-----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, NHD6lVI9hrF7TnP/OTx83QySY0/QtBiIVHfi6Fs8YnPxtMMfh/cg87M+hc6uf9Rt UDVIyk+1zUySuMoIMEx0xA== 0000787621-96-000001.txt : 19960328 0000787621-96-000001.hdr.sgml : 19960328 ACCESSION NUMBER: 0000787621-96-000001 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960327 SROS: NONE 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: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-14283 FILM NUMBER: 96539274 BUSINESS ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLZ STREET 2: PO BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 BUSINESS PHONE: 8032391000 MAIL ADDRESS: STREET 1: ONE INSIGNIA FINANCIAL PLAZA STREET 2: P.O. BOX 1089 CITY: GREENVILLE STATE: SC ZIP: 29602 10KSB 1 U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB (Mark One) X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 [FEE REQUIRED] For the fiscal year ended December 31, 1995 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] For the transition period from to Commission file number 0-14283 ANGELES INCOME PROPERTIES, LTD. IV California (State or other jurisdiction of 95-3974194 incorporation or organization) (I.R.S. Employer 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 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Limited Partnership Units (Title of class) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10- KSB or any amendment to this Form 10-KSB. X State issuer's revenues for its most recent fiscal year. $3,702,709 State the aggregate market value of the voting stock held by nonaffiliates of the Registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within the past 60 days. Market value information for Registrant's Partnership Interests is not available. Should a trading market develop for these Interests, it is the General Partner's belief that such trading would not exceed $25 million. DOCUMENTS INCORPORATED BY REFERENCE None PART I Item 1. Description of Business Angeles Income Properties, Ltd. IV (the "Partnership" or the "Registrant") is a publicly-held limited partnership organized under the California Uniform Limited Partnership Act pursuant to the Certificate and Agreement of Limited Partnership (hereinafter referred to as the "Agreement") dated June 29, 1984. The Partnership's General Partner is Angeles Realty Corporation II, a California corporation (hereinafter referred to as the "General Partner" or "ARCII"). The Partnership, through its public offering of Limited Partnership Units, sold 131,800 units aggregating $65,900,000. The General Partner contributed capital in the amount of $1,000 for a 2% interest in the Partnership. The Partnership was formed for the purpose of acquiring fee and other forms of equity interests in various types of real property. The Partnership presently owns two investment properties and owns a general partnership interest in one additional property. The General Partner of the Partnership intends to maximize the operating results and, ultimately, the net realizable value of each of the Partnership's properties in order to achieve the best possible return for the investors. Such results may best be achieved through property sales, refinancings, debt restructurings or relinquishment of the assets. The Partnership intends to evaluate each of its holdings periodically to determine the most appropriate strategy for each of the assets. The Partnership has no full time employees. The General Partner is vested with full authority as to the general management and supervision of the business and affairs of the Partnership. Limited Partners have no right to participate in the management or conduct of such business and affairs. Insignia Management Group, L.P. provides property management services to each of the Partnership's investment properties. The property in which the Partnership has a general partnership interest is managed by a third party. The business in which the Partnership is engaged is highly competitive, and the Partnership is not a significant factor in its industry. Each investment property is located in or near a major urban area and, accordingly, competes for rentals not only with similar properties in its immediate area but with hundreds of similar properties throughout the urban area. Such competition is primarily on the basis of location, rents, services and amenities. In addition, the Partnership competes with significant numbers of individuals and organizations (including similar partnerships, real estate investment trusts and financial institutions) with respect to the sale of improved real properties, primarily on the basis of the prices and terms of such transactions. Item 2. Description of Properties The following table sets forth the Registrant's investments in properties: Date of Property Purchase Type of Ownership Use Eastgate Marketplace 08/29/86 Fee ownership Commercial 141,366 sq.ft. Factory Merchants Mall 05/22/86 Fee ownership subject Commercial to a first mortgage 200,222 sq.ft. The Partnership has a 66.7% investment in Northtown Mall Partners ("Northtown"). The Partnership entered into a General Partnership Agreement with Angeles Income Properties, Ltd. III, a California partnership and an affiliate of the General Partner, to form Northtown. Northtown is accounted for on the Partnership's balance sheet using the equity method and is included in "Equity interest in net liabilities of joint venture". The property owned by Northtown, as of December 31, 1995, is summarized as follows: Date of Property Purchase Type of Ownership Use Northtown Mall 06/28/85 66.7% Commercial 806,730 sq.ft. The Partnership had a 50% investment in Moraine West Carrollton Partners ("Moraine"). The Partnership entered into a General Partnership Agreement with Angeles Income Properties, Ltd. III, a California partnership and an affiliate of the General Partner, to form Moraine. The investment property owned by Moraine was sold on July 21, 1994, to an unaffiliated party. The Partnership had a 43% investment in the Fort Worth Option Joint Venture ("Fort Worth"). The Partnership entered into a General Partnership Agreement with Angeles Income Properties, Ltd. V, a California partnership and an affiliate of the General Partner, to form Fort Worth. The remaining property owned by Fort Worth was sold on March 22, 1995, to an unaffiliated party. The Partnership also had a 43% investment in Burlington Outlet Mall Joint Venture ("Burlington"). The Partnership entered into a General Partnership Agreement with Angeles Income Properties, Ltd. III, a California partnership and an affiliate of the General Partner, to form Burlington. On October 30, 1995, Burlington lost its only investment property, Burlington Outlet Mall, through a foreclosure by an unaffiliated mortgage holder. Schedule of Properties:
Gross Carrying Accumulated Federal Property Value Depreciation Rate Method Tax Basis Eastgate Marketplace $ 2,762,257 $ 1,903,374 5-20 yrs (1) $ 3,795,660 Factory Merchants Mall 19,976,666 8,554,723 5-20 yrs (1) 12,104,964 $22,738,923 $10,458,097 $15,900,624 (1) Straight line
See "Note A" of the financial statements included in "Item 7" for a description of the Partnership's depreciation policy. Schedule of Mortgages:
