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, 1998 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) (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois 60611
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 312-915-1987
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- -------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of class)
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 [ ]
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 ]
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant. Not applicable.
Documents incorporated by reference: None
<PAGE>
TABLE OF CONTENTS
Page
----
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . 1
Item 2. Properties . . . . . . . . . . . . . . . . . . . 4
Item 3. Legal Proceedings. . . . . . . . . . . . . . . . 6
Item 4. Submission of Matters to a
Vote of Security Holders . . . . . . . . . . . . 6
PART II
Item 5. Market for the Partnership's
Limited Partnership Interests
and Related Security Holder Matters. . . . . . . 6
Item 6. Selected Financial Data. . . . . . . . . . . . . 7
Item 7. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. . . . . . . . . . . . 9
Item 7A. Quantitative and Qualitative
Disclosures About Market Risk. . . . . . . . . . 10
Item 8. Financial Statements and
Supplementary Data . . . . . . . . . . . . . . . 11
Item 9. Changes in and Disagreements
with Accountants on Accounting and
Financial Disclosure . . . . . . . . . . . . . . 27
PART III
Item 10. Directors and Executive Officers
of the Partnership . . . . . . . . . . . . . . . 27
Item 11. Executive Compensation . . . . . . . . . . . . . 30
Item 12. Security Ownership of Certain
Beneficial Owners and Management . . . . . . . . 31
Item 13. Certain Relationships and
Related Transactions . . . . . . . . . . . . . . 35
PART IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K. . . . . . . . . . . . . 35
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . 36
i
<PAGE>
PART I
ITEM 1. BUSINESS
Unless otherwise indicated, all references to "Notes" are to Notes to
Consolidated Financial Statements contained in this annual report.
Capitalized terms used herein, but not defined, have the same meanings as
used in the Notes.
The registrant, JMB Income Properties, Ltd.-IV (the "Partnership"),
was a limited partnership formed in early 1976 and governed by the Revised
Uniform Limited Partnership Act of the State of Illinois to invest in
improved income-producing commercial real property. The Partnership sold
$20,000,000 in Limited Partnership interests (the "Interests") at $1,000
per Interest to the public commencing on July 26, 1976 pursuant to a
Registration Statement on Form S-11 under the Securities Act of 1933
(Registration No. 2-55624). The offering closed September 24, 1976. No
Limited Partner has made any additional capital contribution after such
date. The Limited Partners of the Partnership shared in their portion of
the benefits of ownership of the Partnership's real property investments
according to the number of Interests held.
The Partnership was engaged solely in the business of the acquisition,
operation and sale and disposition of equity real estate investments. Such
equity investments were held by fee title and/or through joint venture
interests. As of December 31, 1998, all of the Partnership's investments
in real estate have been sold or disposed. The Partnership's investments
were located throughout the nation and it had no investments located
outside the United States. A presentation of information about industry
segments, geographic regions, raw materials or seasonality was not
applicable and would not have been material to an understanding of the
Partnership's business taken as a whole. The Partnership was self-
liquidating in nature. Upon the sale of a particular property, the net
proceeds, if any, were distributed or reinvested in existing properties
rather than invested in acquiring additional properties. The Partnership
made a final liquidating distribution of $9,368,942 to the Limited Partners
and $1,129,118 to the General Partners and wound up its affairs and
dissolved effective December 31, 1998. Reference is made to Item 7.
The Partnership made the real property investments set forth in the
following table:
<PAGE>
<TABLE>
<CAPTION>
SALE OR
NAME, TYPE OF PROPERTY DATE OF DISPOSITION
AND LOCATION SIZE PURCHASE DATE TYPE OF OWNERSHIP
- ---------------------- ---------- -------- ----------- ---------------------
<S> <C> <C> <C> <C>
1. Wall Towers Office
Complex
office buildings
Midland, Texas . . . 190,000 11-14-77 4-3-91 fee ownership of land
sq.ft. and improvements
2. Parkway City Mall
shopping center
Huntsville,
Alabama. . . . . . . 415,000 2-27-76 12-1-98 fee ownership of land
sq.ft. and improvements
g.l.a. (through joint venture
partnership) (a)(b)
3. Holly Hill Mall
shopping center
Burlington, North
Carolina . . . . . . 395,000 8-20-76 12-1-92 fee ownership of land
sq.ft. and improvements
g.l.a.
4. Northgate Mall
shopping center
Chattanooga,
Tennessee. . . . . . 353,000 10-11-76 1-4-83 fee ownership of
sq.ft. improvements and
g.l.a. ground leasehold
interest in land
(through joint venture
partnership)
5. Three Penn Center Plaza
office building
Philadelphia,
Pennsylvania . . . . 498,000 6-30-77 1-1-84 fee ownership of land
sq.ft. and improvements
g.l.a. (through joint venture
partnership)
6. Mid-America Plaza
office buildings
Omaha, Nebraska. . . 189,000 6-16-78 12-18-86 fee ownership of land
sq.ft. and improvements
<PAGE>
<FN>
- -----------------------
(a) Reference is made to the Notes for a description of the joint venture
partnership through which the Partnership made this real property
investment.
(b) The Partnership's interest in this property has been sold. Reference
is made to the Notes for a description of the sale of the Partnership's
interest in this real property investment.
</TABLE>
<PAGE>
The Partnership's real property investment was subject to competition
from similar types of properties in the vicinity in which it is located.
Such competition was generally for the retention of existing tenants.
Additionally, the Partnership was in competition for new tenants if
significant vacancies were present. Approximate occupancy levels for the
property are set forth in the table in Item 2 below to which reference is
hereby made. The Partnership maintained the suitability and
competitiveness of its property in its market primarily on the basis of
effective rents, tenant allowances and services provided to tenants.
On December 1, 1998, the Partnership, through a joint venture, sold
the Parkway City Mall to an affiliate of the otherwise unaffiliated
indirect partner in the joint venture. Reference is made to the Notes for
a further description of such event.
The Partnership had no employees.
The terms of transactions between the Partnership, the General
Partners and their affiliates are set forth in Item 11 below to which
reference is hereby made for a description of such terms and transactions.
ITEM 2. PROPERTY
The Partnership owned, through a joint venture partnership, the
property referred to under Item 1 above to which reference is hereby made
for a description of said property.
The following is a listing of principal businesses or occupations
carried on in and approximate occupancy levels by quarter during fiscal
year 1998 and 1997 for the Partnership's investment property owned during
1998:
<PAGE>
<TABLE>
<CAPTION>
1997 1998
------------------------- -------------------------
Principal At At At At At At At At
Business 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> <C>
1. Parkway City Mall
Huntsville,
Alabama. . . . . . . . . . . Retail 74% 74% 75% 61% 61% 61% 61% N/A
- --------------------
<FN>
An "N/A" indicates that the property was sold and not owned by the Partnership's joint venture at the end of
the quarter.
</TABLE>
<PAGE>
ITEM 3. LEGAL PROCEEDINGS
At the time of liquidation, the Partnership was not subject to any
pending material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
1997 and 1998.
PART II
ITEM 5. MARKET FOR THE PARTNERSHIP'S LIMITED PARTNERSHIP INTERESTS
AND RELATED SECURITY HOLDER MATTERS
Immediately prior to the dissolution of the Partnership, there were
1,511 record holders of Interests of the Partnership. On December 31,
1998, the Partnership made a final liquidating cash distribution to its
Limited and General Partners and subsequently wound up its affairs and
dissolved effective December 31, 1998. There had been no public market for
Interests and it had not been anticipated that a public market for
Interests would develop. Upon request, the Corporate General Partner
provided information relating to a prospective transfer of Interests to an
investor desiring to transfer his Interests. The price paid for the
Interests, as well as any other economic aspects of the transaction, was
subject to negotiation by the Investor.
