SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1996 Commission file number 0-8469
JMB INCOME PROPERTIES, LTD. - IV
(Exact name of registrant as specified in its charter)
Illinois 36-2857658
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . 9
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . 12
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 3,877,752 6,822,336
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . 277,546 379,877
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . 314 27,086
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 121,456 18,880
------------ -----------
Total current assets. . . . . . . . . . . . . . . . . . . . . . 4,277,068 7,248,179
------------ -----------
Investment property, at cost:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 429,000 429,000
Buildings and improvements. . . . . . . . . . . . . . . . . . . . . . 15,978,029 15,978,029
------------ -----------
16,407,029 16,407,029
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . 11,102,589 10,916,302
------------ -----------
Total investment property, net of accumulated depreciation. . . 5,304,440 5,490,727
Deferred expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 74,139 100,616
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . 265,903 250,554
------------ -----------
$ 9,921,550 13,090,076
============ ===========
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
Current liabilities:
Current portion of long-term debt . . . . . . . . . . . . . . . . . . $ 437,759 416,495
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . 27,056 16,349
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . 14,374 16,066
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,534 45,681
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . 94,136 --
------------ -----------
Total current liabilities . . . . . . . . . . . . . . . . . . . 618,859 494,591
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . 17,595 18,845
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . 820,107 820,107
Long-term debt, less current portion. . . . . . . . . . . . . . . . . . 2,610,247 2,834,574
------------ -----------
Commitments and contingencies
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . 4,066,808 4,168,117
Venture partner's equity in venture . . . . . . . . . . . . . . . . . . 901,972 1,576,047
Partners' capital accounts (deficits):
General partners:
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . . 2,339,807 2,328,570
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (3,729,765) (3,375,428)
------------ -----------
(1,389,958) (1,046,858)
------------ -----------
Limited partners (20,005 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . 17,996,292 17,996,292
Cumulative net earnings (loss). . . . . . . . . . . . . . . . . . . 39,327,727 38,777,119
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . (50,981,291) (48,380,641)
------------ -----------
6,342,728 8,392,770
------------ -----------
Total partners' capital accounts. . . . . . . . . . . . . . . . 4,952,770 7,345,912
------------ -----------
$ 9,921,550 13,090,076
============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Rental income . . . . . . . . . . . . . . . . . $ 948,693 1,127,569 1,997,050 2,202,753
Interest income . . . . . . . . . . . . . . . . 72,076 85,218 145,063 154,268
----------- ---------- ----------- ----------
1,020,769 1,212,787 2,142,113 2,357,021
----------- ---------- ----------- ----------
Expenses:
Mortgage and other interest . . . . . . . . . . 77,062 86,886 156,672 176,080
Depreciation. . . . . . . . . . . . . . . . . . 92,763 92,979 186,287 185,959
Property operating expenses . . . . . . . . . . 406,241 407,264 834,262 769,839
Professional services . . . . . . . . . . . . . 11,460 27,400 27,493 32,400
Amortization of deferred expenses . . . . . . . 14,038 14,801 28,001 29,031
General and administrative. . . . . . . . . . . 22,419 16,471 43,866 20,568
----------- ---------- ----------- ----------
623,983 645,801 1,276,581 1,213,877
----------- ---------- ----------- ----------
Operating earnings (loss) . . . . . . . 396,786 566,986 865,532 1,143,144
Venture partner's share of venture's operations . (138,260) (210,154) (303,687) (405,616)
----------- ---------- ----------- ----------
Net earnings (loss) . . . . . . . . . . $ 258,526 356,832 561,845 737,528
=========== ========== =========== ==========
Net earnings (loss) per limited
partnership interest. . . . . . . . . $ 12.66 17.48 27.52 36.13
=========== ========== =========== ==========
Cash distributions per limited
partnership interest. . . . . . . . . $ 130.00 -- 130.00 --
=========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(UNAUDITED)
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 561,845 737,528
Items not requiring (providing) cash or cash equivalents:
Depreciation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186,287 185,959
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . 28,001 29,031
Venture partner's share of venture's operations . . . . . . . . . . . . 303,687 405,616
Changes in:
Rents and other receivables . . . . . . . . . . . . . . . . . . . . . . 102,331 19,702
Prepaid expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,772 15,265
Escrow deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . (102,576) (119,672)
Accrued rents receivable. . . . . . . . . . . . . . . . . . . . . . . . (15,349) (147,791)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,707 5,391
Accrued interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,692) (19,208)
Unearned rents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (147) 33,182
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . . . 94,136 94,887
Tenant security deposits. . . . . . . . . . . . . . . . . . . . . . . . (1,250) (1,750)
----------- -----------
Net cash provided by (used in) operating activities . . . . . . . 1,192,752 1,238,140
----------- -----------
Cash flows from investing activities:
Net sales and maturities (purchases) of short-term investments. . . . . . -- (2,771,309)
Additions to investment properties. . . . . . . . . . . . . . . . . . . . -- (3,921)
Payment of deferred expenses. . . . . . . . . . . . . . . . . . . . . . . (1,524) (5,732)
----------- -----------
Net cash provided by (used in) investing activities . . . . . . . (1,524) (2,780,962)
----------- -----------
Cash flows from financing activities:
Principal payments on long-term debt. . . . . . . . . . . . . . . . . . . (203,063) (215,352)
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (2,600,650) --
Distributions to general partners . . . . . . . . . . . . . . . . . . . . (354,337) --
Distribution to venture partner . . . . . . . . . . . . . . . . . . . . . (977,762) --
----------- -----------
Net cash provided by (used in) financing activities . . . . . . . (4,135,812) (215,352)
----------- -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . (2,944,584) (1,758,174)
Cash and cash equivalents, beginning of year. . . . . . . . . . . 6,822,336 3,110,077
----------- -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . $ 3,877,752 1,351,903
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ 158,364 206,314
=========== ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
=========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1995
which are included in the Partnership's 1995 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.