Principal Principal Balance At Balance December 31, Interest Period Maturity Due At Property 1995 Rate Amortized Date Maturity Factory Merchants Mall 1st mortgage $14,469,438 9.87% 20 years 12/1997 $13,853,040
Average annual rental rate and occupancy for 1995 and 1994 for each property: Average Annual Average Rental Rates Occupancy Property 1995 1994 1995 1994 Eastgate Marketplace $ 3.29/s.f. $ 3.35/s.f. 94% 93% Factory Merchants Mall 13.94/s.f. 13.87/s.f. 91% 92% As noted in "Item 1. Description of Business," the real estate industry is highly competitive. All of the properties of the Partnership are subject to competition from other commercial buildings in the area. The General Partner believes that all of the properties are adequately insured. The following is a schedule of the lease expirations for the years 1996-2005: Number of % of Gross Expirations Square Feet Annual Rent Annual Rent Eastgate Marketplace 1996 4 7,388 $ 45,483 9.24% 1997 1 46,000 62,100 12.62% 1998 2 3,264 25,881 5.26% 1999 0 -- -- -- 2000-2005 1 1,150 11,362 2.31% Factory Merchants Mall 1996 14 57,266 $813,021 26.92% 1997 3 5,097 76,050 2.52% 1998 6 22,916 326,672 10.82% 1999 9 34,047 437,400 14.48% 2000 5 17,757 284,764 9.43% 2001 4 33,457 467,859 15.49% 2002 0 0 0 -- 2003 0 0 0 -- 2004 1 8,680 117,180 3.88% 2005 1 2,500 35,874 1.19% The following schedule reflects information on tenants occupying 10% or more of the leasable square footage for Eastgate Marketplace: Nature of Square Footage Annual Rent Business Leased Per Square Foot Lease Expiration Retail 38,524 $4.40 11/30/07 Retail 22,400 3.16 02/13/14 Retail 46,000 1.35 09/30/97 Factory Merchants Mall has no tenants occupying 10% or more of the leasable square footage. Real estate taxes and rates in 1995 for each property were: 1995 1995 Billing Rate Eastgate Marketplace $ 74,585 1.52 Factory Merchants Mall 147,185 .80 Item 3. Legal Proceedings In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, formerly affiliated with Angeles Corporation ("Angeles"), initiated litigation against Fort Worth, and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which was $2,240,000 plus accrued interest from March 1993 ("AMIT Obligation"). MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1.2% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. On November 9, 1994, Fort Worth executed a definitive Settlement Agreement to settle the dispute with respect to the AMIT obligation. The actual closing of the Settlement occurred April 14, 1995. The Partnership's claim against AMIT was satisfied by a cash payment by AMIT totalling $1,932,975 (the "Settlement Amount") plus interest at closing. These funds were applied against the Partnership's $5,000,000 note receivable from Fort Worth (See discussion below). On August 9, 1995, Fort Worth and Angeles entered into an agreement in principle regarding the allowance of an amended claim for the deficiency between the original principal and the Settlement Amount (the "deficiency"). The amended claim equalled 90% of the deficiency, or $276,322. Subsequent to December 31, 1995, the Partnership received $47,527 as payment on the deficiency. As part of the settlement, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement), have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. Additionally, Angeles either directly or through an affiliate, maintained a central disbursement account (the "Account") for the properties and partnerships managed by Angeles and its affiliates, including the Registrant. Angeles caused the Partnership to make deposits to the Account ostensibly to fund the payment of certain obligations of the Partnership. Angeles further caused checks on such account to be written to or on behalf of certain other partnerships. However, of these total deposits, at least $81,263 deposited by or on behalf of the Partnership was used for purposes other than satisfying the liabilities of the Partnership. Accordingly, the Partnership filed a Proof of Claim in the Angeles bankruptcy proceedings for such amount. However, subsequently the General Partner of the Partnership has determined that the cost involved to pursue such claim would likely exceed any amount received, if in fact such claim were to be resolved in favor of the Partnership. Therefore, the Partnership withdrew this claim on August 9, 1995. Subsequent to year end, the Partnership, along with other affiliates, was named in a suit brought by a company which owned a 20% interest in Fort Worth's investment property, the W.T. Waggoner Building, which was sold in 1995. The General Partner believes that there is no merit in this suit and intends to vigorously defend it. Item 4. Submission of Matters to a Vote of Security Holders The Unit holders of the Partnership did not vote on any matter during the fourth quarter of the fiscal year covered by this report. PART II Item 5. Market for the Partnership's Common Equity and Related Security Holder Matters The Partnership, a publicly-held limited partnership, sold 131,800 Limited Partnership Units during its offering period through April 24, 1986, and currently has 131,760 Limited Partnership Units and 5,983 Limited Partners of record. There is no intention to sell additional Limited Partnership Units nor is there an established market for these units. During 1994, the number of Limited Partnership Units decreased by 40 units due to limited partners abandoning their units. In abandoning his or her Limited Partnership Units, a limited partner relinquishes all right, title and interest in the Partnership as of the date of abandonment. There was no change in the number of Limited Partnership Units during 1995. The Partnership has discontinued making cash distributions from operations until and unless the financial condition of the Partnership and other relevant factors warrant resumption of distributions. Item 6. Management's Discussion and Analysis or Plan of Operation Results of Operations This item should be read in conjunction with the consolidated financial statements and other items contained elsewhere in this report. The Partnership recognized net income of $1,447,217 for 1995 versus a net loss of $3,273,457 for 1994. The increase in the net income for the year ended December 31, 1995, as compared to the year ended December 31, 1994, is primarily due to an increase in revenues and tenant reimbursements and an increase in equity in income of the joint ventures (see discussion below). The increase in rental revenue for the year ended December 31, 1995, as compared to the year ended December 31, 1994, is a result of an increase in percentage rent and an increase in the rental rates at Factory Merchant's Mall. The increase in other income is due to an increase in interest income as a result of increased cash balances. General and administrative expense decreased primarily due to a decrease in partnership accounting, investor services and asset management cost reimbursements. The increase in property management fees is due to the increase in rental revenues as such fees are based on revenues. The increase in maintenance expenses for the year ended December 31, 1995, as compared to the year ended December 31, 1994, is primarily caused by increased repairs and maintenance at Factory Merchant's Mall in an effort to enhance the property's curb appeal and thereby increase occupancy. Bad debt expense for the year ended December 31, 