Reference is made to Item 6 below for a discussion of cash
distributions made to the Holders of Interest.
Reference is made to Item 7 for a discussion of unsolicited tender
offers received from unaffiliated third parties.
<PAGE>
<TABLE>
ITEM 6. SELECTED FINANCIAL DATA
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1997, 1996, 1995 AND 1994
(NOT COVERED BY INDEPENDENT AUDITORS' REPORT)
<CAPTION>
1998 1997 1996 1995 1994
----------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total income . . . . . . . . $ 3,570,109 3,564,209 3,976,232 4,663,663 3,908,841
=========== ========== ========== ========== ==========
Earnings (loss) before
gain on sale of
investment property . . . . $ 794,940 833,564 937,078 1,553,443 1,122,589
Gain on sale of
investment property and
liquidation of venture,
net of venture
partners' share . . . . . . 3,493,807 -- -- -- --
----------- ---------- ---------- ---------- ----------
Earnings (loss) before
extraordinary item. . . . . 4,288,747 833,564 937,078 1,553,443 1,122,589
Extraordinary item . . . . . (41,166) -- -- -- --
----------- ---------- ---------- ---------- ----------
Net earnings (loss). . . . . $ 4,247,581 833,564 937,078 1,553,443 1,122,589
=========== ========== ========== ========== ==========
Net earnings (loss) per
limited partnership
Interests:
Earnings (loss) before
gain on sale of
investment property . . . $ 38.94 40.83 45.91 76.10 54.99
Gain on sale of
investment property
and liquidation of
venture . . . . . . . . . 55.15 -- -- -- --
Extraordinary item . . . . (2.03) -- -- -- --
----------- ---------- ---------- ---------- ----------
Net earnings (loss) (b). . . $ 92.06 40.83 45.91 76.10 54.99
=========== ========== ========== ========== ==========
Total assets . . . . . . . . $10,498,060 11,097,934 10,388,002 13,090,076 11,147,874
Long-term debt . . . . . . . $ -- 1,866,179 2,374,762 2,834,574 3,251,069
Cash distributions
per Interest (c)(d) . . . . $ -- -- 130.00 -- 25.00
=========== ========== ========== ========== ==========
<PAGE>
<FN>
______________
(a) The above selected financial data should be read in conjunction with the consolidated financial
statements and related notes appearing elsewhere in this annual report.
(b) The net earnings (loss) per Interest is based upon the number of Interests outstanding at the end
of each period (20,005).
(c) Cash distributions from the Partnership were generally not equal to Partnership income (loss) for
financial reporting or Federal income tax purposes. Each Partner's taxable income (or loss) from the Partnership
in each year was equal to his allocable share of the taxable income (or loss) of the Partnership without regard to
the cash generated or distributed by the Partnership. Accordingly, cash distributions to the Limited Partners
since the inception of the Partnership have not resulted in taxable income to such Limited Partners and have
therefore represented a return of capital.
(d) This amount does not include the final liquidating cash distribution of $9,368,942 ($468.33 per
Interest) to the Limited Partners and $1,129,118 to the General Partners paid by the Partnership on December 31,
1998.
</TABLE>
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
As a result of the public offering described in Item 1, the
Partnership had approximately $17,996,000 (after deducting selling expenses
and other offering costs) with which to make investments in commercial real
property, to pay legal fees and other costs (including acquisition fees)
related to such investments and for working capital. A portion of such
proceeds was utilized to acquire the properties described in Item 1 above.
During 1996, 1997 and 1998, some of the Holders of Interests in the
Partnership received unsolicited tender offers from unaffiliated third
parties to purchase up to 4.9% of the Interests in the Partnership at
prices ranging from between $150 and $225 per Interest. The Partnership
recommended against acceptance of these offers on the basis that, among
other things, the offer prices were inadequate. Such offers have expired.
As of the date of this report, the Partnership is aware that 11.06% of the
Interests in the Partnership were purchased by such unaffiliated third
parties either pursuant to such tender offers or through negotiated
purchases. The board of directors of JMB Realty Corporation ("JMB") the
managing general partner of the Partnership, had 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 retained independent counsel to advise it in connection
with any potential tender offers for Interests and had retained Lehman
Brothers Inc. as financial advisor to assist the Special Committee in
evaluating and responding to these and any additional potential tender
offers for Interests.
HUNTSVILLE - PARKWAY CITY MALL
On December 1, 1998, the Partnership, through a joint venture, sold
the Parkway City Mall to an affiliate of the otherwise unaffiliated
indirect partner in the joint venture. Reference is made to the Notes for
a further description of such event.
GENERAL
On December 31, 1998, the Partnership made a final liquidating
distribution of $9,368,942 ($468 per interest) to the Limited Partners and
$1,129,118 to the General Partners and wound up its affairs and dissolved
effective December 31, 1998.
RESULTS OF OPERATIONS
Significant variances between periods reflected in the accompanying
consolidated financial statements are the result of the sale of the Parkway
City Mall on December 1, 1998.
The decrease in rental income for the year ended December 31, 1998 as
compared to the year ended December 31, 1997 is due to the sale of the
Parkway City Mall on December 1, 1998. This decrease was offset by an
increase in the rents received from temporary tenants as well as an
increase in base rents primarily as a result of the space previously
occupied by Yeilding's being vacant during 1997 until Castner Knott took
occupancy in October 1997. Additionally, in the second quarter of 1998,
Huntsville received approximately $130,000 as a settlement from a former
tenant that had previously filed for bankruptcy. The decrease in rental
income for the year ended December 31, 1997 as compared to the year ended
December 31, 1996 is primarily due to a decrease in base rents and in
recoverable operating expenses due to a decrease in occupancy in 1997 at
the Parkway City Mall primarily as a result of Yeilding's closing its
approximately 24,000 square foot store in October 1996 and Castner Knott
Market Centre not opening until October 1997.
<PAGE>
The decrease in depreciation expense for the year ended December 31,
1998 as compared to the same periods in 1997 and 1996 is due to
depreciation expense no longer being incurred on the Parkway City Mall as a
result of this property being classified as held for sale or disposition in
accordance with SFAS 121 on September 30, 1997, and therefore, not subject
to continued depreciation after that date.
The increases in professional services and general and administrative
expense for the year ended December 31, 1998 as compared to December 31,
1997 and 1996 is primarily due to an increase in certain costs due to the
winding up of the Partnership.
During 1998 and 1996, the Managing General Partner received management
fees of $265,366 and $88,911 out of distributions of operating cash flow.
There were no management fees paid in 1997.
The increase in venture partner's share of venture's operations for
the year ended December 31, 1998 as compared to the year ended December 31,
1997 is primarily due to the increases in rental and interest income at the
Parkway City Mall. The decrease in venture partner's share of venture's
operations for the year ended December 31, 1997 as compared to the year
ended December 31, 1996 is primarily due to the decreases in rental and
interest income and increases in property operating expenses at Parkway
City Mall.
INFLATION
Due to the decrease in the level of inflation in recent years,
inflation generally has not had a material effect on the operations of the
Partnership. Inflation in future periods is not applicable since the
Partnership wound up its affairs and dissolved effective December 31, 1998.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Partnership wound up its affairs and dissolved in 1998. As a
result, there is no meaningful disclosure for this item.
