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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 MARCH 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: 0-13329
CONAM REALTY INVESTORS 4 L.P.
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EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
California 11-2685746
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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 92110-1906
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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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CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
PART 1 - FINANCIAL INFORMATION
ITEM 1. Financial Statements
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CONSOLIDATED BALANCE SHEETS AT MARCH 31, AT DECEMBER 31,
1999 1998
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<S> <C> <C>
ASSETS
Investments in real estate:
Land $ - $ 2,153,239
Buildings and improvements - 11,023,211
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- 13,176,450
Less accumulated depreciation - (5,968,023)
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- 7,208,427
Cash and cash equivalents 482,298 1,403,143
Other assets 5,751 160,534
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TOTAL ASSETS $488,049 $ 8,772,104
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LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses 188,185 239,393
Due to General Partner - 6,853
Security deposits - 34,109
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Total Liabilities 188,185 280,355
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Partners' Capital:
General Partner 35,552 -
Limited Partners (128,110 Units
outstanding) 264,312 8,491,749
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Total Partners' Capital 299,864 8,491,749
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $488,049 $ 8,772,104
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SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
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<TABLE>
<CAPTION>
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CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 1998
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<S> <C> <C>
INCOME
Rental $ 115,938 $408,274
Interest and other 47,175 63,583
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Total Income 163,113 471,857
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EXPENSES
Property operating 141,887 261,981
Depreciation 17,623 105,701
General and administrative 42,904 59,604
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Total Expenses 202,414 427,286
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Income (loss) from operations (39,301) 44,571
Gain on sale of properties 1,939,570 -
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NET INCOME $1,900,269 $ 44,571
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NET INCOME ALLOCATED:
To the General Partner $ 127,439 $ 14,234
To the Limited Partners 1,772,830 30,337
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NET INCOME $1,900,269 $ 44,571
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PER LIMITED PARTNERSHIP UNIT
(128,110 UNITS OUTSTANDING)
Income (loss) from operations $ (0.30) $ 0.24
Gain on sale of properties 14.14 -
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NET INCOME $ 13.84 $ 0.24
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<TABLE>
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CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE THREE MONTHS ENDED MARCH 31, 1999
GENERAL LIMITED
PARTNER PARTNERS TOTAL
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<S> <C> <C> <C>
BALANCE AT DECEMBER 31, 1998 $ - $ 8,491,749 $ 8,491,749
Net income 127,439 1,772,830 1,900,269
Distributions ($78.06 per Unit) (91,887) (10,000,267) (10,092,154)
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BALANCE AT MARCH 31, 1999 $ 35,552 $ 264,312 $ 299,864
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</TABLE>
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
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<CAPTION>
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CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 1998
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,900,269 $ 44,571
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 17,623 105,701
Gain on sale of properties (1,939,570) -
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Other assets 154,783 (6,500)
Accounts payable and accrued expenses (127,522) 36,250
Due to General Partner (6,853) (8,752)
Security deposits (34,109) 941
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Net cash provided by (used in) operating activities (35,379) 172,211
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CASH FLOWS FROM INVESTING ACTIVITIES-
net proceeds from sale of properties 9,206,688 -
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CASH FLOWS FROM FINANCING ACTIVITIES-
distributions (10,092,154) (13,729,122)
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Net decrease in cash and cash equivalents (920,845) (13,556,911)
Cash and cash equivalents, beginning of period 1,403,143 15,150,595
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 482,298 $ 1,593,684
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</TABLE>
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The unaudited interim consolidated financial statements should be read in
conjunction with the Partnership's annual 1998 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 March 31, 1999 and
the results of operations and cash flows for the three months ended March 31,
1999 and 1998 and the consolidated statement of partners' capital for the
three months ended March 31, 1999. Results of operations are not necessarily
indicative of the results to be expected for the full year.