1995, increased due to increases in the allowance based on management's review of collectibility of tenant accounts. Tenant reimbursements increased for the year ended December 31, 1995, as compared to the year ended December 31, 1994, due to a different interpretation of the lease agreements at Factory Merchants Mall. The Partnership's equity in the income of the joint ventures is $1,349,648 for the year ended December 31, 1995, and the Partnership's equity in the losses of the joint ventures was $2,412,329 for the year ended December 31, 1994. The change in the equity in income (loss) of joint ventures can be attributed to bad debt recovery for Fort Worth as a result of AMIT's note payment to Fort Worth and to the gain on the foreclosure of Burlington's investment property (see "Note F" for further discussion). As part of the ongoing business plan of the Partnership, the 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 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. Capital Resources and Liquidity The Partnership's primary source of cash is from the operations of its properties and from financing placed on such properties. Cash from these sources is utilized for property operations, capital improvements, and/or repayment of debt. At December 31, 1995, the Partnership had unrestricted cash of $3,425,583 versus $548,218 at December 31, 1994. Net cash provided by operating activities increased in 1995 due to improved operations at the Partnership's investment properties, as discussed above. Net cash from investing activities increased due to the receipt of proceeds from the Fort Worth note receivable and the receipt of distributions from Moraine. Net cash used in financing activities remained stable from 1994 to 1995. 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 $14,469,438, which is secured by the Factory Merchant's Mall investment property, matures in December 1997, at which time the indebtedness will be refinanced or the property will be sold. Future cash distributions will depend on the levels of net cash generated from operations, refinancings, property sales and the availability of cash reserves. There were no cash distributions in 1995 and 1994. On March 15, 1991, Northtown and the holder of the Northtown Mall mortgage note payable entered into an Option Agreement ("Option") whereby such lender has the right and an option to purchase the Northtown Mall property on the terms and conditions as set forth in the Option. The purchase price of the property, as set forth in the Option, is defined as the fair market value of the property. Such Option can be exercised by written notice by the lender at specified dates. A purchase agreement was executed on May 8, 1994 for the sale of all of the Moraine West Carrollton properties to an affiliate of the third party managing agent. The sale was closed on July 21, 1994. Moraine received a net amount of approximately $2,199,000 in proceeds after satisfying all indebtedness. Moraine realized a $140,553 gain on the transaction of which the Partnership's pro rata share was $70,277. Moraine made a final distribution of $1,931,461 in 1995, of which the Partnership's pro-rata share was $965,730, and the joint venture was then dissolved. On March 22, 1995, Fort Worth's remaining property was sold for $300,000 to a tenant of the property. All remaining cash will be used in 1996 to satisfy Fort Worth's remaining debt to the Partnership, at which time Fort Worth will terminate. On October 30, 1995, the Partnership lost Burlington Outlet Mall located in Burlington, NC, through a foreclosure by an unaffiliated mortgage holder. The property was not generating sufficient cash flow to meet debt service requirements. The non-payment of principal and interest constituted a default under terms of the mortgage agreement and allowed the holder of the mortgage agreement to foreclose on the property. The Partnership deemed it to be in its best interest not to contest the foreclosure action. All remaining cash will be used to pay the joint venture's liabilities in 1996, at which time Burlington will be dissolved. Item 7. Financial Statements ANGELES INCOME PROPERTIES, LTD. IV LIST OF FINANCIAL STATEMENTS Report of Independent Auditors Balance Sheet - December 31, 1995 Statements of Operations - Years ended December 31, 1995 and 1994 Statements of Changes in Partners' Deficit - Years ended December 31, 1995 and 1994 Statements of Cash Flows - Years ended December 31, 1995 and 1994 Notes to Financial Statements Report of Ernst & Young LLP, Independent Auditors The Partners Angeles Income Properties, Ltd. IV We have audited the accompanying balance sheet of Angeles Income Properties, Ltd. IV as of December 31, 1995, and the related statements of operations, changes in partners' deficit and cash flows for each of the two years in the period ended December 31, 1995. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the Partnership's management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Angeles Income Properties, Ltd. IV as of December 31, 1995 and the results of its operations and its cash flows for each of the two years in the period ended December 31, 1995, in conformity with generally accepted accounting principles. As discussed in Note J, the statement of changes in partners' deficit has been restated to reflect a correction of the recording of equity interests in the net liabilities of joint ventures in 1993. /S/ ERNST & YOUNG LLP Greenville, South Carolina February 22, 1996 ANGELES INCOME PROPERTIES, LTD. IV BALANCE SHEET December 31, 1995 Assets Cash: Unrestricted $ 3,425,583 Restricted--tenant security deposits 7,589 Accounts receivable, net of allowance of $189,729 217,983 Escrows for taxes and insurance 222,638 Other assets 468,059 Investment properties (Notes B and E): Land $ 2,707,811 Buildings and related personal property 20,031,112 22,738,923 Less accumulated depreciation (10,458,097) 12,280,826 $ 16,622,678 Liabilities and Partners' Deficit Liabilities Accounts payable $ 63,217 Tenant security deposits 7,589 Accrued taxes 147,185 Other liabilities 140,374 Mortgage note payable (Notes B and E) 14,469,438 Equity interest in net liabilities of joint venture, net of advances of $890,597 (Note F) 12,804,789 Partners' Deficit General partner $ (1,359,178) Limited partners (131,760 units issued and outstanding) ( 9,650,736) (11,009,914) $ 16,622,678 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. IV STATEMENTS OF OPERATIONS Years Ended December 31, 1995 1994 Revenues: Rental income $ 3,512,066 $ 3,090,429 Other income 190,643 44,991 Total revenue 3,702,709 3,135,420 Expenses: Operating 975,657 1,011,540 General and administrative 418,852 672,020 Property management fees (Note D) 171,218 123,405 Maintenance 305,779 266,359 Depreciation 1,112,305 1,141,622 Amortization 103,573 69,071 Interest 1,482,686 1,507,415 Property taxes 221,815 214,561 Bad debt expense 171,620 5,476 Tenant reimbursements (1,358,365) (1,014,921) Total expenses 3,605,140 3,996,548 Income (loss) before equity in income (loss) of joint ventures 97,569 (861,128) Equity in income (loss) of joint ventures (Note F) 1,349,648 (2,412,329) Net income (loss) $ 1,447,217 $(3,273,457) Net income (loss) allocated to general partner (2%) $ 28,944 $ (65,469) Net income (loss) allocated to limited partners (98%) 1,418,273 (3,207,988) Net income (loss) $ 1,447,217 $(3,273,457) Net income (loss) per limited partnership unit $ 10.98 $ (24.34) See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. IV STATEMENT OF CHANGES IN PARTNERS' DEFICIT