YEAR 2000
The Partnership wound up its affairs and dissolved in 1998.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
INDEX
Independent Auditors' Report
Consolidated Balance Sheets, December 31, 1998 (Immediately prior to
final liquidating distribution) and December 31, 1997
Consolidated Statements of Operations, year ended December 31,
1998 (Immediately prior to final liquidating distribution),
and years ended December 31, 1997 and 1996
Consolidated Statements of Partners' Capital Accounts (Deficits),
year ended December 31, 1998 (Immediately prior to final
liquidating distribution), and years ended December 31, 1997 and 1996
Consolidated Statements of Cash Flows, year ended December 31,
1998 (Immediately prior to final liquidating distribution),
and years ended December 31, 1997 and 1996
Notes to Consolidated Financial Statements
Schedules not filed:
All schedules have been omitted as the required information is
inapplicable or the information is presented in the consolidated financial
statements or related notes.
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Partners
JMB INCOME PROPERTIES, LTD. - IV:
We have audited the consolidated financial statements of JMB Income
Properties, Ltd. - IV (a limited partnership) and consolidated venture as
listed in the accompanying index. These consolidated financial statements
are the responsibility of the General Partners of the Partnership. Our
responsibility is to express an opinion on these consolidated 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 General Partners of the
Partnership, 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 consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
JMB Income Properties, Ltd. - IV and consolidated venture at December 31,
1998 (immediately prior to final liquidating distribution) and December 31,
1997, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1998, in conformity
with generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
March 12, 1999
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION)
AND DECEMBER 31, 1997
ASSETS
------
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . . . . . . . . $ 10,498,060 5,539,319
Rents and other receivables (net of allowance for doubtful accounts
of $50,017 for 1997) . . . . . . . . . . . . . . . . . . . . . . . . . -- 440,968
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 25,675
Escrow deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 750
------------ ------------
Total current assets . . . . . . . . . . . . . . . . . . . . . . 10,498,060 6,006,712
------------ ------------
Investment property held for sale . . . . . . . . . . . . . . . . . . . . -- 4,860,403
------------ ------------
Deferred expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 5,845
Accrued rents receivable . . . . . . . . . . . . . . . . . . . . . . . . . -- 224,974
------------ ------------
$ 10,498,060 11,097,934
============ ============
<PAGE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
-----------------------------------------------------
1998 1997
------------ ------------
Current liabilities:
Current portion of long-term debt. . . . . . . . . . . . . . . . . . . . $ -- 508,287
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 29,828
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 13,851
Unearned rents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 74,814
------------ ------------
Total current liabilities. . . . . . . . . . . . . . . . . . . . -- 626,780
Tenant security deposits . . . . . . . . . . . . . . . . . . . . . . . . . -- 17,595
Other long-term liabilities. . . . . . . . . . . . . . . . . . . . . . . . -- 820,107
Long-term debt, less current portion . . . . . . . . . . . . . . . . . . . -- 1,866,179
------------ ------------
Commitments and contingencies
Total liabilities. . . . . . . . . . . . . . . . . . . . . . . . -- 3,330,661
Venture partner's equity in venture. . . . . . . . . . . . . . . . . . . . -- 1,516,794
Partners' capital accounts (deficits):
General partners:
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . . . . 4,769,971 2,363,983
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . (3,640,853) (3,640,853)
------------ ------------
1,129,118 (1,276,870)
------------ ------------
Limited partners (20,005 interests):
Capital contributions, net of offering costs. . . . . . . . . . . . . 17,996,292 17,996,292
Cumulative net earnings . . . . . . . . . . . . . . . . . . . . . . . 42,353,941 40,512,348
Cumulative cash distributions . . . . . . . . . . . . . . . . . . . . (50,981,291) (50,981,291)
------------ ------------
9,368,942 7,527,349
------------ ------------
Total partners' capital accounts . . . . . . . . . . . . . . . . 10,498,060 6,250,479
------------ ------------
$ 10,498,060 11,097,934
============ ============
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS
YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1997 and 1996
<CAPTION>
1998 1997 1996
----------- ------------ -----------
<S> <C> <C> <C>
Income:
Rental income. . . . . . . . . . . . . . . . . . . . . $ 3,273,899 3,331,500 3,733,410
Interest income. . . . . . . . . . . . . . . . . . . . 296,210 232,709 242,822
----------- ------------ -----------
3,570,109 3,564,209 3,976,232
----------- ------------ -----------
Expenses:
Mortgage and other interest. . . . . . . . . . . . . . 195,214 264,004 302,890
Depreciation . . . . . . . . . . . . . . . . . . . . . -- 274,235 371,325
Property operating expenses. . . . . . . . . . . . . . 1,483,631 1,627,387 1,545,605
Professional services. . . . . . . . . . . . . . . . . 110,890 61,068 40,461
Amortization of deferred expenses. . . . . . . . . . . 2,011 45,749 61,088
Management fees to Managing General Partner. . . . . . 265,366 -- 88,911
General and administrative . . . . . . . . . . . . . . 138,037 90,619 77,948
----------- ------------ -----------
2,195,149 2,363,062 2,488,228
----------- ------------ -----------
1,374,960 1,201,147 1,488,004
Venture partner's share of
venture operations . . . . . . . . . . . . . . . . . . (580,020) (367,583) (550,926)
----------- ------------ -----------
Earnings (loss) before gain on sale of
investment property. . . . . . . . . . . . . . 794,940 833,564 937,078
Gain on sale of investment property and
liquidation of venture, net of venture
partners' share of ($406,554). . . . . . . . . . . . . 3,493,807 -- --
----------- ------------ -----------
Earnings before extraordinary item . . . . . . . 4,288,747 833,564 937,078
Extraordinary item - prepayment penalty,
net of venture partner's share of ($10,292). . . . . . (41,166) -- --
----------- ------------ -----------
Net earnings (loss). . . . . . . . . . . . . . . $ 4,247,581 833,564 937,078
=========== ============ ===========
<PAGE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
1998 1997 1996
----------- ------------ -----------
Net earnings (loss) per limited
partnership interest:
Earnings (loss) before gain on sale
of investment property . . . . . . . . . . . $ 38.94 40.83 45.91
Gain on sale of investment property
and liquidation of venture . . . . . . . . . 55.15 -- --
Extraordinary item . . . . . . . . . . . . . . (2.03) -- --
----------- ------------ -----------
Net earnings (loss). . . . . . . . . . . . . . . $ 92.06 40.83 45.91
=========== ============ ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS)
YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1997 AND 1996
<CAPTION>
GENERAL PARTNERS LIMITED PARTNERS (20,005 INTERESTS)
--------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET OF
NET CASH OFFERING NET CASH
EARNINGS DISTRIBUTIONS TOTAL COSTS EARNINGS DISTRIBUTIONS TOTAL
---------- ------------- ----------- ----------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance (deficits)
December 31,
1995. . . . . . . . . . $2,328,570 (3,375,428) (1,046,858) 17,996,292 38,777,119 (48,380,641) 8,392,770
Net earnings
(loss). . . . . . . . . 18,742 -- 18,742 -- 918,336 -- 918,336
Cash distributions
($130.00 per limited
partnership interest) . -- (265,425) (265,425) -- -- (2,600,650) (2,600,650)
---------- ----------- ----------- ----------- ---------- ----------- ----------
Balance (deficits)
December 31,
1996. . . . . . . . . . 2,347,312 (3,640,853) (1,293,541) 17,996,292 39,695,455 (50,981,291) 6,710,456
Net earnings
(loss). . . . . . . . . 16,671 -- 16,671 -- 816,893 -- 816,893
Cash distributions . . . -- -- -- -- -- -- --
---------- ----------- ----------- ----------- ---------- ----------- ----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL ACCOUNTS (DEFICITS) - CONTINUED
