U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1995
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 0-14283
ANGELES INCOME PROPERTIES, LTD. IV
California
(State or other jurisdiction of 95-3974194
incorporation or organization) (I.R.S. Employer
Identification No.)
One Insignia Financial Plaza, P.O. Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (864) 239-1000
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of Registrant's knowledge in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. X
State issuer's revenues for its most recent fiscal year. $3,702,709
State the aggregate market value of the voting stock held by nonaffiliates
of the Registrant. The aggregate market value shall be computed by reference
to the price at which the stock was sold, or the average bid and asked prices
of such stock, as of a specified date within the past 60 days. Market value
information for Registrant's Partnership Interests is not available. Should a
trading market develop for these Interests, it is the General Partner's belief
that such trading would not exceed $25 million.
DOCUMENTS INCORPORATED BY REFERENCE
None
PART I
Item 1. Description of Business
Angeles Income Properties, Ltd. IV (the "Partnership" or the
"Registrant") is a publicly-held limited partnership organized under the
California Uniform Limited Partnership Act pursuant to the Certificate and
Agreement of Limited Partnership (hereinafter referred to as the "Agreement")
dated June 29, 1984. The Partnership's General Partner is Angeles Realty
Corporation II, a California corporation (hereinafter referred to as the
"General Partner" or "ARCII").
The Partnership, through its public offering of Limited Partnership
Units, sold 131,800 units aggregating $65,900,000. The General Partner
contributed capital in the amount of $1,000 for a 2% interest in the
Partnership. The Partnership was formed for the purpose of acquiring fee and
other forms of equity interests in various types of real property. The
Partnership presently owns two investment properties and owns a general
partnership interest in one additional property. The General Partner of the
Partnership intends to maximize the operating results and, ultimately, the net
realizable value of each of the Partnership's properties in order to achieve
the best possible return for the investors. Such results may best be achieved
through property sales, refinancings, debt restructurings or relinquishment of
the assets. The Partnership intends to evaluate each of its holdings
periodically to determine the most appropriate strategy for each of the
assets.
The Partnership has no full time employees. The General Partner is
vested with full authority as to the general management and supervision of the
business and affairs of the Partnership. Limited Partners have no right to
participate in the management or conduct of such business and affairs.
Insignia Management Group, L.P. provides property management services to each
of the Partnership's investment properties. The property in which the
Partnership has a general partnership interest is managed by a third party.
The business in which the Partnership is engaged is highly competitive, and
the Partnership is not a significant factor in its industry. Each investment
property is located in or near a major urban area and, accordingly, competes
for rentals not only with similar properties in its immediate area but with
hundreds of similar properties throughout the urban area. Such competition is
primarily on the basis of location, rents, services and amenities. In
addition, the Partnership competes with significant numbers of individuals and
organizations (including similar partnerships, real estate investment trusts
and financial institutions) with respect to the sale of improved real
properties, primarily on the basis of the prices and terms of such
transactions.
Item 2. Description of Properties
The following table sets forth the Registrant's investments in properties:
Date of
Property Purchase Type of Ownership Use
Eastgate Marketplace 08/29/86 Fee ownership Commercial
141,366 sq.ft.
Factory Merchants Mall 05/22/86 Fee ownership subject Commercial
to a first mortgage 200,222 sq.ft.
The Partnership has a 66.7% investment in Northtown Mall Partners
("Northtown"). The Partnership entered into a General Partnership Agreement
with Angeles Income Properties, Ltd. III, a California partnership and an
affiliate of the General Partner, to form Northtown. Northtown is accounted
for on the Partnership's balance sheet using the equity method and is included
in "Equity interest in net liabilities of joint venture". The property owned
by Northtown, as of December 31, 1995, is summarized as follows:
Date of
Property Purchase Type of Ownership Use
Northtown Mall 06/28/85 66.7% Commercial
806,730 sq.ft.
The Partnership had a 50% investment in Moraine West Carrollton Partners
("Moraine"). The Partnership entered into a General Partnership Agreement
with Angeles Income Properties, Ltd. III, a California partnership and an
affiliate of the General Partner, to form Moraine. The investment property
owned by Moraine was sold on July 21, 1994, to an unaffiliated party.
The Partnership had a 43% investment in the Fort Worth Option Joint Venture
("Fort Worth"). The Partnership entered into a General Partnership Agreement
with Angeles Income Properties, Ltd. V, a California partnership and an
affiliate of the General Partner, to form Fort Worth. The remaining property
owned by Fort Worth was sold on March 22, 1995, to an unaffiliated party.
The Partnership also had a 43% investment in Burlington Outlet Mall Joint
Venture ("Burlington"). The Partnership entered into a General Partnership
Agreement with Angeles Income Properties, Ltd. III, a California partnership
and an affiliate of the General Partner, to form Burlington. On October 30,
1995, Burlington lost its only investment property, Burlington Outlet Mall,
through a foreclosure by an unaffiliated mortgage holder.
Schedule of Properties:
<TABLE>
<CAPTION>
Gross
Carrying Accumulated Federal
Property Value Depreciation Rate Method Tax Basis
<S> <C> <C> <C> <C> <C>
Eastgate Marketplace $ 2,762,257 $ 1,903,374 5-20 yrs (1) $ 3,795,660
Factory Merchants Mall 19,976,666 8,554,723 5-20 yrs (1) 12,104,964
$22,738,923 $10,458,097 $15,900,624
<FN>
(1) Straight line
</TABLE>
See "Note A" of the financial statements included in "Item 7" for a
description of the Partnership's depreciation policy.
