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 February 28, 1997
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: 0-014341
HUTTON/CONAM REALTY INVESTORS 5
Exact Name of Registrant as Specified in its Charter
California
State or Other Jurisdiction of 11-2712111
Incorporation or Organization 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 February 28, At November 30,
1997 1996
Assets
Investments in real estate:
Land $ 3,780,687 $ 3,780,687
Buildings and improvements 22,125,028 22,125,028
25,905,715 25,905,715
Less accumulated depreciation (10,265,899) (10,055,068)
15,639,816 15,850,647
Property held for disposition _ 3,687,584
Cash and cash equivalents 2,047,353 2,121,544
Restricted cash 265,732 225,415
Other assets, net of accumulated
amortization of $107,598 in 1997 and
$99,528 in 1996 147,156 167,504
Total Assets $ 18,100,057 $ 22,052,694
Liabilities and Partners' Capital
Liabilities:
Mortgage payable $ 6,271,363 $ 6,299,052
Distribution payable 351,980 439,974
Accounts payable and accrued expenses 312,758 309,475
Due to general partners and affiliates 15,190 19,613
Security deposits 106,422 129,482
Total Liabilities 7,057,713 7,197,596
Partners' Capital:
General Partners 179,866 182,637
Limited Partners (57,490 units
outstanding) 10,862,478 14,672,461
Total Partners' Capital 11,042,344 14,855,098
Total Liabilities and Partners'
Capital $18,100,057 $ 22,052,694
Consolidated Statement of Partners' Capital
For the three months ended February 28, 1997
General Limited
Partners Partners Total
Balance at November 30, 1996 $ 182,637 $ 14,672,461 $14,855,098
Net income 4,269 2,686,387 2,690,656
Cash distributions (7,040) (6,496,370) (6,503,410)
Balance at February 28, 1997 $ 179,866 $ 10,862,478 $11,042,344
Consolidated Statements of Operations
For the three months ended February 28 and February 29, 1997 1996
Income
Rental $ 952,545 $ 1,167,533
Interest and other 61,842 26,455
Total Income 1,014,387 1,193,988
Expenses
Property operating 525,504 550,558
Depreciation and amortization 218,901 273,855
Interest 121,866 123,925
General and administrative 40,101 35,114
Total Expenses 906,372 983,452
Income from operations 108,015 210,536
Gain on sale of property 2,582,641 _
Net Income $2,690,656 $ 210,536
Net Income Allocated:
To the General Partners $ 4,269 $ 6,505
To the Limited Partners 2,686,387 204,031
$2,690,656 $ 210,536
Per limited partnership unit (57,490 outstanding)
Income from operations $ 1.81 $ 3.55
Gain on sale of property 44.92 _
$46.73 $ 3.55
Consolidated Statements of Cash Flows
For the three months ended February 28 and February 29, 1997 1996
Cash Flows From Operating Activities:
Net income $ 2,690,656 $ 210,536
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 218,901 273,855
Gain on sale of property (2,582,641) _
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Fundings to restricted cash (40,317) (42,568)
Other assets 12,278 (29,361)
Accounts payable and accrued expenses 3,283 (81,713)
Due to general partners and affiliates (4,423) 1,377
Security deposits (23,060) (1,717)
Net cash provided by operating activities 274,677 330,409
Cash Flows From Investing Activities:
Net proceeds from sale of property 6,270,225 _
Additions to real estate _ (125,897)
Net cash provided by (used for) investing activities 6,270,225 (125,897)
Cash Flows From Financing Activities:
Distributions (6,591,404) (439,974)
Mortgage principal payments (27,689) (25,630)
Net cash used for financing activities (6,619,093) (465,604)
Net decrease in cash and cash equivalents (74,191) (261,092)
Cash and cash equivalents, beginning of period 2,121,544 2,253,221
Cash and cash equivalents, end of period $ 2,047,353 $ 1,992,129
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for interest $121,866 $123,925
Notes to the Consolidated Financial Statements
The unaudited interim consolidated financial statements should be
read in conjunction with the Partnership's annual 1996 audited
consolidated financial statements within Form 10-K.