GENERAL PARTNERS LIMITED PARTNERS (20,005 INTERESTS)
--------------------------------------- ---------------------------------------------------
CONTRI-
BUTIONS
NET OF
NET CASH OFFERING NET CASH
EARNINGS DISTRIBUTIONS TOTAL COSTS EARNINGS DISTRIBUTIONS TOTAL
---------- ------------- ----------- ----------- ---------- ------------- ----------
Balance (deficits)
December 31,
1997. . . . . . . . . . 2,363,983 (3,640,853) (1,276,870) 17,996,292 40,512,348 (50,981,291) 7,527,349
Net earnings
(loss). . . . . . . . . 2,405,988 -- 2,405,988 -- 1,841,593 -- 1,841,593
Cash distributions . . . -- -- -- -- -- -- --
---------- ----------- ----------- ----------- ---------- ----------- ----------
Balance (deficits)
December 31,
1998. . . . . . . . . . $4,769,971 (3,640,853) 1,129,118 17,996,292 42,353,941 (50,981,291) 9,368,942
========== =========== =========== =========== ========== =========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1998 (IMMEDIATELY PRIOR TO FINAL LIQUIDATING DISTRIBUTION),
AND YEARS ENDED DECEMBER 31, 1997 AND 1996
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings . . . . . . . . . . . . . . . . . . . . . $ 4,247,581 833,564 937,078
Items not requiring (providing) cash
or cash equivalents:
Depreciation . . . . . . . . . . . . . . . . . . . . -- 274,235 371,325
Amortization of deferred expenses. . . . . . . . . . 2,011 45,749 61,088
Venture partner's share of venture operations,
gain on sale and extraordinary item. . . . . . . . 163,174 367,583 550,926
Total gain on sale of investment property. . . . . . (3,087,253) -- --
Extraordinary item including venture
partner's share. . . . . . . . . . . . . . . . . . 51,458 -- --
Changes in:
Rents and other receivables. . . . . . . . . . . . . 440,968 (102,779) 41,688
Prepaid expenses . . . . . . . . . . . . . . . . . . 25,675 (4,449) 5,860
Accrued rents receivable . . . . . . . . . . . . . . 37,320 62,220 (36,640)
Escrow deposits. . . . . . . . . . . . . . . . . . . 750 18,593 (463)
Accounts payable . . . . . . . . . . . . . . . . . . (29,828) (24,380) 37,859
Accrued interest . . . . . . . . . . . . . . . . . . (13,851) 1,551 (3,766)
Unearned rents . . . . . . . . . . . . . . . . . . . (74,814) (4,732) 33,865
Tenant security deposits . . . . . . . . . . . . . . (17,595) (3,250) 2,000
----------- ----------- -----------
Net cash provided by (used in)
operating activities . . . . . . . . . . . . 1,745,596 1,463,905 2,000,820
----------- ----------- -----------
Cash flows from investing activities:
Additions to investment properties . . . . . . . . . . (808) (11,129) (4,107)
Payment of deferred expenses . . . . . . . . . . . . . -- (5,456) (6,610)
Proceeds from sale of investment property. . . . . . . 6,178,721 -- --
----------- ----------- -----------
Net cash provided by (used in)
investing activities . . . . . . . . . . . . 6,177,913 (16,585) (10,717)
----------- ----------- -----------
<PAGE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1998 1997 1996
----------- ----------- -----------
Cash flows from financing activities:
Loan repayment to venture partner. . . . . . . . . . . (820,107) -- --
Principal payments on long-term debt . . . . . . . . . (464,693) (460,404) (416,199)
Distributions to venture partner . . . . . . . . . . . (1,679,968) -- (977,762)
Distributions to limited partners. . . . . . . . . . . -- -- (2,600,650)
Distributions to general partners. . . . . . . . . . . -- -- (265,425)
----------- ----------- -----------
Net cash used in financing activities. . . . . (2,964,768) (460,404) (4,260,036)
----------- ----------- -----------
Net increase (decrease) in cash
and cash equivalents . . . . . . . . . . . . 4,958,741 986,916 (2,269,933)
Cash and cash equivalents,
beginning of year. . . . . . . . . . . . . . 5,539,319 4,552,403 6,822,336
----------- ----------- -----------
Cash and cash equivalents,
end of year. . . . . . . . . . . . . . . . . $10,498,060 5,539,319 4,552,403
=========== =========== ===========
Supplemental disclosure of
cash flow information:
Cash paid for mortgage and other interest. . . . . . . $ 209,788 262,453 306,656
=========== =========== ===========
Non-cash investing and financing activities. . . . . . $ -- -- --
=========== =========== ===========
Sale of investment property:
Total sale proceeds, net of selling expenses . . . . $ 8,139,952 -- --
Prepayment penalty . . . . . . . . . . . . . . . . . (51,458) -- --
Payment on loans payable . . . . . . . . . . . . . . (1,909,773) -- --
----------- ----------- -----------
Cash proceeds from sale of
investment property, net of
selling expenses . . . . . . . . . . . . . . $ 6,178,721 -- --
=========== =========== ===========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
JMB INCOME PROPERTIES, LTD. - IV
(A LIMITED PARTNERSHIP)
AND CONSOLIDATED VENTURE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996
OPERATIONS AND BASIS OF ACCOUNTING
The Partnership held (through a joint venture) an ownership in a
shopping center in Huntsville, Alabama. Business activities consisted of
rentals to a variety of retail companies and the ultimate sale or
disposition of such real estate. The accompanying consolidated financial
statements include the accounts of the Partnership and its majority owned
venture, Huntsville Mall Associates ("Huntsville") (prior to the sale in
December 1998). The effect of all transactions between the Partnership and
its consolidated venture has been eliminated.
The Partnership's records were maintained on the accrual basis of
accounting as adjusted for Federal income tax reporting purposes. The
accompanying consolidated financial statements have been prepared from such
records after making appropriate adjustments to present the Partnership's
accounts in accordance with generally accepted accounting principles
("GAAP") and to consolidate the accounts of the venture as described above.
Such GAAP and consolidation adjustments were not recorded on the records of
the Partnership. The net effect of these items for the year ended December
31, 1998 (immediately prior to final liquidating distribution) and the year
ended December 31, 1997 is summarized as follows:
<PAGE>
<TABLE>
<CAPTION>
1998 1997
-------------------------------------------------------------
TAX BASIS TAX BASIS
GAAP BASIS (Unaudited) GAAP BASIS (Unaudited)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . $ 10,498,060 10,498,060 11,097,934 5,977,403
Partners' capital
accounts (deficits):
General partners . . . . . . . . . . 1,129,118 1,129,118 (1,276,870) (72,802)
Limited partners . . . . . . . . . . 9,368,942 9,368,942 7,527,349 6,054,773
Net earnings (loss):
General partners . . . . . . . . . . 2,405,988 1,201,920 16,671 15,860
Limited partners . . . . . . . . . . 1,841,593 3,314,169 816,893 777,144
Net earnings (loss)
per limited
partnership
interest. . . . . . . . . . . . . . . 92.06 165.67 40.83 38.85
============ ========== =========== ==========
</TABLE>
<PAGE>
The net earnings (loss) per limited partnership interest ("Interest")
was based upon the number of Interests outstanding at the end of each
period (20,005). Also, because net earnings (loss) was computed
immediately prior to dissolution, Holders of Interests may have, upon
dissolution, an additional capital gain or loss depending on the Holders'
basis for Federal income tax purposes.
The preparation of financial statements in accordance with GAAP
required the Partnership to make estimates and assumptions that affected
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 have differed from those
estimates.
Statement of Financial Accounting Standards No. 95 requires the
Partnership to present a statement which classifies receipts and payments
according to whether they stem from operating, investing or financing
activities. The required information has been segregated and accumulated
according to the classifications specified in the pronouncement. In
addition, the Partnership recorded investments held in U.S. Government
obligations at cost, which approximates market. For the purpose of these
statements, the Partnership's policy was to consider all such amounts held
with original maturities of three months or less (none and $5,221,075 at
December 31, 1998 and 1997, respectively) as cash equivalents, which
included investments in an institutional mutual fund which held United
States Government obligations, with any remaining amounts (generally with
original maturities of one year or less) reflected as short-term
investments being held to maturity.
