-----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, L8mI7b8bp1Ft5mrVjvLrWTnaKTl3xbqil5wo6zWbeZto1A7b8fe2m2xW7Zkux0km Ntsepu2qFf0bWxTKAKx3Ww== 0000928790-97-000162.txt : 19971016 0000928790-97-000162.hdr.sgml : 19971016 ACCESSION NUMBER: 0000928790-97-000162 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 5 CENTRAL INDEX KEY: 0000761310 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 112712111 STATE OF INCORPORATION: CA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14341 FILM NUMBER: 97696119 BUSINESS ADDRESS: STREET 1: 3 EORLD FINANCIAL CENTER STREET 2: 29 TH FL 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: 0-014341 HUTTON/CONAM REALTY INVESTORS 5 Exact Name of Registrant as Specified in its Charter California 11-2712111 State or Other Jurisdiction I.R.S. Employer of 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 At August 31, At November 30, 1997 1996 Assets Investments in real estate: Land $ 3,780,687 $ 3,780,687 Buildings and improvements 22,125,028 22,125,028 25,905,715 25,905,715 Less accumulated depreciation (10,687,560) (10,055,068) 15,218,155 15,850,647 Property held for disposition --- 3,687,584 Cash and cash equivalents 1,726,684 2,121,544 Restricted cash 363,061 225,415 Other assets, net of accumulated amortization of $123,738 in 1997 and $99,528 in 1996 136,884 167,504 Total Assets $17,444,784 $22,052,694 Liabilities and Partners' Capital Liabilities: Mortgage payable $ 6,214,353 $ 6,299,052 Distribution payable 351,981 439,974 Accounts payable and accrued expenses 504,599 309,475 Due to general partners and affiliates 16,032 19,613 Security deposits 93,946 129,482 Total Liabilities 7,180,911 7,197,596 Partners' Capital: General Partners 168,513 182,637 Limited Partners (57,490 units outstanding) 10,095,360 14,672,461 Total Partners' Capital 10,263,873 14,855,098 Total Liabilities and Partners' Capital $17,444,784 $22,052,694 Consolidated Statement of Partners' Capital For the nine months ended August 31, 1997 General Limited Partners Partners Total Balance at November 30, 1996 $182,637 $14,672,461 $14,855,098 Net income 6,995 2,609,149 2,616,144 Cash distributions (21,119) (7,186,250) (7,207,369) Balance at August 31, 1997 $168,513 $10,095,360 $10,263,873 Consolidated Statements of Operations Three months ended Nine months ended August 31, August 31, 1997 1996 1997 1996 Income Rental $ 930,876 $1,187,558 $2,767,817 $3,521,196 Interest and other 28,981 27,885 112,664 78,047 Total Income 959,857 1,215,443 2,880,481 3,599,243 Expenses Property operating 685,518 494,462 1,700,215 1,555,927 Depreciation and amortization 218,900 263,491 656,702 808,623 Interest 120,776 122,916 363,968 370,265 General and administrative 32,914 50,631 126,093 118,019 Total Expenses 1,058,108 931,500 2,846,978 2,852,834 Income (Loss) from operations (98,251) 283,943 33,503 746,409 Gain on sale of property --- --- 2,582,641 --- Net Income (Loss) $(98,251) $283,943 $2,616,144 $ 746,409 Net Income (Loss) Allocated: To the General Partners $ 143 $ 7,240 $ 6,995 $ 20,663 To the Limited Partners (98,394) 276,703 2,609,149 725,746 $(98,251) $283,943 $2,616,144 $ 746,409 Per limited partnership unit (57,490 outstanding) Income (loss) from operations $(1.71) $4.81 $ .46 $12.62 Gain on sale of property --- --- 44.92 --- $(1.71) $4.81 $45.38 $12.62 Consolidated Statements of Cash Flows For the nine months ended August 31, 1997 1996 Cash Flows From Operating Activities: Net income $2,616,144 $ 746,409 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 656,702 808,623 Gain on sale of property (2,582,641) --- Increase (decrease) in cash arising from changes in operating assets and liabilities: Fundings to restricted cash (137,646) (127,608) Other assets 6,410 8,653 Accounts payable and accrued expenses 195,124 49,600 Due to general partners and affiliates (3,581) 10,930 Security deposits (35,536) (513) Net cash provided by operating activities 714,976 1,496,094 Cash Flows From Investing Activities: Net proceeds from sale of property 6,270,225 --- Additions to real estate --- (288,766) Net cash provided by (used for) investing activities 6,270,225 (288,766) Cash Flows From Financing Activities: Distributions (7,295,362) (1,319,923) Mortgage principal payments (84,699) (78,401) Net cash used for financing activities (7,380,061) (1,398,324) Net decrease in cash and cash equivalents (394,860) (190,996) Cash and cash equivalents, beginning of period 2,121,544 2,253,221 Cash and cash equivalents, end of period $1,726,684 $2,062,225 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for interest $ 363,968 $ 370,265 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 and the consolidated statements of cash flows and partners' capital 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. On August 29, 1997 ConAm Property Services IV, Ltd. ("CPS IV"), a co-general partner of the Partnership, executed a contract to acquire RI 5 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. The following significant event has occurred subsequent to fiscal year 1996, which requires disclosure in this interim report per Regulation S-X, Rule 10-01, Paragraph (a)(5): Sale of Property On December 10, 1996, the Partnership closed on the sale of Canterbury Park Apartments ("Canterbury Park"). Canterbury Park sold for $6,387,300 to Burcam Capital I, L.L.C., a North Carolina limited liability company (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 transaction resulted in a gain on sale for Canterbury Park of $2,582,641, which is reflected in the Partnership's consolidated statements of operations for the nine months ended August 31, 1997. On January 24, 1997, the General Partners paid a special distribution of $6,151,430, representing the net proceeds from the sale of Canterbury Park, to the Limited Partners. 