Limited Partnership General Limited Units Partner Partners Total Original capital contributions 131,800 $ 1,000 $ 65,900,000 $65,901,000 Partners' deficit at December 31, 1993 as previously reported 131,800 $(1,372,355) $(10,296,421) $(11,668,776) Adjustment to correct the recording of equity interests in net liabilities of joint ventures in 1993 (Note J) -- 49,702 2,435,400 2,485,102 Partners' deficit at December 31, 1993, as restated 131,800 (1,322,653) (7,861,021) (9,183,674) Abandonment of Limited Partnership Units (Note I) (40) -- -- -- Net loss for the year ended December 31, 1994 -- (65,469) (3,207,988) (3,273,457) Partners' deficit at December 31, 1994, as restated 131,760 (1,388,122) (11,069,009) (12,457,131) Net income for the year ended December 31, 1995 -- 28,944 1,418,273 1,447,217 Partners' deficit at December 31, 1995 131,760 $(1,359,178) $(9,650,736) $(11,009,914) See Accompanying Notes to Financial Statements
ANGELES INCOME PROPERTIES, LTD. IV STATEMENTS OF CASH FLOWS Years Ended December 31, 1995 1994 Cash flows from operating activities: Net income (loss) $ 1,447,217 $(3,273,457) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Equity in (income) loss of joint ventures (1,349,648) 2,412,329 Depreciation 1,112,305 1,141,622 Bad debt expense 171,620 5,476 Amortization of loan costs and leasing commissions 145,310 109,233 Change in accounts: Restricted cash 557 (2,231) Accounts receivable (280,561) 60,316 Escrows for taxes (52,300) (116,632) Other assets (99,283) (130,836) Accounts payable 24,406 (58,576) Tenant security deposit liabilities (557) 1,077 Accrued taxes 14,811 -- Other liabilities (34,771) (119,284) Net cash provided by operating activities 1,099,106 29,037 Cash flows from investing activities: Property improvements and replacements (270,552) (374,640) Distributions from joint venture 965,730 500,000 Advances to joint ventures (750,031) (808,465) Proceeds from notes receivable 2,111,438 -- Net cash provided by (used in) investing activities 2,056,585 (683,105) Cash flows from financing activities: Payments on mortgage notes payable (278,326) (252,236) Net increase (decrease) in cash and cash equivalents 2,877,365 (906,304) Cash and cash equivalents at beginning of year 548,218 1,454,522 Cash and cash equivalents at end of year $ 3,425,583 $ 548,218 Supplemental disclosure of cash flow information: Cash paid for interest $ 1,443,238 $ 1,469,328 See Accompanying Notes to Financial Statements ANGELES INCOME PROPERTIES, LTD. IV Notes to Financial Statements December 31, 1995 Note A Organization and Significant Accounting Policies Organization: Angeles Income Properties, Ltd. IV (the "Partnership" or "Registrant") is a California limited partnership organized on June 29, 1984, to acquire and operate residential and commercial real estate properties. The Partnership's General Partner is Angeles Realty Corporation II ("ARC II"), an affiliate of Insignia Financial Group, Inc. As of December 31, 1995, the Partnership owns and operates two commercial properties and owns a general partner interest in a third commercial property. Principles of Consolidation: The financial statements include all of the accounts of the Partnership and its majority owned partnerships. All significant interpartnership balances have been eliminated. Minority interest is immaterial and not shown separately on the financial statements. Investment in Joint Ventures: The Partnership accounts for its investments in joint ventures using the equity method of accounting (see "Note F"). Under the equity method, the Partnership records its equity interest in earnings or losses of the joint ventures; however, the investment in the joint ventures will be recorded at an amount less than zero (a liability) to the extent of the Partnership's share of net liabilities of the joint ventures. Allocations and Distributions to Partners: In accordance with the Agreement, any gain from the sale or other disposition of Partnership assets will be allocated first to the General Partner to the extent of the amount of any Brokerage Compensation and Incentive Interest to which the General Partner is entitled. Any gain remaining after said allocation will be allocated to the General Partner and Limited Partners in proportion to their interests in the Partnership. The Partnership will allocate other profits and losses 2% to the General Partner and 98% to the Limited Partners. Except as discussed below, the Partnership will allocate distributions 2% to the General Partner and 98% to the Limited Partners. Upon the sale or other disposition, or refinancing, of any asset of the Partnership, the Distributable Net Proceeds shall be distributed as follows: (i) First, to the General Partner, on account of the current and accrued Management Fee Payable, deferred as contemplated therein; (ii) Second, to the Partners in proportion to their interests until the Limited Partners have received proceeds equal to their Original Capital Investment applicable to the property; (iii) Third, to the Partners until the Limited Partners have received distributions from all sources equal to their 8% Cumulative Distribution; (iv) Fourth, to the General Partner until it has received its Brokerage Compensation and (v) Thereafter, 88% to the Limited Partners in proportion to their interests and 12% ("Incentive Interest") to the General Partner. Depreciation: Depreciation is computed utilizing the straight-line method over the estimated lives of the investment properties and related personal property. For Federal income tax purposes, depreciation is computed by using the straight-line method over an estimated life of 5 to 20 years for personal property and 15 to 40 years for real property. Note A - Organization and Significant Accounting Policies (continued) Cash and Cash Equivalents: The Partnership considers all highly liquid investments with a maturity when purchased of three months or less to be cash equivalents. At certain times, the amount of cash deposited at a bank may exceed the limit on insured deposits. Investment Properties: Prior to the fourth quarter of 1995, investment properties were carried at the lower of cost or estimated fair value, which was determined using the higher of the property's non-recourse debt amount, when applicable, or the net operating income of the investment property capitalized at a rate deemed reasonable for the type of property. During the fourth quarter of 1995, the Partnership adopted FASB Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", which requires impairment losses to be recorded on long- lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amount. The impairment loss is measured by comparing the fair value of the asset to its carrying amount. The effect of adoption was not material. Loan Costs: Loan costs, included in "Other assets," of $165,274 are being amortized on a straight-line basis over the life of the loan. Current accumulated amortization is $83,540. Leases: Commercial building lease terms are generally for one to twenty years. Several tenants have percentage rent clauses which provide for additional rent upon the tenant achieving certain rental objectives. Percentage rent realized totalled $484,600 in 1995 and $291,561 in 1994. Lease Commissions: Lease commissions, included in "Other assets," of $560,509 are being amortized on a straight-line basis over the terms of the respective leases. Current accumulated amortization is $252,789. Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Reclassifications: Certain reclassifications have been made to the 1994 balances to conform to the 1995 presentation. Fair Value: In 1995, the Partnership implemented Statement of Financial Accounting Standards No. 107, "Disclosure about Fair Value of Financial Instruments," which requires disclosure of fair value information about financial instruments for which it is practicable to estimate that value. The carrying amount of the Partnership's cash and cash equivalents approximates fair value due to short-term maturities. The Partnership estimates the fair value of its fixed rate mortgage by discounted cash flow analysis, based on estimated borrowing rates currently available to the Partnership ("Note B"). Note B - Mortgage Note Payable The principal terms of the mortgage note payable are as follows:
Monthly Principal Principal Payment Stated Balance Balance At Including Interest Maturity Due At December 31, Property Interest Rate Date Maturity 1995 Factory Merchants Mall 1st mortgage $143,464 9.87% 12/1997 $13,853,040 $14,469,438
The mortgage note payable is nonrecourse and is secured by pledge of the Partnership s investment property and by pledge of revenues from the investment property. The estimated fair value of the Partnership's debt approximates its carrying amount. Scheduled principal payments for the mortgage note payable subsequent to December 31, 1995, are as follows: 1996 $ 307,079 1997 14,162,359 $14,469,438 Note C - Income Taxes Taxable income or loss of the Partnership is reported in the income tax returns of its partners. Accordingly, no provision for income taxes is made in the financial statements of the Partnership. Differences between the net loss as reported and Federal taxable loss result primarily from differences in methods of accounting for joint ventures and depreciation over different methods and lives and on differing cost basis of investment properties. The following is a reconciliation of reported net loss and Federal taxable loss: 1995 1994 Net income (loss) as reported $ 1,447,217 $(3,273,457) Add (deduct): Depreciation differences 118,852 154,993 Unearned income (38,728) 13,475 Investment in joint venture (7,802,026) (428,194) Bad debts (2,595,928) Other (149,428) (25,575) Federal taxable loss $(9,020,041) $(3,558,758) Federal taxable loss per limited partnership unit $ (67.09) $ (26.74) Note C - Income Taxes (continued) The following is a reconciliation between the Partnership's reported amounts and Federal tax basis of net assets and liabilities: Net liabilities as reported $(11,009,914) Land and buildings 2,693,071 Accumulated depreciation 926,727 Syndication and distribution costs 8,848,293 Investments in Joint Ventures 3,435,794 Note receivable 1,362,443 Other Net assets - Federal tax basis $ 6,256,414 Note D - 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 payments to affiliates for services and as reimbursement of certain expenses incurred by affiliates on behalf of the Partnership. The following payments were made to the General Partner and affiliates in 1995 and 1994: 1995 1994 Property management fees $171,218 $123,405 Reimbursement for services of affiliates 334,171 497,966 The Partnership insures its properties under a master policy through an agency and insurer unaffiliated with the General Partner. An affiliate of the General Partner acquired, in the acquisition of a business, certain financial obligations from an insurance agency which were 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 General Partner, who receives payment on these obligations from the agent. The amount of the Partnership's insurance premiums accruing to the benefit of the affiliate of the General Partner by virtue of the agent's obligations is not significant. Note D - Transactions with Affiliated Parties (continued) In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate investment trust, formerly affiliated with Angeles Corporation ("Angeles"), initiated litigation against the Angeles Fort Worth Option Joint Venture ("Fort Worth"), of which the Partnership is a General Partner, and other partnerships which loaned money to AMIT seeking to avoid repayment of such obligations. The Partnership subsequently filed a counterclaim against AMIT seeking to enforce the obligation, the principal amount of which was $2,240,000 plus accrued interest from March 1993 ("AMIT Obligation"). MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns 1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these Class B Shares, in whole or in part, into Class A Shares on the basis of 1 Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE GP to receive 1.2% of the distributions of net cash distributed by AMIT. These Class B Shares also entitle MAE GP to vote on the same basis as Class A Shares which allows MAE GP to vote approximately 37% of the total shares (unless and until converted to Class A Shares at which time the percentage of the vote controlled represented by the shares held by MAE GP would approximate 1.2% of the vote). Between the date of acquisition of these shares (November 24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since that date, MAE GP voted its shares at the 1995 annual meeting in connection with the election of trustees and other matters. MAE GP has not exerted, and continues to decline to exert, any management control over or participate in the management of AMIT. MAE GP may choose to vote these shares as it deems appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"), an affiliate of the General Partner and an affiliate of Insignia Financial Group, Inc., which provides property management and partnership administration services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class A Shares entitle LAC to vote approximately 1.5% of the total shares. On November 9, 1994, Fort Worth executed a definitive Settlement Agreement to settle the dispute with respect to the AMIT obligation. The actual closing of the Settlement occurred April 14, 1995. The Partnership's claim against AMIT was satisfied by a cash payment by AMIT totalling $1,932,975 (the "Settlement Amount") plus interest at closing. These funds were applied against the Partnership's $5,000,000 note receivable from Fort Worth (See discussion below). On August 9, 1995, Fort Worth and Angeles entered into an agreement in principle regarding the allowance of an amended claim for the deficiency between the original principal and the Settlement Amount (the "deficiency"). The amended claim equalled 90% of the deficiency, or $276,322. Subsequent to December 31, 1995, the Partnership received $47,527 as payment on the deficiency. As part of the settlement, MAE GP granted to AMIT an option to acquire the Class B Shares owned by it. This option can be exercised at the end of 10 years or when all loans made by AMIT to partnerships affiliated with MAE GP as of November 