<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Fiscal Year Ended DECEMBER 31, 1995
Commission File Number
2-74063
REAL ESTATE ASSOCIATES LIMITED IV
A CALIFORNIA LIMITED PARTNERSHIP
I.R.S. Employer Identification No. 95-3718731
9090 WILSHIRE BLVD., SUITE 201, BEVERLY HILLS, CALIFORNIA 90211
Registrant's Telephone Number, Including Area Code (310) 278-2191
Securities Registered Pursuant to Section 12(b) or 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed with the Commission by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding twelve months (or 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_______________
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to
this Form 10-K. [X]
<PAGE> 2
PART I.
ITEM 1. BUSINESS:
Real Estate Associates Limited IV ("REAL IV" or the "Partnership") is a limited
partnership which was formed under the laws of the State of California on
August 24, 1981. On March 12, 1982, REAL IV offered 3,000 units consisting of
6,000 Limited Partnership Interests and Warrants to purchase a maximum of 6,000
Additional Limited Partnership Interests through a public offering managed by
Lehman Brothers, Inc.
The general partners of Real IV are National Partnership Investments Corp.
("NAPICO"), a California corporation (the "Corporate General Partner"), and
Coast Housing Investment Associates ("CHIA"). CHIA is a limited partnership
formed under the California Limited Partnership Act and consists of Messrs.
Nicholas G. Ciriello, an unrelated individual, as general partner, and Charles
H. Boxenbaum as limited partner. The business of REAL IV is conducted
primarily by its general partners as REAL IV has no employees of its own.
Casden Investment Corporation ("CIC") owns 100 percent of NAPICO's stock. The
current members of NAPICO's Board of Directors are Charles H. Boxenbaum, Bruce
E. Nelson, Alan I. Casden, Henry C. Casden and Brian D. Goldberg.
REAL IV holds limited partnership interests in twenty-two local limited
partnerships as of December 31, 1995 and a general partner interest in Real
Estate Associates II ("REA II") which in turn holds limited partnership
interests in an additional seven limited partnerships. Therefore, REAL IV
holds directly or indirectly through REA II investments in twenty-nine local
limited partnerships. The general partners of REA II are REAL IV and NAPICO.
Each of the local partnerships own a low income housing project which is
subsidized and/or has a mortgage note payable to or insured by agencies of the
federal or local government.
In order to stimulate private investment in low income housing, the federal
government and certain state and local agencies have provided significant
ownership incentives, including interest subsidies, rent supplements, and
mortgage insurance, with the intent of reducing certain market risks and
providing investors with certain tax benefits, plus limited cash distributions
and the possibility of long-term capital gains. There remains, however,
significant risks. The long-term nature of investments in government assisted
housing limits the ability of REAL IV to vary its portfolio in response to
changing economic, financial and investment conditions. These investments are
also subject to changes in local economic circumstances and housing patterns,
as well as rising operating costs, vacancies, rent collection difficulties,
energy shortages and other factors which have an impact on real estate values.
These projects also require greater management expertise and may have higher
operating expenses than conventional housing projects.
The partnerships in which REAL IV has invested were, at least initially,
organized by private developers who acquired the sites, or options thereon, and
applied for applicable mortgage insurance and subsidies. REAL IV became the
principal limited partner in these local limited partnerships pursuant to
arm's-length negotiations with these developers, or others, who act as general
partners. As a limited partner, REAL IV's liability for obligations of the
local limited partnership is limited to its investment. The local general
partner of the local limited partnership retains responsibility for developing,
constructing, maintaining, operating and managing the project. Under certain
circumstances, REAL IV has the right to replace the general partner of the
local limited partnerships.
Although each of the partnerships in which REAL IV has invested generally owns
a project which must compete in the market place for tenants, interest
subsidies and rent supplements from governmental agencies make it possible to
offer these dwelling units to eligible "low income" tenants at a cost
significantly below the market rate for comparable conventionally financed
dwelling units in the area.
<PAGE> 3
During 1995, the projects in which REAL IV had invested were substantially
rented. The following is a schedule of the status as of December 31, 1995, of
the projects owned by local limited partnerships in which REAL IV, either
directly or indirectly, has invested.
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS AN INVESTMENT
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8/or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------ --------------- -------- -----------
<S> <C> <C> <C> <C>
Alliance Towers
Alliance, OH 101 101/0 100 99%
Antelope Valley Apartments
Lancaster, CA 121 121/0 117 97%
Armitage Commons
Chicago, IL 104 104/0 103 99%
Barnesboro Family Project
Barnesboro, PA 62 62/0 58 94%
Baughman Towers
Philippi, WV 104 104/0 103 99%
Beacon Hill/
Hillsdale Place
Hillsdale, MI 199 199/0 194 97%
Branford Elderly II
Branford, CT 44 44/0 44 100%
Buckingham Apartments
Los Angeles, CA 83 83/0 82 99%
Coatesville Towers
Coatesville, PA 90 90/0 89 99%
Daniel Scott Commons
Chester, PA 72 72/0 70 97%
Ethel Arnold Bradley Gardens
Los Angeles, CA 81 81/0 79 98%
Glenoaks Townhouses
Los Angeles, CA 48 48/0 48 100%
</TABLE>
<PAGE> 4
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS AN INVESTMENT
DECEMBER 31, 1995
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8/or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------ --------------- -------- ------------
<S> <C> <C> <C> <C>
Lakeland Place
Waterford, MI 200 200/ 0 200 100%
Loch Haven Apartments
Lauderhill, FL 208 None 204 98%
Ninety-Five Vine Street
Hartford, CT 31 31/ 0 28 90%
Oakridge Park Apartments
North Biloxi, MS 40 0/ 40 39 98%
O'Fallon Apartments
O'Fallon, IL 132 132/ 0 132 100%
One Madison Avenue
Madison, ME 27 27/ 0 26 96%
Pacific Coast Villa
Long Beach, CA 50 50/ 0 49 98%
Queensbury Heights
Middlesboro, KY 64 0/ 64 58 91%
Rosewood Apartments
Camarillo, CA 150 None 149 99%
Sandwich Apartments
Sandwich, IL 90 90/ 0 88 98%
Scituate Vista
Cranston, RI 232 230/ 0 230 100%
Sterling Village
San Bernardino, CA 80 80/ 0 79 99%
Villa del Sol
Norwalk, CA 121 None 112 93%
</TABLE>
<PAGE> 5
SCHEDULE OF PROJECTS OWNED BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS AN INVESTMENT
DECEMBER 31, 1995
(CONTINUED)
<TABLE>
<CAPTION>
Units Authorized
For Rental
Assistance Under
Section 8/or
Other Rent
No. of Supplement Units Percentage of
Name & Location Units Program Occupied Total Units
- --------------- ------ ---------------- -------- ------------
<S> <C> <C> <C> <C>
Village of Albany/
Village of Brodhead
Albany & Brodhead, WI 32 0/ 32 30 94%
Vista Park Chino
Chino, CA 40 40/ 0 40 100%
Wasco Arms Apartments
Wasco, CA 78 78/ 0 75 96%
Wright Park Phase II
Rome, NY 99 20/ 20 44 44%
----- --------- -----
TOTALS 2,783 2,087/156 2,670 96%
===== ========= =====
</TABLE>
<PAGE> 6
ITEM 2. PROPERTIES:
Through its investment in local limited partnerships, REAL IV holds interests
in real estate properties. See Item 1 and Schedule XI for information
pertaining to these properties.