Schedule of Mortgages:
<TABLE>
<CAPTION>
Principal Principal
Balance At Balance
December 31, Interest Period Maturity Due At
Property 1995 Rate Amortized Date Maturity
<S> <C> <C> <C> <C> <C>
Factory Merchants Mall
1st mortgage $14,469,438 9.87% 20 years 12/1997 $13,853,040
</TABLE>
Average annual rental rate and occupancy for 1995 and 1994 for each property:
Average Annual Average
Rental Rates Occupancy
Property 1995 1994 1995 1994
Eastgate Marketplace $ 3.29/s.f. $ 3.35/s.f. 94% 93%
Factory Merchants Mall 13.94/s.f. 13.87/s.f. 91% 92%
As noted in "Item 1. Description of Business," the real estate industry is
highly competitive. All of the properties of the Partnership are subject to
competition from other commercial buildings in the area. The General Partner
believes that all of the properties are adequately insured.
The following is a schedule of the lease expirations for the years 1996-2005:
Number of % of Gross
Expirations Square Feet Annual Rent Annual Rent
Eastgate Marketplace
1996 4 7,388 $ 45,483 9.24%
1997 1 46,000 62,100 12.62%
1998 2 3,264 25,881 5.26%
1999 0 -- -- --
2000-2005 1 1,150 11,362 2.31%
Factory Merchants Mall
1996 14 57,266 $813,021 26.92%
1997 3 5,097 76,050 2.52%
1998 6 22,916 326,672 10.82%
1999 9 34,047 437,400 14.48%
2000 5 17,757 284,764 9.43%
2001 4 33,457 467,859 15.49%
2002 0 0 0 --
2003 0 0 0 --
2004 1 8,680 117,180 3.88%
2005 1 2,500 35,874 1.19%
The following schedule reflects information on tenants occupying 10% or
more of the leasable square footage for Eastgate Marketplace:
Nature of Square Footage Annual Rent
Business Leased Per Square Foot Lease Expiration
Retail 38,524 $4.40 11/30/07
Retail 22,400 3.16 02/13/14
Retail 46,000 1.35 09/30/97
Factory Merchants Mall has no tenants occupying 10% or more of the leasable
square footage.
Real estate taxes and rates in 1995 for each property were:
1995 1995
Billing Rate
Eastgate Marketplace $ 74,585 1.52
Factory Merchants Mall 147,185 .80
Item 3. Legal Proceedings
In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate
investment trust, formerly affiliated with Angeles Corporation ("Angeles"),
initiated litigation against Fort Worth, and other partnerships which loaned
money to AMIT seeking to avoid repayment of such obligations. The Partnership
subsequently filed a counterclaim against AMIT seeking to enforce the
obligation, the principal amount of which was $2,240,000 plus accrued interest
from March 1993 ("AMIT Obligation").
MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns
1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1
Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE
GP to receive 1.2% of the distributions of net cash distributed by AMIT.
These Class B Shares also entitle MAE GP to vote on the same basis as Class A
Shares which allows MAE GP to vote approximately 37% of the total shares
(unless and until converted to Class A Shares at which time the percentage of
the vote controlled represented by the shares held by MAE GP would approximate
1.2% of the vote). Between the date of acquisition of these shares (November
24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since
that date, MAE GP voted its shares at the 1995 annual meeting in connection
with the election of trustees and other matters. MAE GP has not exerted, and
continues to decline to exert, any management control over or participate in
the management of AMIT. MAE GP may choose to vote these shares as it deems
appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"),
an affiliate of the General Partner and an affiliate of Insignia Financial
Group, Inc., which provides property management and partnership administration
services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class
A Shares entitle LAC to vote approximately 1.5% of the total shares.
On November 9, 1994, Fort Worth executed a definitive Settlement Agreement
to settle the dispute with respect to the AMIT obligation. The actual closing
of the Settlement occurred April 14, 1995. The Partnership's claim against
AMIT was satisfied by a cash payment by AMIT totalling $1,932,975 (the
"Settlement Amount") plus interest at closing. These funds were applied
against the Partnership's $5,000,000 note receivable from Fort Worth (See
discussion below). On August 9, 1995, Fort Worth and Angeles entered into an
agreement in principle regarding the allowance of an amended claim for the
deficiency between the original principal and the Settlement Amount (the
"deficiency"). The amended claim equalled 90% of the deficiency, or $276,322.
Subsequent to December 31, 1995, the Partnership received $47,527 as payment
on the deficiency.
As part of the settlement, MAE GP granted to AMIT an option to acquire the
Class B Shares owned by it. This option can be exercised at the end of 10
years or when all loans made by AMIT to partnerships affiliated with MAE GP as
of November 9, 1994, (which is the date of execution of a definitive
Settlement Agreement), have been paid in full, but in no event prior to
November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at
closing, which occurred April 14, 1995, as payment for the option. Upon
exercise of the option, AMIT would remit to MAE GP an additional $94,000.
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able
to vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted
to the AMIT trustees, in their capacity as trustees of AMIT, proxies with
regard to the Class B Shares instructing such trustees to vote said Class B
Shares in accordance with the vote of the majority of the Class A Shares
voting to be determined without consideration of the votes of "Excess Class A
Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT.
Additionally, Angeles either directly or through an affiliate, maintained a
central disbursement account (the "Account") for the properties and
partnerships managed by Angeles and its affiliates, including the Registrant.
Angeles caused the Partnership to make deposits to the Account ostensibly to
fund the payment of certain obligations of the Partnership. Angeles further
caused checks on such account to be written to or on behalf of certain other
partnerships. However, of these total deposits, at least $81,263 deposited by
or on behalf of the Partnership was used for purposes other than satisfying
the liabilities of the Partnership. Accordingly, the Partnership filed a
Proof of Claim in the Angeles bankruptcy proceedings for such amount.
