-----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, GtCI+olszAntWhnFn328pa+l1nMqmjIovh0Dnt10Dw0k85D/MOdGSR0efd5tojBa NRVV6o31CVEGXNIMRIS7XQ== 0000711642-00-000139.txt : 20000515 0000711642-00-000139.hdr.sgml : 20000515 ACCESSION NUMBER: 0000711642-00-000139 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANGELES INCOME PROPERTIES LTD IV CENTRAL INDEX KEY: 0000763049 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 953974194 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-14283 FILM NUMBER: 628642 BUSINESS ADDRESS: STREET 1: 55 BEATTIE PLACE STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 3037578101 MAIL ADDRESS: STREET 1: 1873 SOUTH BELLAIRE STREET 17TH FLOOR STREET 2: P.O. BOX 1089 CITY: DENVER STATE: CO ZIP: 80222 10QSB 1 FIRST QUARTER 10-QSB FORM 10-QSB--QUARTERLY OR TRANSITIONAL 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 (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, 2000 [ ] 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 0-14283 ANGELES INCOME PROPERTIES, LTD. IV (Exact name of small business issuer as specified in its charter) California 95-3974194 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 55 Beattie Place, PO Box 1089 Greenville, South Carolina 29602 (Address of principal executive offices) (864) 239-1000 (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED BALANCE SHEET (Unaudited) (in thousands, except unit data) March 31, 2000
Assets Cash and cash equivalents $ 1,351 Receivables and deposits, net of $293 allowance for doubtful accounts 417 Restricted escrows 683 Other assets 424 Investment property: Land $ 2,414 Buildings and related personal property 18,104 20,518 Less accumulated depreciation (12,639) 7,879 $ 10,754 Liabilities and Partners' Deficit Liabilities Tenant security deposit liabilities $ 6 Accrued property taxes 202 Other liabilities 189 Mortgage note payable 14,814 Partners' Deficit General partner $ (105) Limited partners (131,585 units issued and outstanding) (4,352) (4,457) $ 10,754
See Accompanying Notes to Consolidated Financial Statements b) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except unit data) Three Months Ended March 31, 2000 1999 Revenues: Rental income $ 916 $ 936 Other income 22 55 Total revenues 938 991 Expenses: Operating 397 438 General and administrative 47 45 Depreciation 237 269 Interest 371 376 Property taxes 40 60 Total expenses 1,092 1,188 Net income (loss) $ (154) $ (197) Net income (loss) allocated to general partner (2%) $ (3) $ (4) Net income (loss) allocated to limited partners (98%) (151) (193) $ (154) $ (197) Net income (loss) per limited partnership unit $ (1.15) $ (1.47) See Accompanying Notes to Consolidated Financial Statements c) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENT OF CHANGES IN PARTNERS' DEFICIT (Unaudited) (in thousands, except unit data)
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 131,800 $ 1 $65,900 $65,901 Partners' deficit at December 31, 1999 131,585 $ (102) $(4,201) $(4,303) Net income for the three months ended March 31, 2000 -- (3) (151) (154) Partners' deficit at March 31, 2000 131,585 $ (105) $(4,352) $(4,457)
See Accompanying Notes to Consolidated Financial Statements d) ANGELES INCOME PROPERTIES, LTD. IV CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands)
Three Months Ended March 31, 2000 1999 Cash flows from operating activities: Net income (loss) $ (154) $ (197) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation 237 269 Amortization of loan costs and leasing commissions 33 29 Change in accounts: Receivables and deposits 169 251 Other assets 14 15 Accounts payable (35) 10 Accrued property taxes 41 (91) Other liabilities (40) (466) Net cash provided by (used in) operating activities 265 (180) Cash flows from investing activities: Lease commissions paid -- (23) Net deposits to restricted escrows (34) (34) Net cash used in investing activities (34) (57) Cash flows used in financing activities: Payments on mortgage note payable (50) (44) Net increase (decrease) in cash and cash equivalents 181 (281) Cash and cash equivalents at beginning of period 1,170 3,637 Cash and cash equivalents at end of period $1,351 $3,356 Supplemental disclosure of cash flow information: Cash paid for interest $ 362 $ 367
See Accompanying Notes to Consolidated Financial Statements e) ANGELES INCOME PROPERTIES, LTD. IV NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Note A - Basis of Presentation The accompanying unaudited consolidated financial statements of Angeles Income Properties, Ltd. IV (the "Partnership" or "Registrant") 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 Angeles Realty Corporation II ("ARC II" or the "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 March 31, 2000, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2000. For further information, refer to the consolidated financial statements and footnotes thereto included in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999. Principles of Consolidation The consolidated financial statements of the Partnership include its wholly-owned limited partnership interest in Factory Merchants, AIP IV, L.P. and