<PAGE>
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 MAY 31, 1999
or
Transition Report Pursuant to Section 13 of 15(d) of the
- --------- Securities Exchange Act of 1934
For the transition period from ____ to ____
COMMISSION FILE NUMBER: 0-13330
CONAM REALTY PENSION INVESTORS L.P.
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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 Identification No.
Incorporation or Organization
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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<PAGE>
CONAM REALTY PENSION INVESTORS L.P.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
<TABLE>
<CAPTION>
BALANCE SHEETS AT MAY 31, AT NOVEMBER 30,
1999 1998
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<S> <C> <C>
ASSETS
Investment in real estate:
Property:
Land $ - $ 1,200,000
Buildings and improvements - 4,841,693
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- 6,041,693
Less accumulated depreciation - (220,567)
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- 5,821,126
Cash and cash equivalents 47,508 773,672
Other assets 245,104 318,255
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TOTAL ASSETS $ 292,612 $ 6,913,053
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses $ 142,593 $ 145,501
Due to general partner and affiliates - 4,539
Security deposits - 26,986
---------------------------------------------
Total Liabilities 142,593 177,026
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Partners' Capital (Deficit):
General Partner (171,273) 132,203
Limited Partners (96,490 Units outstanding) 321,292 6,603,824
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Total Partners' Capital 150,019 6,736,027
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 292,612 $ 6,913,053
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</TABLE>
See accompanying notes to the financial statements.
<PAGE>
CONAM REALTY PENSION INVESTORS L.P.
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MAY 31, SIX MONTHS ENDED MAY 31,
---------------------------------- -----------------------------------
1999 1998 1999 1998
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INCOME
Rental $ - $ 283,404 $ 177,185 $ 550,433
Mortgage interest - 23,011 - 133,525
Interest and other income 4,515 9,997 30,416 20,759
Loan modification fees - 4,334 - 13,898
-------------------------------------- ---------------------------------------------
Total Income 4,515 320,746 207,601 718,615
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EXPENSES
Property operating - 169,353 137,692 290,565
Depreciation - 48,170 235,308 96,170
General and administrative 42,340 72,431 73,305 104,836
-------------------------------------- ---------------------------------------------
Total Expenses 42,340 289,954 446,305 491,571
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Income (loss) from operations (37,825) 30,792 (238,704) 227,044
Gain on sale of property - - 2,000 -
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NET INCOME (LOSS) $ (37,825) $ 30,792 $ (236,704) $ 227,044
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NET INCOME (LOSS) ALLOCATED:
To the General Partner $ (1,755) $ 307 $ (378,476) $ 2,270
To the Limited Partners (36,070) 30,485 141,772 224,774
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NET INCOME (LOSS) $ (37,825) $ 30,792 $ (236,704) $ 227,044
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PER LIMITED PARTNERSHIP UNIT
(96,490 UNITS OUTSTANDING)
Income (loss) from operations $ (0.37) $ 0.32 $ 1.45 $ 2.33
Gain on sale of property - - 0.02 -
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NET INCOME (LOSS) $ (0.37) $ 0.32 $ 1.47 $ 2.33
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</TABLE>
STATEMENT OF PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED MAY 31,1999
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
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<S> <C> <C> <C>
BALANCE AT NOVEMBER 30, 1998 $ 132,203 $ 6,603,824 $ 6,736,027
Net Income (Loss) (378,476) 141,772 (236,704)
Capital contributions 102,303 - 102,303
Distributions ($66.58 per Limited Partner Unit) (27,303) (6,424,304) (6,451,607)
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BALANCE (DEFICIT) AT MAY 31, 1999 $ (171,273) $ 321,292 $ 150,019
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</TABLE>
See accompanying notes to the financial statements.
<PAGE>
CONAM REALTY PENSION INVESTORS L.P.