However, subsequently the General Partner of the Partnership has determined
that the cost involved to pursue such claim would likely exceed any amount
received, if in fact such claim were to be resolved in favor of the
Partnership. Therefore, the Partnership withdrew this claim on August 9,
1995.
Subsequent to year end, the Partnership, along with other affiliates, was
named in a suit brought by a company which owned a 20% interest in Fort
Worth's investment property, the W.T. Waggoner Building, which was sold in
1995. The General Partner believes that there is no merit in this suit and
intends to vigorously defend it.
Item 4. Submission of Matters to a Vote of Security Holders
The Unit holders of the Partnership did not vote on any matter during the
fourth quarter of the fiscal year covered by this report.
PART II
Item 5. Market for the Partnership's Common Equity and Related Security
Holder Matters
The Partnership, a publicly-held limited partnership, sold 131,800 Limited
Partnership Units during its offering period through April 24, 1986, and
currently has 131,760 Limited Partnership Units and 5,983 Limited Partners of
record. There is no intention to sell additional Limited Partnership Units nor
is there an established market for these units.
During 1994, the number of Limited Partnership Units decreased by 40 units
due to limited partners abandoning their units. In abandoning his or her
Limited Partnership Units, a limited partner relinquishes all right, title and
interest in the Partnership as of the date of abandonment. There was no
change in the number of Limited Partnership Units during 1995.
The Partnership has discontinued making cash distributions from operations
until and unless the financial condition of the Partnership and other
relevant factors warrant resumption of distributions.
Item 6. Management's Discussion and Analysis or Plan of Operation
Results of Operations
This item should be read in conjunction with the consolidated financial
statements and other items contained elsewhere in this report.
The Partnership recognized net income of $1,447,217 for 1995 versus a net
loss of $3,273,457 for 1994. The increase in the net income for the year
ended December 31, 1995, as compared to the year ended December 31, 1994, is
primarily due to an increase in revenues and tenant reimbursements and an
increase in equity in income of the joint ventures (see discussion below).
The increase in rental revenue for the year ended December 31, 1995, as
compared to the year ended December 31, 1994, is a result of an increase in
percentage rent and an increase in the rental rates at Factory Merchant's
Mall. The increase in other income is due to an increase in interest income
as a result of increased cash balances. General and administrative expense
decreased primarily due to a decrease in partnership accounting, investor
services and asset management cost reimbursements. The increase in property
management fees is due to the increase in rental revenues as such fees are
based on revenues. The increase in maintenance expenses for the year ended
December 31, 1995, as compared to the year ended December 31, 1994, is
primarily caused by increased repairs and maintenance at Factory Merchant's
Mall in an effort to enhance the property's curb appeal and thereby increase
occupancy. Bad debt expense for the year ended December 31, 1995, increased
due to increases in the allowance based on management's review of
collectibility of tenant accounts. Tenant reimbursements increased for the
year ended December 31, 1995, as compared to the year ended December 31, 1994,
due to a different interpretation of the lease agreements at Factory Merchants
Mall.
The Partnership's equity in the income of the joint ventures is $1,349,648
for the year ended December 31, 1995, and the Partnership's equity in the
losses of the joint ventures was $2,412,329 for the year ended December 31,
1994. The change in the equity in income (loss) of joint ventures can be
attributed to bad debt recovery for Fort Worth as a result of AMIT's note
payment to Fort Worth and to the gain on the foreclosure of Burlington's
investment property (see "Note F" for further discussion).
As part of the ongoing business plan of the Partnership, the General
Partner monitors the rental market environment of each of its investment
properties to assess the feasibility of increasing rents, maintaining or
increasing occupancy levels and protecting the Partnership from increases in
expense. As part of this plan, the General Partner attempts to protect the
Partnership from the burden of inflation-related increases in expenses by
increasing rents and maintaining a high overall occupancy level. However, due
to changing market conditions, which can result in the use of rental
concessions and rental reductions to offset softening market conditions, there
is no guarantee that the General Partner will be able to sustain such a plan.
Capital Resources and Liquidity
The Partnership's primary source of cash is from the operations of its
properties and from financing placed on such properties. Cash from these
sources is utilized for property operations, capital improvements, and/or
repayment of debt.
At December 31, 1995, the Partnership had unrestricted cash of $3,425,583
versus $548,218 at December 31, 1994. Net cash provided by operating
activities increased in 1995 due to improved operations at the Partnership's
investment properties, as discussed above. Net cash from investing activities
increased due to the receipt of proceeds from the Fort Worth note receivable
and the receipt of distributions from Moraine. Net cash used in financing
activities remained stable from 1994 to 1995.
The sufficiency of existing liquid assets to meet future liquidity and
capital expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership. Such assets are
currently thought to be sufficient for any near-term needs of the Partnership.
The mortgage indebtedness of $14,469,438, which is secured by the Factory
Merchant's Mall investment property, matures in December 1997, at which time
the indebtedness will be refinanced or the property will be sold. Future cash
distributions will depend on the levels of net cash generated from operations,
refinancings, property sales and the availability of cash reserves. There
were no cash distributions in 1995 and 1994.
On March 15, 1991, Northtown and the holder of the Northtown Mall mortgage
note payable entered into an Option Agreement ("Option") whereby such lender
has the right and an option to purchase the Northtown Mall property on the
terms and conditions as set forth in the Option. The purchase price of the
property, as set forth in the Option, is defined as the fair market value of
the property. Such Option can be exercised by written notice by the lender at
specified dates.