AIP IV GP, LP. The Partnership may remove the general partner of Factory Merchants, AIP IV, L.P. and AIP IV GP, LP; therefore, the partnerships are controlled and consolidated by the Partnership. All significant interpartnership balances have been eliminated. Minority interest is immaterial and not shown separately in the consolidated financial statements. Note B - Transfer of Control Pursuant to a series of transactions which closed on October 1, 1998 and February 26, 1999, Insignia Financial Group, Inc. and Insignia Properties Trust merged into Apartment Investment and Management Company ("AIMCO"), a publicly traded real estate investment trust, with AIMCO being the surviving corporation (the "Insignia Merger"). As a result, AIMCO acquired 100% ownership interest in the General Partner. The General Partner does not believe that this transaction has had or will have a material effect on the affairs and operations of the Partnership. Note C - Transactions with Affiliated Parties The Partnership has no employees and is dependent on the General Partner and its affiliates for the management and administration of all Partnership activities. The Partnership Agreement provides for certain payments to affiliates for services and reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following amounts were paid or accrued to the General Partner and affiliates during the three months ended March 31, 2000 and 1999: 2000 1999 (in thousands) Reimbursement for services of affiliates (included in operating and general and administrative expenses and investment properties) $ 17 $ 27 An affiliate of the General Partner received reimbursement of accountable administrative expenses amounting to approximately $17,000 and $27,000 for the three months ended March 31, 2000 and 1999, respectively. AIMCO and its affiliates currently own 27,432 limited partnership units in the Partnership representing 20.847% of the outstanding units. A number of these units were acquired pursuant to tender offers made by AIMCO or its affiliates. It is possible that AIMCO or its affiliates will make one or more additional offers to acquire additional limited partnership interests in the Partnership for cash or in exchange for units in the operating partnership of AIMCO. Under the Partnership Agreement, unitholders holding a majority of the Units are entitled to take action with respect to a variety of matters. As a result of its ownership of 20.847% of the outstanding units, AIMCO is in a position to significantly influence all voting decisions with respect to the Registrant. When voting on matters, AIMCO would in all likelihood vote the Units it acquired in a manner favorable to the interest of the General Partner because of their affiliation with the General Partner. Note D - Distribution No distributions were made during the three months ended March 31, 2000 and 1999. Note E - Segment Reporting Description of the types of products and services from which reportable segment derives its revenues: The Partnership has one reportable segment: commercial properties. The Partnership's commercial property segment consists of one retail shopping center in Tennessee at March 31, 2000. This property leases space to various specialty retail outlets and fast food enterprises at terms ranging from 1 to 9 years. The Partnership's other commercial property was sold on June 16, 1999. Measurement of segment profit or loss: The Partnership evaluates performance based on segment profit (loss) before depreciation. The accounting policies of the reportable segment are the same as those of the Partnership as described in the Partnership's Annual Report on Form 10-KSB for the fiscal year ended December 31, 1999. Segment information for the three months ended March 31, 2000 and 1999 is shown in the tables below (in thousands). The "Other" column includes Partnership administration related items and income and expense not allocated to the reportable segment. 2000 Commercial Other Totals Rental income $ 916 $ -- $ 916 Other income 12 10 22 Interest expense 371 -- 371 Depreciation expense 237 -- 237 General and administrative expense -- 47 47 Segment income (loss) 120 (37) 83 Total assets 9,752 1,002 10,754 1999 Commercial Other Totals Rental income $ 936 $ -- $ 936 Other income 25 30 55 Interest expense 376 -- 376 Depreciation 269 -- 269 General and administrative expense -- 45 45 Segment loss (182) (15) (197) Total assets 11,664 3,039 14,703 Note F - Legal Proceedings In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia ("Insignia Affiliates") of interests in certain general partner entities, past tender offers by Insignia Affiliates to acquire limited partnership units, the management of partnerships by Insignia Affiliates and the Insignia Merger (see "Note B - Transfer of Control"). The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to final court approval, on behalf of the Partnership and all limited partners who own units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Superior Court of the State of California, County of San Mateo, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of class plaintiffs' counsel to enter the settlement. On December 14, 1999, the General Partner and its affiliates terminated the proposed settlement. Certain plaintiffs have filed a motion to disqualify some of the plaintiffs' counsel in the action. The General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. The Partnership is unaware of any other pending or outstanding litigation that is not of a routine nature arising in the ordinary course of business. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION The matters discussed in this Form 10-QSB contain certain forward-looking statements and involve risks and uncertainties (including changing market conditions, competitive and regulatory matters, etc.) detailed in the disclosures contained in this Form 10-QSB and the other filings with the Securities and Exchange Commission made by the Registrant from time to time. The discussions of the Registrant's business and results of operations, including forward-looking statements pertaining to such matters, does not take into account the effects of any changes to the Registrant's business and results of operation. Accordingly, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including those identified herein. The Partnership's investment property consists of one commercial property. The following table sets forth the average occupancy of the property for the three months ended March 31, 2000 and 1999: Average Occupancy Property 2000 1999 Factory Merchants Mall 88% 92% Pigeon Forge, Tennessee The General Partner attributes the decrease in occupancy to the loss of several tenants during the second half of 1999 and to reduced rental footage by several existing tenants during 1999. Results from Operations The Partnership realized a net loss of approximately $154,000 for the three months ended March 31, 2000 as compared to a net loss of approximately $197,000 for the comparable period in 1999. The decrease in net loss for the three months ended March 31, 2000 is primarily due to a decrease in total expenses which was offset by a slight decrease in total revenues. The decrease in total expenses is due to a decrease in operating and depreciation expense. The decrease in operating expense is due to a decrease in common area expenses at Factory Merchants Mall. The decrease in common area expense is due to the decrease in contract grounds projects. The decrease in total revenues and remaining expenses is primarily due to the Partnership owning one investment property at March 31, 2000 as compared to two investment properties at March 31, 1999 (Eastgate Mall was sold on June 16, 1999). Excluding the operations of Eastgate Mall, the Partnership had an increase in total revenues and a decrease in total expenses, primarily due to a decrease in operating expense as discussed above. The increase in total revenues is due to an increase in rental income partially offset by a decrease in other income. The increase in rental income is primarily due to an increase in percentage rent and a decrease in bad debt expense. This was partially offset by the decrease in occupancy discussed above. The decrease in other income is related to decreased late charges and a decrease in cash held in interest bearing accounts. Included in general and administrative expenses for the three months ended March 31, 2000 and 1999, are reimbursements to the General Partner allowed under the Partnership Agreement associated with its management of the Partnership. In addition, costs associated with the quarterly and annual communications with investors and regulatory agencies and the annual audit required by the Partnership Agreement are also included. As part of the ongoing business plan of the Partnership, the General Partner monitors the rental market environment of its investment property to assess the feasibility of increasing rents, maintaining or increasing occupancy levels and protecting the Partnership from increases in expenses. As part of this plan, the 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 General Partner will be able to sustain such a plan. Liquidity and Capital Resources At March 31, 2000, the Partnership had cash and cash equivalents of approximately $1,351,000 as compared to approximately $3,356,000 at March 31, 1999. For the three months ended March 31, 2000, cash and cash equivalents increased approximately $181,000 from the Partnership's year ended December 31, 1999. This increase in cash and cash equivalents is due to approximately $265,000 of cash provided by operating activities which was partially offset by approximately $50,000 of cash used in financing activities and approximately $34,000 of cash used in investing activities. Cash used in financing activities consists of payments of principal made on the mortgage encumbering Factory Merchants Mall. The cash used in investing activities consists of net deposits to restricted escrows maintained by the mortgage lender. The Partnership invests its working capital reserves in a money market account. 