Deferred expenses consisted of leasing fees which were amortized over
the term of the related leases using the straight-line method.
Although certain leases of the Partnership provided for tenant
occupancy during periods for which no rent was due and/or increases in
minimum lease payments over the term of the lease, the Partnership accrued
rental income for the full period of occupancy on a straight-line basis.
Such amounts are reflected as accrued rents receivable in the accompanying
balance sheets.
No provision for state or Federal income taxes had been made as the
liability for such taxes is that of the partners rather than the
Partnership. However, in certain instances, the Partnership has been
required under applicable law to remit directly to the taxing authorities
amounts representing withholding from distributions paid to partners.
The Partnership initially acquired, either directly or through joint
ventures, three shopping centers and three office buildings, all of which
have been sold as of December 31, 1998. The cost of the investment
properties represented the total cost to the Partnership or its ventures,
including miscellaneous acquisition costs.
Depreciation on the properties had been provided over the estimated
useful lives of the various components as follows:
YEARS
-----
Buildings and improvements -- straight-line . . . . . 5-35
====
Maintenance and repairs were generally charged to operations as
incurred. Significant betterments and improvements were capitalized and
depreciated over their estimated useful lives.
<PAGE>
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. SFAS 121 required that the Partnership record an
impairment loss on its properties to be held for investment whenever their
carrying value could not be fully recovered through estimated undiscounted
future cash flows from their operations and sale. The amount of the
impairment loss to be recognized would have been the difference between the
property's carrying value and the property's estimated fair value. The
Partnership's policy was to consider a property to be held for sale or
disposition when the Partnership had committed to a plan to sell such
property and active marketing activity had commenced or was expected to
commence in the near term. In accordance with SFAS 121, any properties
identified as "held for sale or disposition" were no longer depreciated.
Adjustments for impairment loss for such properties (subsequent to the date
of adoption of SFAS 121) were made in each period as necessary to report
these properties at the lower of carrying value or fair value less costs to
sell. The adoption of SFAS 121 did not have any effect on the
Partnership's financial position, results of operations or liquidity.
As of September 30, 1997, the Partnership committed to a plan to sell
the Parkway City Mall investment property. Accordingly, the property was
classified at September 30, 1997 as held for sale or disposition in the
accompanying consolidated financial statements until the sale in December
1998. The results of operations, net of venture partner's share, for the
property is $1,182,275, $885,434 and $1,019,120, respectively, for the
years ended December 31, 1998, 1997 and 1996.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. These standards became
effective for reporting periods after December 15, 1997. As the
Partnership's capital structure only had general and limited partnership
interests, the Partnership did not experience any significant impact on its
consolidated financial statements upon adoption of these standards when
required at the end of 1997.
HUNTSVILLE - PARKWAY CITY MALL
The Partnership was a general partner in Huntsville Mall Associates
("Huntsville"). In 1976, Huntsville purchased a shopping center, the
Parkway City Mall, in Huntsville, Alabama for $10,024,458. The Partnership
originally contributed approximately $3,450,000 to Huntsville.
In 1979, the original venture partner sold its interest in Huntsville,
for which the Partnership had the right of first refusal, to affiliates of
the General Partners of the Partnership for $1,050,000 in cash.
On December 1, 1998, the Partnership, through a joint venture, sold
the Parkway City Mall to an affiliate of the otherwise unaffiliated
indirect partner in the joint venture for $8,200,000 less selling costs of
approximately $60,000. A portion of the sales proceeds was utilized to
retire the mortgage debt with an outstanding balance of approximately
$1,910,000 and a prepayment premium of approximately $51,000 (of which the
Partnership's share of $41,166 is reported as an extraordinary item in the
1998 Consolidated Financial Statements). The Partnership received cash
proceeds from the sale of approximately $5,360,000. As a result of the
sale, the Partnership recognized a gain of approximately $3,500,000 for
financial reporting purposes and $4,051,000 for Federal income tax purposes
in 1998. Due to preference levels within the venture agreement, the
venture partner's share is a loss of approximately ($407,000) for financial
reporting purposes and ($647,000) for Federal income tax purposes. The
joint venture made no representations, warranties or covenants in
connection with the sale of this property.
<PAGE>
Net cash receipts (as defined) of Huntsville were distributed as
follows: the first $83,455 was distributable to the Partnership; the next
$343,750 was distributable $275,000 to the Partnership and $68,750 to the
venture partner, and any remaining net cash receipts were distributable 60%
to the Partnership and 40% to the venture partner. The Partnership had a
preferred position (related to the Partnership's cash investment in
Huntsville) with respect to the distribution of sale or refinancing
proceeds from Huntsville.
In prior years, the venture partners made non-interest bearing loans
(70% funded by the Partnership) to the venture to fund an expansion of the
property and certain other improvements, reflected as other long-term
liabilities in the financial statements. The loans were repaid from net
sales proceeds prior to any distributions as described above.
Huntsville's operating profits (other than depreciation expense) were
allocated to the Partnership (to a maximum of 80%) in relation to
distributions of net cash receipts. Huntsville's operating losses were
allocated to the Partnership to the extent of 80%. The Partnership's share
of the net earnings of Huntsville in 1998, 1997 and 1996 was approximately
67%, 71% and 66%, respectively.
Huntsville had previously 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, in response to market conditions, Huntsville had examined a
potential redevelopment of the Parkway City Mall which it determined not to
undertake. Consequently, in May 1996, Huntsville made a special
distribution of its net cash receipts for 1993, 1994 and a portion of 1995
of which the Partnership's share was approximately $2,200,000. In 1998,
Huntsville distributed its remaining net cash receipts for the remaining
portion of 1995, 1996, 1997 and 1998 of which the Partnership's share was
approximately $3,260,000.
Huntsville had entered into an agreement with an affiliate of the
General Partners for the operation and management of the Parkway City Mall.
Such agreement provided for management fees equal to 5% of the property's
gross receipts.
LONG-TERM DEBT
Long-term debt consisted of the following at December 31, 1998 and
1997:
1998 1997
---------- ---------
10% mortgage note, secured by
the Parkway City Mall shopping
center in Huntsville, Alabama;
payable in monthly installments
of $60,238, including interest,
repaid in December 1998
upon sale of the property . . . . . . . $ -- 2,374,466
Less current portion of
long-term debt . . . . . . . . -- 508,287
---------- ---------
Total long-term debt . . . . . $ -- 1,866,179
========== =========
<PAGE>
PARTNERSHIP AGREEMENT
Pursuant to the terms of the Partnership Agreement, net profits or
losses of the Partnership from operations were allocated 98% to the Limited
Partners and 2% to the General Partners. Profits from the sale or
refinancing of investment properties were allocated to the General Partners
in an amount equal to the greater of 1% of such profits or any cash
distributions from such sale or refinancing paid to the General Partners.
Losses from the sale or refinancing of investment properties were to be
allocated 1% to the General Partners. The remaining profits and losses
from a sale or refinancing were allocated to the Limited Partners.
However, if at any time profits were realized by the Partnership, any
current or anticipated event that would cause the deficit balance in
absolute amount in the Capital Account of the General Partners to be
greater than their share of the Partnership's indebtedness (as defined)
after such event, then the allocation of Profits to the General Partners
was to be increased to the extent necessary to cause the deficit balance in
the Capital Account of the General Partners to be no less than their
respective shares of the Partnership's indebtedness (as defined) after such
event.