A purchase agreement was executed on May 8, 1994 for the sale of all of the
Moraine West Carrollton properties to an affiliate of the third party managing
agent. The sale was closed on July 21, 1994. Moraine received a net amount
of approximately $2,199,000 in proceeds after satisfying all indebtedness.
Moraine realized a $140,553 gain on the transaction of which the Partnership's
pro rata share was $70,277. Moraine made a final distribution of $1,931,461
in 1995, of which the Partnership's pro-rata share was $965,730, and the joint
venture was then dissolved.
On March 22, 1995, Fort Worth's remaining property was sold for $300,000 to
a tenant of the property. All remaining cash will be used in 1996 to satisfy
Fort Worth's remaining debt to the Partnership, at which time Fort Worth will
terminate.
On October 30, 1995, the Partnership lost Burlington Outlet Mall located in
Burlington, NC, through a foreclosure by an unaffiliated mortgage holder. The
property was not generating sufficient cash flow to meet debt service
requirements. The non-payment of principal and interest constituted a
default under terms of the mortgage agreement and allowed the holder of the
mortgage agreement to foreclose on the property. The Partnership deemed it to
be in its best interest not to contest the foreclosure action. All remaining
cash will be used to pay the joint venture's liabilities in 1996, at which
time Burlington will be dissolved.
Item 7. Financial Statements
ANGELES INCOME PROPERTIES, LTD. IV
LIST OF FINANCIAL STATEMENTS
Report of Independent Auditors
Balance Sheet - December 31, 1995
Statements of Operations - Years ended December 31, 1995 and 1994
Statements of Changes in Partners' Deficit - Years ended
December 31, 1995 and 1994
Statements of Cash Flows - Years ended December 31, 1995 and 1994
Notes to Financial Statements
Report of Ernst & Young LLP, Independent Auditors
The Partners
Angeles Income Properties, Ltd. IV
We have audited the accompanying balance sheet of Angeles Income Properties,
Ltd. IV as of December 31, 1995, and the related statements of operations,
changes in partners' deficit and cash flows for each of the two years in the
period ended December 31, 1995. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by the Partnership's management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Angeles Income Properties,
Ltd. IV as of December 31, 1995 and the results of its operations and its cash
flows for each of the two years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
As discussed in Note J, the statement of changes in partners' deficit has been
restated to reflect a correction of the recording of equity interests in the
net liabilities of joint ventures in 1993.
/S/ ERNST & YOUNG LLP
Greenville, South Carolina
February 22, 1996
ANGELES INCOME PROPERTIES, LTD. IV
BALANCE SHEET
December 31, 1995
Assets
Cash:
Unrestricted $ 3,425,583
Restricted--tenant security deposits 7,589
Accounts receivable, net of allowance
of $189,729 217,983
Escrows for taxes and insurance 222,638
Other assets 468,059
Investment properties (Notes B and E):
Land $ 2,707,811
Buildings and related personal
property 20,031,112
22,738,923
Less accumulated depreciation (10,458,097) 12,280,826
$ 16,622,678
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 63,217
Tenant security deposits 7,589
Accrued taxes 147,185
Other liabilities 140,374
Mortgage note payable (Notes B and E) 14,469,438
Equity interest in net liabilities of
joint venture, net of advances of
$890,597 (Note F) 12,804,789
Partners' Deficit
General partner $ (1,359,178)
Limited partners (131,760
units issued and outstanding) ( 9,650,736) (11,009,914)
$ 16,622,678
See Accompanying Notes to Financial Statements
ANGELES INCOME PROPERTIES, LTD. IV
STATEMENTS OF OPERATIONS
Years Ended December 31,
1995 1994
Revenues:
Rental income $ 3,512,066 $ 3,090,429
Other income 190,643 44,991
Total revenue 3,702,709 3,135,420
Expenses:
Operating 975,657 1,011,540
General and administrative 418,852 672,020
Property management fees (Note D) 171,218 123,405
Maintenance 305,779 266,359
Depreciation 1,112,305 1,141,622
Amortization 103,573 69,071
Interest 1,482,686 1,507,415
Property taxes 221,815 214,561
Bad debt expense 171,620 5,476
Tenant reimbursements (1,358,365) (1,014,921)
Total expenses 3,605,140 3,996,548
Income (loss) before equity in income
(loss) of joint ventures 97,569 (861,128)
Equity in income (loss) of joint
ventures (Note F) 1,349,648 (2,412,329)
Net income (loss) $ 1,447,217 $(3,273,457)
Net income (loss) allocated to general
partner (2%) $ 28,944 $ (65,469)
Net income (loss) allocated to limited
partners (98%) 1,418,273 (3,207,988)
Net income (loss) $ 1,447,217 $(3,273,457)
Net income (loss) per limited partnership
unit $ 10.98 $ (24.34)
See Accompanying Notes to Financial Statements
ANGELES INCOME PROPERTIES, LTD. IV
STATEMENT OF CHANGES IN PARTNERS' DEFICIT
<TABLE>
<CAPTION>
Limited
Partnership General Limited
Units Partner Partners Total
<S> <C> <C> <C> <C>
Original capital contributions 131,800 $ 1,000 $ 65,900,000 $65,901,000
Partners' deficit at December 31,
1993 as previously reported 131,800 $(1,372,355) $(10,296,421) $(11,668,776)
Adjustment to correct the
recording of equity interests
in net liabilities of joint
ventures in 1993 (Note J) -- 49,702 2,435,400 2,485,102
Partners' deficit at December 31,
1993, as restated 131,800 (1,322,653) (7,861,021) (9,183,674)
Abandonment of Limited
Partnership Units (Note I) (40) -- -- --
Net loss for the year ended
December 31, 1994 -- (65,469) (3,207,988) (3,273,457)
Partners' deficit at
December 31, 1994, as restated 131,760 (1,388,122) (11,069,009) (12,457,131)
Net income for the year
ended December 31, 1995 -- 28,944 1,418,273 1,447,217
Partners' deficit at
December 31, 1995 131,760 $(1,359,178) $(9,650,736) $(11,009,914)
<FN>
See Accompanying Notes to Financial Statements
</TABLE>
ANGELES INCOME PROPERTIES, LTD. IV
STATEMENTS OF CASH FLOWS