ITEM 3. LEGAL PROCEEDINGS:
As of December 31, 1995, the Partnership's Corporate General Partner was a
plaintiff or defendant in several lawsuits. None of these suits were related to
REAL IV.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
Not applicable.
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP INTERESTS AND RELATED
SECURITY HOLDER MATTERS:
The limited partnership interests are not traded on a public exchange but were
sold through a public offering managed by Lehman Brothers Inc. It is not
anticipated that any public market will develop for the purchase and sale of
any partnership interest. Limited partnership interests may be transferred
only if certain requirements are satisfied. At December 31, 1995, there were
2,703 registered holders of units in REAL IV. No distributions have been made
from the inception of the Partnership to December 31, 1995. The Partnership
has invested in certain government assisted projects under programs which in
many instances restrict the cash return available to project owners. The
Partnership was not designed to provide cash distributions to investors in
circumstances other than refinancing or disposition of its investments in
limited partnerships.
<PAGE> 7
ITEM 6. SELECTED FINANCIAL DATA:
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
------------ ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Loss From Partnership
Operations $ (654,466) $ (680,262) $ (697,033) $ (705,158) $ (644,530)
Distributions From
Limited Partnerships
Recognized as Income 1,222,286 1,053,488 948,374 737,962 777,030
Equity in Income (Loss)
of Limited Partnerships
and Amortization of
Acquisition Costs 487,116 314,015 372,206 174,023 (14,722)
------------ ------------ ----------- ----------- -----------
Net Income $ 1,054,936 $ 687,241 $ 623,547 $ 206,827 $ 117,778
============ =========== =========== =========== ===========
Net Income per Limited
Partnership Interest $ 80 $ 52 $ 47 $ 16 $ 9
============ =========== =========== =========== ===========
Total assets $ 8,997,384 $ 7,954,058 $ 7,226,884 $ 6,588,593 $ 6,330,155
============ =========== =========== =========== ===========
Investments in Limited
Partnerships $ 3,221,339 $ 3,234,884 $ 3,289,353 $ 3,070,307 $ 3,252,058
============ =========== =========== =========== ===========
Notes Payable $ 1,230,743 $ 1,230,743 $ 1,230,743 $ 1,230,743 $ 1,230,743
============ =========== =========== =========== ===========
</TABLE>
<PAGE> 8
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS:
LIQUIDITY
The Partnership's primary sources of funds include interest income on money
market funds and certificates of deposit and distributions from local
partnerships in which the Partnership has invested. It is not expected that
any of the local limited partnerships in which the Partnership has invested
will generate cash flow sufficient to provide for distributions to the
Partnership's limited partners in any material amount.
CAPITAL RESOURCES
REAL IV received $16,500,000 in subscriptions for units of limited partnership
interests (at $5,000 per unit) during the period March 12, l982 to July 15,
1982, pursuant to a registration statement on Form S-11. As of March 31, 1983,
REAL IV received an additional $16,500,000 in subscriptions pursuant to the
exercise of warrants and the sale of additional limited partnership interests.
RESULTS OF OPERATIONS
The Partnership was formed to provide various benefits to its partners as
discussed in Item 1. It is anticipated that the local limited partnerships in
which REAL IV has invested could produce tax losses for as long as 20 years.
The Partnership will seek to defer income taxes from capital gains by not
selling any projects or project interests within 10 years, except to qualified
tenant cooperatives, or when proceeds of the sale would supply sufficient cash
to enable the partners to pay applicable taxes.
Tax benefits will decline over time as the advantages of accelerated
depreciation are greatest in the earlier years, as deductions for interest
expense will decrease as mortgage principal is amortized, and as the Tax Reform
Act of 1986 limits the deductions available. The Partnership accounts for its
investments in the local limited partnerships on the equity method, thereby
adjusting its investment balance by its proportionate share of the income or
loss of the local limited partnerships.
The Partnership accounts for its investments in the local limited partnerships
on the equity method, thereby adjusting its investment balance by its
prportionate share of the income or loss of the local limited partnerships.
Losses incurred after the limited partnership investment account is reduced to
zero are not recognized.
Distributions received from limited partnerships are recognized as return of
capital until the investment balance has been reduced to zero or to a negative
amount equal to future capital contributions required. Subsequent
distributions received are recognized as income.
<PAGE> 9
Except for certificates of deposit and money market funds, the Partnership's
investments are entirely interests in other limited partnerships owning
government assisted projects. Available cash not invested in Limited
Partnerships is invested in these funds earning interest income as reflected in
the statements of operations. These money market funds and certificates of
deposit can be converted to cash to meet obligations as they arise. The
Partnership intends to continue investing available funds in this manner.
A recurring partnership expense is the annual management fee. The fee is
payable to the Corporate General Partner of the Partnership and is calculated
as a percentage of the Partnership's invested assets. The management fee is
paid to the corporate general partner for its continuing management of
Partnership affairs. The fee is payable beginning with the month following the
Partnership's initial investment in a local limited partnership.
Operating expenses, exclusive of management fees and interest,consist
substantially of professional fees for services rendered to the Partnership.
The Partnership, as a limited partner in the local limited partnerships in
which it has invested, is subject to the risks incident to the management and
ownership of improved real estate. The Partnership investments are also
subject to adverse general economic conditions, and, accordingly, the status of
the national economy, including substantial unemployment and concurrent
inflation, could increase vacancy levels, rental payment defaults, and
operating expenses, which in turn, could substantially increase the risk of
operating losses for the projects.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The Financial Statements and Supplementary Data are listed under Item 14.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE:
Not applicable.
<PAGE> 10
REAL ESTATE ASSOCIATES LIMITED IV
(A California limited partnership)
FINANCIAL STATEMENTS,
FINANCIAL STATEMENT SCHEDULES
AND INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
DECEMBER 31, 1995
<PAGE> 11
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Partners of
Real Estate Associates Limited IV
(A California limited partnership)
We have audited the accompanying balance sheets of Real Estate Associates
Limited IV (a California limited partnership) as of December 31, 1995 and 1994,
and the related statements of operations, partners' equity (deficiency) and
cash flows for each of the three years in the period ended December 31, 1995.
