-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J/5px2JacpGWJyAggblV4KOjIO3LjYhzRr77msVuV9sOI5hI8FscrNYDid/go9MY W6XKF5wcIFLjRXc6cLYfug== 0000702174-96-000003.txt : 19960314 0000702174-96-000003.hdr.sgml : 19960314 ACCESSION NUMBER: 0000702174-96-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19960312 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHELTER PROPERTIES IV LIMITED PARTNERSHIP CENTRAL INDEX KEY: 0000702174 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 570721760 STATE OF INCORPORATION: SC FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-10884 FILM NUMBER: 96534087 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P O BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: P O BOX 2347 CITY: GREENVILLE STATE: SC ZIP: 29602 10QSB 1 FORM 10-QSB--QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Quarterly or Transitional Report (As last amended by 34-32231, eff. 6/3/93.) U. S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-QSB [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 1996 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period.........to......... Commission file number 0-10884 SHELTER PROPERTIES IV LIMITED PARTNERSHIP (Exact name of small business issuer as specified in its charter) South Carolina 57-0721760 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) One Insignia Financial Plaza, P.O. Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (Zip Code) Issuer's telephone number (864) 239-1000 Check whether the issuer (1) 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 . PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS a) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED BALANCE SHEET (Unaudited) January 31, 1996 Assets Cash and cash equivalents: Unrestricted $ 1,651,303 Restricted--tenant security deposits 246,370 Accounts receivable 26,941 Escrow for taxes 203,505 Restricted escrows 1,643,593 Other assets 608,075 Investment properties: Land $ 3,442,097 Buildings and related personal property 54,872,023 58,314,120 Less accumulated depreciation (28,982,974) 29,331,146 $33,710,933 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 228,485 Tenant security deposits 250,965 Accrued taxes 62,651 Other liabilities 272,279 Mortgage notes payable 24,953,269 Partners' Capital General partners $ (4,931) Limited partners (50,000 units issued and outstanding) 7,948,215 7,943,284 $33,710,933 See Accompanying Notes to Consolidated Financial Statements b) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended January 31, 1996 1995 Revenues: Rental income $2,531,197 $2,388,648 Other income 147,677 127,295 Total revenues 2,678,874 2,515,943 Expenses: Operating 694,209 695,540 General and administrative 89,716 69,704 Property management fees 132,757 123,898 Maintenance 446,174 717,980 Depreciation 445,765 426,153 Interest 569,444 579,131 Property taxes 183,104 169,583 Total expenses 2,561,169 2,781,989 Net income (loss) $ 117,705 $ (266,046) Net income (loss) allocated to general partners (1%) $ 1,177 $ (2,660) Net income (loss) allocated to limited partners (99%) 116,528 (263,386) $ 117,705 $ (266,046) Net income (loss) per limited partnership unit $ 2.33 $ (5.27) See Accompanying Notes to Consolidated Financial Statements
c) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 50,000 $ 2,000 $50,000,000 $50,002,000 Partners' capital at October 31, 1995 50,000 $ 3,892 $ 8,821,687 $ 8,825,579 Net income for the three months ended January 31, 1996 -- 1,177 116,528 117,705 Partners' distributions -- (10,000) (990,000) (1,000,000) Partners' capital at January 31, 1996 50,000 $ (4,931) $ 7,948,215 $ 7,943,284 See Accompanying Notes to Consolidated Financial Statements
d) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended January 31, 1996 1995 Cash flows from operating activities: Net income (loss) $ 117,705 $ (266,046) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation 445,765 426,153 Amortization of discounts and loan costs 66,052 64,015 Change in accounts: Restricted cash (8,920) (1,288) Accounts receivable (4,071) (14,110) Escrows for taxes 513,629 381,462 Other assets (396) 20,746 Accounts payable (239,495) 149,373 Tenant security deposit liabilities 13,067 8,865 Accrued taxes (538,322) (389,330) Other liabilities (45,143) (46,665) Net cash provided by operating activities 319,871 333,175 Cash flows from investing activities: Property improvements and replacements (263,318) (154,597) Deposits to restricted escrows (16,361) (22,712) Receipts from restricted escrows 7,000 10,376 Net cash used in investing activities (272,679) (166,933) Cash flows from financing activities: Partners' distributions $(1,000,000) $ -- Payments on mortgage notes payable (160,684) (148,960) Net cash used in financing activities (1,160,684) (148,960) Net (decrease) increase in cash (1,113,492) 17,282 Cash at beginning of period 2,764,795 2,254,370 Cash at end of period $ 1,651,303 $ 2,271,652 Supplemental disclosure of cash flow information: Cash paid for interest $ 503,392 $ 555,116 See Accompanying Notes to Consolidated Financial Statements
e) SHELTER PROPERTIES IV LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of the Corporate General Partner, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended January 31, 1996, are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 1996. For further information, refer to the financial statements and footnotes thereto included in the Partnership's annual report on Form 10-KSB for the year ended October 31, 1995. Cash and Cash Equivalents: Unrestricted - Unrestricted cash includes cash on hand and in banks, money market funds and Certificates of Deposit with original maturities less than 90 days. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Restricted cash - tenant security deposits - The Partnership requires security deposits from lessees for the duration of the lease and such deposits are considered restricted cash. Deposits are refunded when the tenant vacates, provided the tenant has not damaged its space and is current on its rental payments. Certain reclassifications have been made to the 1995 information to conform to the 1996 presentation. Note B - Reconciliation of Cash Flows The following is a reconciliation of the subtotal on the accompanying statements of cash flows captioned "net cash provided by operating activities" to "net cash used in operations", as defined in the partnership agreement. However, "net cash used in operations" should not be considered an alternative to net income as an indicator of the Partnership's operating performance or to cash flows as a measure of liquidity. For the Three Months Ended January 31, 1996 1995 Net cash provided by operating activities $ 319,871 $ 333,175 Payments on mortgage notes payable (160,684) (148,960) Property improvements and replacements (263,318) (154,597) Change in restricted escrows, net (9,361) (12,336) Changes in reserves for net operating liabilities 314,478 (109,052) Additional reserves (200,986) -- Net cash used in operations $ -- $ (91,770) The Corporate General Partner reserved $200,986 on January 31, 1996, to fund capital improvements and repairs at the property. Note C Transactions with Affiliated Parties The Partnership has no employees and is dependent on the Corporate General Partner and its affiliates for the management and administration of all partnership activities. The Partnership Agreement provides for payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following transactions with Insignia Financial Group, Inc. and affiliates were charged to expense in 1996 and 1995: For the Three Months Ended January 31, 1996 1995 Property management fees $132,757 $123,898 Reimbursement for services of affiliates 30,155 35,855 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the Corporate General Partner. An affiliate of the Corporate General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which was later acquired by the agent who placed the current year's master policy. The current agent assumed the financial obligations to the affiliate of the Corporate General Partner, who receives payments on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the Corporate General Partner by virtue of the agent's obligations is not significant. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The Partnership's investment properties consist of three apartment complexes. The following table sets forth the average occupancy of the properties for the three months ended January 31, 1996 and 1995: Average Occupancy Property 1996 1995 Baymeadows Apartments Jacksonville, Florida 96% 94% Quail Run Apartments Columbia, South Carolina 96% 95% Countrywood Village Apartments Raleigh, North Carolina 96% 94% The Partnership's net income as shown in the financial statements for the three months ended January 31, 1996, was $117,705 versus a net loss of $266,046 for the corresponding period in 1995. The increase in net income is primarily attributable to a decrease in maintenance expense resulting from prior year painting, exterior renovations, and interior building improvements at Baymeadows and Countrywood, which were performed throughout 1995 and completed in the fourth quarter. General and administrative expenses increased as a result of higher legal expenses in the first quarter of 1996 due to additional legal costs related to an outstanding discrimination case as disclosed in the 10-KSB for the year ended October 31, 1995. Rental revenue increased due to higher occupancy and periodic rental rate increases at Baymeadows, Quail Run, and Countrywood. Other income also increased due to additional tenant charges and increased revenue at Baymeadows' ancillary operations. Offsetting the increase in net income was an increase in real estate taxes due to a property assessment increase at Baymeadows. As part of the ongoing business plan of the Partnership, the Corporate General Partner monitors the rental market environment of each of its investment properties to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expense. As part of this plan, the Corporate General Partner attempts to protect the Partnership from the burden of inflation-related increases in expenses by increasing rents and maintaining a high overall occupancy level. However, due to changing market conditions, which can result in the use of rental concessions and rental reductions to offset softening market conditions, there is no guarantee that the Corporate General Partner will be able to sustain such a plan. At January 31, 1996, the Partnership reported unrestricted cash of $1,651,303 versus $2,271,652 at January 31, 1995. Net cash provided by operating activities decreased primarily due to the decrease in accounts payable resulting from the payment of property improvements in 1996 for services rendered during fiscal year 1995. Offsetting this decrease was the increase in net income described above. Net cash used in investing activities increased primarily due to an increase in property improvements in the three months ended January 31, 1996, over the same period in 1995. Finally, the statement of cash flows includes an increase in cash used in financing activities resulting primarily from a $1,000,000 distribution from operations paid to the partners in the first quarter of 1996. Capital improvement projects for the next quarter include five roof replacements at Baymeadows which will be paid for from property operations. The Partnership has no other material capital programs scheduled to be performed in 1996, although certain routine capital expenditures and maintenance expenses have been budgeted. These capital expenditures and maintenance expenses will be incurred only if cash is available from operations. The sufficiency of existing liquid assets to meet future liquidity and capital expenditure requirements is directly related to the level of capital expenditures required at the property to adequately maintain the physical assets and other operating needs of the Partnership. Such assets are currently thought to be sufficient for any near-term needs of the Partnership. The mortgage indebtedness of $24,953,269, net of discount, is amortized over 257 months with a balloon payment of $20,669,395 due on November 15, 2002, at which time the properties will either by refinanced or sold. Cash distributions of $1,000,000 were made in the first quarter of 1996. These distribution were made from property cash flow. Future cash distributions will depend on the levels of net cash generated from operations, property sales, and the availability of cash reserves. PART II - OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits: Exhibit 27, Financial Data Schedule, is filed as an exhibit to this report. b) Reports on Form 8-K filed in the quarter ended January 31, 1996: None. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SHELTER PROPERTIES IV LIMITED PARTNERSHIP By: Shelter Realty IV Corporation Corporate General Partner By:/s/ William H. Jarrard, Jr. William H. Jarrard, Jr. President and Director By:/s/ Ronald Uretta Ronald Uretta Treasurer (Principal Financial Officer and Principal Accounting Officer) Date: March 12, 1996 EX-27 2
5 This schedule contains summary financial information extracted from Shelter Properties IV 1996 1st Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000702174 SHELTER PROPERTIES IV 1 3-MOS OCT-31-1996 JAN-31-1996 1,651,303 0 26,941 0 0 0 58,314,120 28,982,974 33,710,933 0 24,953,269 0 0 0 7,943,284 33,710,933 0 2,678,874 0 0 2,556,342 0 569,444 117,705 0 0 0 0 0 117,705 2.33 0 The Partnership has an unclassified balance sheet.
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