Years Ended December 31,
1995 1994
Cash flows from operating activities:
Net income (loss) $ 1,447,217 $(3,273,457)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Equity in (income) loss of joint ventures (1,349,648) 2,412,329
Depreciation 1,112,305 1,141,622
Bad debt expense 171,620 5,476
Amortization of loan costs and leasing
commissions 145,310 109,233
Change in accounts:
Restricted cash 557 (2,231)
Accounts receivable (280,561) 60,316
Escrows for taxes (52,300) (116,632)
Other assets (99,283) (130,836)
Accounts payable 24,406 (58,576)
Tenant security deposit liabilities (557) 1,077
Accrued taxes 14,811 --
Other liabilities (34,771) (119,284)
Net cash provided by operating
activities 1,099,106 29,037
Cash flows from investing activities:
Property improvements and replacements (270,552) (374,640)
Distributions from joint venture 965,730 500,000
Advances to joint ventures (750,031) (808,465)
Proceeds from notes receivable 2,111,438 --
Net cash provided by (used in)
investing activities 2,056,585 (683,105)
Cash flows from financing activities:
Payments on mortgage notes payable (278,326) (252,236)
Net increase (decrease) in cash and cash
equivalents 2,877,365 (906,304)
Cash and cash equivalents at beginning of year 548,218 1,454,522
Cash and cash equivalents at end of year $ 3,425,583 $ 548,218
Supplemental disclosure of cash flow
information:
Cash paid for interest $ 1,443,238 $ 1,469,328
See Accompanying Notes to Financial Statements
ANGELES INCOME PROPERTIES, LTD. IV
Notes to Financial Statements
December 31, 1995
Note A Organization and Significant Accounting Policies
Organization: Angeles Income Properties, Ltd. IV (the "Partnership" or
"Registrant") is a California limited partnership organized on June 29, 1984,
to acquire and operate residential and commercial real estate properties. The
Partnership's General Partner is Angeles Realty Corporation II ("ARC II"), an
affiliate of Insignia Financial Group, Inc. As of December 31, 1995, the
Partnership owns and operates two commercial properties and owns a general
partner interest in a third commercial property.
Principles of Consolidation: The financial statements include all of the
accounts of the Partnership and its majority owned partnerships. All
significant interpartnership balances have been eliminated. Minority interest
is immaterial and not shown separately on the financial statements.
Investment in Joint Ventures: The Partnership accounts for its investments in
joint ventures using the equity method of accounting (see "Note F"). Under
the equity method, the Partnership records its equity interest in earnings or
losses of the joint ventures; however, the investment in the joint ventures
will be recorded at an amount less than zero (a liability) to the extent of
the Partnership's share of net liabilities of the joint ventures.
Allocations and Distributions to Partners: In accordance with the Agreement,
any gain from the sale or other disposition of Partnership assets will be
allocated first to the General Partner to the extent of the amount of any
Brokerage Compensation and Incentive Interest to which the General Partner is
entitled. Any gain remaining after said allocation will be allocated to the
General Partner and Limited Partners in proportion to their interests in the
Partnership.
The Partnership will allocate other profits and losses 2% to the General
Partner and 98% to the Limited Partners.
Except as discussed below, the Partnership will allocate distributions 2% to
the General Partner and 98% to the Limited Partners.
Upon the sale or other disposition, or refinancing, of any asset of the
Partnership, the Distributable Net Proceeds shall be distributed as follows:
(i) First, to the General Partner, on account of the current and accrued
Management Fee Payable, deferred as contemplated therein; (ii) Second, to the
Partners in proportion to their interests until the Limited Partners have
received proceeds equal to their Original Capital Investment applicable to the
property; (iii) Third, to the Partners until the Limited Partners have
received distributions from all sources equal to their 8% Cumulative
Distribution; (iv) Fourth, to the General Partner until it has received its
Brokerage Compensation and (v) Thereafter, 88% to the Limited Partners in
proportion to their interests and 12% ("Incentive Interest") to the General
Partner.
Depreciation: Depreciation is computed utilizing the straight-line method
over the estimated lives of the investment properties and related personal
property. For Federal income tax purposes, depreciation is computed by using
the straight-line method over an estimated life of 5 to 20 years for personal
property and 15 to 40 years for real property.
Note A - Organization and Significant Accounting Policies (continued)
Cash and Cash Equivalents: The Partnership considers all highly liquid
investments with a maturity when purchased of three months or less to be cash
equivalents. At certain times, the amount of cash deposited at a bank may
exceed the limit on insured deposits.
Investment Properties: Prior to the fourth quarter of 1995, investment
properties were carried at the lower of cost or estimated fair value, which
was determined using the higher of the property's non-recourse debt amount,
when applicable, or the net operating income of the investment property
capitalized at a rate deemed reasonable for the type of property. During the
fourth quarter of 1995, the Partnership adopted FASB Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to Be Disposed Of", which requires impairment losses to be recorded on long-
lived assets used in operations when indicators of impairment are present and
the undiscounted cash flows estimated to be generated by those assets are less
than the assets' carrying amount. The impairment loss is measured by
comparing the fair value of the asset to its carrying amount. The effect of
adoption was not material.