Our audits also included the financial statement schedules listed in the index
on item 14. These financial statements and financial statement schedules are
the responsibility of the management of the Partnership. Our responsibility is
to express an opinion on these financial statements and financial statement
schedules based on our audits. We did not audit the financial statements of
certain limited partnerships, the investments in which are reflected in the
accompanying financial statements using the equity method of accounting. The
investments in these limited partnerships represent 22 percent and 30 percent
of total assets as of December 31, 1995 and 1994, respectively, and the equity
in income of these limited partnerships represents 27 percent, 20 percent and
33 percent of the total net income of the Partnership for the years ended
December 31, 1995, 1994 and 1993, respectively, and represent a substantial
portion of the investee information in Note 2 and the financial statement
schedules. The financial statements of these limited partnerships are audited
by other auditors. Their reports have been furnished to us and our opinion,
insofar as it relates to the amounts included for these limited partnerships,
is based solely on the reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 management, as well as evaluating the overall financial
statement presentation. We believe our audits and the reports of other
auditors provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of other auditors, the
financial statements referred to above present fairly, in all material
respects, the financial position of Real Estate Associates Limited IV as of
December 31, 1995 and 1994, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1995 in
conformity with generally accepted accounting principles. Also, in our
opinion, based on our audits and the reports of other auditors, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 29, 1996
<PAGE> 12
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
INVESTMENTS IN LIMITED PARTNERSHIPS (Note 2) $3,221,339 $3,234,884
CASH AND CASH EQUIVALENTS (Note 1) 5,561,045 4,594,174
SHORT TERM INVESTMENTS (Note 1) 125,000 125,000
OTHER ASSETS 90,000 -
---------- ----------
TOTAL ASSETS $8,997,384 $7,954,058
========== ==========
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY)
LIABILITIES:
Notes payable (Notes 3 and 7) $1,230,743 $1,230,743
Interest payable (Notes 3 and 7) 407,511 432,406
Accounts payable 29,327 16,042
---------- ----------
1,667,581 1,679,191
---------- ----------
COMMITMENTS AND CONTINGENCIES (Notes 4 and 5)
PARTNERS' EQUITY (DEFICIENCY):
General partners (198,732) (209,281)
Limited partners 7,528,535 6,484,148
---------- ----------
7,329,803 6,274,867
---------- ----------
TOTAL LIABILITIES AND PARTNERS'
EQUITY $8,997,384 $7,954,058
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ---------
<S> <C> <C> <C>
INTEREST INCOME $ 152,450 $ 105,982 $ 83,290
---------- ---------- ---------
OPERATING EXPENSES:
Legal and accounting 89,895 83,322 77,027
Management fees - general partner (Note 4) 505,392 505,392 505,392
Interest (Note 2) 123,000 123,000 123,000
Administrative (Note 4) 88,629 74,530 74,904
---------- ---------- ---------
TOTAL OPERATING EXPENSES 806,916 786,244 780,323
LOSS FROM OPERATIONS (654,466) (680,262) (697,033)
DISTRIBUTIONS FROM LIMITED
PARTNERSHIPS RECOGNIZED AS
INCOME (Note 2) 1,222,286 1,053,488 948,374
EQUITY IN INCOME OF LIMITED
PARTNERSHIPS AND AMORTIZATION
OF ACQUISITION COSTS 487,116 314,015 372,206
---------- ---------- ---------
NET INCOME $1,054,936 $ 687,241 $ 623,547
========== ========== =========
NET INCOME PER LIMITED PARTNERSHIP
INTEREST (Note 1) $ 80 $ 52 $ 47
========== ========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
--------- ---------- -----------
<S> <C> <C> <C>
EQUITY (DEFICIENCY),
January 1, 1993 $(222,388) $5,186,467 $4,964,079
Net income for 1993 6,235 617,312 623,547
--------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1993 (216,153) 5,803,779 5,587,626
Net income for 1994 6,872 680,369 687,241
--------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1994 (209,281) 6,484,148 6,274,867
Net income for 1995 10,549 1,044,387 1,054,936
--------- ---------- ----------
EQUITY (DEFICIENCY),
December 31, 1995 $(198,732) $7,528,535 $7,329,803
========= ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 15
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $1,054,936 $ 687,241 $ 623,547
Adjustments to reconcile net income to net cash
used in operating activities:
Equity in income of limited partnerships and amorti-
zation of additional basis and acquisition costs (487,116) (314,015) (372,206)
Decrease (increase) in other assets (90,000) - 53,400
Decrease (increase) in accounts payable and
interest payable (11,610) 39,933 14,744
---------- ---------- ----------
Net cash provided by operating activities 466,210 413,159 319,485
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital contributions to limited partnerships - (200,000) (47,716)
Increase in short term investments - (125,000) -
Distributions from limited partnerships
recognized as return of capital 500,661 568,484 200,876
---------- ---------- ----------
Net cash provided by investing activities 500,661 243,484 153,160
---------- ---------- ----------
NET INCREASE IN CASH AND
CASH EQUIVALENTS 966,871 656,643 472,645
CASH AND CASH EQUIVALENTS,
beginning of year 4,594,174 3,937,531 3,464,886
---------- ---------- ----------
CASH AND CASH EQUIVALENTS,
end of year $5,561,045 $4,594,174 $3,937,531
========== ========== ==========
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW INFORMATION:
Cash paid during the year for interest $ 147,896 $ 96,283 $ 96,353
========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 16
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
Real Estate Associates Limited IV (the Partnership) was formed under
the California Limited Partnership Act on August 24, 1981. The
Partnership was formed to invest either directly or indirectly in
other limited partnerships which own and operate primarily federal,
state and local government-assisted housing projects. The general
partners are National Partnership Investments Corp. (NAPICO), the
corporate general partner, and Coast Housing Investments Associates
(CHIA), a limited partnership. Casden Investment Corp. owns 100
percent of NAPICO's stock. The limited partner of CHIA is an officer
of NAPICO.
The Partnership issued 13,200 limited partner interests through a
public offering. The general partners have a 1 percent interest in
operating profits and losses of the Partnership. The limited partners
have the remaining 99 percent interest in proportion to their
respective investments.
The Partnership shall be dissolved only upon the expiration of 52
complete calendar years (December 31, 2033) from the date of formation
of the Partnership or the occurrence of various other events as
specified in the terms of the Partnership Agreement.
