Hutton/ConAm Realty Investors 4
and Consolidated Ventures
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, 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: 0-13329
HUTTON/CONAM REALTY INVESTORS 4
Exact Name of Registrant as Specified in its Charter
California
State or Other Jurisdiction 11-2685746
of 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 March 31, At December 31,
1997 1996
Assets
Property:
Land $ 5,627,763 $ 5,627,763
Buildings and improvements 20,452,272 20,448,021
-------------------------------
26,080,035 26,075,784
Less accumulated depreciation (9,951,123) (9,754,730)
--------------------------------
16,128,912 16,321,054
Property held for disposition 7,358,300 7,358,300
Cash and cash equivalents 2,489,801 2,314,876
Other assets 13,933 15,370
-------------------------------
Total Assets $ 25,990,946 $ 26,009,600
===============================
Liabilities and Partners' Capital
Liabilities:
Accounts payable and accrued expenses $ 273,268 $ 108,269
Distribution payable 533,792 533,792
Due to general partners and affiliates 20,200 20,443
Security deposits payable 145,194 144,220
-------------------------------
Total Liabilities 972,454 806,724
Partners' Capital:
General Partners _ _
Limited Partners 25,018,492 25,202,876
-------------------------------
Total Partners' Capital 25,018,492 25,202,876
Total Liabilities and
Partners' Capital $ 25,990,946 $26,009,600
===============================
Consolidated Statement of Partners' Capital
For the three months ended March 31, 1997
Limited General
Partners Partners Total
Balance at December 31, 1996 $ 25,202,876 $ _ $ 25,202,876
Net income 296,029 53,379 349,408
Distributions (480,413) (53,379) (533,792)
-------------------------------------
Balance at March 31, 1997 $ 25,018,492 $ _ $ 25,018,492
=====================================
Consolidated Statements of Operations
For the three months ended March 31, 1997 1996
Income
Rental $ 1,207,761 $ 1,181,149
Interest and other income 32,395 27,331
----------------------------
Total Income 1,240,156 1,208,480
Expenses
Property operating 636,206 645,762
Depreciation 196,393 298,492
General and administrative 58,149 48,275
----------------------------
Total Expenses 890,748 992,529
----------------------------
Net Income $ 349,408 $ 215,951
============================
Net Income Allocated:
To the General Partners $ 53,379 $ 53,379
To the Limited Partners 296,029 162,572
----------------------------
$ 349,408 $ 215,951
============================
Per limited partnership unit
(128,110 outstanding) $ 2.31 $ 1.27
Consolidated Statements of Cash Flows
For the three months ended March 31, 1997 1996
Cash Flows From Operating Activities:
Net income $ 349,408 $ 215,951
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 196,393 298,492
Increase (decrease) in cash arising from
changes in operating assets and liabilities:
Other assets 1,437 _
Accounts payable and accrued expenses 164,999 104,315
Security deposits payable 974 (1,119)
Due to general partners and affiliates (243) 263
---------------------------
Net cash provided by operating activities 712,968 617,902
Cash Flows From Investing Activities:
Additions to real estate (4,251) (9,200)
---------------------------
Net cash used for investing activities (4,251) (9,200)
Cash Flows From Financing Activities:
Distributions (533,792) (587,171)
---------------------------
Net cash used for financing activities (533,792) (587,171)
Net increase in cash and cash equivalents 174,925 21,531
Cash and cash equivalents, beginning of period 2,314,876 2,436,356
---------------------------
Cash and cash equivalents, end of period $2,489,801 $2,457,887
===========================
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 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 March 31, 1997 and the results of operations and
cash flows for the three months ended March 31, 1997 and 1996 and
the statement of partners' capital for the three months ended
March 31, 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 to conform to
the current year's presentation.
No significant events have occurred subsequent to fiscal year
1996 and no material contingencies exist, which 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, 1997, the Partnership had cash and cash equivalents
of $2,489,801, which were invested in unaffiliated money market
funds, compared with $2,314,876 at December 31, 1996. The
increase is attributable to cash provided by operating activities
exceeding cash used for distributions and additions to real
estate. The Partnership expects sufficient cash to be generated
from operations to meet its current operating expenses.
The Partnership had signed a contract, dated September 26, 1996,
to sell River Hill Apartments. On November 8, 1996, the
prospective buyer executed its right to terminate the purchase
agreement during the due diligence period. Subsequently, the
Partnership resumed marketing the property for sale and signed a
contract dated January 24, 1997 to sell the property to an
unaffiliated institutional investor. However, on March 17, 1997,
the General Partners opted to allow the prospective buyer to
exercise its right to terminate the purchase agreement. The
General Partners have since resumed marketing River Hill
Apartments for sale. Accordingly, River Hill Apartments was
reclassified on the consolidated balance sheet as "Property held
for disposition" at its net book value.
The General Partners declared a cash distribution of $3.75 per
Unit for the quarter ended March 31, 1997 which will be paid to
investors on or about May 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.
Given the performance of the Partnership's properties, and the
improvement in the real estate capital markets which has
increased demand by potential buyers, the General Partners have
determined that it is in the best interest of the Partnership to
attempt to sell the remaining properties in an orderly manner
over the next few years. Assuming these efforts are successful,
the General Partners expect to distribute the sales proceeds and
subsequently dissolve the Partnership in 1998 or 1999. However,
meeting this objective will be dependent upon a variety of
factors, many of which are not within the Partnership's control.
Consequently, there can be no assurance that any specific
property or all the properties can be sold, that particular
prices will be achieved, or that all the properties can be sold
within this time frame.
Accounts payable and accrued expenses increased from $108,269 at
December 31, 1996 to $273,268 at March 31, 1997 primarily as a
result of accruals for real estate taxes for all four properties.
Results of Operations
Partnership operations for the three months ended March 31, 1997,
resulted in net income of $349,408, compared with net income of
$215,951 in the corresponding period in 1996. The increase is
primarily attributable to higher rental income at three of the
four properties and lower depreciation expense due to the
reclassification of the River Hill property as property held for
disposition. Net cash provided by operating activities was
$712,968 for the three months ended March 31, 1997, compared with
$617,902 for the corresponding period in 1996. The increase was
primarily due to the increase in net income discussed above, and
an increase in accounts payable and accrued expenses.
Rental income for the three months ended March 31, 1997 was
$1,207,761 compared with $1,181,149 in the corresponding period
in 1996. The increase reflects higher rental revenues at Pelican
Landing, River Hill and Village at the Foothills II. At
Shadowood Village, rental income decreased slightly due to a
decrease in average occupancy.
Property operating expenses for the first quarter of 1997
remained largely unchanged from a year earlier as lower rental
administrative expense at Pelican Landing and lower repairs and
maintenance expense at River Hill were offset by higher utilities
expense at Shadowood Village. General and administrative
expenses for the three months ended March 31, 1997 were $58,149,
compared to $48,275 for the same period in 1996. During the 1997
period, certain expenses incurred by an unaffiliated third party
service provider in servicing the Partnership, which were
voluntarily absorbed by affiliates of RI 3-4 Real Estate
Services, Inc. in prior periods, were reimbursed to RI 3-4 Real
Estate Services, Inc. and its affiliates.
During the first three months of 1997 and 1996, average occupancy
levels at each of the properties were as follows:
Property 1997 1996
Pelican Landing 98% 98%
River Hill Apartments 96% 95%
Shadowood Village 93% 95%
Village at the Foothills II94% 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 - No reports on Form 8-K were
filed during the quarter ended March 31, 1997.
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 20, 1997 BY: /s/ Paul L. Abbott
Director, President,
Chief Executive Officer and
Chief Financial Officer