<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 JUNE 30,1998
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: 0-13329
CONAM REALTY INVESTORS 4 L.P.
-----------------------------
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
CALIFORNIA 11-2685746
---------- ----------
STATE OR OTHER JURISDICTION OF I.R.S. EMPLOYER IDENTIFICATION NO.
INCORPORATION OR ORGANIZATION
1764 San Diego Avenue
San Diego, Ca Attn. Robert J. Svatos 92110-1906
- ------------------------------------- ----------
Address of Principal Executive Offices Zip Code
(619) 297-6771
--------------
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
---- ----
<PAGE>
CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
AT JUNE 30, AT DECEMBER 31,
1998 1997
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in real estate:
Land $ 2,153,239 $ 2,153,239
Buildings and improvements 11,015,879 11,015,879
----------- -----------
13,169,118 13,169,118
Less accumulated depreciation (5,764,229) (5,552,827)
----------- -----------
7,404,889 7,616,291
Cash and cash equivalents 1,556,646 15,150,595
Other assets 45,361 3,300
- --------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 9,006,896 $22,770,186
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses 174,096 144,530
Distribution payable 142,344 13,729,122
Due to General Partner 6,609 15,471
Security deposits 36,437 35,573
----------- -----------
Total Liabilities 359,486 13,924,696
----------- -----------
Partners' Capital:
General Partner - -
Limited Partners (128,110 units outstanding) 8,647,410 8,845,490
----------- -----------
Total Partners' Capital 8,647,410 8,845,490
- --------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 9,006,896 $22,770,186
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------------
INCOME
<S> <C> <C> <C> <C>
Rental $405,666 $1,219,739 $813,940 $2,427,500
Interest and other 21,830 28,057 85,413 60,452
--------------------------------------------------------
Total Income 427,496 1,247,796 899,353 2,487,952
- ------------------------------------------------------------------------------------------------------------------
EXPENSES
Property operating 224,735 682,385 486,716 1,318,591
Depreciation 105,701 196,465 211,402 392,858
General and administrative 55,022 49,523 114,626 107,672
--------------------------------------------------------
Total Expenses 385,458 928,373 812,744 1,819,121
- ------------------------------------------------------------------------------------------------------------------
NET INCOME $ 42,038 $319,423 $ 86,609 $ 668,831
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
NET INCOME ALLOCATED:
To the General Partner $ 14,235 $ 53,380 $ 28,469 $ 106,759
To the Limited Partners 27,803 266,043 58,140 562,072
- ------------------------------------------------------------------------------------------------------------------
NET INCOME $ 42,038 $319,423 $ 86,609 $ 668,831
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
PER LIMITED PARTNERSHIP UNIT
(128,110 UNITS OUTSTANDING)
NET INCOME $ 0.22 $2.08 $ 0.45 $ 4.39
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
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CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1998
<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 $ - $8,845,490 $8,845,490
Net income 28,469 58,140 86,609
Distributions ($2.00 per Unit) (28,469) (256,220) (284,689)
- ----------------------------------------------------------------------------------------------
BALANCE AT JUNE 30, 1998 $ - $8,647,410 $8,647,410
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1998 1997
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 86,609 $ 668,831
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 211,402 392,858
Increase (decrease) in cash arising from changes in
operating assets and liabilities:
Other assets (42,061) 2,135
Accounts payable and accrued expenses 29,566 232,596
Due to General Partner (8,862) 1,798
Security deposits 864 (267)
---------------------------
Net cash provided by operating activities 277,518 1,297,951
- ----------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES-
Additions to real estate - (4,251)
- ----------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES-
Distributions (13,871,467) (1,067,584)
- ----------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (13,593,949) 226,116
Cash and cash equivalents, beginning of period 15,150,595 2,314,876
- ----------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,556,646 $ 2,540,992
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
- -------------------------------------------------------------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited interim consolidated financial statements should be read in
conjunction with the Partnership's annual 1997 audited consolidated financial
statements within Form 10-K.
