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, 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.
-----------------------------
EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER
California 11-2685746
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STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION I.R.S. EMPLOYER IDENTIFICATION NO.
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
CONSOLIDATED BALANCE SHEETS
AT JUNE 30, AT DECEMBER 31,
1999 1998
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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 334,577 1,403,143
Other assets - 160,534
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TOTAL ASSETS $ 334,577 $ 8,772,104
====================================================================================================================
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued expenses 74,194 239,393
Due to General Partner - 6,853
Security deposits - 34,109
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Total Liabilities 74,194 280,355
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Partners' Capital:
General Partner 35,157 -
Limited Partners (128,110 Units outstanding) 225,226 8,491,749
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Total Partners' Capital 260,383 8,491,749
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TOTAL LIABILITIES AND PARTNERS' CAPITAL $ 334,577 $ 8,772,104
====================================================================================================================
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
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INCOME
Rental $ - $ 405,666 $ 115,938 $ 813,940
Interest and other 4,592 21,830 51,767 85,413
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Total Income 4,592 427,496 167,705 899,353
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EXPENSES
Property operating - 224,735 141,887 486,716
Depreciation - 105,701 17,623 211,402
General and administrative 44,073 55,022 86,977 114,626
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Total Expenses 44,073 385,458 246,487 812,744
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Income (Loss) from operations (39,481) 42,038 (78,782) 86,609
Gain on sale of properties - - 1,939,570 -
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NET INCOME (LOSS) $ (39,481) $ 42,038 $ 1,860,788 $ 86,609
============================================================================================================================
NET INCOME (LOSS) ALLOCATED:
To the General Partner $ (395) $ 14,235 $ 127,044 $ 28,469
To the Limited Partners (39,086) 27,803 1,733,744 58,140
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NET INCOME (LOSS) $ (39,481) $ 42,038 $ 1,860,788 $ 86,609
============================================================================================================================
PER LIMITED PARTNERSHIP UNIT
(128,110 UNITS OUTSTANDING)
Income (Loss) from operations $ (0.31) $ 0.22 $ (0.61) $ 0.45
Gain on sale of properties - - 14.14 -
----------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (0.31) $ 0.22 $ 13.53 $ 0.45
============================================================================================================================
CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL
FOR THE SIX MONTHS ENDED JUNE 30, 1999
GENERAL LIMITED
PARTNER PARTNERS TOTAL
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BALANCE AT DECEMBER 31, 1998 $ - $ 8,491,749 $ 8,491,749
Net income 127,044 1,733,744 1,860,788
Distributions ($78.06 per Limited Partner Unit) (91,887) (10,000,267) (10,092,154)
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BALANCE AT JUNE 30, 1999 $ 35,157 $ 225,226 $ 260,383
=========================================================================================================================
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
CONAM REALTY INVESTORS 4 L.P.
AND CONSOLIDATED VENTURES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,860,788 $ 86,609
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation 17,623 211,402
Gain on sale of properties (1,939,570) -
Increase (decrease) in cash arising from changes in operating assets and
liabilities:
Other assets 160,534 (42,061)
Accounts payable and accrued expenses (165,199) 29,566
Due to General Partner (6,853) 864
Security deposits (34,109) (8,862)
--------------------------------------
Net cash provided by (used in) operating activities (106,786) 277,518
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CASH FLOWS FROM INVESTING ACTIVITIES-
net proceeds from sale of properties 9,130,374 -
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CASH FLOWS FROM FINANCING ACTIVITIES-
distributions (10,092,154) (13,871,467)
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Net decrease in cash and cash equivalents (1,068,566) (13,593,949)
Cash and cash equivalents, beginning of period 1,403,143 15,150,595
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CASH AND CASH EQUIVALENTS, END OF PERIOD $ 334,577 $ 1,556,646
=========================================================================================================================
SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS.
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 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 June 30,
1999 and the results of operations for the three and six months ended June
30, 1999 and 1998, cash flow for the six months ended June 30, 1999 and
1998, and the consolidated statement of partners' capital for the six
months ended June 30, 1999. Results for the six months ended June 30, 1999
are not necessarily indicative of the results to be expected for the full
year.
The Partnership has 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 fiscal year 1998,
and no material contingencies exist, which would require disclosure in this
interim report per Regulation S-X, Rule 10-01, Paragraph (a) (5).
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 and
distribution, cash and cash equivalents comprise all of the remaining assets of
the Partnership. The General Partner believes that the Partnership has
sufficient cash to meet the needs of the Partnership for any contingencies or
costs associated with the Sale and final liquidation of the Partnership.
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 June 30, 1999, the Partnership had cash and cash equivalents of $334,577
compared with $1,403,143 at December 31, 1998. The decrease in cash and cash
equivalents is due to the Sale of the Properties and the subsequent distribution
of substantially all of the net proceeds thereof and other Partnership cash.
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 (loss) for the three and six months ended June 30, 1999
was ($39,481) and $1,860,788, respectively, compared to net income of $42,038
and $86,609 for the corresponding periods in fiscal 1998. The decreased income
for the three months ended June 30, 1999 is primarily attributable to the Sale
of the Properties. The increase in income for the six month period is primarily
attributable to the gain on the Sale.
The Partnership generated operating losses for the three and six months ended
June 30, 1999 of $39,481 and $78,782, respectively, compared to operating income
of $42,038 and $86,609, respectively, for the corresponding periods in fiscal
1998. Total income for the three and six months ended June 30, 1999 totaled
$4,592 and $167,705, respectively, compared with $427,496 and $899,353,
respectively, for the corresponding period in fiscal 1998. The decreased total
income and operating loss for the three and six months ended June 30, 1999, is
primarily attributable to the decrease in rental income attributable to the Sale
on January 29, 1999, partially offset by interest income earned on the proceeds
from the Sale prior to distributions to the Unitholders and reduced operating
expenses.
Total expenses for the three and six months ended June 30, 1999 were $44,073 and
$246,487, respectively, compared to $385,458 and $812,744, respectively, for the
corresponding periods in fiscal 1998. The decrease in total expenses is
primarily attributable to the Sale.
General and administrative expenses for the three and six months ended June 30,
1999 were $44,073 and $86,977, respectively, compared to $55,022 and $114,626,
respectively, for the corresponding periods in fiscal 1998. The decrease in
general and administrative expenses is primarily attributable to a reduction in
printing, mailing and investor relation expenses.
YEAR 2000
Due to the consummation of the Sale, 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
Due to the consummation of the Sale, the Partnership has no exposure to interest
rate risk. In addition, the Partnership is expected to be liquidated during
1999.
PART II - OTHER INFORMATION
ITEMS 1-5. 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
No reports on Form 8-K were filed during the quarter ended June 30, 1999.
(27) Financial Data Schedule
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: August 10, 1999 BY: /s/ DANIEL J. EPSTEIN
---------------------
Daniel J. Epstein
Director, President, and Principal
Executive Officer
Date: August 10, 1999 BY: /s/ ROBERT J. SVATOS
---------------------
Robert J. Svatos
Vice President and Director