Upon total or partial liquidation of the Partnership or the
disposition or partial disposition of a project or project interest
and distribution of the proceeds, the general partners will be
entitled to a liquidation fee as stipulated in the Partnership
Agreement. The limited partners will have a priority item equal to
their invested capital attributable to the project(s) or project
interest(s) sold and shall receive from the sale of the project(s) or
project interest(s) sold and shall receive from the sale of the
project(s) an amount sufficient to pay state and federal income taxes,
if any, calculated at the maximum rate then in effect. The general
partners' liquidation fee may accrue but shall not be paid until the
limited partners have received distributions equal to 100 percent of
their capital contributions.
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 reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates.
Principles of Consolidation
These financial statements include the accounts of the Partnership and
Real Estate Associates II (REA II), a California general partnership
in which the Partnership holds a 99.9 percent general partner
interest. Losses in excess of the minority interest is equity that
would otherwise be attributed to the minority interest are being
allocated to the Partnership.
5
<PAGE> 17
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Method of Accounting for Investments in Limited Partnerships
The investments in limited partnerships are accounted for on the
equity method. Acquisition, selection and other costs related to the
acquisition of the projects have been capitalized as part of the
investment account and are being amortized on a straight line basis
over the estimated lives of the underlying assets, which is generally
30 years.
Net Income Per Limited Partnership Interest
Net income per limited partnership interest was computed by dividing
the limited partners' share of net income by the number of limited
partnership interests outstanding during the year. The number of
limited partnership interests was 13,202 for all years presented.
Cash and Cash Equivalents
Cash and cash equivalents consist of cash and bank certificates of
deposit with an original maturity date of three months or less.
Short Term Investments
Short term investments consist of bank certificates of deposit with
original maturities ranging from more than three months to twelve
months. The fair value of these securities, which have been
classified as held for sale, approximates their carrying value.
2. INVESTMENTS IN LIMITED PARTNERSHIPS
The Partnership holds limited partnership interests in twenty-two
limited partnerships. In addition, the Partnership holds a general
partner interest in REA II. NAPICO is also a general partner in REA
II. REA II, in turn, holds limited partner interests in seven
additional limited partnerships. In total, therefore, the Partnership
holds interests, either directly or indirectly through REA II, in
twenty-nine partnerships which own residential low income rental
projects consisting of 2,783 apartment units. The mortgage loans of
these projects are payable to or insured by various governmental
agencies.
The Partnership, as a limited partner, is entitled to between 80
percent and 99 percent of the profits and losses of the limited
partnerships it has invested in directly. The Partnership is also
entitled to 99.9 percent of the profits and losses of REA II. REA II
is entitled to a 99 percent interest in each of the limited
partnerships in which it has invested.
Equity in loss of the limited partnerships is recognized until the
investment balance is reduced to zero. Losses incurred after the
limited partnership investment account is reduced to zero are not
recognized. The cumulative amount of the unrecognized equity in
losses of certain limited partnerships was approximately $9,713,000
and $9,316,000 as of December 31, 1995 and 1994, respectively.
6
<PAGE> 18
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Distributions from the limited partnerships are accounted for as a
return of capital until the investment balance is reduced to zero or
to a negative amount equal to further capital contributions required.
Subsequent distributions received are recognized as income.
The following is a summary of the investments in limited partnerships
and reconciliation to the limited partnership accounts:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Investment balance, beginning of year $3,234,884 $3,289,353
Equity in income of limited partnerships 665,948 496,078
Amortization of additional basis capitalized
acquisition costs and fees (178,832) (182,063)
Distributions recognized as return of capital (500,661) (568,484)
Capital contributions - 200,000
---------- ----------
Investment balance, end of year $3,221,339 $3,234,884
========== ==========
</TABLE>
The difference between the investment per the accompanying balance
sheets at December 31, 1995 and 1993, and the deficiency per the
limited partnerships' combined financial statements is due primarily
to cumulative unrecognized equity in losses of certain limited
partnerships, additional basis costs capitalized to the investment
account and cumulative distributions recognized as income.
Selected financial information from the combined financial statements
at December 31, 1995 and 1994 and for each of the three years in the
period ended December 31, 1995, of the limited partnerships in which
the Partnership has invested directly or indirectly, is as follows:
Balance Sheets
<TABLE>
<CAPTION>
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
Land and buildings, net $ 65,753 $ 69,147
======== ========
Total assets $ 81,698 $ 83,590
======== ========
Mortgages payable $ 93,181 $ 92,831
======== ========
Total liabilities $ 98,494 $ 98,716
======== ========
Deficiency of Real Estate
Associates Limited IV $(15,945) $(14,332)
======== ========
Deficiency of other partners $ (851) $ (794)
======== ========
</TABLE>
7
<PAGE> 19
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
2. INVESTMENTS IN LIMITED PARTNERSHIPS (CONTINUED)
Statements of Operations
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total revenue $23,498 $23,484 $23,207
======= ======= =======
Interest expense $ 8,088 $ 8,309 $ 8,627
======= ======= =======
Depreciation $ 3,764 $ 3,679 $ 3,678
======= ======= =======
Total expenses $23,559 $23,416 $23,022
======= ======= =======
Net income (loss) $ (61) $ 68 $ 185
======= ======= =======
Net income allocable to the Partnership $ 269 $ 318 $ 436
======= ======= =======
</TABLE>
Land and buildings above have been adjusted for the amount by which
the investments in the limited partnerships exceed the Partnership's
share of the net book value of the underlying net assets of the
investee which are recorded at historical costs. Depreciation on the
adjustment is provided for over the estimated remaining useful lives
of the properties.
An affiliate of NAPICO is the general partner in two of the limited
partnerships included above, and another affiliate receives property
management fees of 5 percent of their revenue. The affiliate received
property management fees of $120,060, $119,980 and $117,316 in 1995,
1994 and 1993, respectively. The following sets forth the significant
data for these partnerships, reflected in the accompanying financial
statements using the equity method of accounting:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
(in thousands)
<S> <C> <C> <C>
Total assets $ 5,896 $ 5,384
======= =======
Total liabilities $ 8,894 $ 8,410
======= =======
Deficiency of Real Estate Associates Limited IV $(2,968) $(2,995)
======= =======
Deficiency of other partners $ (30) $ (31)
======= =======
Total revenue $ 2,831 $ 2,775 $ 2,727
======= ======= =======
Net income $ 220 $ 181 $ 160
======= ======= =======
</TABLE>
8
<PAGE> 20
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
3. NOTES PAYABLE
Certain of the Partnership's investments involved purchases of
partnership interests from partners who subsequently withdrew from the
operating partnership. The Partnership is obligated on non-recourse
notes payable of $1,230,743 bearing interest at 10 percent, to the
sellers of the partnership interests. The notes and the related
interest are payable by the Partnership through REA II, and have
principal maturity dates ranging from 2015 to 2022 or upon sale or
refinancing of the underlying partnership properties. The notes are
collateralized by REA II's investment in the respective limited
partnerships and are payable only out of cash distributions from the
investee partnerships as defined in the notes. Unpaid interest is due
at maturity of the notes.