The unaudited interim consolidated 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 June 30, 1998 and the
results of operations and cash flows for the three and six months ended June
30, 1998 and 1997 and the consolidated statement of partners' capital for the
six months ended June 30, 1998. Results of operations are not necessarily
indicative of the results to be expected for the full year.
No significant events have occurred subsequent to the year ended December 31,
1997, 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 INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
- -------------------------------------------------------------------------------
PART I, ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Partnership had cash and cash equivalents of $1,556,646
which were invested in money market funds, compared with $15,150,595 at December
31, 1997. The decrease reflects a special cash distribution on January 21, 1998
of $103.00 per Unit from the net proceeds of the sale of Pelican Landing . The
Partnership expects sufficient cash to be generated from operations to meet its
current operating expenses.
The General Partner declared a regular cash distribution of $1.00 per Unit for
the quarter ended June 30, 1998 which will be paid in August, 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 and six months ended June 30, 1998
generated net income of $42,038 and $86,609, respectively, compared with net
income of $319,423 and $668,831 for the corresponding periods in 1997. The
decrease for the three and six month periods is primarily attributable to
reduced rental revenue partially offset by reduced property operating expenses
due to the sales of River Hill Apartments on August 6, 1997 and Pelican Landing
on December 30, 1997. Rental income for the three and six months ended June 30,
1998 was $405,666 and $813,940, respectively, compared with $1,219,739 and
$2,427,500, respectively, for the corresponding periods in 1997. The decrease is
primarily due to the sales of properties as described above.
Interest and other income totaled $21,830 and $85,413, respectively, for the
three and six months ended June 30, 1998 compared with $28,057 and $60,452,
respectively, for the corresponding periods in 1997. The increase for the
six month period is primarily due to higher cash equivalent balances in the
first quarter of 1998, related to the undistributed proceeds from the sale of
Pelican Landing in December, 1997. The decrease for the three month period
ended June 30, 1998 is attributable to the lower cash equivalent balances
following the distribution of those proceeds during the first quarter of 1998.
Property operating expenses for the three and six months ended June 30, 1998
totaled $224,735 and $486,716, respectively, compared with $682,385 and
$1,318,591, respectively, for the corresponding periods in 1997. The decrease
is primarily attributable to a decrease in property operating expenses
associated with the sales of the two properties. The property operating
expenses for the two remaining properties, Shadowood Village and Village at the
Foothills II were relatively stable between the two periods.
The occupancy rates for the two remaining properties, Shadowood Village and
Village at the Foothills II have increased from the same period in 1997,
reflecting favorable economic conditions in Arizona and Florida.
During the first six months of 1998 and 1997, average occupancy levels at the
Partnership's properties were as follows:
<TABLE>
<CAPTION>
PROPERTY 1998 1997
------------------------------------------------------
<S> <C> <C>
Shadowood Village 97% 93%
Village at the Foothills II 94% 93%
------------------------------------------------------
</TABLE>
<PAGE>
CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
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 - No reports on Form 8-K were filed during
the quarter ended June 30, 1998.
<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 IV, LTD.
General Partner of ConAm Realty Investors 4 L.P.
BY: CONTINENTAL AMERICAN DEVELOPMENT, INC.
GENERAL PARTNER
Date: July 30, 1998 BY: /s/ DANIEL J. EPSTEIN
---------------------------------
Daniel J. Epstein
Director, President, and Principal Executive Officer
Date: July 30, 1998 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> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,556,646
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 13,169,118
<DEPRECIATION> 5,764,229
<TOTAL-ASSETS> 9,006,896
<CURRENT-LIABILITIES> 359,486
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,647,410
<TOTAL-LIABILITY-AND-EQUITY> 9,006,896
<SALES> 813,940
<TOTAL-REVENUES> 899,353
<CGS> 0
<TOTAL-COSTS> 486,716
<OTHER-EXPENSES> 326,028
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 86,609
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 86,609
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.45
</TABLE>