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MAY 31, 1999 1998
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (236,704) $ 227,044
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 235,308 96,170
Gain on sale of property (2,000) -
Increase (decrease) in cash arising from changes in operating assets
and liabilities:
Interest received - deferred, net - 449,350
Other assets 73,151 (460,989)
Accounts payable and accrued expenses (2,908) (48,666)
Due to general partner and affiliates (4,539) 219
Deferred income - loan modification fees - (897)
Security deposits (26,986) (954)
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Net cash provided by operating activities 35,322 261,277
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of property 5,639,649 -
Collection of mortgage loan receivable - 5,200,650
Additions to buildings and improvements (51,831) (16,989)
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Net cash provided by investing activities 5,587,818 5,183,661
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CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions 102,303 -
Distributions (6,451,607) (5,957,413)
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Net cash used in financing activities (6,349,304) (5,957,413)
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Net decrease in cash and cash equivalents (726,164) (512,475)
Cash and cash equivalents, beginning of period 773,672 1,029,577
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 47,508 $ 517,102
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</TABLE>
See accompanying notes to the financial statements.
<PAGE>
CONAM REALTY PENSION INVESTORS L.P.
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NOTES TO THE FINANCIAL STATEMENTS
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1998 audited financial statements within Form 10-K.
The unaudited interim financial statements include all normal and recurring
adjustments which are, in the opinion of management, necessary to present a
fair statement of financial position as of May 31, 1999 and the results of
operations for the three and six months ended May 31, 1999 and 1998, cash
flow for the six months ended May 31, 1999 and 1998, and the statement of
partners' capital for the six months ended May 31, 1999. Results of
operations are not necessarily indicative of the results to be expected for
the full year.
The Partnership has sold its remaining investment in real estate. The sale
and liquidation plan was approved by the Unitholders through a consent
solicitation statement as of January 15, 1999 and the sale of the property
was completed on January 29, 1999.
For assets sold or otherwise disposed of, the cost and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
reflected in net income for the period.
Within 30 days of the completion of the sale of the property, the Partnership
declared a cash distribution representing substantially all of the net
proceeds from sale and substantially all of the remaining cash form
operations of the Partnership less an amount for costs and contingencies
associated with the sale and liquidation of the Partnership.
No other significant events have occurred subsequent to fiscal year 1998, and
no material contingencies exist, which would require disclosure in this
interim report per Regulation S-X, Rule 10-01, Paragraph (a) (5).
<PAGE>
CONAM REALTY PENSION INVESTORS L.P.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
LIQUIDITY AND CAPITAL RESOURCES
On February 26, 1999, the Partnership declared a cash distribution in the
amounts of $6,424,304 to the Limited Partner Unitholders ($66.58 per Unit)
and $27,303 to the General Partner, which amounts were equal to substantially
all of the net proceeds from the sale of Oaktree Village (the "Sale"),
together with other available cash of the Partnership, less an amount for
costs associated with the Sale, liquidation of the Partnership and other
contingencies. As a result of the Sale and distribution, cash and cash
equivalents and other assets comprise all of the remaining assets of the
Partnership. The General Partner believes that the Partnership has sufficient
cash to meet the needs of the Partnership for any contingencies or costs
associated with the Sale and the final liquidation of the Partnership.
As a result of the Sale, the Partnership's only source of revenue prior to final
liquidation will be the interest generated on the remaining cash balances. The
remaining cash is invested in an unaffiliated highly liquid money market fund.
At May 31, 1999, the Partnership had cash and cash equivalents of $47,508
compared with $773,672 at November 30, 1998. The decrease in cash and cash
equivalents is due to the Sale of the property and the distribution of
substantially all of the net proceeds thereof and other Partnership cash and
subsequent reduction in revenue from the property operations. As required by the
Partnership agreement, upon final liquidation of the Partnership, the general
partner is to contribute $275,825 ("GP Contribution") to the Partnership, which
represents distributions of net proceeds from Sale or refinancing previously
received by the general partner. During the second quarter of fiscal 1999,
$102,303 of the GP Contribution was contributed to the Partnership. Remaining
cash available, if any, after the contribution by the General Partner and the
satisfaction of all Partnership obligations will be distributed pursuant to the
Partnership agreement.