Maturity dates on the notes payable are as follows:
<TABLE>
<CAPTION>
Years Ending December 31
------------------------
<S> <C>
1996 $ -
1997 -
1998 -
1999 -
2000 -
Thereafter 1,230,743
----------
$1,230,743
==========
</TABLE>
4. FEES AND EXPENSES DUE GENERAL PARTNER
Under the terms of the Restated Certificate and Agreement of Limited
Partners, the Partnership is obligated to NAPICO for an annual
management fee equal to .4 percent of the original invested assets of
the limited partnerships. Invested assets is defined as the costs of
acquiring project interests, including the proportionate amount of the
mortgage loans related to the Partnerships interest in the capital
accounts of the respective partnerships.
The Partnership reimburses NAPICO for certain expenses. The
reimbursement to NAPICO was $32,004, $30,841 and $30,665 in 1995, 1994
and 1993, respectively, and is included in operating expenses.
5. CONTINGENCIES
The corporate general partner of the Partnership is a plaintiff in
various lawsuits and has also been named a defendant in other lawsuits
arising from transactions in the ordinary course of business. In the
opinion of management and the corporate general partner, the claims
will not result in any material liability to the Partnership.
9
<PAGE> 21
REAL ESTATE ASSOCIATES LIMITED IV
(a California limited partnership)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
6. INCOME TAXES
No provision has been made for income taxes in the accompanying
financial statements since such taxes, if any, are the liability of
the individual partners.
The major differences in tax and financial reporting result from the
use of different bases and depreciation methods for the properties
held by the limited partnerships. Differences in tax and financial
reporting also arise as losses are not recognized for financial
reporting purposes when the investment balance has been reduced to
zero.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosure about
Fair Value of Financial Instruments," requires disclosure of fair
value information about financial instruments, when it is practicable
to estimate that value. The notes payable are collateralized by the
Partnership's investments in the investee limited partnerships and are
payable only out of cash distributions from the investee partnerships.
The operations generated by the investee limited partnerships are
subject to various government rules, regulations and restrictions
which make it impracticable to estimate the fair value of the notes
payable and related accrued interest. The carrying amount of other
assets and liabilities reported on the balance sheets that require
such disclosure approximates fair value due to their short-term
maturity.
8. FOURTH-QUARTER ADJUSTMENT
The Partnership's policy is to record its equity in the income (loss)
of limited partnerships on a quarterly basis, using estimated
financial information furnished by the various local operating general
partners. The equity in income (loss) of limited partnerships
reflected in the accompanying financial statements is based primarily
upon audited financial statements of the investee limited
partnerships. The increase, approximately $91,000, between the
estimated nine-month equity in income and the actual 1995 income has
been recorded in the fourth quarter.
10
<PAGE> 22
SCHEDULE
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1995
-------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1995 butions Received Income (Loss) 31, 1995
- ------------------- ---------- --------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
Alliance Towers $ $ $ (57,930) $ 57,930 $ -
Antelope Village Apts. (57,433) 57,433 -
Armitage Commons
Barnesboro Family Project 482,115 (139,741) (45,537) 296,837
Baughman Towers
Beacon Hill/Hillsdale Place
Branford Elderly II 157,786 (14,900) 45,609 188,495
Buckingham Apts.
Coatesville Towers - (85,185) 85,185 -
Daniel Scott Commons 7,262 (7,262) -
Ethel Arnold Bradley 324,129 (10,578) (33,313) 280,238
Glen Oaks Townhomes
Lakeland Place 110,512 (37,632) 67,661 140,541
Loch Haven Apts. 834,403 (90,000) 45,847 790,250
Ninety-Five Vine St.
Oakridge Park Apts.
O'Fallon Apts.
One Madison
Pacific Coast Villa
Queensbury Heights
Rosewood Apts.
Sandwich Apts
Scituate Vista 1,318,677 206,301 1,524,978
Sterling Village
Villa del Sol
Village of Albany/Brodhead
Vista Chino Park
Wasco Arms Apts.
Wright Park Phase II
---------- --------- --------- --------- ----------
TOTAL $3,234,884 $ - $(500,661) $ 487,116 $3,221,339
========== ========= ========= ========= ==========
</TABLE>
<PAGE> 23
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1994
--------------------------------------------------------------------------
Cash
Balance Capital Distri- Equity Balance
January Contri- butions in December
Limited Partnerships 1, 1994 butions Received Income (Loss) 31, 1994
- -------------------- ---------- -------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Alliance Towers $ 117,965 $ $(194,505) $ 76,540 $
Antelope Village Apts.
Armitage Commons
Barnesboro Family Project 96,560 200,000 185,555 482,115
Baughman Towers
Beacon Hill/Hillsdale Place
Branford Elderly II 149,216 (13,903) 22,473 157,786
Buckingham Apts.
Coatesville Towers 33,676 (94,064) 60,388 -
Daniel Scott Commons 56,191 (85,000) 36,071 7,262
Ethel Arnold Bradley 335,120 (10,579) (412) 324,129
Glen Oaks Townhomes
Lakeland Place 86,633 (37,632) 61,511 110,512
Loch Haven Apts. 820,365 (15,778) 29,816 834,403
Ninty-Five Vine St. 213,316 (213,316)
Oakridge Park Apts.
O'Fallon Apts.
One Madison
Pacific Coast Villa
Queensbury Heights
Rosewood Apts.
Sandwich Apts
Scituate Vista 1,380,311 (117,023) 55,389 1,318,677
Sterling Village
Villa del Sol
Village of Albany/Brodhead
Vista Chino Park
Wasco Arms Apts.
Wright Park Phase II
---------- -------- --------- --------- ----------
TOTAL $3,289,353 $200,000 $(568,484) $ 314,015 $3,234,884
========== ======== ========= ========= ==========
</TABLE>
<PAGE> 24
SCHEDULE
(CONTINUED)
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
Year Ended December 31, 1993
----------------------------
Cash Future
Balance Capital Distri- Equity Balance Capital
January Contri- butions in December Contributions
Limited Partnerships 1, 1993 butions Received Income (Loss) 31, 1993 Payable
- -------------------- ------- ------- -------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C>
Alliance Towers $ $ $ (32,505) $ 150,470 $ 117,965 $
Antelope Village Apts.
