-----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, QJ4duLmWlbGehyR7+NgFimUqttiBFo337C4ih0U99Epm+3KMJ0cHcqN+t9cnZEiQ Qq5m28PxeD8x2aKH+s5xaQ== 0000792181-97-000003.txt : 19970602 0000792181-97-000003.hdr.sgml : 19970602 ACCESSION NUMBER: 0000792181-97-000003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970430 FILED AS OF DATE: 19970530 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: 97617191 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 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 April 30, 1997 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) (in thousands) April 30, 1997 Assets Cash and cash equivalents: Unrestricted $ 1,719 Restricted--tenant security deposits 273 Accounts receivable 44 Escrow for taxes 462 Restricted escrows 1,714 Other assets 502 Investment properties: Land $ 3,442 Buildings and related personal property 56,071 59,513 Less accumulated depreciation (31,283) 28,230 $32,944 Liabilities and Partners' Capital (Deficit) Liabilities Accounts payable $ 188 Tenant security deposits 273 Accrued taxes 269 Other liabilities 256 Mortgage notes payable 24,335 Partners' Capital General partners $ (8) Limited partners (49,995 units issued and outstanding) 7,631 7,623 $32,944 See Accompanying Notes to Consolidated Financial Statements b) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except per unit data)
Three Months Ended Six Months Ended April 30, April 30, 1997 1996 1997 1996 Revenues: Rental income $2,616 $2,574 $5,216 $5,105 Interest income 39 38 79 83 Other income 115 119 239 221 Total revenues 2,770 2,731 5,534 5,409 Expenses: Operating 860 834 1,704 1,660 General and administrative 98 91 162 181 Maintenance 680 442 1,150 888 Depreciation 477 458 945 904 Interest 558 565 1,117 1,134 Property taxes 200 188 400 371 Total expenses 2,873 2,578 5,478 5,138 Net (loss) income $ (103) $ 153 $ 56 $ 271 Net (loss) income allocated to general partners (1%) $ (1) $ 2 $ 1 $ 3 Net (loss) income allocated to limited partners (99%) (102) 151 55 268 $ (103) $ 153 $ 56 $ 271 Net (loss) income per limited partnership unit $(2.03) $ 3.04 $ 1.13 $ 5.37 See Accompanying Notes to Consolidated Financial Statements
c) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' CAPITAL (DEFICIT) (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partners Partners Total Original capital contributions 50,000 $ 2 $50,000 $50,002 Partners' (deficit) capital at October 31, 1996 49,995 $ (4) $ 8,076 $ 8,072 Net income for the six months ended April 30, 1997 1 55 56 Partners' distributions (5) (500) (505) Partners' (deficit) capital at at April 30, 1997 49,995 $ (8) $ 7,631 $ 7,623 See Accompanying Notes to Consolidated Financial Statements
d) SHELTER PROPERTIES IV LIMITED PARTNERSHIP CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Six Months Ended April 30, 1997 1996 Cash flows from operating activities: Net income $ 56 $ 271 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 945 904 Amortization of discounts and loan costs 137 133 Change in accounts: Restricted cash -- (26) Accounts receivable 3 (3) Escrows for taxes 360 309 Other assets 58 (8) Accounts payable (86) (255) Tenant security deposit liabilities (2) 27 Accrued taxes (373) (350) Other liabilities (241) (36) Net cash provided by operating activities 857 966 Cash flows from investing activities: Property improvements and replacements (540) (540) Deposits to restricted escrows (35) (36) Receipts from restricted escrows -- 7 Net cash used in investing activities (575) (569) Cash flows from financing activities: Partners' distributions (505) (1,000) Payments on mortgage notes payable (349) (325) Net cash used in financing activities (854) (1,325) Net decrease in cash (572) (928) Cash at beginning of period 2,291 2,765 Cash at end of period $1,719 $ 1,837 Supplemental disclosure of cash flow information: Cash paid for interest $ 979 $ 1,004 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 of Shelter Properties IV Limited Partnership ("Partnership") 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 Shelter Realty IV Corporation ("Corporate General Partner"), all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended April 30, 1997, are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 1997. 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, 1996. Certain reclassifications have been made to the 1996 information to conform to the 1997 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 Six Months Ended April 30, 1997 1996 (in thousands) Net cash provided by operating activities $ 857 $ 966 Payments on mortgage notes payable (349) (325) Property improvements and replacements (540) (540) Change in restricted escrows, net (35) (29) Changes in reserves for net operating liabilities 281 342 Additional reserves (214) (414) Net cash used in operations $ -- $ -- The Corporate General Partner reserved approximately $214,000 and $414,000 on April 30, 1997 and 1996, respectively, to fund capital improvements and repairs at its properties. 