Loan Costs: Loan costs, included in "Other assets," of $165,274 are being
amortized on a straight-line basis over the life of the loan. Current
accumulated amortization is $83,540.
Leases: Commercial building lease terms are generally for one to twenty years.
Several tenants have percentage rent clauses which provide for additional rent
upon the tenant achieving certain rental objectives. Percentage rent realized
totalled $484,600 in 1995 and $291,561 in 1994.
Lease Commissions: Lease commissions, included in "Other assets," of $560,509
are being amortized on a straight-line basis over the terms of the respective
leases. Current accumulated amortization is $252,789.
Use of Estimates: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
Reclassifications: Certain reclassifications have been made to the 1994
balances to conform to the 1995 presentation.
Fair Value: In 1995, the Partnership implemented Statement of Financial
Accounting Standards No. 107, "Disclosure about Fair Value of Financial
Instruments," which requires disclosure of fair value information about
financial instruments for which it is practicable to estimate that value. The
carrying amount of the Partnership's cash and cash equivalents approximates
fair value due to short-term maturities. The Partnership estimates the fair
value of its fixed rate mortgage by discounted cash flow analysis, based on
estimated borrowing rates currently available to the Partnership ("Note B").
Note B - Mortgage Note Payable
The principal terms of the mortgage note payable are as follows:
<TABLE>
<CAPTION>
Monthly Principal Principal
Payment Stated Balance Balance At
Including Interest Maturity Due At December 31,
Property Interest Rate Date Maturity 1995
<S> <C> <C> <C> <C> <C>
Factory Merchants Mall
1st mortgage $143,464 9.87% 12/1997 $13,853,040 $14,469,438
</TABLE>
The mortgage note payable is nonrecourse and is secured by pledge of the
Partnership s investment property and by pledge of revenues from the
investment property.
The estimated fair value of the Partnership's debt approximates its carrying
amount.
Scheduled principal payments for the mortgage note payable subsequent to
December 31, 1995, are as follows:
1996 $ 307,079
1997 14,162,359
$14,469,438
Note C - Income Taxes
Taxable income or loss of the Partnership is reported in the income tax
returns of its partners. Accordingly, no provision for income taxes is made
in the financial statements of the Partnership.
Differences between the net loss as reported and Federal taxable loss result
primarily from differences in methods of accounting for joint ventures and
depreciation over different methods and lives and on differing cost basis of
investment properties. The following is a reconciliation of reported net loss
and Federal taxable loss:
1995 1994
Net income (loss) as reported $ 1,447,217 $(3,273,457)
Add (deduct):
Depreciation differences 118,852 154,993
Unearned income (38,728) 13,475
Investment in joint venture (7,802,026) (428,194)
Bad debts (2,595,928)
Other (149,428) (25,575)
Federal taxable loss $(9,020,041) $(3,558,758)
Federal taxable loss per
limited partnership unit $ (67.09) $ (26.74)
Note C - Income Taxes (continued)
The following is a reconciliation between the Partnership's reported amounts
and Federal tax basis of net assets and liabilities:
Net liabilities as reported $(11,009,914)
Land and buildings 2,693,071
Accumulated depreciation 926,727
Syndication and distribution costs 8,848,293
Investments in Joint Ventures 3,435,794
Note receivable 1,362,443
Other
Net assets - Federal tax basis $ 6,256,414
Note D - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and
its affiliates for the management and administration of all partnership
activities. The Partnership Agreement provides for payments to affiliates for
services and as reimbursement of certain expenses incurred by affiliates on
behalf of the Partnership.
The following payments were made to the General Partner and affiliates in 1995
and 1994:
1995 1994
Property management fees $171,218 $123,405
Reimbursement for services of affiliates 334,171 497,966
The Partnership insures its properties under a master policy through an agency
and insurer unaffiliated with the General Partner. An affiliate of the
General Partner acquired, in the acquisition of a business, certain financial
obligations from an insurance agency which were later acquired by the agent
who placed the current year's master policy. The current agent assumed the
financial obligations to the affiliate of the General Partner, who receives
payment on these obligations from the agent. The amount of the Partnership's
insurance premiums accruing to the benefit of the affiliate of the General
Partner by virtue of the agent's obligations is not significant.
Note D - Transactions with Affiliated Parties (continued)
In July 1993, Angeles Mortgage Investment Trust ("AMIT"), a real estate
investment trust, formerly affiliated with Angeles Corporation ("Angeles"),
initiated litigation against the Angeles Fort Worth Option Joint Venture
("Fort Worth"), of which the Partnership is a General Partner, and other
partnerships which loaned money to AMIT seeking to avoid repayment of such
obligations. The Partnership subsequently filed a counterclaim against AMIT
seeking to enforce the obligation, the principal amount of which was
$2,240,000 plus accrued interest from March 1993 ("AMIT Obligation").
MAE GP Corporation ("MAE GP"), an affiliate of the General Partner, owns
1,675,113 Class B Shares of AMIT. MAE GP has the option to convert these
Class B Shares, in whole or in part, into Class A Shares on the basis of 1
Class A Share for every 49 Class B Shares. These Class B Shares entitle MAE
GP to receive 1.2% of the distributions of net cash distributed by AMIT.