Armitage Commons
Barnesboro Family Project 58,190 38,370 96,560 205,000
Baughman Towers
Beacon Hill/Hillsdale Place
Branford Elderly II 127,268 (5,979) 27,927 149,216
Buckingham Apts.
Coatesville Towers (84,121) 117,797 33,676
Daniel Scott Commons 306,638 (250,447) 56,191
Ethel Arnold Bradley 402,045 (10,473) (56,452) 335,120
Glen Oaks Townhomes
Lakeland Place 16,292 (67,798) 138,139 86,633
Loch Haven Apts. 709,969 47,716 62,680 820,365
Ninty-Five Vine St. 231,223 (17,907) 213,316
Oakridge Park Apts.
O'Fallon Apts.
One Madison
Pacific Coast Villa
Queensbury Heights
Rosewood Apts.
Sandwich Apts
Scituate Vista 1,218,682 161,629 1,380,311
Sterling Village
Villa del Sol
Village of Albany/Brodhead
Vista Chino Park
Wasco Arms Apts.
Wright Park Phase II
---------- -------- --------- ---------- ---------- --------
TOTAL $3,070,307 $ 47,716 $(200,876) $ 372,206 $3,289,353 $205,000
========== ======== ========= ========== ========== ========
</TABLE>
<PAGE> 25
SCHEDULE
(Continued)
REAL ESTATE ASSOCIATES LIMITED IV
INVESTMENT IN LIMITED PARTNERSHIPS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
NOTES: 1. Equity in income (losses) of the limited partnerships
represents the Partnership's allocable share of the
net income (loss) from the limited partnerships for
the year. Equity in income (losses) of the limited
partnerships will be recognized until the investment
balance is reduced to zero, or below zero to an
amount equal to future capital contributions to be
made by the Partnership.
2. Cash distributions from the limited partnerships will
be treated as a return on the investment and will
reduce the investment balance until such time as the
investment is reduced to an amount equal to
additional contributions. Distributions subsequently
received will be recognized as income.
<PAGE> 26
SCHEDULE III
REAL ESTATE ASSOCIATES LIMITED IV
REAL ESTATE AND ACCUMULATED DEPRECIATION
OF PROPERTY HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Number Outstanding Buildings,
of Mortgage Furnishings, Accumulated Construction
Partnership/Location Units Loan Land & Equipment Total Depreciation Period
-------------------- ---- ----------- ----------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alliance Towers 101 $ 2,468,265 $ 306,054 $ 3,205,200 $ 3,511,254 $2,120,866 (A)
Alliance, OH
Antelope Valley Apartments 121 5,412,086 377,311 6,827,086 7,204,397 3,149,459 1982-1983
Lancaster, CA
Armitage Commons 104 4,873,096 234,000 4,816,326 5,050,326 2,336,964 1982-1983
Chicago, IL
Barnesboro Family Project 62 1,956,417 55,247 2,742,741 2,797,988 1,197,941 1982-1983
Barnesboro, PA
Baughman Towers 104 3,662,658 285,159 4,045,437 4,330,596 2,627,119 (A)
Phillippi, WV
Beacon Hill/ 199 6,879,253 1,209,738 7,861,691 9,071,429 5,382,211 (A)
Hillsdale Place
Hillsdale, MI
Branford Elderly II 44 1,463,159 306,089 1,625,960 1,932,049 519,605 1982-1983
Branford, CT
Buckingham Apartments 83 3,579,170 608,527 4,054,297 4,662,824 1,833,865 1982-1983
Los Angeles, CA
Coatesville Towers 90 2,559,390 429,145 2,945,838 3,374,983 1,964,747 (A)
Coatesville, PA
Daniel Scott Commons 72 3,205,700 86,400 3,787,978 3,874,378 1,234,755 1982-1983
Chester, PA
Ethel Arnold 81 4,088,662 1,020,762 3,979,226 4,999,988 1,272,750 1982-1983
Los Angeles, CA
Glenoaks Townhouses 48 2,529,367 716,570 2,555,316 3,271,886 1,171,735 1982-1983
Los Angeles, CA
Lakeland Place 200 4,932,302 663,771 5,325,248 5,989,019 3,772,463 (A)
Waterford, MI
Loch Haven Apartments 208 3,000,000 402,000 4,456,799 4,858,799 3,059,151 (A)
Lauderhill, FL
Oakridge Park Apts. 40 960,945 40,000 1,125,466 1,165,466 981,509 1982-1983
North Biloxi, MS
One Madison Avenue 27 960,594 83,750 1,076,522 1,160,272 515,366 1982-1983
Madison, ME
O'Fallon Apartments 132 4,477,144 149,211 4,768,491 4,917,702 2,111,452 1981-1982
O'Fallon, IL
Pacific Coast Villa 50 1,249,904 100,000 1,607,587 1,707,587 830,244 (A)
Long Beach, CA
Queensbury Heights 64 1,891,885 50,000 2,560,072 2,610,072 1,009,738 1982-1983
Middlesboro, KY
Rosewood Apartments 150 5,400,625 541,000 5,799,175 6,340,175 3,139,539 (A)
Camarillo, CA
Sandwich Apartments 90 2,520,000 60,000 3,569,713 3,629,713 2,413,411 (A)
Sandwich, IL
Scituate Vista 232 7,357,199 411,548 10,146,815 10,558,363 4,012,782 1981-1983
Cranston, RI
Sterling Village 80 2,890,137 280,000 3,479,727 3,759,727 2,076,471 1982-1983
San Bernardino, CA
Villa del Sol 121 3,668,245 345,959 4,038,693 4,384,652 2,531,893 (A)
Norwalk, CA
Village of Albany/ 32 1,056,979 59,850 1,149,498 1,209,348 486,864 1982-1983
Village of Brodhead
Albany & Brodhead, WI
95 Vine Street 31 1,389,783 280,000 1,738,801 2,018,801 578,423 1982-1983
Hartford, CT
Vista Park Chino 40 1,973,812 261,548 2,350,219 2,611,767 1,097,640 1982-1983
Chino, CA
Wasco Arms Apartments 78 3,296,850 160,991 4,242,657 4,403,648 2,021,158 1982-1983
Wasco, CA
Wright Park Phase II 99 3,477,233 17,530 3,390,330 3,407,860 1,928,092 (A)
Rome, NY
Additional carrying value of real 941,860 9,200,516 10,142,376 5,826,093
estate on investee limited
partnerships not recorded on
said limited partnerships
----- ----------- ----------- ------------ ------------ -----------
TOTAL 2,783 $93,180,860 $10,484,020 $118,473,425 $128,957,445 $63,204,306
===== =========== =========== ============ ============= ===========
</TABLE>
(A) This project was complete when REAL IV entered the Partnership.