The unaudited interim consolidated financial statements include
all normal and reoccurring adjustments which are, in the opinion
of management, necessary to present a fair statement of financial
position as of February 28, 1997 and the results of operations
and cash flows for the three months ended February 28, 1997 and
February 29, 1996 and the consolidated statement of partners'
capital for the three months ended February 28, 1997. Results of
operations for the periods are not necessarily indicative of the
results to be expected for the full year.
Certain prior year amounts have been reclassified in order to
conform to the current year's presentation.
The following significant event has occurred subsequent to fiscal
year 1996, which requires disclosure in this interim report per
Regulation S-X, Rule 10-01, Paragraph (a)(5):
Sale of Property
On December 10, 1996, the Partnership closed on the sale of
Canterbury Park Apartments ("Canterbury Park"). Canterbury Park
sold for $6,387,300 to Burcam Capital I, L.L.C., a North Carolina
limited liability company (the "Buyer"), which is unaffiliated
with the Partnership. The selling price was determined by arm's
length negotiations between the Partnership and the Buyer. The
transaction resulted in a gain on sale for Canterbury Park of
$2,582,641, which is reflected in the Partnership's consolidated
statements of operations for the three months ended February 28,
1997.
On January 24, 1997, the General Partners paid a special
distribution of $6,151,430, representing the net proceeds from
the sale of Canterbury Park, to the Limited Partners.
Part I, Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Liquidity and Capital Resources
At February 28, 1997, the Partnership had cash and cash
equivalents of $2,047,353 which were invested in unaffiliated
money market funds, compared with $2,121,544 at November 30,
1996. The decrease reflects mortgage principal payments and cash
distributions to Partners exceeding proceeds from the sale of
Canterbury Park (discussed below) and cash provided by operating
activities during the first quarter of fiscal 1997.
On December 10, 1996, the Partnership closed on the sale of
Canterbury Park. Canterbury Park sold for $6,387,300 to Burcam
Capital I, L.L.C., a North Carolina limited liability company
(the "Buyer"), which is unaffiliated with the Partnership. The
selling price was determined by arm's length negotiations between
the Partnership and the Buyer. The transaction resulted in a
gain on sale for Canterbury Park of $2,582,641, which is
reflected in the Partnership's consolidated statement of
operations in the first quarter of the 1997 fiscal year.
On January 24, 1997, the General Partners paid a special
distribution of $6,151,430, or $107.00 per unit, representing the
net proceeds from the sale of Canterbury Park, to the Limited
Partners.
The General Partners declared a regular cash distribution of $6
per Unit for the quarter endedFebruary 28, 1997 which will be paid
to investors on or about April 15, 1997. 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 1997 as a result of capital
expenditures required at the Partnership's properties.
Results of Operations
Partnership operations for the three months ended February 28,
1997 generated net income of $2,690,656 compared with net income
of $210,536 for the corresponding period in fiscal 1996. The
increase was primarily attributable to the gain on sale of
Canterbury Park. Income from operations was $108,015 for the
three months ended February 28, 1997, compared with $210,536 for
the corresponding period in fiscal 1996. The decrease is
primarily due to the sale of Canterbury Park and the
corresponding reduction in rental income.
Rental income totaled $952,545 for the three months ended
February 28, 1997 compared with $1,167,533 for the corresponding
period in fiscal 1996, down primarily as a result of the sale of
Canterbury Park on December 10, 1996, and a decline in occupancy
at Lakeview Village. Interest and other income increased from
$26,455 for the three months ended February 29, 1996 to $61,842
for the three months ended February 28, 1997. The increase is
primarily due to an increase in the Partnership's average cash
balance due to the sale of Canterbury Park.
Property operating expenses for the three months ended February
28, 1997 totaled $525,504 compared with $550,558 for the
corresponding period in fiscal 1996. The decrease is
attributable to the sale of Canterbury Park, and to a decrease in
repairs and maintenance expense at The Hamptons at Quail Hollow.
During the first three months of fiscal 1997 and 1996, average
occupancy levels at the Partnership's properties were as follows:
Property 1997 1996
The Hamptons at Quail Hollow 94% 95%
Lakeview Village 88% 97%
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 December 24, 1996, a Form 8-K was filed reporting the
sale of Canterbury Park.
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 5
BY: RI 5 Real Estate Services Inc.
General Partner
Date: April 14, 1997 BY: /s/ Paul L. Abbott
Paul L. Abbott
Director, President, Chief
Executive Officer and
Chief Financial Officer