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 $1,726,684 which were invested in unaffiliated money market funds, compared with $2,121,544 at November 30, 1996. The decrease reflects mortgage principal payments and cash distributions to Partners exceeding proceeds from the December 1996 sale of Canterbury Park and cash provided by operating activities during the first nine months of fiscal 1997. The Partnership's restricted cash balance totaled $363,061 at August 31, 1997, compared to $225,415 at November 30, 1996. The increase is primarily attributable to contributions made to an escrow account for the purpose of funding real estate taxes as required under the terms of the Lakeview Village mortgage. Accounts payable and accrued expenses totaled $504,599 at August 31, 1997, compared to $309,475 at November 30, 1996. The increase is primarily attributable to North Carolina state withholding tax requirements relating to the special distribution paid to the Limited Partners from the sale proceeds of Canterbury Park. The sale of Canterbury Park is also the primary reason for the decrease in the Partnership's security deposits and due to general partners and affiliates balances at August 31, 1997, compared to the amount of such balances at November 30, 1996. The General Partners declared a regular cash distribution of $6 per Unit for the quarter ended August 31, 1997 which will be paid to investors on or about October 22, 1997. The General Partners will determine the amount of future quarterly distributions based on the Partnership's available cash flow and future cash needs. Results of Operations Partnership operations for the three and nine months ended August 31, 1997 generated a net loss of $98,251 and net income of $2,616,144, respectively, compared with net income of $283,943 and $746,409, respectively, for the corresponding periods in fiscal 1996. The increase for the nine month period is primarily attributable to the gain on the sale of Canterbury Park. Income (loss) from operations for the three and nine months ended August 31, 1997 was $(98,251) and $33,503, respectively, compared with $283,943 and $746,409, respectively, for the corresponding periods in fiscal 1996. The decrease is primarily due to the sale of Canterbury Park and the corresponding reduction in rental income and, to a lesser extent, an increase in repairs and maintenance expense at Lakeview Village, and a decline in occupancy at Lakeview Village, resulting in decreased rental income at the property. Rental income totaled $930,876 and $2,767,817 for the three and nine months ended August 31, 1997, compared with $1,187,558 and $3,521,196, respectively, for the corresponding periods in fiscal 1996, down primarily as a result of the sale of Canterbury Park on December 10, 1996, and a decline in occupancy at Lakeview Village. Interest and other income totaled $28,981 and $112,664, respectively, for the three and nine months ended August 31, 1997 compared with $27,885 and $78,047, respectively, for the corresponding periods in fiscal 1996. The increase for the nine- month period is primarily due to an increase in the Partnership's average cash balance due to the sale of Canterbury Park. Property operating expenses for the three and nine months ended August 31, 1997 totaled $685,518 and $1,700,215, respectively, compared with $494,462 and $1,555,927, respectively, for the corresponding periods in fiscal 1996. The increases for both periods are primarily attributable to an increase in repairs and maintenance at Lakeview Village primarily as a result of roof repairs. The sale of Canterbury Park is the primary reason for the decrease in depreciation and amortization expense for the three and nine months ended August 31, 1997, which totaled $218,900 and $656,702, respectively, compared to $263,491 and $808,623, respectively, for the corresponding periods in fiscal 1996. General and administrative expenses for the three and nine months ended August 31, 1997 were $32,914 and $126,093, respectively, compared to $50,631 and $118,019, respectively, for the same periods in 1996. The decrease for the three-month period is primarily attributable to a decrease in audit fees and the timing of accruals during the 1996 period of certain administrative and professional fees. The increase for the nine-month period is primarily attributable to the reimbursement of certain expenses incurred by an unaffiliated third party service provider in servicing the Partnership, which were voluntarily absorbed by affiliates of RI 5 Real Estate Services Inc. in prior periods. During the 1997 periods, such expenses were reimbursed to RI 5 Real Estate Services Inc. and its affiliates. During the first nine months of fiscal 1997 and 1996, average occupancy levels at the Partnership's properties were as follows: Property 1997 1996 The Hamptons at Quail Hollow 96% 96% Lakeview Village 89% 97% Part II Other Information Items 1-4 Not applicable. Item 5 Other Information ConAm Property Services IV, Ltd. ("CPS IV") and RI 5 Real Estate Services Inc.'s ("RI 5") have served as co- general partners of the Partnership since its inception. On August 29, 1997, CPS IV executed a contract to acquire RI 5'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 5 BY: RI 5 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 5 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 9-mos Nov-30-1997 August-31-1997 1,726,684 000 000 000 000 000 25,905,715 10,687,560 17,444,784 966,558 6,214,353 000 000 000 10,263,873 17,444,784 2,767,817 2,880,481 000 1,700,215 782,795 000 363,968 2,616,144 000 000 000 000 000 2,616,144 45.38 45.38
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