9, 1994, (which is the date of execution of a definitive Settlement Agreement), have been paid in full, but in no event prior to November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at closing, which occurred April 14, 1995, as payment for the option. Upon exercise of the option, AMIT would remit to MAE GP an additional $94,000. Note D - Transactions with Affiliated Parties (continued) Simultaneously with the execution of the option, MAE GP executed an irrevocable proxy in favor of AMIT the result of which is MAE GP will be able to vote the Class B Shares on all matters except those involving transactions between AMIT and MAE GP affiliated borrowers or the election of any MAE GP affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted to the AMIT trustees, in their capacity as trustees of AMIT, proxies with regard to the Class B Shares instructing such trustees to vote said Class B Shares in accordance with the vote of the majority of the Class A Shares voting to be determined without consideration of the votes of "Excess Class A Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT. In 1992, the Partnership loaned Fort Worth $5,000,000 to cover leasing commissions, tenant improvements, and capital expenditures. The note payable required interest at a rate of prime plus 1.5% with monthly interest only payments through January 1996, at which time the principal was due. The note was in default in prior years due to non-payment of interest when due. On December 22, 1994, the Partnership entered into an agreement with Fort Worth and Angeles Income Properties, Ltd. V ("AIPL V"), an affiliate of the General Partner and the other 57% owner of Fort Worth, whereby Fort Worth transferred, assigned and delivered to the Partnership all of Fort Worth's right, title and interests in and to all payment, distributions, profits, returns of capital and benefits accruing from the repayment by AMIT of the loan made to AMIT from Fort Worth. This transfer effectively transferred AIPL V's right, title and interest in and to all payment, distributions, profits, returns of capital and benefits accruing from the repayment by AMIT of the loan made to AMIT from Fort Worth. AIPL V has consented to this transfer, assignment and delivery. The Partnership may make advances to the affiliated joint ventures as deemed appropriate by the General Partner. These advances do not bear interest and do not have stated terms of repayment. Note E - Investment Properties and Accumulated Depreciation Initial Cost To Partnership Cost Buildings Capitalized and Related (Removed) Personal Subsequent to Description Encumbrances Land Property Acquisition Eastgate Marketplace $ -- $ 900,741 $ 3,991,260 $(2,129,744) Factory Merchants Mall 14,469,438 2,413,967 16,155,019 1,407,680 Totals $14,469,438 $3,314,708 $20,146,279 $ (722,064)
Gross Amount At Which Carried At December 31, 1995 Buildings And Related Personal Accumulated Date Depreciable Description Land Property Total Depreciation Acquired Life-Years Eastgate $ 293,843 $ 2,468,414 $ 2,762,257 $ 1,903,374 08/29/86 10-20 Factory Merchants Mall 2,413,968 17,562,698 19,976,666 8,554,723 05/22/86 10-20 Totals $2,707,811 $20,031,112 $22,738,923 $10,458,097
The depreciable lives included above are for the buildings and components. The depreciable lives for related personal property are for 5 to 7 years. Reconciliation of "Investment Properties and Accumulated Depreciation": Year Ended December 31, 1995 1994 Investment Properties Balance at beginning of year $22,468,371 $22,093,731 Property improvements 270,552 374,640 Balance at end of year $22,738,923 $22,468,371 Accumulated Depreciation Balance at beginning of year $ 9,345,792 $ 8,204,170 Additions charged to expense 1,112,305 1,141,622 Balance at end of year $10,458,097 $ 9,345,792 The aggregate cost of the investment for Federal income tax purposes at December 31, 1995 and 1994 is $25,431,994 and $25,169,533, respectively. The accumulated depreciation taken for Federal income tax purposes at December 31, 1995 and 1994 is $9,531,370 and $8,537,917, respectively. Note F - Investment in Joint Ventures The Partnership has a 66.7% investment in Northtown Mall Partners ("Northtown") which is included in "Equity interest in net liabilities of joint venture". The Partnership had a 43% investment in Fort Worth, a 43% investment in Burlington Outlet Mall Joint Venture ("Burlington") and a 50% investment in Moraine West Carrollton Joint Venture ("Moraine"). The Partnership's investment in these joint ventures will terminate effective December 31, 1995, due to the sale of Fort Worth's investment property, the foreclosure of Burlington's investment property and the dissolution of Moraine during 1995 as discussed below. The condensed balance sheet information as of December 31, 1995 for Fort Worth, Northtown and Burlington is as follows: Fort Assets Worth Northtown Burlington Cash $ 62,015 $ 88,139 $ 22,764 Accounts receivable -- 1,390,342 -- Other assets -- 5,739,772 -- Investment properties, net -- 26,410,618 -- Total $ 62,015 $ 33,628,871 $ 22,764 Liabilities and Partners' Deficit Notes payable $ 62,015 $ 51,732,243 $ -- Other liabilities -- 539,063 12,706 Due to partners -- 1,822,852 10,058 Partners' deficit -- (20,465,287) -- Total $ 62,015 $ 33,628,871 $ 22,764 The condensed statements of operations of Fort Worth, Northtown, Burlington and Moraine for the years ended December 31, 1995 and 1994, are summarized as follows:
Fort Worth Northtown 1995 1994 1995 1994 Revenue $ 207,399 $ 758,998 $ 6,319,682 $ 6,051,699 Costs and expenses (460,758) (1,969,300) (8,307,913) (8,302,206) Bad debt recovery 1,932,975 -- -- Extraordinary gain- forgiveness of debt 5,174,115 -- -- -- Loss on disposal of property -- -- (140,544) (169,716) Net income (loss) $ 6,853,731 $(1,210,302) $(2,128,775) $(2,420,223) Note F - Investment in Joint Ventures (continued) Burlington Moraine 1995 1994 1995 1994 Revenue $ 230,472 $ 595,823 $ 12,445 $ 989,221 Costs and expenses (762,497) (1,609,435) (625) (989,260) Gain on foreclosure of property 2,606,903 -- -- -- Gain on sale of property -- -- -- 140,553 Net income (loss) $ 2,074,878 $(1,013,612) $ 11,820 $ 140,514 The Partnership's equity in the income of the joint ventures was $1,349,648 for the year ended December 31, 1995, and the Partnership's equity in the loss of the joint ventures was $2,412,329 for the year ended December 31, 1994. This increase in income can be primarily attributed to Fort Worth and Burlington (see discussion below). Fort Worth: The increase in Fort Worth's income from 1994 to 1995 can be attributed to the following: 1) bad debt recovery as a result of a partial recovery of its receivable from AMIT (see "Note D"), 2) debt forgiveness as a result of the write-off of all outstanding liabilities of Fort Worth and 3) as a result of the sale of Fort Worth's remaining asset, Fort Worth realized a considerable decrease in costs and expenses from 1994 to 1995. Fort Worth's general partners have decided to terminate the joint venture in 1995 after the W.T. Waggoner Building, Fort Worth's remaining property, was sold on March 22, 1995. All remaining cash was used to pay Fort Worth's liabilities in January 1996, at which time the joint venture was dissolved. Subsequent to year end, the Partnership, along with other