RESULTS OF OPERATIONS
Partnership net loss for the three and six months ended May 31, 1999 was
$37,825 and $236,704, respectively, compared to net income of $30,792 and
$227,044 for the corresponding periods in fiscal 1998. The increased loss for
the three and six months ended May 31, 1999 is primarily attributable to the
lack of income due to the Sale of the property and the reduction in interest
income as a result of the repayment of the mortgage loan receivable in fiscal
1998.
Total income for the three and six months ended May 31, 1999 totaled $4,515 and
$207,601, respectively, compared with $320,746 and $718,615, respectively, for
the corresponding period in fiscal 1998. The decreased total income is primarily
attributable to the decrease in rental income attributable to the Sale on
January 29, 1999, and decrease in interest income as a result of the repayment
of the mortgage loan receivable.
Total expenses for the three and six months ended May 31, 1999 were $42,340 and
$446,305, respectively, compared to $289,954 and $491,571, respectively, for the
corresponding periods in fiscal 1998. The decrease in total expenses is
primarily attributable to the Sale on January 29, 1999.
General and administrative expenses for the three and six months ended May 31,
1999 were $42,340 and $73,305, respectively, compared to $72,431 and $104,836,
respectively, for the corresponding periods in fiscal 1998. The decrease in
general and administrative expenses is primarily attributable to lower fees
charged for printing, mailing and investor relations.
<PAGE>
YEAR 2000
Due to the consummation of the Sale, the Partnership is no longer engaged in the
operation of real property or any other business. As a result of the foregoing,
and in view of the General Partner's plan to complete the full liquidation of
the Partnership prior to January 1, 2000, the Partnership has no exposure to
Year 2000 issues.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risks
Due to the consummation of the Sale, the Partnership has no exposure to interest
rate risk. In addition, the Partnership is expected to be liquidated during
1999.
PART II - OTHER INFORMATION
ITEMS 1-5. Not applicable
ITEM 6. Exhibits & Reports on Form 8-K
(a) Exhibits
3.1 Amendment, dated January 18, 1999 to Partnership's Second
Amended and Restated Certificate and Agreement of Limited
Partnership (included as, and incorporated herein by
reference to, Exhibit 4.1 to the Partnership's Report on
Form 8-K filed on February 16, 1999).
10.1 Agreement for Purchase and Sale and Joint Escrow
Instructions between ConAm Realty Pension Investors L.P. and
DOC Investors, L.L.C. dated January 26, 1999 with respect to
the sale of Oaktree Village Apartments (included as, and
incorporated herein by reference to, Exhibit 10.1 to the
Partnership's Report on Form 8-K filed on February 16,
1999).
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
May 31, 1999.
(27) Financial Data Schedule
<PAGE>
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 hereunto duly authorized.
CONAM PROPERTY SERVICES III, LTD.
General Partner of ConAm Realty Pension
Investors L.P.
BY: CONTINENTAL AMERICAN DEVELOPMENT, INC.
GENERAL PARTNER
Date: July 13, 1999 BY: /s/ DANIEL J. EPSTEIN
------------------------------------------
Daniel J. Epstein
Director, President, and Principal
Executive Officer
Date: July 13, 1999 BY:/s/ ROBERT J. SVATOS
------------------------------------------
Robert J. Svatos
Vice President and Director
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> MAY-31-1999
<CASH> 47,508
<SECURITIES> 0
<RECEIVABLES> 245,104
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 292,612
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 292,612
<CURRENT-LIABILITIES> 142,593
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 150,019
<TOTAL-LIABILITY-AND-EQUITY> 292,612
<SALES> 177,185
<TOTAL-REVENUES> 207,601
<CGS> 0
<TOTAL-COSTS> 137,692
<OTHER-EXPENSES> 308,613
<LOSS-PROVISION> 2,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (236,704)
<INCOME-TAX> 0
<INCOME-CONTINUING> (236,704)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (236,704)
<EPS-BASIC> 1.47
<EPS-DILUTED> 1.47
</TABLE>