The Partnership sold its remaining investments 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 properties 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 properties, the
Partnership declared a cash distribution representing substantially all of
the net proceeds from sale and substantially all of the remaining cash from
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 the year ended
December 31, 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 INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
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 cash distributions in the
amounts of $10,000,267 to the Limited Partner Unitholders ($78.06 per Unit)
and $91,887 to the General Partner, which amounts represent substantially all
of the net proceeds from the sale (the "Sale" ) of the Partnership's
remaining investments in real estate ("Properties") together with other
available cash from operations of the Partnership less an amount for costs
associated with the liquidation of the Partnership and other contingencies.
As a result of the Sale of the remaining Properties, the 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 March 31, 1999, the Partnership had cash and cash equivalents of $482,298
compared with $1,403,143 at December 31, 1998. The decrease in cash and cash
equivalents is due to the distribution of the proceeds from the Sale and cash
from operations. The General Partner believes that the Partnership has
sufficient cash to meet the needs of the Partnership for any contingencies or
costs associated with Sale and the final liquidation of the Partnership.
Remaining cash available, if any, after the satisfaction of all Partnership
obligations will be distributed pursuant to the Partnership agreement.
RESULTS OF OPERATIONS
Partnership net income for the three months ended March 31, 1999 was
$1,900,269 compared to $44,571 for the corresponding period in 1998. The
increase for the three months ended March 31, 1999 is primarily attributable
to the gain on the Sale.
For the three months ended March 31, 1999, the Partnership generated
operating losses of $39,301 compared to operating income of $44,571 for the
corresponding period in 1998. Rental income totaled $115,938 for the three
months ended March 31, 1999 compared with $408,274 for the corresponding
period in 1998. Partnership expenses for the three months ended March 31,
1999 totaled $202,414 compared with $427,286 for the corresponding period in
1998. For the three months ended March 31, 1999, the decreased income from
operations, rental income and partnership expenses are primarily attributable
to the Sale on January 29, 1999.
YEAR 2000
Due to the consummation of the Sale in January 1999, the Partnership is no
longer engaged in the operation of real properties 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
Since the Partnership sold its remaining Properties on January 29, 1999 and
has no interest-bearing indebtedness, the Partnership has no exposure to
interest rate risk. In addition, the Partnership is expected to be liquidated
during 1999.
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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 all of the Partnership's remaining
real estate investments 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 64,056
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 - 69,717 Units "FOR;"
1,953 Units "AGAINST;" and 733 Units "ABSTAIN;" and (ii) with
respect to the Amendment - 68,418 Units "FOR;" 2,983 Units
"AGAINST;" and 1,027 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 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 Village at the Foothills (Phase II) Joint Venture Limited
Partnership and Doc Investors, L.L.C. dated January 26, 1999 with
respect to the Sale of Village at the Foothills II & III
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).
10.2 Agreement for Purchase and Sale and Joint Escrow Instructions
between Shadowood Village, Ltd. and Doc Investors, L.L.C. dated
January 26, 1999 with respect to Shadowood Village Apartments
(included as, and incorporated herein by reference to,
Exhibit 10.2 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
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consummation of the sale of all of its real property investments
on January 29, 1999 to DOC Investors, L.L.C. No other reports on
Form 8-K were filed during the quarter ended March 31, 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 IV, LTD.
General Partner of ConAm Realty Investors 4 L.P.
BY: CONTINENTAL AMERICAN DEVELOPMENT, INC.
GENERAL PARTNER
Date: May 14, 1999 BY: /s/ DANIEL J. EPSTEIN
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Daniel J. Epstein
Director, President, and Principal
Executive Officer
Date: May 14, 1999 BY: /s/ ROBERT J. SVATOS
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Robert J. Svatos
Vice President and Director
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<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 482,298
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 488,049
<CURRENT-LIABILITIES> 188,185
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 299,864
<TOTAL-LIABILITY-AND-EQUITY> 488,049
<SALES> 115,938
<TOTAL-REVENUES> 163,113
<CGS> 0
<TOTAL-COSTS> 141,887
<OTHER-EXPENSES> 60,527
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,900,269
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,900,269
<EPS-PRIMARY> 13.84
<EPS-DILUTED> 13.84
</TABLE>
