October 31, 1997, the Partnership paid a special distribution to Limited Partners in the amount of $58.75 per Unit. A portion of this distribution, in the amount of $55 per Unit, represented the net proceeds from the sale of River Hill Apartments. The remaining $3.75 per Unit represented net cash flow from Partnership operations for the third quarter of 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. As a result of the sale of River Hill Apartments, future quarterly cash distributions will be reduced to reflect the corresponding reduction in the Partnership's cash flow. Accounts payable and accrued expenses increased from $108,269 at December 31, 1996 to $352,528 at September 30, 1997, primarily as a result of accruals for real estate taxes for the Partnership's remaining properties. Security deposits payable decreased from $144,220 at December 31, 1996 to $102,963 at September 30, 1997, primarily due to the sale of River Hill Apartments on August 6, 1997. Results of Operations Partnership operations for the three months ended September 30, 1997 resulted in a net loss of $71,992, compared with net income of $235,908 for the corresponding period in 1996. Partnership operations for the nine months ended September 30, 1997 resulted in net income of $596,839, compared with net income of $738,774 for the corresponding period in 1996. The changes for both periods are primarily attributable to lower rental income due to the sale of River Hill Apartments on August 6, 1997 and the loss on sale of the property of $249,944, which was partially offset by a decrease in depreciation expense due to River Hill Apartments no longer being depreciated following its reclassification as an asset held for disposition as of December 31, 1996. Net cash provided by operating activities was $1,644,945 for the nine months ended September 30, 1997, compared with $1,979,262 for the corresponding period in 1996. The decrease is primarily due to a decrease in rental revenues and an increase in property expenses, as well as the timing of payments of accrued expenses. Rental income for the three and nine months ended September 30, 1997 was $998,355 and $3,425,855, respectively, compared with $1,185,400 and $3,557,572 for the corresponding periods in 1996. The decreases are primarily due to the sale of River Hill Apartments, which was partially offset by higher rental revenues at Pelican Landing and Shadowood Village. At Village of the Foothills II, rental income remained relatively unchanged. Interest income for the three and nine months ended September 30, 1997 was $87,496 and $142,643, respectively, compared with $26,750 and $80,122 for the corresponding periods in 1996. The increases are primarily due to higher cash balances being maintained by the Partnership due to the receipt of proceeds from the sale of River Hill Apartments during the third quarter of 1997. Property operating expenses for the three and nine months ended September 30, 1997 totaled $675,756 and $1,994,347, respectively, compared to $624,697 and $1,877,876 for the corresponding periods in 1996. The increases for both periods are primarily attributable to increases in repair and maintenance expenses at Pelican Landing, Village at Foothills II and Shadowood Village, higher advertising expenses at Village at Foothills II and Shadowood Village and higher utilities costs at Shadowood Village during the 1997 periods. As a result of the reclassification of the River Hill property as held for disposition as of December 31, 1996 and the subsequent sale of the property on August 6, 1997, depreciation expense decreased from $293,002 and $890,415 for the three and nine months ended September 30, 1996, respectively, to $196,464 and $589,322 for the corresponding periods in 1997. General and administrative expenses for the three and nine months ended September 30, 1997 were $37,115 and $144,787, respectively, compared to $58,543 and $134,924 for the same periods in 1996. During 1997, certain Partnership expenses, which were voluntarily absorbed by affiliates of RI 3-4 Real Estate Services, Inc. in prior periods, were reimbursed to RI 3- 4 Real Estate Service, Inc. affiliates and will no longer be absorbed by these affiliates. The change for the three-month period is also attributable to lower legal, audit, printing and postage costs. The change for the nine-month period is also due to higher legal, appraisal and printing costs. During the first nine months of 1997 and 1996, average occupancy levels at each of the properties were as follows: Property 1997 1996 Pelican Landing 97% 97% Shadowood Village 93% 95% Village at the Foothills II 93% 94% Part II Other Information Items 1-4 Not applicable. Item 5 Other events. ConAm Property Services IV, Ltd. ("CPS IV") and RI 3-4 Real Estate Services, Inc. ("RI 3-4") have served as co-general partners of the Partnership since its inception. On October 8, 1997, CPS IV acquired RI 3-4's co-general partner interest in the Partnership pursuant to Purchase Agreement between CPS IV and RI 3-4 dated August 29, 1997. As a result, CPS IV will now serve as the sole general partner of the Partnership. In conjunction with this transaction, the name of the Partnership has been changed from Hutton/ConAm Realty Investors 4 to ConAm Realty Investors 4, L.P. The purchase of RI 3-4's interest by CPS IV will not affect the Partnership's operations. 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 three months ended September 30, 1997. On October 8, 1997, the Partnership filed a Form 8K reporting ConAm Property Services IV, Ltd.'s acquisition of the RI 3-4 Real Estate Services, Inc. co-general partner interest and the change in the name of the Partnership from Hutton/ConAm Realty Investors 4 to ConAm Realty Investors 4, L.P. 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. CONAM REALTY INVESTORS 4 L.P. CONAM PROPERTY SERVICES IV, Ltd General Partner BY: CONTINENTAL AMERICAN DEVELOPMENT, INC. General Partner Date: November 14, 1997 BY: /s/ Daniel J. Epstein Director, President, and Principal Executive Officer Date: November 14, 1997 BY: /s/ Robert J. Svatos Chief Financial Officer EX-27 2 FINANCIAL DATA SCHEDULE FOR THIRD QUARTER 10-Q CONAM REALTY INVESTORS 4, L.P. WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 9-mos Dec-31-1997 Sep-30-1997 9,462,551 000 000 000 000 000 15,735,982 5,447,126 25,201,833 8,049,544 000 000 000 000 17,152,289 25,201,833 000 3,575,239 000 1,994,347 734,109 000 000 596,839 000 596,839 000 000 000 3.41 3.41
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