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 its affiliates were charged to expense in 1997 and 1996 (in thousands): For the Six Months Ended April 30, 1997 1996 Property management fees $275 $268 Reimbursement for services of affiliates (1) 125 98 (1) Included in "reimbursements for services of affiliates" for the six months ended April 30, 1997, is approximately $22,000 in reimbursements for construction oversight costs. 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. PART II - OTHER INFORMATION 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 six months ended April 30, 1997 and 1996: Average Occupancy Property 1997 1996 Baymeadows Apartments Jacksonville, Florida 95% 97% Quail Run Apartments Columbia, South Carolina 90% 96% Countrywood Village Apartments Raleigh, North Carolina 95% 95% The Corporate General Partner attributes the decrease in occupancy at Quail Run to military transfers resulting from a large number of troops at Fort Jackson being reassigned to other bases. Also, interest rates have made home ownership more attractive, and the property has lost tenants to first time home buying. In an effort to counteract these occupancy decreases, management is utilizing an aggressive marketing plan, and the property has been undergoing exterior renovations in order to attract quality residents. The Partnership's net income for the six months ended April 30, 1997, was approximately $56,000 compared to approximately $271,000 for the corresponding period in 1996. The Partnership recorded a net loss of approximately $103,000 for the three months ended April 30, 1997, compared to net income of approximately $153,000 for the corresponding period of 1996. The decrease in net income for the three and six month periods ended April 30, 1997, compared to the corresponding periods of 1996 is primarily attributable to increased maintenance expenses at Quail Run and Baymeadows. Maintenance expense increased as a result of exterior painting and repair projects and parking lot repairs, which were incurred to improve the building exteriors in order to attract new tenants and ultimately increase occupancy at these properties. Offsetting the decrease in net income for the six month period ended April 30, 1997, compared to the corresponding period of 1996, was a decrease in general and administrative expenses due to a decrease in legal expenses related to a discrimination case at Baymeadows, which was settled in November 1996. Included in maintenance expense in 1997 is approximately $500,000 of major repair and maintenance comprised primarily of the exterior painting and parking lot repairs discussed above. 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 increase 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. Liquidity and Capital Resources At April 30, 1997, the Partnership had unrestricted cash of approximately $1,719,000 compared to approximately $1,837,000 at April 30, 1996. Net cash provided by operating activities decreased primarily due to the decrease in net income, as discussed above and an increase in cash paid for other liabilities, which was partially offset by a decrease in cash paid for accounts payable. Net cash used in investing activities remained stable. Finally, net cash used in financing activities decreased due to a decrease in distributions paid to the partners for the six months ended April 30, 1997, compared to the corresponding period of 1996. The Partnership has budgeted approximately $1.2 million in capital improvements for it three investment properties in 1997. Of this amount, approximately $540,000 in capital improvement projects were completed during the six months ended April 30, 1997. Projects planned for the next quarter include a continuation of roof replacements and major sewer replacements at Quail Run. Other projects planned throughout 1997 include major carpet replacement at Countrywood and Baymeadows. 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 properties 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 approximately $24,335,000 net of discount, is amortized over 257 months with balloon payments of approximately $20,669,000 due on November 15, 2002, at which time the properties will either be refinanced or sold. Cash distributions of approximately $505,000 were made during the six months ended April 30, 1997. Cash distributions of approximately $1,000,000 were made during the six months ended April 30, 1996. These distributions were made from property operations. Future cash distributions will depend on the levels of net cash generated from operations, property sales and the availability of cash reserves. 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 April 30, 1997: 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 Vice President/Treasurer Date: May 30, 1997 EX-27 2
5 This schedule contains summary financial information extracted from Shelter Properties IV Limited Partnership 1997 Second Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000702174 SHELTER PROPERTIES IV LIMITED PARTNERSHIP 1,000 6-MOS OCT-31-1997 APR-30-1997 1,719 0 44 0 0 0 59,513 (31,283) 32,944 0 24,335 0 0 0 7,623 32,944 0 5,534 0 0 5,478 0 1,117 0 0 0 0 0 0 56 1.13 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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