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: 0-10223
HUTTON/CONAM REALTY INVESTORS 81
(Exact name of registrant as specified in its charter)
California 13-3069026
(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 $ 5,255,820 $ 5,255,820
Buildings and improvements 28,473,477 28,473,477
33,729,297 33,729,297
Less- accumulated depreciation (14,160,285) (13,875,550)
19,569,012 19,853,747
Cash and cash equivalents 1,679,180 1,535,391
Restricted cash 671,166 659,076
Mortgage fees, net of accumulated amortization
of $224,611 in 1995 and $202,797 in 1994 386,200 408,014
Other assets 25,658 41,055
Total Assets $ 22,331,216 $ 22,497,283
Liabilities and Partners' Capital
Liabilities:
Mortgages payable $ 15,565,367 $ 15,601,031
Distribution payable 173,978 173,978
Accounts payable and accrued expenses 260,095 183,869
Security deposits 134,180 141,408
Due to general partners and affiliates 32,596 44,814
Total Liabilities 16,166,216 16,145,100
Partners' Capital (Deficit):
General Partners (1,334,445) (1,316,915)
Limited Partners 7,499,445 7,669,098
Total Partners' Capital 6,165,000 6,352,183
Total Liabilities and
Partners' Capital $ 22,331,216 $ 22,497,283
Consolidated Statement of Partners' Capital (Deficit)
For the three months ended March 31, 1995
General Limited
Partners Partners Total
Balance at January 1, 1995 $ (1,316,915) $ 7,669,098 $ 6,352,183
Net loss (132) (13,073) (13,205)
Cash distributions (17,398) (156,580) (173,978)
Balance at March 31, 1995 $ (1,334,445) $ 7,499,445 $ 6,165,000
See accompanying notes to the consolidated financial statements
Consolidated Statements of Operations
For the three months ended March 31, 1995 and 1994
Income 1995 1994
Rental $ 1,228,790 $ 1,162,104
Interest 23,807 11,407
Total Income 1,252,597 1,173,511
Expenses
Property operating 590,414 546,039
Interest 330,067 332,953
Depreciation and amortization 306,549 306,796
General and administrative 38,772 46,252
Total Expenses 1,265,802 1,232,040
Net Loss $ (13,205) $ (58,529)
Net Loss Allocated:
To the General Partners $ (132) $ (585)
To the Limited Partners (13,073) (57,944)
$ (13,205) $ (58,529)
Per limited partnership unit
(78,290 outstanding) $ (.17) $ (.74)
See accompanying notes to the consolidated financial statements
Consolidated Statements of Cash Flows
For the three months ended March 31, 1995 and 1994
Cash Flows from Operating Activities: 1995 1994
Net loss $ (13,205) $ (58,529)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 306,549 306,796
Increase (decrease) in cash arising from changes
in operating assets and liabilities:
Fundings to restricted cash (161,509) (149,609)
Release of restricted cash to property operations 149,419 133,694
Other assets 15,397 14,041
Accounts payable and accrued expenses 76,226 (7,341)
Security deposits (7,228) (4,921)
Due to general partners and affiliates (12,218) (2,950)
Net cash provided by operating activities 353,431 231,181
Cash Flows from Financing Activities:
Distributions (173,978) (173,978)
Mortgage principal payments (35,664) (32,778)
Net cash used for financing activities (209,642) (206,756)
Net increase in cash and cash equivalents 143,789 24,425
Cash and cash equivalents at beginning of period 1,535,391 1,418,054
Cash and cash equivalents at end of period $ 1,679,180 $ 1,442,479
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $ 330,067 $ 332,953
See accompanying notes to the consolidated financial statements
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 (deficit) 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 and cash equivalents of $1,679,180,
which were invested in unaffiliated money market funds. The $143,789 increase
in the cash balance from December 31, 1994 was the result of the Partnership's
generating cash flow from operations in excess of cash distributions and
mortgage principal payments. The Partnership also maintains a restricted cash
balance, which totaled $671,166 at March 31, 1995, composed of escrows required
by the lender for property improvements, real estate taxes, and insurance.
Pursuant to the terms of the loans, as costs are incurred for property
improvements or when real estate taxes and insurance are due, reimbursements
are made from the escrow accounts maintained by the lender to the Partnership.
The General Partners expect sufficient cash to be generated from operations to
meet the Partnership's current operating expenses and debt service
requirements.
Accounts payable and accrued expenses were $260,095 at March 31, 1995 compared
to $183,869 at December 31, 1994. The increase is primarily due to the accrual
of first quarter real estate taxes.
The General Partners have been in extensive negotiations with an institutional
buyer to sell Kingston Village and Cedar Bay Village. The General Partners
expect to execute a sales contract in the very near future with the objective
of closing the sale early in the third quarter. However, there can be no
assurance that the sale will be completed or that any particular price for the
properties can be obtained. In the event that a sale is completed, the General
Partners intend to distribute the net proceeds following a review of the
Partnership's cash reserve requirements.
The General Partners declared a cash distribution of $2.00 per Unit for the
quarter ended March 31, 1995, paid to investors on May 16, 1995. Cumulative
cash distributions have totaled $371.15 per $500 Unit including $200 per Unit
in return of capital payments. The level and timing of future distributions
will be reviewed on a quarterly basis by the General Partners.
Results of Operations
Partnership operations for the three months ended March 31, 1995 resulted in a
net loss of $13,205 compared with a net loss of $58,529 for the three months
ended March 31, 1994. After adding back depreciation and amortization, both
noncash expenses, and subtracting mortgage amortization, operations generated
cash flow of $257,680 for the three months ended March 31, 1995, compared with
cash flow of $215,489 for the corresponding period in 1994. The decrease in
net loss and higher cash flow in 1995 is primarily attributable to an increase
in rental income.
Rental income for the three months ended March 31, 1995 and 1994, was
$1,228,790 and $1,162,104, respectively. The 6% increase in 1995 reflects
higher rental income at all the Partnership's properties, particularly at the
Las Colinas property, due primarily to rental rate increases implemented over
the past year. Interest income totaled $23,807 and $11,407 for the three
months ended March 31, 1995 and 1994, respectively. The increase was due to
the Partnership's higher cash balance and higher interest rates in 1995.
Total expenses for the three months ended March 31, 1995 and 1994 were
$1,265,802 and $1,232,040, respectively. Property operating expenses increased
from $546,039 in 1994 to $590,414 in 1995, reflecting higher repair and
maintenance and rental administrative expenses primarily at the Las Colinas
property. All other expense components remained in line with 1994 levels.
The average occupancy levels at each of the Properties for the three months
ended March 31, 1995 and 1994 were as follows:
Three Months Ended March 31,
Property 1995 1994
Las Colinas I & II 96% 97%
Tierra Catalina 95% 97%
Ridge Park 93% 94%
Kingston Village 97% 96%
Cedar Bay Village 98% 91%
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 81
BY: RI81 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