The General Partners were not required to make any capital contri-
butions except under certain limited circumstances upon termination of the
Partnership, which did not apply. Distributions of "cash flow" of the
Partnership were allocated 90% to the Limited Partners and 10% to the
General Partners (of which 5% constitutes a management fee to the Managing
General Partner for services in managing the Partnership).
After the Limited Partners' receipt of their contributed capital plus
a stipulated return thereon (which had been received as of December 31,
1985) distributions of proceeds arising from the sale or refinancing of
investment properties were allocated 85% to the Limited Partners and 15% to
the General Partners. In addition, the General Partners were entitled to
receive distributions in an amount up to 3/4 of 1% of the selling price of
a property in the event of a sale.
TRANSACTIONS WITH AFFILIATES
Fees, commissions, and other expenses required to be paid by the
Partnership to the General Partners and their affiliates as of December 31,
1998 and for the year ended December 31, 1998 (immediately prior to final
liquidating distribution), and for the years ended December 31, 1997 and
1996 are as follows:
UNPAID AT
DECEMBER 31,
1998 1997 1996 1998
-------- -------- -------- ------------
Property management
fees. . . . . . . . . . . $166,564 165,325 187,284 --
Management fees to
Managing General
Partners. . . . . . . . . 265,366 -- 88,911 --
Insurance commissions. . . 5,847 9,573 9,211 --
Reimbursement
(at cost) for
out-of-pocket
expenses. . . . . . . . . 1,620 -- 264 --
-------- -------- -------- --------
$439,397 174,898 285,670 --
======== ======== ======== ========
Effective October 1, 1995, the Managing General Partner of the
Partnership engaged independent third parties to perform certain
administrative services for the Partnership which were previously performed
by affiliates of the General Partners. Use of such third parties did not
have a material effect on the operations of the Partnership.
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There were no changes in or disagreements with, accountants during
fiscal years 1997 and 1998.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The Managing General Partner of the Partnership was JMB Realty
Corporation ("JMB"), a Delaware corporation, substantially all of the
outstanding stock of which is owned, directly or indirectly, by certain of
its officers, directors, members of their families and affiliates. JMB had
responsibility for all aspects of the Partnership's operations, subject to
the requirement that sales of real property were to be approved by Messrs.
Neil G. Bluhm and Judd D. Malkin as individual general partners of the
Partnership. The Partnership was subject to certain conflicts of interest
arising out of its relationships with the General Partners and their
affiliates as well as the fact that the General Partners and their
affiliates are engaged in a range of real estate activities. Certain
services were provided to the Partnership or its investment property by
affiliates of the General Partners, including property management services
and insurance brokerage services. In general, such services were to be
provided on terms no less favorable to the Partnership than could be
obtained from independent third parties and were otherwise subject to
conditions and restrictions contained in the Partnership Agreement. The
Partnership Agreement permitted the General Partners and their affiliates
to provide services to, and otherwise deal and do business with, persons
who may have been engaged in transactions with the Partnership, and
permitted the Partnership to borrow from, purchase goods and services from,
and otherwise to do business with, persons doing business with the General
Partners or their affiliates. The General Partners and their affiliates
may have been in competition with the Partnership under certain
circumstances, including, in certain geographical markets, for tenants
and/or for the sale of property. Because the timing and amount of cash
distributions and profits and losses of the Partnership may have been
affected by various determinations by the General Partners under the
Partnership Agreement, including whether and when to sell a property, the
establishment and maintenance of reasonable reserves and the determination
of the sources (i.e., offering proceeds, cash generated from operations or
sale proceeds) and uses of such reserves, the timing of expenditures and
the allocation of certain tax items under the Partnership Agreement, the
General Partners may have had a conflict of interest with respect to such
determinations.
The names, positions held and length of service therein of each
director and the executive and certain other officers of the Managing
General Partner are as follows:
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Judd D. Malkin Chairman 5/03/71
Director 5/03/71
Chief Financial Officer 2/22/96
Neil G. Bluhm President 5/03/71
Director 5/03/71
Burton E. Glazov Director 7/01/71
Stuart C. Nathan Executive Vice President 5/08/79
Director 3/14/73
A. Lee Sacks Director 5/09/88
John G. Schreiber Director 3/14/73
H. Rigel Barber Executive Vice President 1/02/87
Chief Executive Officer 8/01/93
Glenn E. Emig Executive Vice President 1/01/93
Chief Operating Officer 1/01/95
<PAGE>
SERVED IN
NAME OFFICE OFFICE SINCE
- ---- ------ ------------
Gary Nickele Executive Vice President 1/01/92
General Counsel 2/27/84
Gailen J. Hull Senior Vice President 6/01/88
Howard Kogen Senior Vice President 1/02/86
Treasurer 1/01/91
There is no family relationship among any of the foregoing directors
or officers. The foregoing directors have been elected to serve a one-year
term until the annual meeting of the Managing General Partner to be held on
June 2, 1999. All of the foregoing officers have been elected to serve
one-year terms until the first meeting of the Board of Directors held after
the annual meeting of the Managing General Partner to be held on June 2,
1999. There are no arrangements or understandings between or among any of
said directors or officers and any other person pursuant to which any
director or officer was elected as such.
JMB is the corporate general partner of Carlyle Real Estate Limited
Partnership-XI ("Carlyle-XI"), Carlyle Real Estate Limited Partnership-XIII
("Carlyle-XIII"), Carlyle Real Estate Limited Partnership-XIV
("Carlyle-XIV"), Carlyle Real Estate Limited Partnership-XV ("Carlyle-XV"),
Carlyle Income Plus, L.P.-II ("Carlyle Income Plus-II"), and the managing
general partner of JMB Income Properties, Ltd.-V ("JMB Income-V"), JMB
Income Properties, Ltd.-VII ("JMB Income-VII"), JMB Income Properties,
Ltd.-X ("JMB Income-X"), and JMB Income Properties, Ltd.-XI ("JMB
Income-XI"). JMB is also the sole general partner of the associate general
partner of most of the foregoing partnerships. Most of the foregoing
directors and officers are also officers and/or directors of various
affiliated companies of JMB including Arvida/JMB Managers, Inc. (the
general partner of Arvida/JMB Partners, L.P. ("Arvida")). Most of such
directors and officers are also partners, directly or indirectly, of
certain partnerships which are associate general partners in the following
real estate limited partnerships: Carlyle-XI, Carlyle-XIII, Carlyle-XIV,
Carlyle-XV, JMB Income-VII, JMB Income-X, JMB Income-XI, and Carlyle Income
Plus-II.
The business experience during the past five years of each such
director and officer of the Managing General Partner of the Partnership in
addition to that described above is as follows:
Judd D. Malkin (age 61) is an individual general partner of JMB
Income-V. Mr. Malkin has been associated with JMB since October 1969. Mr.
Malkin is also a director of Urban Shopping Centers, Inc., an affiliate of
JMB that is a real estate investment trust in the business of owning,
managing and developing shopping centers. He is a Certified Public
Accountant.
<PAGE>
Neil G. Bluhm (age 61) is an individual general partner of JMB
Income-V. Mr. Bluhm has been associated with JMB since August 1970. Mr.
Bluhm is also a principal of Walton Street Capital, L.L.C., which sponsors
real estate investment funds, and a director of Urban Shopping Centers,
Inc. He is a member of the Bar of the State of Illinois and a Certified
Public Accountant.
Burton E. Glazov (age 60) has been associated with JMB since June
1971, and served as an Executive Vice President of JMB until December of
1990. Mr. Glazov is currently retired. He is a member of the Bar of the
State of Illinois.