These Class B Shares also entitle MAE GP to vote on the same basis as Class A
Shares which allows MAE GP to vote approximately 37% of the total shares
(unless and until converted to Class A Shares at which time the percentage of
the vote controlled represented by the shares held by MAE GP would approximate
1.2% of the vote). Between the date of acquisition of these shares (November
24, 1992) and March 31, 1995, MAE GP declined to vote these shares. Since
that date, MAE GP voted its shares at the 1995 annual meeting in connection
with the election of trustees and other matters. MAE GP has not exerted, and
continues to decline to exert, any management control over or participate in
the management of AMIT. MAE GP may choose to vote these shares as it deems
appropriate in the future. In addition, Liquidity Assistance, LLC, ("LAC"),
an affiliate of the General Partner and an affiliate of Insignia Financial
Group, Inc., which provides property management and partnership administration
services to the Partnership, owns 63,200 Class A Shares of AMIT. These Class
A Shares entitle LAC to vote approximately 1.5% of the total shares.
On November 9, 1994, Fort Worth executed a definitive Settlement Agreement to
settle the dispute with respect to the AMIT obligation. The actual closing of
the Settlement occurred April 14, 1995. The Partnership's claim against AMIT
was satisfied by a cash payment by AMIT totalling $1,932,975 (the "Settlement
Amount") plus interest at closing. These funds were applied against the
Partnership's $5,000,000 note receivable from Fort Worth (See discussion
below). On August 9, 1995, Fort Worth and Angeles entered into an agreement
in principle regarding the allowance of an amended claim for the deficiency
between the original principal and the Settlement Amount (the "deficiency").
The amended claim equalled 90% of the deficiency, or $276,322. Subsequent to
December 31, 1995, the Partnership received $47,527 as payment on the
deficiency.
As part of the settlement, MAE GP granted to AMIT an option to acquire the
Class B Shares owned by it. This option can be exercised at the end of 10
years or when all loans made by AMIT to partnerships affiliated with MAE GP as
of November 9, 1994, (which is the date of execution of a definitive
Settlement Agreement), have been paid in full, but in no event prior to
November 9, 1997. AMIT delivered to MAE GP cash in the sum of $250,000 at
closing, which occurred April 14, 1995, as payment for the option. Upon
exercise of the option, AMIT would remit to MAE GP an additional $94,000.
Note D - Transactions with Affiliated Parties (continued)
Simultaneously with the execution of the option, MAE GP executed an
irrevocable proxy in favor of AMIT the result of which is MAE GP will be able
to vote the Class B Shares on all matters except those involving transactions
between AMIT and MAE GP affiliated borrowers or the election of any MAE GP
affiliate as an officer or trustee of AMIT. On these matters, MAE GP granted
to the AMIT trustees, in their capacity as trustees of AMIT, proxies with
regard to the Class B Shares instructing such trustees to vote said Class B
Shares in accordance with the vote of the majority of the Class A Shares
voting to be determined without consideration of the votes of "Excess Class A
Shares" as defined in Section 6.13 of the Declaration of Trust of AMIT.
In 1992, the Partnership loaned Fort Worth $5,000,000 to cover leasing
commissions, tenant improvements, and capital expenditures. The note payable
required interest at a rate of prime plus 1.5% with monthly interest only
payments through January 1996, at which time the principal was due. The note
was in default in prior years due to non-payment of interest when due.
On December 22, 1994, the Partnership entered into an agreement with Fort
Worth and Angeles Income Properties, Ltd. V ("AIPL V"), an affiliate of the
General Partner and the other 57% owner of Fort Worth, whereby Fort Worth
transferred, assigned and delivered to the Partnership all of Fort Worth's
right, title and interests in and to all payment, distributions, profits,
returns of capital and benefits accruing from the repayment by AMIT of the
loan made to AMIT from Fort Worth. This transfer effectively transferred AIPL
V's right, title and interest in and to all payment, distributions, profits,
returns of capital and benefits accruing from the repayment by AMIT of the
loan made to AMIT from Fort Worth. AIPL V has consented to this transfer,
assignment and delivery.
The Partnership may make advances to the affiliated joint ventures as deemed
appropriate by the General Partner. These advances do not bear interest and
do not have stated terms of repayment.
Note E - Investment Properties and Accumulated Depreciation
Initial Cost
To Partnership
Cost
Buildings Capitalized
and Related (Removed)
Personal Subsequent to
Description Encumbrances Land Property Acquisition
Eastgate Marketplace $ -- $ 900,741 $ 3,991,260 $(2,129,744)
Factory Merchants Mall 14,469,438 2,413,967 16,155,019 1,407,680
Totals $14,469,438 $3,314,708 $20,146,279 $ (722,064)
<TABLE>
<CAPTION>
Gross Amount At Which Carried
At December 31, 1995
Buildings
And Related
Personal Accumulated Date Depreciable
Description Land Property Total Depreciation Acquired Life-Years
<S> <C> <C> <C> <C> <C> <C>
Eastgate $ 293,843 $ 2,468,414 $ 2,762,257 $ 1,903,374 08/29/86 10-20
Factory Merchants
Mall 2,413,968 17,562,698 19,976,666 8,554,723 05/22/86 10-20
Totals $2,707,811 $20,031,112 $22,738,923 $10,458,097
</TABLE>
The depreciable lives included above are for the buildings and components.
The depreciable lives for related personal property are for 5 to 7 years.
Reconciliation of "Investment Properties and Accumulated Depreciation":
Year Ended December 31,
1995 1994
Investment Properties
Balance at beginning of year $22,468,371 $22,093,731
Property improvements 270,552 374,640
Balance at end of year $22,738,923 $22,468,371
Accumulated Depreciation
Balance at beginning of year $ 9,345,792 $ 8,204,170
Additions charged to expense 1,112,305 1,141,622
Balance at end of year $10,458,097 $ 9,345,792
The aggregate cost of the investment for Federal income tax purposes at
December 31, 1995 and 1994 is $25,431,994 and $25,169,533, respectively. The
accumulated depreciation taken for Federal income tax purposes at December 31,
1995 and 1994 is $9,531,370 and $8,537,917, respectively.
