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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 FEBRUARY 28, 1998
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: 0-13330
CONAM REALTY PENSION INVESTORS
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formerly known as
HUTTON/CONAM REALTY PENSION INVESTORS
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EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
New York 11-2673854
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STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION IDENTIFICATION NO.
1764 San Diego Avenue
San Diego, Ca. 92110 Attn. Robert J. Svatos 92110-1906
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ADDRESS OF PRINCIPAL EXECUTIVE OFFICES ZIP CODE
(619)-297-6771
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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
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CONAM REALTY PENSION INVESTORS
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<TABLE>
<CAPTION>
BALANCE SHEETS AT FEBRUARY 28, AT NOVEMBER 30,
1998 1997
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<S> <C> <C>
ASSETS
Investments in real estate:
Properties:
Land $ 1,200,000 $ 1,200,000
Buildings and improvements 4,816,989 4,800,000
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6,016,989 6,000,000
Less accumulated depreciation (75,943) (27,943)
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5,941,046 5,972,057
Mortgage loan investment 5,200,650 5,200,650
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11,141,696 11,172,707
Cash and cash equivalents 946,566 1,029,577
Interest receivable - deferred, net of valuation allowance
of $1,399,890 in 1998 and 1997 449,350 449,350
Other assets 64,838 53,504
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TOTAL ASSETS $ 12,602,450 $ 12,705,138
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Distribution payable $ - $ 253,921
Accounts payable and accrued expenses 136,581 183,988
Due to general partner and affiliates 4,529 4,339
Deferred income - loan modification fees 4,334 897
Security deposits 32,386 33,625
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Total Liabilities 177,830 476,770
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Partners' Capital:
General Partner 188,584 186,621
Limited Partners (96,490 Units outstanding) 12,236,036 12,041,747
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Total Partners' Capital 12,424,620 12,228,368
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 12,602,450 $ 12,705,138
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</TABLE>
See accompanying notes to the financial statements.
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CONAM REALTY PENSION INVESTORS
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<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the three months ended February 28, 1998 1997
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<S> <C> <C>
INCOME
Rental $ 267,029 $ 667,948
Mortgage interest 110,514 205,613
Interest and other income 10,762 19,005
Loan modification fees 9,564 5,131
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Total Income 397,869 897,697
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EXPENSES
Property operating 121,212 321,218
Provision for losses - 205,613
Depreciation 48,000 42,196
General and administrative 32,405 61,651
Total Expenses 201,617 630,678
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NET INCOME $ 196,252 $ 267,019
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NET INCOME ALLOCATED:
To the General Partner $ 1,963 $ 15,039
To the Limited Partners 194,289 251,980
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$ 196,252 $ 267,019
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PER LIMITED PARTNERSHIP UNIT
(96,490 UNITS OUTSTANDING) $ 2.01 $ 2.61
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</TABLE>
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STATEMENT OF PARTNERS' CAPITAL
For the three months ended February 28, 1998
<TABLE>
<CAPTION>
General Limited
Partner Partners Total
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<S> <C> <C> <C>
BALANCE AT NOVEMBER 30, 1997 $ 186,621 $ 12,041,747 $ 12,228,368
Net income 1,963 194,289 196,252
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BALANCE AT FEBRUARY 28, 1998 $ 188,584 $ 12,236,036 $ 12,424,620
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</TABLE>
See accompanying notes to the financial statements.
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CONAM REALTY PENSION INVESTORS
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<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
For the three months ended February 28, 1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 196,252 $ 267,019
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for losses - 205,613
Depreciation 48,000 42,196
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Interest receivable - (205,613)
Other assets (11,334) -
Accounts payable and accrued expenses (47,407) (177,732)
Due to general partner and affiliates 190 (38)
Deferred income - loan modification fees 3,437 (5,131)
Security deposits (1,239) (3,237)
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Net cash provided by operating activities 187,899 123,077
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CASH FLOWS FROM INVESTING ACTIVITIES -
Additions to buildings and improvements (16,989) -
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CASH FLOWS FROM FINANCING ACTIVITIES -
Distributions (253,921) (507,842)
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Net decrease in cash and cash equivalents (83,011) (384,765)
Cash and cash equivalents, beginning of period 1,029,577 1,818,059
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 946,566 $ 1,433,294
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</TABLE>
See accompanying notes to the financial statements.
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CONAM REALTY PENSION INVESTORS
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NOTES TO THE FINANCIAL STATEMENTS
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1997 audited financial statements within Form 10-K.
The unaudited interim 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 February 28, 1998 and the results
of operations and cash flows for the three months ended February 28, 1998 and
1997 and the statement of partners' capital for the three months ended
February 28, 1998. Results of operations for the periods are not necessarily
indicative of the results to be expected for the full year.