Stuart C. Nathan (age 57) has been associated with JMB since July
1972. He is a member of the Bar of the State of Illinois.
A. Lee Sacks (age 65) has been associated with JMB since December
1972. He is also President and director of JMB Insurance Agency, Inc.
John G. Schreiber (age 52) has been associated with JMB since December
1970, and served as an Executive Vice President for JMB until December
1990. Mr. Schreiber is President of Schreiber Investments, Inc., which is
engaged in the real estate investing business. He is also a senior advisor
and partner of Blackstone Real Estate Advisors L.P., an affiliate of the
Blackstone Group, L.P. Mr. Schreiber is also a director of Urban Shopping
Centers, Inc, a trustee of Amli Residential Property Trust and a director
of a number of investment companies advised or managed by T. Rowe Price
Associates, Inc. and its affiliates. He holds a Masters degree in Business
Administration from Harvard University Graduate School of Business.
H. Rigel Barber (age 50) has been associated with JMB since March
1982. He holds a J.D. degree from the Northwestern Law School and is a
member of the Bar of the State of Illinois.
Glenn E. Emig (age 51) has been associated with JMB since December
1979. Prior to becoming Executive Vice President of JMB in 1993, Mr. Emig
was Executive Vice President and Treasurer of JMB Institutional Realty
Corporation. He holds a Masters degree in Business Administration from the
Harvard University Graduate School of Business and is a Certified Public
Accountant.
Gary Nickele (age 46) has been associated with JMB since February
1984. He holds a J.D. degree from the University of Michigan Law School
and is a member of the Bar of the State of Illinois.
Gailen J. Hull (age 50) has been associated with JMB since March 1982.
He holds a Masters degree in Business Administration from Northern Illinois
University and is a Certified Public Accountant.
Howard Kogen (age 63) has been associated with JMB since March 1973.
He is a Certified Public Accountant.
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
The Partnership had no officers or directors. The Partnership was
required to pay a management fee to the Managing General Partner and the
General Partners were entitled to receive a share of cash distributions,
when and as cash distributions were made to the Limited Partners, and a
share of profits or losses. During 1998, 1997 and 1996, management fees of
$265,366, $0 and $88,911 were paid to the Managing General Partner and the
General Partner received distributions, including the final liquidating
distribution of $1,129,118, $0 and $265,425, respectively. The General
Partners also received a share of the Partnership's earnings for Federal
income tax purposes aggregating $1,201,920 in 1998.
JMB Insurance Agency, Inc., an affiliate of the Managing General
Partner of the Partnership, earned insurance brokerage commissions in 1998
aggregating $5,847, all of which was paid at December 31, 1998, in
connection with providing insurance coverage for the remaining real
property investment of the Partnership. Such commissions were at rates set
by insurance companies for the classes of coverage involved.
Urban Retail Properties Company, an affiliate of the Managing General
Partner, provided property management services to the Partnership's joint
venture in 1998 for the Parkway City Mall investment property at a fee
calculated at 5% of gross income from such property. In 1998, such
affiliate earned property management fees of $166,564 for such services,
all of which was paid at December 31, 1998. As set forth in the Prospectus
of the Partnership, the Managing General Partner was to negotiate such
agreements on terms no less favorable to the Partnership than those
customarily charged for similar services in the relevant geographical area
(but in no event at rates greater than 5% of the gross income from a
property), and such agreements were to be terminable by either party
thereto, without penalty upon 60 days' notice.
The General Partners of the Partnership and their affiliates were
reimbursed for their direct expenses relating to the administration of the
Partnership and the operation of the Partnership's real property
investments. In 1998, the Managing General Partner of the Partnership and
its affiliates received reimbursements of $1,620 for such out-of-pocket
expenses.
The Partnership was permitted to engage in various transactions
involving affiliates of the Managing General Partner of the Partnership.
The relationship of the Managing General Partner (and its directors and
officers) to its affiliates is set forth in Item 10 above and Exhibit 21
hereto.
<PAGE>
<TABLE>
<CAPTION>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) The following owned, or may have been deemed to have owned, beneficially more than 5% of the outstanding
Interests of the Partnership immediately prior to its liquidation.
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
(i)
Limited Partnership Liquidity Fund X (1) 45 Interests Less than
Interests directly (2) 1%
Limited Partnership Liquidity Fund XIV (1) 50 Interests Less than
Interests directly (2) 1%
Limited Partnership Liquidity Fund XV (1) 45 Interests Less than
Interests directly (2) 1%
Limited Partnership Liquidity Fund 32, L.P. (1) 264 Interests 1.3%
Interests directly (2)
Limited Partnership Liquidity Fund High Yield 37 Interests Less than
Interests Institutional Investors (1) directly (2) 1%
Limited Partnership Liquidity Fund Tax Exempt 365 Interests 1.8%
Interests Partners (1) directly (2)
Limited Partnership Liquidity Fund Tax Exempt 456 Interests 2.3%
Interests Partners II (1) directly (2)
Limited Partnership Liquidity Fund 73, L.P. (1) 264 Interests 1.3%
Interests directly (2)
Limited Partnership LF 74, L.P. (1) 238.5 Interests 1.2%
Interests directly (2)
Limited Partnership Liquidity Financial Group, 1,764.5 Interests 8.8%
Interests L.P. (1) indirectly (3)
Limited Partnership Liquidity Financial 1,764.5 Interests 8.8%
Interests Corporation (1) indirectly (3)
<PAGE>
<FN>
(1) The address of each beneficial owner listed in this subsection (a)(i) is P.O. Box 882044, San Francisco,
California 94188.
(2) Each entity referenced by this note (2) had reported that it had sole voting and dispositive power with
respect to the Interests that it owned directly as shown in the above table in this subsection (a)(i). However,
voting and dispositive power was exercised on behalf of each such entity by its general partner, Liquidity
Financial Group, L.P. The general partner of Liquidity Financial Group, L.P. is Liquidity Financial Corporation.
Because of their affiliations, all beneficial owners identified in this subsection (a)(i) may be deemed to have
been members of a group with shared voting and dispositive power with respect to the aggregate 1,764.5 Interests
(8.8%) beneficially owned by them. See note (3) of this subsection (a)(i). The exercise of voting power with
respect to any Interests was subject to the terms and conditions of the Partnership Agreement of the Partnership.
(3) Includes the aggregate 1,764.5 Interests owned directly by the entities referenced by note (2) in this
subsection (a)(i). Liquidity Financial Group, L.P, was the general partner of each such entity and exercised
voting and dispositive power on behalf of each such entity. Liquidity Financial Corporation is the general
partner of Liquidity Financial Group, L.P. As such, Liquidity Financial Group, L.P. and Liquidity Financial
Corporation may have been deemed to have had shared voting and dispositive power with respect to the aggregate
1,764.5 Interests owned by such entities. Reference is made to note (2) in this subsection (a)(i).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
(ii)
Limited Partnership Equity Resource 20 Interests Less than
Interests Bridge Fund (1) (4) directly 1%
Limited Partnership Equity Resource 269 Interests 1.3%
Interests Fund XV Limited directly
Partnership (1) (4)
Limited Partnership Equity Resource 1,133.22 Interests 5.7%
Interests Fund XVII Limited directly
Partnership (1) (4)
Limited Partnership Equity Resources 1,402.22 Interests 7.0%
Interests Group, Incorporated indirectly (2) (3)
(1) (4)
Limited Partnership Eggert Dagbjartsson 1,133.22 Interests 5.7%
Interests (1) (4) indirectly (3)
Limited Partnership Mark S. Thompson (1) (4) 269 Interests 1.3%
Interests indirectly (2)
<FN>
(1) The address of each beneficial owner listed in this subsection (a)(ii) is 14 Story Street, Cambridge,
Massachusetts 02138.
