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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, 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
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New York 11-2673854
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<S> <C>
STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION I.R.S. EMPLOYER 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
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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 L.P.
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
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BALANCE SHEETS AT FEBRUARY 28, 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 6,432,006 773,672
Other assets 273,451 318,255
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TOTAL ASSETS $ 6,705,457 $ 6,913,053
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Distribution payable $ 6,451,607 $ -
Accounts payable and accrued expenses 168,309 145,501
Due to general partner and affiliates - 4,539
Security deposits - 26,986
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Total Liabilities 6,619,916 177,026
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Partners' Capital (Deficit):
General Partner (271,821) 132,203
Limited Partners (96,490 Units outstanding) 357,362 6,603,824
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Total Partners' Capital 85,541 6,736,027
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 6,705,457 $ 6,913,053
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
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CONAN REALTY PENSION INVESTORS L.P.
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STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1999 1998
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<S>
INCOME <C> <C>
Rental $ 177,185 $ 267,029
Mortgage interest - 110,514
Interest and other income 25,901 10,762
Loan modification fees - 9,564
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Total Income 203,086 397,869
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EXPENSES
Property operating 137,692 121,212
Depreciation 235,308 48,000
General and administrative 30,965 32,405
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Total Expenses 403,965 201,617
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Income (loss) from operations (200,879) 196,252
Gain on sale of property 2,000 -
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NET INCOME (LOSS) $ (198,879) $ 196,252
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NET INCOME (LOSS) ALLOCATED:
To the General Partner $ (376,721) $ 1,963
To the Limited Partners 177,842 194,289
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NET INCOME (LOSS) $ (198,879) $ 196,252
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PER LIMITED PARTNERSHIP UNIT
(96,490 UNITS OUTSTANDING)
Income (loss) from operations $ 1.82 $ 2.01
Gain on sale of property 0.02 -
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NET INCOME $ 1.84 $ 2.01
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STATEMENT OF PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED FEBRUARY 28,1999
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) (376,721) 177,842 (198,879)
Distributions ($66.58 per Unit) (27,303) (6,424,304) (6,451,607)
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BALANCE (DEFICIT) AT FEBRUARY 28, 1999 $ (271,821) $ 357,362 $ 85,541
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
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STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (198,879) $ 196,252
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation 235,308 48,000
Gain on sale of property (2,000) -
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Other assets 44,804 (11,334)
Accounts payable and accrued expenses 22,808 (47,407)
Due to general partner and affiliates (4,539) 190
Deferred income - loan modification fees - 3,437
Security deposits (26,986) (1,239)
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Net cash provided by operating activities 70,516 187,899
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CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of property 5,639,649 -
Additions to buildings and improvements (51,831) (16,989)
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Net cash provided by (used in) investing activities 5,587,818 (16,989)
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CASH FLOWS FROM FINANCING ACTIVITIES-
Distributions - (253,921)
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Net increase (decrease) in cash and cash equivalents 5,658,334 (83,011)
Cash and cash equivalents, beginning of period 773,672 1,029,577
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 6,432,006 $ 946,566
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SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS.
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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 February 28, 1999
and the results of operations and cash flows for the three months ended
February 28, 1999 and 1998 and the statement of partners' capital for the
three months ended February 28, 1999. Results of operations are not
necessarily indicative of the results to be expected for the full year.
The Partnership agreed on a price to sell its remaining asset in December
1998, but did not have the ability to sell the property until a majority of
the Unitholders approved the sale on January 15, 1999. Therefore, additional
depreciation expense was recorded during the period the property was held for
use to reduce its carrying value to its estimated net selling price.
The Partnership 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
assets 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).
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CONAM REALTY PENSION INVESTORS L.P.
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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. Immediately following this distribution, and the collection of
interest earned on the undistributed cash and cash equivalents, the
Partnership had a cash and cash equivalents balance of $29,051. The General
Partner believes that the Partnership has sufficient cash and other assets
that can be converted into cash to meet the obligations 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 February 28, 1999, the Partnership had cash and cash equivalents of
$6,432,006 compared with $773,672 at November 30, 1998. The increase in cash and
cash equivalents is due to the receipt of the proceeds from the Sale. Remaining
cash available after all obligations have been satisfied, if any, will be
distributed to the Unitholders.