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 asset and other operating needs of the Registrant and to comply with Federal, state, and local legal and regulatory requirements. Capital improvements planned for the Partnership's property is detailed below. Factory Merchants Mall During the three months ended March 31, 2000, no capital improvements were made at Factory Merchants Mall. As the property is currently being marketed for sale, capital improvements will be made only as needed. The Registrant's current assets are thought to be sufficient for any near-term needs (exclusive of capital improvements) of the Registrant. The mortgage indebtedness of approximately $14,814,000 matures in October 2006. The General Partner will attempt to refinance such indebtedness and/or sell the property prior to such maturity date. Although the property is currently being marketed for sale, there is no guarantee when, or if, a buyer and the Partnership agree to terms that are mutually acceptable to complete a sale transaction. If the property cannot be refinanced or sold for a sufficient amount, the Registrant will risk losing such property through foreclosure. There were no cash distributions for the three months ended March 31, 2000 and 1999. The Registrant's distribution policy is reviewed on a semi-annual basis. Future cash distributions will depend on the levels of net cash generated from operations, the availability of cash reserves, and the timing of the debt maturity, refinancing and/or property sale. There can be no assurance, however, that the Registrant will generate sufficient funds from operations after required capital expenditures to permit distributions to its partners during the remainder of 2000 or subsequent periods. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEDINGS In March 1998, several putative unit holders of limited partnership units of the Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia Financial Group, Inc., et al. in the Superior Court of the State of California for the County of San Mateo. The plaintiffs named as defendants, among others, the Partnership, the General Partner and several of their affiliated partnerships and corporate entities. The action purports to assert claims on behalf of a class of limited partners and derivatively on behalf of a number of limited partnerships (including the Partnership) which are named as nominal defendants, challenging the acquisition by Insignia Financial Group, Inc. ("Insignia") and entities which were, at one time, affiliates of Insignia ("Insignia Affiliates") of interests in certain general partner entities, past tender offers by Insignia Affiliates to acquire limited partnership units, the management of partnerships by Insignia Affiliates and the Insignia Merger (see "Part 1 - Financial Information, Item 1. Financial Statements, Note B - Transfer of Control"). The plaintiffs seek monetary damages and equitable relief, including judicial dissolution of the Partnership. On June 25, 1998, the General Partner filed a motion seeking dismissal of the action. In lieu of responding to the motion, the plaintiffs have filed an amended complaint. The General Partner filed demurrers to the amended complaint which were heard February 1999. Pending the ruling on such demurrers, settlement negotiations commenced. On November 2, 1999, the parties executed and filed a Stipulation of Settlement, settling claims, subject to final court approval, on behalf of the Partnership and all limited partners who own units as of November 3, 1999. Preliminary approval of the settlement was obtained on November 3, 1999 from the Superior Court of the State of California, County of San Mateo, at which time the Court set a final approval hearing for December 10, 1999. Prior to the December 10, 1999 hearing the Court received various objections to the settlement, including a challenge to the Court's preliminary approval based upon the alleged lack of authority of class plaintiffs' counsel to enter the settlement. On December 14, 1999, the General Partner and its affiliates terminated the proposed settlement. Certain plaintiffs have filed a motion to disqualify some of the plaintiffs' counsel in the action. The General Partner does not anticipate that costs associated with this case will be material to the Partnership's overall operations. 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: None filed during the quarter ended March 31, 2000. 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. ANGELES INCOME PROPERTIES, LTD. IV By: Angeles Realty Corporation II General Partner By: /s/Patrick J. Foye Patrick J. Foye Executive Vice President By: /s/Martha L. Long Martha L. Long Senior Vice President and Controller Date: EX-27 2 FIRST QUARTER 10-QSB
5 This schedule contains summary financial information extracted from Angeles Income Properties, LTD. IV 2000 First Quarter 10-QSB and is qualified in its entirety by reference to such 10-QSB filing. 0000763049 Angeles Income Properties, LTD. IV 1,000 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 1,351 0 0 0 0 0 20,518 12,639 10,754 0 14,814 0 0 0 (4,457) 10,754 0 938 0 0 1,092 0 371 0 0 0 0 0 0 (154) (1.15) 0 Registrant has an unclassified balance sheet. Multiplier is 1.
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