affiliates, was named in a suit brought by a company which owned a 20% interest in Fort Worth's investment property, the W.T. Waggoner Building, which was sold in 1995. The General Partner believes that there is no merit in this suit and intends to vigorously defend it. Northtown: The net loss at Northtown decreased due to an increase in revenues. The $140,544 loss on disposition of property at Northtown is the result of a roof replacement at the investment property. This loss is due to the write-off of the old roof which was not fully depreciated. On March 15, 1991, Northtown and the holder of the Northtown Mall mortgage note payable entered into an Option Agreement ("Option") whereby the lender has the right and an option to purchase the Northtown Mall property on the terms and conditions as set forth in the Option. The purchase price of the property, as set forth in the Option, is defined as the fair market value of the property. Such Option can be exercised by written notice by the lender at specified dates. Note F - Investment in Joint Ventures (continued) Burlington: On October 30, 1995, Burlington lost its investment property, the Burlington Outlet Mall located in Burlington, NC, through foreclosure by an unaffiliated mortgage holder. The property was not generating sufficient cash flow to meet debt service requirements. The non-payment of principal and interest constituted a default under terms of the mortgage agreement and allowed the holder of the nonrecourse mortgage to foreclose on the property. Burlington recognized a gain of $2,606,903 as a result of the foreclosure, and subsequently the general partners decided to terminate the joint venture. All remaining cash will be used to pay the joint venture's liabilities in 1996, at which time Burlington will be dissolved. Moraine: A purchase agreement was executed on May 8, 1994, for the sale of all the Moraine West Carrollton properties to an affiliate of the third party managing agent. The sale closed on July 21, 1994. Moraine received a net amount of approximately $2,199,000 in proceeds after satisfying all indebtedness. Moraine realized a $140,553 gain on the transaction of which the Partnership's share was $70,277. Moraine made a final distribution of $1,931,461 in 1995, of which the Partnership's share was $965,730, and the joint venture was then dissolved. Note G - Operating Leases Tenants of the commercial properties are responsible for their own utilities and maintenance of their space, and payment of their proportionate share of common area maintenance, utilities, insurance and real estate taxes. Tenants are generally not required to pay a security deposit. As of December 31, 1995, the Partnership had minimum future rentals under noncancellable leases with terms ranging from twelve months to fifteen years. 1996 $ 2,345,452 1997 2,004,646 1998 1,811,313 1999 1,397,776 2000 947,915 Thereafter 2,758,125 $11,265,227 Note H - Ground Lease Factory Merchants Mall is subject to three ground leases. The aggregate annual lease expense for each of the years ended December 31, 1995 and 1994, were $160,424 and $160,249, respectively. Such amounts are included in the statements of operation as operating expenses. The terms of two of the leases provide for increases every year, based on the consumer price index. The terms of the third lease provide for increases every five years, based on the consumer price index. Note H - Ground Lease (continued) As of December 31, 1995, the aggregate minimum rental payments under the land leases are as follows: 1996 $ 160,424 1997 160,424 1998 160,424 1999 160,424 2000 160,424 Thereafter 4,378,250 $5,180,370 Note I - Abandonment of Limited Partnership Units In 1994, the number of Limited Partnership Units decreased by 40 units due to limited partners abandoning their units. In abandoning his or her Limited Partnership Units, a limited partner relinquishes all right, title and interest in the Partnership as of the date of abandonment. However, the limited partner is allocated his or her share of income or loss in the year of abandonment. In 1994, the loss per limited partnership unit in the accompanying statements of operations is calculated based on the number of units outstanding at the beginning of the year. There were no abandonments in 1995. Note J - Adjustment in Recording Equity Interests in Net Liabilities of Joint Ventures In the fourth quarter of 1995 the Partnership became aware of an overstatement in the recorded amount of equity interests in the net liabilities of joint venture due to an error in recording the equity interest in the loss of Fort Worth in 1993. The statement of changes in partners' deficit has been restated, resulting in a decrease in the deficit of $2,485,102. The adjustment had no effect on the net loss for the year ended December 31, 1994. The adjustment also had no effect on the taxable amounts reported to the partners in the Partnership. Item 8. Changes in and Disagreements with Accountant on Accounting and Financial Disclosures There were no disagreements with Ernst & Young LLP regarding the 1995 or 1994 audits of the Partnership's financial statements. PART III Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act The name of the directors and executive officers of Angeles Realty Corporation II ("ARC II"), the Partnership's General Partner as of December 31, 1995, their age and the nature of all positions with ARC II presently held by them are as follows: Name Age Position Carroll D. Vinson 55 President Robert D. Long, Jr. 28 Controller and Principal Accounting Officer William H. Jarrard, Jr. 49 Vice President John K. Lines 36 Secretary Kelley M. Buechler 38 Assistant Secretary Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P., and subsidiaries since August of 1994. Prior to that, during 1993 to August 1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm) and engaged in various other investment and consulting activities. Briefly, in early 1993, Mr. Vinson served as President and Chief Executive Officer of Angeles Corporation, a real estate investment firm. From 1991 to 1993, Mr. Vinson was employed by Insignia in various capacities including Managing Director-President during 1991. From 1986 to 1990, Mr. Vinson was President and a Director of U.S. Shelter Corporation, a real estate services company, which sold substantially all of its assets to Insignia in December 1990. Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to joining Metropolitan Asset Enhancement, L.P., and subsidiaries, he was an auditor for the State of Tennessee and was associated with the accounting firm of Harshman Lewis and Associates. He is a graduate of the University of Memphis. William H. Jarrard, Jr. is Managing Director - Partnership Administration of Insignia Financial Group, Inc. ("Insignia"). During the five years prior to joining Insignia in 1991, he served in a similar capacity for U.S. Shelter. He was previously associated with the accounting firm, Ernst & Whinney, for eleven years. Mr. Jarrard is a graduate of the University of South Carolina and a certified public accountant. John K. Lines has been General Counsel and Secretary of Insignia since June 1994. From May 1993 until June 1994, Mr. Lines was the Assistant General Counsel and Vice President of Ocwen Financial Corporation in West Palm Beach, Florida. From October 1991 until April 1993, Mr. Lines was a Senior Attorney with Banc One Corporation in Columbus, Ohio. From May 1984 until October 1991, Mr. Lines was employed as an Associate Attorney with Squire Sanders & Dempsey in Columbus, Ohio. Kelley M. Buechler is Assistant Secretary of Insignia. During the five years prior to joining Insignia in 1991, she served in a similar capacity for U.S. Shelter. Ms. Buechler is a graduate of the University of North Carolina. Item 10. Executive Compensation No direct form of compensation or remuneration was paid by the Partnership to any officer or director of ARC II. The Partnership has no plan, nor does the Partnership presently propose a plan, which will result in any remuneration being paid to any officer or director upon termination of employment. However, fees and other payments have been made to the Partnership's General Partner and its affiliates, as described in "Note D" of the Financial Statements included under "Item 7", which is incorporated herein by reference. Item 11. Security Ownership of Certain Beneficial Owners and Management As of January 1, 1996, no person owned of record more than 5% of the Limited Partnership Units of the Partnership nor was any person known by the Partnership to own of record and beneficially, or beneficially only, more than 5% of such securities. The Partnership knows of no contractual arrangements, the operation or the terms of which may at a subsequent date result in a change in control of the Partnership, except for: Article 12.1 of the Agreement, which provide that upon a vote of the Limited Partners holding more than 50% of the then outstanding Limited Partnership Units the General Partner may be expelled from the Partnership upon 90 days written notice. In the event that a successor general partner has been elected by Limited Partners holding more than 50% of the then outstanding Limited Partnership Units and if said Limited Partners elect to continue the business of the Partnership, the Partnership is required to pay in cash to the expelled General Partner an amount equal to the accrued and unpaid management fee described in Article 10 of the Agreement and to purchase the General Partner's interest in the Partnership on the effective date of the expulsion, which shall be an amount equal to the difference between (i) the balance of the General Partner's capital account and (ii) the fair market value of the share of Distributable Net Proceeds to which the General Partner would be entitled. Such determination of the fair market value of the share of Distributable Net Proceeds is defined in Article 12.2(b) of the Agreement. Item 12. Certain Relationships and Related Transactions No transactions have occurred between the Partnership and any officer or director of ARC II. During the years ended December 31, 1995, and December 31, 1994, the transactions that occurred between the Partnership and ARC II and affiliates of ARC II pursuant to the terms of the Agreement are disclosed under "Note D" of the Partnership's Financial Statements included under "Item 7", which is hereby incorporated by reference. PART IV Item 13. Exhibits and Reports on Form 8-K (a) Exhibits required by Item 601 of Regulation S-B: Refer to Exhibit Index. (b) Reports on Form 8-K: None. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ANGELES INCOME PROPERTIES, LTD. IV (A California Limited Partnership) (Registrant) By: Angeles Realty Corporation II By: /s/ Carroll D. Vinson Carroll D. Vinson President Date: March 27, 1996 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities on the date indicated. /s/ Carroll D. Vinson President March 27, 1996 Carroll D. Vinson /s/Robert D. Long, Jr. Controller and March 27, 1996 Robert D. Long, Jr. Principal Accounting Officer ANGELES INCOME PROPERTIES, LTD. IV Exhibit Index Exhibit Number Description of Exhibit 3.1 Amended Certificate and Agreement of the Limited Partnership filed in Amendment Number 2 to Form S-11 dated April 25, 1985 which is incorporated herein by reference 10.1 Agreement of Purchase and Sale of Real Property with Exhibits - Northtown Mall filed in Form 8K dated July 15, 1985 which is incorporated herein by reference 10.2 Agreement of Purchase and Sale of Real Property with Exhibits-Burlington Mall Partners filed in Form 8K dated December 19, 1985 which is incorporated herein by reference 10.3 Agreement of Purchase and Sale of Real Property with Exhibits - Moraine West Carrollton Partners filed in Form 8K dated December 20, 1985 which is incorporated herein by reference 10.4 Agreement of Purchase and Sale of Property with Exhibits - Factory Merchants Etc. Mall- Phase I and Phase II filed in Form 8K dated May 22, 1986 which is incorporated herein by reference 10.5 Promissory Note - Fort Worth Center and the W.T. Waggoner Building filed in Form 8K dated July 16, 1986 which is incorporated herein by reference 10.6 Deed of Trust, Assignment of Leases and Rents and Security Agreement - Fort Worth Center and the W.T. Waggoner Building filed in Form 8K dated July 16, 1986 which is incorporated herein by reference 10.7 Deed of Trust - Option - Fort Worth Center and the W.T. Waggoner Building filed in Form 8K dated July 16, 1986 which is incorporated herein by reference 10.8 Security Agreement - Fort Worth Center and the W.T. Waggoner Building filed in Form 8K dated July 16, 1986 which is incorporated herein by reference ANGELES INCOME PROPERTIES, LTD. IV Exhibit Index Exhibit Number Description of Exhibit 10.9 Option Agreement - Fort Worth Center and the W.T. Waggoner Building filed in Form 8K dated July 16, 1986 which is incorporated herein by reference 10.10 Covenant not to compete - Fort Worth Center and the W.T. Waggoner Building filed in Form 8K dated July 16, 1986 which is incorporated herein by reference 10.12 Acquisition or Disposition of Assets - Fort Worth Option Joint Venture - filed in form 8K dated November 1, 1987, which is incorporated herein by reference 10.13 Promissory Note - Northtown Mall. Filed in Form 10-K dated December 31, 1990, Exhibit 10.13, which is incorporated herein by reference 10.14 Stock Purchase Agreement dated November 24, 1992 showing the purchase of 100% of the outstanding stock of Angeles Realty Corporation II, a subsidiary of MAE GP Corporation, filed in Form 8-K dated December 31, 1992, which is incorporated herein by reference 10.15 Acquisition or Disposition of Assets - Moraine West Carrollton - filed in Form 8-K dated July 21, 1994, which is incorporated herein by reference. 16 Letter from Registrant's former accountant regarding its concurrence with the statements made by the Registrant is incorporated by reference to the Exhibit filed with Form 8-K dated September 1, 1993.
EX-27 2
5 This schedule contains summary financial information extracted from Angeles Income Properties Ltd IV 1995 Year-End 10-KSB and is qualified in its entirety by reference to such 10-KSB filing. 0000763049 ANGELES INCOME PROPERTIES LTD IV 1 12-MOS DEC-31-1995 DEC-31-1995 3,425,583 0 407,712 189,729 0 0 22,738,923 10,458,097 16,622,678 0 14,469,438 0 0 0 (11,009,914) 16,622,678 0 3,702,709 0 0 3,605,140 0 1,482,686 1,447,217 0 1,447,217 0 0 0 1,447,217 10.98 0 The Registrant has an unclassified balance sheet.
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