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, 1996
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
Incorporation or Organizanization I.R.S. Employer 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 March 31, At December 31,
1996 1995
Assets
Investments in real estate:
Land $7,526,126 $7,526,126
Buildings and improvements 26,235,802 26,226,602
33,761,928 33,752,728
Less accumulated depreciation (9,257,041) (8,958,549)
24,504,887 24,794,179
Cash and cash equivalents 2,457,887 2,436,356
Other assets 16,206 16,206
Total Assets $26,978,980 $27,246,741
Liabilities and Partners' Capital
Liabilities:
Distribution payable $533,791 $ 587,171
Accounts payable and accrued expenses 270,844 168,831
Due to affiliates 34,774 32,209
Security deposits 141,921 143,040
Total Liabilities 981,330 931,251
Partners' Capital:
General Partners ------ ------
Limited Partners 25,997,650 26,315,490
Total Partners' Capital 25,997,650 26,315,490
Total Liabilities and Partners'Capital $26,978,980 $27,246,741
Consolidated Statement of Partners' Capital
For the three months ended March 31, 1996
Limited General
Partners Partners Total
Balance at December 31, 1995 $26,315,490 $ ------ $26,315,490
Net Income 162,572 53,379 215,951
Distributions (480,412) (53,379) (533,791)
Balance at March 31, 1996 $25,997,650 $ ------ $25,997,650
Consolidated Statements of Operations
For the three months ended March 31, 1996 1995
Income
Rental $1,181,149 $1,927,525
Interest 27,331 43,193
Total Income 1,208,480 1,970,718
Expenses
Property operating 645,762 1,086,744
Depreciation 298,492 497,329
Interest ------ 127,767
General and administrative 48,275 43,740
Total Expenses 992,529 1,755,580
Net Income $215,951 $215,138
Net Income Allocated:
To the General Partners $53,379 $ ------
To the Limited Partners 162,572 215,138
$215,951 $215,138
Per limited partnership unit
(128,110 outstanding) $ 1.27 $ 1.68
Consolidated Statements of Cash Flows
For the three months ended March 31, 1996 1996 1995
Cash Flows From Operating Activities:
Net income $215,951 $215,138
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 298,492 497,329
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Other assets ------ (2,574)
Accounts payable and accrued expenses 102,013 215,400
Security deposits (1,119) (6,936)
Due to affiliates 2,565 (10,591)
Net cash provided by operating activities 617,902 907,766
Cash Flows From Investing Activities:
Additions to real estate (9,200) (138,223)
Net cash used for investing activities (9,200) (138,223)
Cash Flows From Financing Activities:
Mortgage principal payments ------ (10,578)
Distributions (587,171) ------
Net cash used for financing activities (587,171) (10,578)
Net increase in cash and cash equivalents 21,531 758,965
Cash and cash equivalents, beginning of period 2,436,356 3,234,383
Cash and cash equivalents, end of period $2,457,887 $3,993,348
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ ------ $127,767
Notes to the Consolidated Financial Statements
The unaudited interim consolidated financial statements should be
read in conjunction with the Partnership's annual 1995 audited
consolidated financial statements within Form 10-K.
The unaudited consolidated 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,
1996 and the results of operations and cash flows for the three
months ended March 31, 1996 and 1995 and the statement of
partner's capital for the three months ended March 31, 1996.
Results of operations for the period are not necessarily
indicative of the results to be expected for the full year.
No significant events have occurred subsequent to fiscal year
1995, and no material contingencies exist which would require
disclosure in this interim report per Regulation S-X, Rule 10-01,
Paragraph (a)(5).
Part I, Item 2 . Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
At March 31, 1996, the Partnership had cash and cash equivalents
of $2,457,887, which were invested in unaffiliated money market
funds, relatively unchanged from the balance at December 31,
1995. The Partnership expects sufficient cash to be generated
from operations to meet its current operating expenses and debt
service requirements.
Accounts payable increased from $168,831 at December 31, 1995 to
$270,844 at March 31, 1996 primarily as a result of accruals for
real estate taxes for all four properties.
During 1996, the General Partners are implementing an improvement
program at Pelican Landing and Shadowood Village to upgrade these
properties. This program, which includes exterior painting and
landscaping at Pelican Landing and interior improvements at both
Pelican Landing and Shadowood Village, is intended to protect the
properties' positions within their respective markets, which are
growing increasingly competitive with the addition of new
apartment properties, and position the properties for increases
in revenue and market value. These improvements will be funded
from the Partnership's cash reserves.
The General Partners declared a cash distribution of $3.75 per
Unit for the quarter ended March 31, 1996 which will be paid to
investors on or about May 15, 1996. The level of future
distributions will be evaluated on a quarterly basis and will
depend on the Partnership's operating results and future cash
needs. It is anticipated that cash from reserves may be required
to fund a portion of the distributions during 1996, as a result
of the required property improvements discussed above.
Given favorable market conditions, particularly in the Irving,
Texas area, the General Partners have engaged a commercial real
estate broker to market River Hill Apartments for sale. There
can be no assurances that a sale will be completed or that any
particular price for the property can be obtained.
Results of Operations
Partnership operations for the three months ended March 31, 1996,
resulted in net income of $215,951, virtually unchanged from net
income of $215,138 in the first quarter of 1995 as a decline in
rental income was offset by a reduction in property operating
expenses. Net cash provided by operating activities was $617,902
for the three months ended March 31, 1996, a decrease from
$907,766 for the same period in 1995. The decrease primarily was
attributable to the sale of Trails at Meadowlakes and Cypress
Lakes in July 1995.
Rental income for the three months ended March 31, 1996 was
$1,181,149 compared with $1,927,525 in the first quarter of 1995.
The decrease reflects the sale of Trails at Meadowlakes and
Cypress Lakes, and was partially offset by increases in rental
income at the four remaining properties primarily as a result of
increased rental rates.
Property operating expenses and depreciation and amortization
were lower in the first quarter of 1996 compared to the same
period in 1995 due to the July 1995 sale of Trails at Meadowlakes
and Cypress Lakes. Interest expense also was eliminated due to
the repayment of the mortgage secured by Trails at Meadowlakes at
the time the property was sold. During the first three months of
1996 and 1995, average occupancy levels at each of the properties
were as follows:
Property 1996 1995
Pelican Landing 98% 97%
River Hill Apartments 95% 95%
Shadowood Village 95% 95%
Village at the Foothills II 95% 95%
Part II Other Information
Items 1-5 Not applicable.
Item 6 Exhibits and reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K - On March 15, 1996, based
upon, among other things, the advice of Partnership
counsel, Skadden, Arps, Slate, Meagher & Flom, the
General Partners adopted a resolution that states,
among other things, if a Change of Control (as defined
below) occurs, the General Partners may distribute the
Partnership's cash balances not required for its
ordinary course day-to-day operations. "Change of
Control" means any purchase or offer to purchase more
than 10% of the Units that is not approved in advance
by the General Partners. In determining the amount of
the distribution, the General Partners may take into
account all material factors. In addition, the
Partnership will not be obligated to make any
distribution to any partner and no partner will be
entitled to receive any distribution until the General
Partners have declared the distribution and established
a record date and distribution date for the
distribution. The Partnership filed a Form 8-K
disclosing this resolution on March 21, 1996.
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 13, 1996 BY: /s/ Paul L. Abbott
Director, President,
Chief Executive Officer and
Chief Financial Officer
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<PERIOD-END> Mar-31-1996
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<NET-INCOME> 215,951
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