The following significant event has occurred subsequent to November 30, 1997,
which would require disclosure in this interim report per Regulation S-X, Rule
10-01, Paragraph (a) (5).
On March 19, 1998 ConAm Realty Pension Investors received $5,673,011 as final
payment in full of its mortgage loan and interest receivable, from Southridge
Partners I, a New York limited partnership. This payment included all
principal($5,200,650) and interest ($472,361) due in accordance with the loan
modification agreement.
On March 19, 1998, the general partner declared a special cash distribution of
$58.00 per Unit regarding the proceeds received from the repayment of the above
mortgage loan investment. The distribution was paid on March 27, 1998.
<PAGE>
CONAM REALTY PENSION INVESTORS
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At February 28, 1998, the Partnership's investment portfolio included a loan to
Southridge Partners I which was secured by ParkView Village Apartments. The
unpaid principal and interest on this loan, net of a valuation allowance,
totaled $5,650,000 at February 28, 1998. It was paid in full on March 19,
1998.
At February 28, 1998, the Partnership had cash and cash equivalents of $946,566
which were invested in unaffiliated money market funds, compared with
$1,029,577 at November 30, 1997. The decrease in cash and cash equivalents
reflects cash distributions to partners and additions to buildings and
improvements exceeding cash provided by operating activities during
the first quarter of fiscal 1998.
On March 19, 1998, the General Partner declared a special cash distribution of
the proceeds received from the payment of the mortgage loan and interest
receivable from Southridge Partners I. The distribution was $58.00 per Unit
and was paid on March 27, 1998. The General Partner 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 months ended February 28, 1998 generated
net income of $196,252 compared with net income of $267,019 for the
corresponding period in fiscal 1997. The decrease for the three month period
is primarily attributable to reduced rental income resulting from the sales of
two properties, Bryn Athyn and Chaparosa Apartments, in September, 1997 and
August, 1997, respectively.
Rental income totaled $267,029 for the three months ended February 28, 1998
compared with $667,948 for the corresponding period in fiscal 1997. The
decrease for the three month period is due to the net effect of the sale of
Bryn Athyn and Chaparosa Apartments and the acquisition through a deed in lieu
of foreclosure of Oaktree Village Apartments in September, 1997.
Mortgage interest income, net of provision for losses of $0 and $205,613,
respectively, totaled $110,514 for the three months ended February 28, 1998
compared with $0 for the corresponding period in fiscal 1997. The
increase is attributable to the collection of interest income earned on the
Partnership's mortgage loan investment during the current period.
Property operating expenses for the three months ended February 28, 1998
totaled $121,212 compared with $321,218 for the corresponding period in fiscal
1997. The decrease is primarily attributable to the net effect resulting from
the sales of Bryn Athyn and Chaparosa Apartments, and the acquisition through a
deed in lieu of foreclosure of Oaktree Village Apartments.
During the first three months of fiscal 1998 and 1997, average occupancy levels
at the Partnership's properties and at the properties securing the
Partnership's equity participating loans were as follows:
<TABLE>
<S> <C> <C>
Investments in Real Estate 1998 1997
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Oaktree Village Apartments 94% -
Bryn Athyn Apartments - 97%
Chaparosa Apartments - 97%
Mortgage Loan Investments
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Park View Village Apartments 92% 97%
Oaktree Village Apartments - 92%
</TABLE>
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CONAM REALTY PENSION INVESTORS
PART II OTHER INFORMATION
ITEMS 1-5 Not applicable
ITEMS 6 Exhibits and reports on Form 8-K
(a) Exhibits -
(27) Financial Data Schedule
(b) Reports on Form 8-K
On December 15, 1997 ConAm Realty Pension Investors filed a Form 8-K
(amended on December 17, 1997 by Form 8-K/A) regarding its change of
auditors from Coopers & Lybrand L.L.P. to KPMG Peat Marwick LLP.
There were no disagreements with Coopers & Lybrand on any matters of
accounting principles or practices, financial statement disclosure,
or auditing scope procedure.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<RESTATED>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> NOV-30-1997
<PERIOD-END> FEB-28-1998
<CASH> 946,566
<SECURITIES> 0
<RECEIVABLES> 1,849,240
<ALLOWANCES> 1,399,890
<INVENTORY> 0
<CURRENT-ASSETS> 64,838
<PP&E> 6,016,989
<DEPRECIATION> 75,943
<TOTAL-ASSETS> 12,602,450
<CURRENT-LIABILITIES> 177,830
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 12,424,620
<TOTAL-LIABILITY-AND-EQUITY> 12,602,450
<SALES> 267,029
<TOTAL-REVENUES> 397,869
<CGS> 0
<TOTAL-COSTS> 121,212
<OTHER-EXPENSES> 80,405
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 196,252
<INCOME-TAX> 0
<INCOME-CONTINUING> 196,252
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 196,252
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