<PAGE> 27
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED IV
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS INVESTMENTS
DECEMBER 31, 1995
NOTES: 1. Each local limited partnership has developed, owns and
operates the housing project. Substantially all project
costs, including construction period interest expense, are
being capitalized by the limited partnerships.
2. Depreciation is, or will be, provided for by various methods
over the estimated useful lives of the projects. The
estimated composite useful lives of the buildings are
generally from 25 to 40 years.
3. Investments in property and equipment:
<TABLE>
<CAPTION>
Buildings,
Furnishings,
And
Land Equipment Total
----------- ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1993 $10,262,475 $116,657,430 $126,919,905
Net additions during 1993 - 582,287 582,287
----------- ------------ ------------
Balance, December 31, 1993 10,262,475 117,239,717 127,502,192
Net additions during 1994 44,528 1,149,116 1,193,644
----------- ------------ ------------
Balance, December 31, 1994 10,307,003 118,388,833 128,695,836
Net additions during 1995 177,017 84,592 261,609
----------- ------------ ------------
Balance, December 31, 1995 $10,484,020 $118,473,425 $128,957,445
=========== ============ ============
</TABLE>
<PAGE> 28
SCHEDULE III
(Continued)
REAL ESTATE ASSOCIATES LIMITED IV
REAL ESTATE AND ACCUMULATED DEPRECIATION OF PROPERTY
HELD BY LOCAL LIMITED PARTNERSHIPS
IN WHICH REAL IV HAS INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
Buildings
Furnishings
and Equipment
-------------
<S> <C>
ACCUMULATED DEPRECIATION:
- -------------------------
Balance, January 1, 1993 $49,991,245
Net additions during 1993 7,700,489
-----------
Balance, December 31, 1993 57,691,734
Net additions during 1994 1,856,956
-----------
Balance, December 31, 1994 59,548,690
Net additions during 1995 3,655,616
-----------
Balance, December 31, 1995 $63,204,306
===========
</TABLE>
<PAGE> 29
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT:
REAL ESTATE ASSOCIATES LIMITED IV (the "Partnership") has no directors or
executive officers of its own.
National Partnership Investment Corp. ("NAPICO" or "the Managing General
Partner") is a wholly-owned subsidiary of Casden Investment Corporation, an
affiliate of The Casden Company. The following biographical information is
presented for the directors and executive officers of NAPICO with principal
responsibility for the Partnership's affairs.
CHARLES H. BOXENBAUM, 66, Chairman of the Board of Directors and Chief
Executive Officer of NAPICO.
Mr. Boxenbaum has been associated with NAPICO since its inception. He has been
active in the real estate industry since 1960, and prior to joining NAPICO was
a real estate broker with the Beverly Hills firm of Carl Rhodes Company.
Mr. Boxenbaum has been a guest lecturer at national and state realty
conventions, certified properties exchanger's seminars, Los Angeles Town Hall,
National Association of Home Builders, International Council of Shopping
Centers, Society of Conventional Appraisers, California Real Estate
Association, National Institute of Real Estate Brokers, Appraisal Institute,
various mortgage banking seminars, and the North American Property Forum held
in London, England. In 1963, he was the winner of the Snyder Award, the
highest annual award offered by the National Association of Real Estate Boards
for Best Exchange. He is one of the founders and a past director of the First
Los Angeles Bank, organized in November 1974. Mr. Boxenbaum was a member of
the Board of Directors of the National Housing Council. Mr. Boxenbaum received
his Bachelor of Arts degree from the University of Chicago.
BRUCE E. NELSON, 44, President and a director of NAPICO.
Mr. Nelson joined NAPICO in 1980 and became President in February 1989. He is
responsible for the operations of all NAPICO sponsored limited partnerships.
Prior to that he was primarily responsible for the securities aspects of the
publicly offered real estate investment programs. Mr. Nelson is also involved
in the identification, analysis, and negotiation of real estate investments.
From February 1979 to October 1980, Mr. Nelson held the position of Associate
General Counsel at Western Consulting Group, Inc., private residential and
commercial real estate syndicators. Prior to that time, Mr. Nelson was engaged
in the private practice of law in Los Angeles. Mr. Nelson received his
Bachelor of Arts degree from the University of Wisconsin and is a graduate of
the University of Colorado School of Law. He is a member of the State Bar of
California and is a licensed real estate broker in California and Texas.
ALAN I. CASDEN, 50, Chairman of The Casden Company, an affiliate of Casden
Properties (formerly CoastFed Properties), a director and member of the audit
committee of NAPICO, and chairman of the Executive Committee of NAPICO.
Mr. Casden is Chairman of the Board, Chief Executive Officer and sole
shareholder of The Casden Company and Casden Investment Company. Prior to
that, he was the president and chairman of Mayer Group, Inc., which he joined
in 1975. He is also chairman of Mayer Management, Inc., a real estate
management firm. Mr. Casden has been involved in approximately $3 billion of
real estate financings and sales and has been responsible for the development
and construction of more than 12,000 apartment units and 5,000 single-family
homes and condominiums.
<PAGE> 30
Mr. Casden is a member of the American Institute of Certified Public
Accountants and of the California Society of Certified Public Accountants. Mr.
Casden is a member of the advisory board of the National Multi-Family Housing
Conference, the Multi-Family Housing Council, and the President's Council of
the California Building Industry Association. He also serves on the advisory
board to the School of Accounting of the University of Southern California. He
holds a Bachelor of Science degree and a Masters in Business Administration
degree from the University of Southern California.
HENRY C. CASDEN, 52, President, Chief Operating Officer and Secretary of The
Casden Company and a director and secretary of NAPICO.
Mr. Casden has been President and Chief Operating Officer of The Casden
Company, as well as a director of NAPICO since February 1988. He became
secretary of both companies in late 1994. From 1982 to 1988, Mr. Casden was of
counsel and a partner in the Los Angeles law firm of Troy, Casden & Gould.
From 1978 to 1981, he was of counsel and a partner in the Los Angeles law firm
of Loeb & Loeb. From 1972 to 1978, Mr. Casden was a member of the Beverly
Hills law firm of Fink & Casden, Professional Corporation.
Mr. Casden received his Bachelor of Arts degree from the University of
California at Los Angeles, and is a graduate of the University of San Diego Law
School. Mr. Casden is a member of the State Bar of California and has numerous
professional affiliations.
BRIAN D. GOLDBERG, 32, Chief Financial Officer of The Casden Company and a
director of NAPICO.
Mr. Goldberg joined The Casden Company in 1990 as Vice President of Finance and
became Chief Financial Officer in March 1991. Prior to joining The Casden
Company, Mr. Goldberg was with Arthur Andersen & Co., an international public
accounting firm, from August 1985 until July 1990 in their Los Angeles office.