RESULTS OF OPERATIONS
Partnership net income (loss) for the three months ended February 28, 1999 was
($198,879) compared to $196,252, for the corresponding period in 1998. The
decrease for the three months ended February 28, 1999 is primarily attributable
to an increase in depreciation prior to Oaktree Village being presented as "Held
for Sale" and collection of interest on the Park View Village mortgage in the
first quarter of 1998.
Partnership operations for the three months ended February 28, 1999 generated
net loss of $200,879 compared to net income of $196,252 for the corresponding
period in fiscal 1998. The decrease for the three months ended February 28,
1999 is primarily attributable to a decrease in revenue resulting from the
Sale, an increase in depreciation of $187,308 and a decrease in mortgage
interest income of $110,514.
Rental income totaled $177,185 for the three months ended February 28, 1999
compared with $267,029 for the corresponding period in fiscal 1998. Partnership
expenses for the three months ended February 28, 1999 totaled $403,965 compared
with $201,617 for the corresponding period in 1998. The decrease for the three
months ended February 28, 1999 in rental income and Partnership expenses is
primarily attributable to the Sale.
YEAR 2000
Due to the consummation of the Sale in January 1999, 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.
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ITEM 3. Quantitative and Qualitative Disclosures About Market Risks
Since the Partnership sold its remaining property on January 29, 1999, 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 1-3. Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
Pursuant to a Consent Solicitation Statement dated December
16, 1998, the Unitholders were asked to approve two
proposals as follows: (i) the sale of the Partnership's
remaining real estate investment to DOC Investors, L.L.C.
(the "Sale"); and (ii) an amendment to the Partnership's
partnership agreement to permit sales of Partnership
properties to affiliates of the General Partner if the
terms of the sale are approved by the Unitholders (the
"Amendment"). By its terms, the consent solicitation was to
terminate on January 15, 1999, unless such date was
extended by the General Partner for an aggregate of up to
an additional 40 days. Since both the Sale and the
Amendment were approved by the requisite
majority-in-interest of the Unitholders (i.e., at least
48,246 Units) as of January 15, 1999, the consent
solicitation terminated on such date. Upon termination of
the consent solicitation, the results of the consent
solicitation were as follows: (i) With respect to the Sale
- 51,595 Units "FOR;" 1,582 Units "AGAINST;" and 762 Units
"ABSTAIN;" and (ii) with respect to the Amendment - 51,320
Units "FOR;" 1,744 Units "AGAINST;" and 875 Units
"ABSTAIN." The foregoing results do not include any votes
received after the termination of the consent solicitation.
ITEM 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
On February 16, 1999, the Partnership filed a Form 8-K for
the purpose of disclosing the consummation of the sale of
its remaining real property investment on January 29, 1999
to DOC Investors, L.L.C. No other reports on Form 8-K were
filed during the quarter ended February 28, 1999.
(27) Financial Data Schedule
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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: April 14, 1999 BY:/s/ DANIEL J. EPSTEIN
Daniel J. Epstein
Director, President, and Principal Executive Officer
Date: April 14, 1999 BY:/s/ ROBERT J. SVATOS
Robert J. Svatos
Vice President and Director
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
DATA SCHEDULE FOR THE FIRST QUARTER 10-Q CONAM REALTY PENSION INVESTORS L.P.
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 6,432,006
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 273,451
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 6,705,457
<CURRENT-LIABILITIES> 6,619,916
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 85,541
<TOTAL-LIABILITY-AND-EQUITY> 6,705,457
<SALES> 177,185
<TOTAL-REVENUES> 203,086
<CGS> 0
<TOTAL-COSTS> 137,692
<OTHER-EXPENSES> 266,273
<LOSS-PROVISION> 2,000
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (198,879)
<INCOME-TAX> 0
<INCOME-CONTINUING> (198,879)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (198,879)
<EPS-PRIMARY> 1.84
<EPS-DILUTED> 1.84
</TABLE>