Statement of Financial Accounting Standards No. 121 was adopted by the
Partnership on January 1, 1996.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement of direct expenses relating
to the administration of the Partnership and the operation of the
Partnership's remaining investment. Fees, commissions and other expenses
required to be paid by the Partnership to the General Partners and their
affiliates as of June 30, 1996 and for the six months ended June 30, 1996
and 1995 were as follows:
Unpaid at
June 30,
1996 1995 1996
-------- ------- -------------
Property management fees. . . $ 99,031 103,786 --
Insurance commissions . . . . 7,657 9,348 --
Reimbursement (at cost) for
out-of-pocket expenses. . . 11,230 516 10,957
-------- ------- ------
$117,918 113,650 10,957
======== ======= ======
HUNTSVILLE (PARKWAY CITY MALL)
Huntsville Mall Associates ("Huntsville") discontinued its
distributions effective with the first quarter of 1993 in order to fund
certain tenant allowances and a limited renovation of the shopping center
in 1993 and 1994. Subsequently, Huntsville had examined a potential
redevelopment of the Parkway City Mall in response to market conditions,
which it has determined not to undertake, as described below.
Consequently, in May 1996, Huntsville made a special distribution of its
cash flow from operations for 1993, 1994 and 1995.
Parkway City Mall is one of the two malls serving the Huntsville
metropolitan area. Several years ago, another shopping center developer
announced plans for a proposed third mall which, if built, would
significantly impact the market share of the Parkway City Mall. More
recently, several department stores, some of which currently have stores at
the Parkway City Mall, have announced their intention to open stores at the
proposed third mall. The potential development of the third mall continues
to have substantial adverse effects on Huntsville's ability to market the
Parkway City Mall for lease or sale. Huntsville had considered other
alternative plans, including potential financing options, to reposition the
property to effectively compete with the third mall. However, due to the
complexity of the redevelopment, the lengthy time span likely needed to
complete the project and the joint venture's and the Partnership's desire
to wind up their affairs within the next few years, it was determined that
it would be better for a buyer with a longer-term ownership perspective to
undertake the redevelopment. Accordingly, in May 1996, Huntsville
distributed funds ($3,200,000) no longer required for that potential
project. Huntsville has determined to continue to operate the property in
its present condition until such time as the property can be sold. There
are a number of factors that may affect the timing of a sale and the sale
price that will ultimately be achieved for the Parkway City Mall,
including, among other things, the following: potential increased
competition from the proposed new shopping mall in the area and the timing
of the development of such shopping mall, the relative attractiveness of
retail properties for investment purposes, conditions for retailing
generally, interest rates, the actual operations of the Parkway City Mall,
tenant bankruptcies, the continued operation and success of anchor
department store tenants, the quality of existing tenants and the ability
to retain such existing tenants and attract new tenants at the Parkway City
Mall. As a result, there is no assurance as to what price will ultimately
be obtained upon a sale of the Parkway City Mall.
ADJUSTMENTS
In the opinion of the Managing General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of June 30, 1996
and for the three and six months ended June 30, 1996 and 1995.
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
remaining investment.
During the second quarter, some of the Limited Partners in the
Partnership received from an unaffiliated third party an unsolicited tender
offer to purchase up to 653 Interests in the Partnership at between $180
and $225 per Interest. The Partnership recommended against acceptance of
this offer on the basis that, among other things, the offer price was
inadequate. In June, such offer expired with approximately 260 Interests
being purchased by such unaffiliated third party pursuant to such offer.
In addition, the Partnership has, from time to time, received inquiries
from other third parties that may consider making offers for Interests,
including requests for the list of Limited Partners in the Partnership.
These inquiries are generally preliminary in nature. There is no assurance
that any other third party will commence an offer for Interests, the terms
of any such offer or whether any such offer, if made, will be consummated,
amended or withdrawn. The board of directors of JMB Realty Corporation
("JMB") the managing general partner of the Partnership, has established a
special committee (the "Special Committee") consisting of certain directors
of JMB to deal with all matters relating to tender offers for Interests in
the Partnership, including any and all responses to such tender offers.
The Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests. Expenses incurred in connection with the previous tender
offer(s) and additional potential tender offers for Interests are expected
to increase Partnership operating expenses in the third quarter.
At June 30, 1996, the Partnership and its consolidated venture had
cash and cash equivalents and short-term investments aggregating
approximately $3,878,000, of which approximately $532,000 represents the
joint venture partner's share of undistributed cash flow from operations of
Huntsville. The remaining funds of approximately $3,346,000, are available
for distributions to partners, possible prepayment of the mortgage
indebtedness at the property, tenant improvements and leasing commissions
and other capital expenditures at the Partnership's remaining investment
property and for working capital requirements.
The General Partners expect to conduct an orderly liquidation as
quickly as practicable. The affairs of the Partnership are expected to be
wound up no later than December 31, 1999 (sooner if the last remaining
property is sold in the near term), barring unforeseen economic
developments.
In May 1996, the Partnership made a distribution of $130 per Limited
Partnership Interest, or $2,600,650. The distribution was made out of
previously undistributed sales proceeds and cash flow from operations held
as working capital reserves that had been retained for capital and leasing
costs in connection with the possible redevelopment of the Parkway City
Mall as described in the Notes to Consolidated Financial Statements.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at June 30, 1996 as compared
to December 31, 1995 and the decrease in venture partner's equity in
venture at June 30, 1996 as compared to December 31, 1995 are both
attributable primarily to the May 1996 distribution of $3,200,000 of
previously undistributed cash retained for future capital and leasing costs
in connection with the possible redevelopment of the Parkway City Mall.
The decrease in rents and other receivables at June 30, 1996 as
compared to December 31, 1995 is primarily due to the timing of rental
receipts at the Parkway City Mall.
The decrease in prepaid expenses at June 30, 1996 as compared to
December 31, 1995 is primarily due to the timing of payment of insurance
premiums at the Parkway City Mall.
The increase in escrow deposits and the corresponding increase in
accrued real estate taxes at June 30, 1996 as compared to December 31, 1995
is primarily due to the timing of payment of real estate taxes related to
the Parkway City Mall.
The decrease in rental income for the three and six months ended June
30, 1996 as compared to the three and six months ended June 30, 1995 is
primarily due to lower average occupancy in 1996 at the Parkway City Mall.
The increase in general and administrative expense for the three and
six months ended June 30, 1996 as compared to the three and six months
ended June 30, 1995 is primarily due to the use of independent third
parties to perform certain administrative services for the Partnership.
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's remaining
investment property:
<CAPTION>
1995 1996
------------------------------------- ------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. Parkway City Mall
Huntsville, Alabama . . . 85% 87% 87% 86% 84% 82%
</TABLE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3-A.* The Prospectus of the Partnership dated July 26, 1976,
as supplemented August 19, 1976, September 16, 1976, and September 21,
1976, filed with the Commission pursuant to Rules 424(b) and 424(c), is
hereby incorporated herein by reference.
3-B.* Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus, and which agreement is hereby
incorporated herein by reference.
4. Mortgage Note between Huntsville Mall Associates and
New York Life Insurance Company, dated November 19, 1976, secured by the
Parkway City Mall in Huntsville, Alabama is hereby incorporated herein by
reference to the Partnership's Prospectus filed on Form S-11 (File No. 2-
55624) dated July 26, 1976.
10. Acquisition documents including the venture agreement
relating to the purchase by the Partnership of an interest in the Parkway
City Mall in Huntsville, Alabama are hereby incorporated herein by
reference to the Partnership's Prospectus on Form S-11 (File No. 2-55624)
dated July 26, 1976.
27. Financial Data Schedule
--------------------
* Previously filed as Exhibits 3-A and 3-B, respectively,
to the Partnership's Report for December 31, 1992 on Form 10-K (File No. 0-
8469) dated March 19, 1993.
(b) No reports on Form 8-K were required or have been filed for
the quarter covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JMB INCOME PROPERTIES, LTD. - IV
BY: JMB Realty Corporation
(Managing General Partner)
By: GAILEN J. HULL
Gailen J. Hull, Senior Vice President
Date: August 9, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
Gailen J. Hull, Principal Accounting Officer
Date: August 9, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 3,877,752
<SECURITIES> 0
<RECEIVABLES> 399,316
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,277,068
<PP&E> 16,407,029
<DEPRECIATION> 11,102,589
<TOTAL-ASSETS> 9,921,550
<CURRENT-LIABILITIES> 618,859
<BONDS> 2,610,247
<COMMON> 0
0
0
<OTHER-SE> 4,952,770
<TOTAL-LIABILITY-AND-EQUITY> 9,921,550
<SALES> 1,997,050
<TOTAL-REVENUES> 2,142,113
<CGS> 0
<TOTAL-COSTS> 1,048,550
<OTHER-EXPENSES> 71,359
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 156,672
<INCOME-PRETAX> 865,532
<INCOME-TAX> 0
<INCOME-CONTINUING> 561,845
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 561,845
<EPS-PRIMARY> 27.52
<EPS-DILUTED> 27.52
</TABLE>