(2) Includes 269 Interests owned directly by Equity Resource Fund XV Limited Partnership for which Equity
Resources Group, Incorporated and Mark S. Thompson act as the general partners and have reported that they had
shared voting and dispositive power with respect to such Interests.
(3) Includes 1,133.22 Interests owned directly by Equity Resource Fund XVII Limited Partnership for which
Equity Resources Group, Incorporated and Eggert Dagbjartsson act as the general partners. Equity Resources
Group, Incorporated and Mr. Dagbjartsson have reported that they had shared voting and dispositive power with
respect to Interests owned by such partnership.
(4) Because of their affiliations, all beneficial owners identified in this subsection (a)(ii) may be
deemed to have been members of a group with shared voting and dispositive power with respect to the aggregate
1,422.22 Interests (7.1%) beneficially owned by them. The exercise of voting power with respect to any Interests
was subject to the terms and conditions of the Partnership Agreement of the Partnership.
</TABLE>
<PAGE>
<TABLE>
(b) The Managing General Partner, its officers and directors and the individual General Partners
beneficially owned the following Interests of the Partnership immediately prior to its liquidation:
<CAPTION>
NAME OF AMOUNT AND NATURE
BENEFICIAL OF BENEFICIAL PERCENT
TITLE OF CLASS OWNER OWNERSHIP OF CLASS
- -------------- ---------- ----------------- --------
<S> <C> <C> <C>
Limited Partnership JMB Realty Corporation 5 Interests Less than 1%
Interests directly
Limited Partnership Managing General Partner, 5 Interests Less than 1%
Interests its officers and directly
directors and the
individual General
Partners as a group
<FN>
No officer or director of the Managing General Partner of the Partnership possessed a right to acquire
beneficial ownership of Interests of the Partnership.
Reference is made to Item 10 for information concerning ownership of the Managing General Partner.
(c) There existed no arrangement, known to the Partnership, the operation of which may have resulted in a
change in control of the Partnership.
</TABLE>
<PAGE>
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no significant transactions or business relationships with
the Managing General Partner, affiliates or their management other than
those described in Items 10 and 11 above.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements. (See Index to Financial Statements
filed with this annual report).
(2) 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-A. 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 dated (File No. 2-
55624) July 26, 1976.
21. List of Subsidiaries.
24. Powers of Attorney.
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) The following report on Form 8-K was filed since the last
quarter of the period covered by this report.
(i) The Partnership's Report on Form 8-K (File No. 0-8469)
for December 1, 1998 (describing the sale of Parkway City Mall by
Huntsville Mall Associates) was filed. This report was dated December 15,
1998 and includes a discussion of the sale (Item 2) and narrative pro forma
financial information with respect to the sale (Item 7).
No annual report for the fiscal year 1998 (immediately prior to
liquidating distribution) or proxy material has been sent to the Partners
of the Partnership. An annual report will be sent to the Partners
subsequent to this filing.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Partnership 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
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Date: March 22, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: JMB Realty Corporation
Managing General Partner
JUDD D. MALKIN*
By: Judd D. Malkin, Chairman and
Chief Financial Officer
Date: March 22, 1999
NEIL G. BLUHM*
By: Neil G. Bluhm, President and Director
Date: March 22, 1999
H. RIGEL BARBER*
By: H. Rigel Barber, Chief Executive Officer
Date: March 22, 1999
GLENN E. EMIG*
By: Glenn E. Emig, Chief Operating Officer
Date: March 22, 1999
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Principal Accounting Officer
Date: March 22, 1999
A. LEE SACKS*
By: A. Lee Sacks, Director
Date: March 22, 1999
STUART C. NATHAN*
By: Stuart C. Nathan, Executive Vice President
and Director
Date: March 22, 1999
*By: GAILEN J. HULL, Pursuant to a Power of Attorney
GAILEN J. HULL
By: Gailen J. Hull, Attorney-in-Fact
Date: March 22, 1999
<PAGE>
JMB INCOME PROPERTIES, LTD. - IV
EXHIBIT INDEX
DOCUMENT
INCORPORATED
BY REFERENCE PAGE
------------- ----
3-A.* Pages 9-14, 70-71, 75-76 and
A-6 to A-16 of the Prospectus
of the Partnership dated July 26,
1976, as supplemented August 19,
1976, September 16, 1976 and
September 21, 1976 Yes
3-B.* Amended and Restated Agreement
of Limited Partnership Yes
4. Mortgage Note secured by the
Parkway City Mall Yes
10-A. Acquisition documents related
to the Parkway City Mall Yes
21. List of Subsidiaries No
24. Power of Attorney No
27. Financial Data Schedule No
EXHIBIT 21
LIST OF SUBSIDIARIES
The Partnership was a general partner of Huntsville Mall Associates,
an Illinois general partnership which held title to the Parkway City Mall
in Huntsville, Alabama. Reference is made to the Notes to Consolidated
Financial Statements filed with this annual report for a description of the
terms of the Huntsville partnership agreement. The Partnership's interest
in the Huntsville joint venture partnership and the results of its
operations are included in the consolidated financial statements of the
Partnership filed with this annual report.
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the managing general partner of JMB INCOME PROPERTIES,
LTD. - IV, do hereby nominate, constitute and appoint GARY NICKELE, GAILEN
J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf
of the undersigned officers a Report on Form 10-K of said partnership for
the fiscal year ended December 31, 1998, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 29th day of January, 1999.
H. RIGEL BARBER
- -----------------------
H. Rigel Barber Chief Executive Officer
GLENN E. EMIG
- -----------------------
Glenn E. Emig Chief Operating Officer
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1998,
and any and all amendments thereto, the 29th day of January, 1999.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers of JMB
Realty Corporation, the managing general partner of JMB INCOME PROPERTIES,
LTD. - IV, do hereby nominate, constitute and appoint GARY NICKELE, GAILEN
J. HULL, DENNIS M. QUINN or any of them, attorneys and agents of the
undersigned with full power of authority to sign in the name and on behalf
of the undersigned officers a Report on Form 10-K of said partnership for
the fiscal year ended December 31, 1998, and any and all amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and any of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned have executed this Power of
Attorney the 29th day of January, 1999.
NEIL G. BLUHM
- ----------------------- President and Director
Neil G. Bluhm
JUDD D. MALKIN
- ----------------------- Chairman and Chief Financial Officer
Judd D. Malkin
A. LEE SACKS
- ----------------------- Director of General Partner
A. Lee Sacks
STUART C. NATHAN
- ----------------------- Executive Vice President
Stuart C. Nathan Director of General Partner
The undersigned hereby acknowledge and accept such power of authority
to sign, in the name and on behalf of the above named officers, a Report on
Form 10-K of said partnership for the fiscal year ended December 31, 1998,
and any and all amendments thereto, the 29th day of January, 1999.
GARY NICKELE
-----------------------
Gary Nickele
GAILEN J. HULL
-----------------------
Gailen J. Hull
DENNIS M. QUINN
-----------------------
Dennis M. Quinn
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 10,498,060
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 10,498,060
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,498,060
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 10,498,060
<TOTAL-LIABILITY-AND-EQUITY> 10,498,060
<SALES> 3,273,899
<TOTAL-REVENUES> 3,570,109
<CGS> 0
<TOTAL-COSTS> 1,485,642
<OTHER-EXPENSES> 514,293
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 195,214
<INCOME-PRETAX> 1,374,960
<INCOME-TAX> 0
<INCOME-CONTINUING> 794,940
<DISCONTINUED> 3,493,807
<EXTRAORDINARY> (41,166)
<CHANGES> 0
<NET-INCOME> 4,247,581
<EPS-PRIMARY> 92.06
<EPS-DILUTED> 92.06
</TABLE>
