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 March 31, 1995
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
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
incorporation or organization) Identification No.)
3 World Financial Center, 29th Floor, New York, NY 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
March 31, December 31,
Assets 1995 1994
Investments in real estate:
Land $ 12,088,984 $ 12,088,984
Buildings and improvements 48,374,995 48,236,772
60,463,979 60,325,756
Less- accumulated depreciation (19,394,175) (18,896,846)
41,069,804 41,428,910
Cash and cash equivalents 3,993,348 3,234,383
Other assets 25,101 22,527
Total Assets $ 45,088,253 $ 44,685,820
Liabilities and Partners' Capital
Liabilities:
Mortgage payable $ 5,040,508 $ 5,051,086
Security deposits 281,399 288,335
Accounts payable and accrued expenses 352,409 137,009
Due to general partners and affiliates 43,778 54,369
Total Liabilities 5,718,094 5,530,799
Partners' Capital:
General Partners 0 0
Limited Partners 39,370,159 39,155,021
Total Partners' Capital 39,370,159 39,155,021
Total Liabilities and
Partners' Capital $ 45,088,253 $ 44,685,820
Consolidated Statements of Operations
For the three months ended March 31, 1995 and 1994
Income 1995 1994
Rental $ 1,927,525 $ 1,884,885
Interest 43,193 11,170
Total Income 1,970,718 1,896,055
Expenses
Property operating 1,086,744 956,643
Depreciation 497,329 508,630
Interest 127,767 128,781
General and administrative 43,740 49,591
Total Expenses 1,755,580 1,643,645
Net income $ 215,138 $ 252,410
Net Income Allocated:
To the General Partners $ 0 $ 179,459
To the Limited Partners 215,138 72,951
$ 215,138 $ 252,410
Per limited partnership unit
(128,110 outstanding) $ 1.68 $ .57
Consolidated Statement of Partners' Capital
For the three months ended March 31, 1995
General Limited
Partners Partners Total
Balance at January 1, 1995 $ 0 $ 39,155,021 $ 39,155,021
Net income 0 215,138 215,138
Balance at March 31, 1995 $ 0 $ 39,370,159 $ 39,370,159
Consolidated Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net income $ 215,138 $ 252,410
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 497,329 508,630
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Other assets (2,574) (39)
Security deposits (6,936) (534)
Accounts payable and accrued expenses 215,400 205,572
Due to general partners and affiliates (10,591) (12,053)
Net cash provided by operating activities 907,766 953,986
Cash Flows from Investing Activities:
Additions to real estate (138,223) 0
Net cash used for investing activities (138,223) 0
Cash Flows from Financing Activities:
Mortgage principal payments (10,578) (9,563)
Distributions 0 (640,550)
Net cash used for financing activities (10,578) (650,113)
Net increase in cash and cash equivalents 758,965 303,873
Cash and cash equivalents at beginning of period 3,234,383 2,201,276
Cash and cash equivalents at end of period $ 3,993,348 $ 2,505,149
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 127,767 $ 128,781
Notes to the Consolidated Financial Statements
The unaudited interim financial statements should be read in conjunction with
the Partnership's annual 1994 financial statements within Form 10-K.
The unaudited financial statements include all adjustments which are, in the
opinion of management, necessary to present a fair statement of financial
position as of March 31, 1995 and the results of operations and cash flows for
the three months ended March 31, 1995 and 1994 and the statement of changes in
partners' capital for the three months ended March 31, 1995. Results of
operations for the periods are not necessarily indicative of the results to be
expected for the full year.
No significant events have occurred subsequent to fiscal year 1994, which
require disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part 1, Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Liquidity and Capital Resources
At March 31, 1995, the Partnership had cash of $3,993,348 which was invested in
unaffiliated money market funds, compared with $3,234,383 at December 31, 1994.
The increase is primarily attributable to net cash from operations exceeding
capital improvement expenditures and mortgage principal payments. The
Partnership expects sufficient cash flow to be generated from operations to
meet its current operating expenses and debt service requirements.
The promissory note secured by a mortgage on the Trails at Meadowlakes matures
on July 19, 1995, at which time the Partnership will be required to pay
$5,025,984 to the mortgage lender. The General Partners have determined that
refinancing the property's mortgage loan is not the most attractive option at
this time. Furthermore, as a result of improving market conditions, the
General Partners have begun marketing some of the properties, and have had
extensive negotiations with an institutional buyer to sell Trails at
Meadowlakes and Cypress Lakes. The General Partners expect to enter into a
sales contract in the very near future with the objective of closing the sales
before July 19, 1995. However, there can be no assurance that the sales will
be completed or that any particular price for the properties can be obtained.
Should a sale of one or both of these properties close prior to the July 19,
1995 maturity date, net sale proceeds will first be applied to repay the loan
and the ba lance will be distributed to the Limited Partners as a return of
capital. In addition, the General Partners would evaluate distributing the
reserves which have been accumulated as a result of suspending distributions
commencing in the third quarter of 1994. Distributions were suspended due to
the upcoming maturity of the mortgage loan secured by the Trails at Meadowlakes
property. If a sale does not occur or closes after July 19, 1995, the General
Partners expect to use approximately $3 million of the Partnership's reserves
to partially repay the loan, and repay the $2 million balance from cash flow
and/or sale proceeds.
Accounts payable and accrued expenses were $352,409 at March 31, 1995, compared
with $137,009 at December 31, 1994. The increase reflects the accrual of real
estate taxes for the first three months of 1995.
Results of Operations
Net income for the three month periods ended March 31, 1995 and 1994 totalled
$215,138 and $252,410, respectively. After adding back depreciation, a
non-cash expense, and subtracting mortgage amortization, operations generated
cash flow of $701,889 and $751,477 for the three months ended March 31, 1995
and 1994, respectively. The decrease in net income and cash flow is primarily
attributable to an increase in property operating expenses, partially offset by
an increase in rental and interest income.
Rental income for the three month periods ended March 31, 1995 and 1994
totalled $1,927,525 and $1,884,885, respectively. The 2% increase in 1995
reflects higher revenues at five of the Partnership's six properties due to
rental rate increases instituted during the past year. Interest income for the
three month periods ended March 31, 1995 and 1994 totalled $43,193 and $11,170,
respectively. The increase in 1995 is due primarily to higher interest rates
and higher cash balances as a result of the suspension of cash distributions
beginning in the third quarter of 1994.
Total expenses for the three month periods ended March 31, 1995 and 1994
totalled $1,755,580 and $1,643,645, respectively. The increase in 1995
reflects higher property operating expenses including repairs and maintenance,
utilities, insurance and advertising. All other components of total expenses
remained relatively in line with 1994 levels.
For the three-month periods ended March 31, 1995 and 1994, average occupancy
levels at each of the properties were as follows:
Three Months Ended
March 31,
Property 1995 1994
Cypress Lakes Apartments 95% 98%
Pelican Landing 97% 98%
River Hill Apartments 95% 96%
Shadowood Village 95% 95%
Trails at MeadowLakes 97% 98%
Village at the Foothills II 95% 97%
PART II OTHER INFORMATION
Items 1-5 Not applicable
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits - None
(b) Reports on Form 8-K - No reports on Form 8-K were filed during
the three month period covered by this report.
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 4
BY: RI 3-4 REAL ESTATE SERVICES, INC.
General Partner
Date: May 12, 1995
BY: /s/Paul L. Abbott
Name: Paul L. Abbott
Title: Director, President, Chief
Executive Officer and Chief
Financial Officer
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<PERIOD-END> MAR-31-1995
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