He received his bachelor of science degree in Accounting from the University of
Denver. Mr. Goldberg is a member of the American Institute of Certified Public
Accountants and the California Society of Certified Public Accountants.
SHAWN HORWITZ, 36, Executive Vice President and Chief Financial Officer.
Mr. Horwitz joined NAPICO in 1990 and is responsible for the financial affairs
of NAPICO and the limited partnerships sponsored by NAPICO. Prior to joining
NAPICO, Mr. Horwitz was President for approximately one year of Star Sub Shops,
Inc., a corporation engaged in the business of selling fast food franchises,
was an audit manager in the real estate industry group for Altschuler, Melvin &
Glasser for six years, and was an auditor with Arthur Young & Co. for 3 years.
Mr. Horwitz received his Bachelor of Commerce degree in accounting from Rhodes
University in South Africa and is a member of the Illinois Society of Certified
Public Accountants, the American Institute of Certified Public Accountants and
the South African Institute of Chartered Accountants.
BOB SCHAFER, 54, Vice President and Corporate Controller.
Mr. Schafer joined NAPICO in 1984 and is the Corporate Controller responsible
for the financial reporting function of the Company. Prior to this, he was a
Group and Division Controller at Bergen Brunswig for over eight years,
Controller at a Flintkote subsidiary for over four years, and Assistant
Controller at an electronics subsidiary of General Electric for two years.
Mr. Schafer is a member of the California Society of Certified Public
Accountants. He holds a Bachelor of Science degree in accounting from Woodbury
University, Los Angeles.
<PAGE> 31
PATRICIA W. TOY, 66, Senior Vice President - Communications and Assistant
Secretary.
Mrs. Toy joined NAPICO in 1977, following her receipt of an MBA from the
Graduate School of Management, UCLA. From 1952 to 1956, Mrs. Toy served as a
U.S. Naval Officer in communications and personnel assignments. She holds a
Bachelor of Arts Degree from the University of Nebraska.
MARK L. WALTHER, 35, Executive Vice President, General Counsel and Assistant
Secretary.
Mr. Walther joined NAPICO in 1987 and is responsible for the legal affairs of
the NAPICO sponsored limited partnerships. Prior to joining NAPICO, Mr.
Walther worked in the San Francisco law firm of Browne and Kahn which
specialized in construction litigation. Mr. Walther received his Bachelor of
Arts Degree in Political Science from the University of California, Santa
Barbara and is a graduate of the University of California, Davis, School of
Law. He is a member of the State Bar of Hawaii.
<PAGE> 32
ITEM 11. MANAGEMENT RENUMERATION AND TRANSACTIONS:
Real Estate Associates Limited IV has no officers, employees or directors.
However, under the terms of the Restated Certificate and Agreement of Limited
Partnership, the Partnership is obligated to pay the Corporate General Partner
an annual management fee. The annual management fee is approximately equal to
.4% of the invested assets, including the Partnership's allocable share of the
mortgages related to real estate properties held by local limited partnerships.
The fee is earned beginning in the month the Partnership makes its initial
contribution to the limited partnership. In addition, the Partnership
reimburses the Corporate General Partner for certain expenses.
An affiliate of the General Partner is responsible for the on-site property
management for certain properties owned by the limited partnerships in which
the Partnership has invested.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT:
(a) Security Ownership of Certain Beneficial Owners
The general partners own all of the outstanding general partnership
interests of REAL IV; no person is known to own beneficially in
excess of 5% of the outstanding limited partnership interests.
(b) At December 31, 1995, security ownership of management is as listed:
<TABLE>
<CAPTION>
Percentage of
Outstanding
Amount and Limited
Name of Nature of Partnership
Title of Class Owner Beneficial Owner Interests
- -------------- ------- ---------------- -----------
<S> <C> <C> <C>
Limited Charles H. Boxenbaum
Partnership 780 Latimer Road
Interest Santa Monica, CA 90402 $7,500 *
</TABLE>
* Cumulative limited partnership interests owned by corporate officers
or the General Partner is less than 1% interest of total outstanding
Limited Partnership interests.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The Partnership has no officers, directors or employees of it's own. All of
its affairs are managed by the Corporate General Partner, National Partnership
Investments Corp. The transactions with the Corporate General Partner are
primarily in the form of fees paid by the Partnership to the general partner
for services rendered to the Partnership, as discussed in Item 11 and in the
notes to the accompanying financial statements.
<PAGE> 33
ITEM 14. FINANCIAL STATEMENTS, SCHEDULES, EXHIBITS AND REPORT ON FORM
8-K:
FINANCIAL STATEMENTS
Report of Independent Public Accountants.
Balance Sheets as of December 31, 1995 and December 31, 1994.
Statements of Operations for the years ended December 31, 1995, 1994 and 1993.
Statements of Partners' Equity (Deficiency) for the years ended December 31,
1995, 1994 and 1993.
Statements of Cash Flows for the years ended December 31, 1995, 1994 and 1993.
Notes to Financial Statements December 31, 1995.
FINANCIAL STATEMENT SCHEDULES
APPLICABLE TO REAL ESTATE ASSOCIATES LIMITED IV, REAL ESTATE ASSOCIATES II AND
TO THE LIMITED PARTNERSHIPS IN WHICH REAL ESTATE ASSOCIATES IV AND REAL ESTATE
ASSOCIATES II HAVE INVESTMENTS:
Schedule - Investment in Limited Partnerships, December 31, 1995, 1994 and
1993.
Schedule III - Real Estate and Accumulated Depreciation, December 31, 1995.
The remaining schedules are omitted because any required information is
included in the financial statements and notes thereto.
EXHIBITS
(3) Articles of incorporation and bylaws: The registrant is not
incorporated. The Partnership Agreement was filed with Form S-11,
File #274063 which is hereby incorporated by reference.
(10) Material contracts: The registrant is not party to any material
contracts, other than the Restated Certificate and Agreement of
Limited Partnership dated August 24, 1981, and the twenty-nine
contracts representing the Partnership investment directly or
indirectly in local limited partnerships as previously filed at the
Securities Exchange Commission, File #274063 which is hereby
incorporated by reference.
(13) Annual report to security holders: Pages ____ to ____.
REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the year ended December 31, 1995.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PARTNERSHIP'S STATEMENTS OF EARNINGS AND BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 5,561,045
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,686,045
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,997,384
<CURRENT-LIABILITIES> 29,327
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,329,803
<TOTAL-LIABILITY-AND-EQUITY> 8,997,384
<SALES> 0
<TOTAL-REVENUES> 1,861,852
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 683,916
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 123,000
<INCOME-PRETAX> 1,054,936
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,054,936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,054,936
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