Note F - Investment in Joint Ventures
The Partnership has a 66.7% investment in Northtown Mall Partners
("Northtown") which is included in "Equity interest in net liabilities of
joint venture". The Partnership had a 43% investment in Fort Worth, a 43%
investment in Burlington Outlet Mall Joint Venture ("Burlington") and a 50%
investment in Moraine West Carrollton Joint Venture ("Moraine"). The
Partnership's investment in these joint ventures will terminate effective
December 31, 1995, due to the sale of Fort Worth's investment property, the
foreclosure of Burlington's investment property and the dissolution of Moraine
during 1995 as discussed below. The condensed balance sheet information as of
December 31, 1995 for Fort Worth, Northtown and Burlington is as follows:
Fort
Assets Worth Northtown Burlington
Cash $ 62,015 $ 88,139 $ 22,764
Accounts receivable -- 1,390,342 --
Other assets -- 5,739,772 --
Investment properties,
net -- 26,410,618 --
Total $ 62,015 $ 33,628,871 $ 22,764
Liabilities and Partners'
Deficit
Notes payable $ 62,015 $ 51,732,243 $ --
Other liabilities -- 539,063 12,706
Due to partners -- 1,822,852 10,058
Partners' deficit -- (20,465,287) --
Total $ 62,015 $ 33,628,871 $ 22,764
The condensed statements of operations of Fort Worth, Northtown, Burlington
and Moraine for the years ended December 31, 1995 and 1994, are summarized as
follows:
<TABLE>
<CAPTION>
Fort Worth Northtown
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenue $ 207,399 $ 758,998 $ 6,319,682 $ 6,051,699
Costs and expenses (460,758) (1,969,300) (8,307,913) (8,302,206)
Bad debt recovery 1,932,975 -- --
Extraordinary gain-
forgiveness of debt 5,174,115 -- -- --
Loss on disposal of
property -- -- (140,544) (169,716)
Net income (loss) $ 6,853,731 $(1,210,302) $(2,128,775) $(2,420,223)
Note F - Investment in Joint Ventures (continued)
Burlington Moraine
1995 1994 1995 1994
Revenue $ 230,472 $ 595,823 $ 12,445 $ 989,221
Costs and expenses (762,497) (1,609,435) (625) (989,260)
Gain on foreclosure of
property 2,606,903 -- -- --
Gain on sale of property -- -- -- 140,553
Net income (loss) $ 2,074,878 $(1,013,612) $ 11,820 $ 140,514
The Partnership's equity in the income of the joint ventures was $1,349,648
for the year ended December 31, 1995, and the Partnership's equity in the loss
of the joint ventures was $2,412,329 for the year ended December 31, 1994.
This increase in income can be primarily attributed to Fort Worth and
Burlington (see discussion below).
Fort Worth:
The increase in Fort Worth's income from 1994 to 1995 can be attributed to the
following: 1) bad debt recovery as a result of a partial recovery of its
receivable from AMIT (see "Note D"), 2) debt forgiveness as a result of the
write-off of all outstanding liabilities of Fort Worth and 3) as a result of
the sale of Fort Worth's remaining asset, Fort Worth realized a considerable
decrease in costs and expenses from 1994 to 1995.
Fort Worth's general partners have decided to terminate the joint venture in
1995 after the W.T. Waggoner Building, Fort Worth's remaining property, was
sold on March 22, 1995. All remaining cash was used to pay Fort Worth's
liabilities in January 1996, at which time the joint venture was dissolved.
Subsequent to year end, the Partnership, along with other affiliates, was
named in a suit brought by a company which owned a 20% interest in Fort
Worth's investment property, the W.T. Waggoner Building, which was sold in
1995. The General Partner believes that there is no merit in this suit and
intends to vigorously defend it.
Northtown:
The net loss at Northtown decreased due to an increase in revenues. The
$140,544 loss on disposition of property at Northtown is the result of a roof
replacement at the investment property. This loss is due to the write-off of
the old roof which was not fully depreciated. On March 15, 1991, Northtown
and the holder of the Northtown Mall mortgage note payable entered into an
Option Agreement ("Option") whereby the lender has the right and an option to
purchase the Northtown Mall property on the terms and conditions as set forth
in the Option. The purchase price of the property, as set forth in the
Option, is defined as the fair market value of the property. Such Option can
be exercised by written notice by the lender at specified dates.
Note F - Investment in Joint Ventures (continued)
Burlington:
On October 30, 1995, Burlington lost its investment property, the Burlington
Outlet Mall located in Burlington, NC, through foreclosure by an unaffiliated
mortgage holder. The property was not generating sufficient cash flow to meet
debt service requirements. The non-payment of principal and interest
constituted a default under terms of the mortgage agreement and allowed the
holder of the nonrecourse mortgage to foreclose on the property. Burlington
recognized a gain of $2,606,903 as a result of the foreclosure, and
subsequently the general partners decided to terminate the joint venture. All
remaining cash will be used to pay the joint venture's liabilities in 1996, at
which time Burlington will be dissolved.
Moraine:
A purchase agreement was executed on May 8, 1994, for the sale of all the
Moraine West Carrollton properties to an affiliate of the third party managing
agent. The sale closed on July 21, 1994. Moraine received a net amount of
approximately $2,199,000 in proceeds after satisfying all indebtedness.
Moraine realized a $140,553 gain on the transaction of which the Partnership's
share was $70,277. Moraine made a final distribution of $1,931,461 in 1995,
of which the Partnership's share was $965,730, and the joint venture was then
dissolved.
Note G - Operating Leases
Tenants of the commercial properties are responsible for their own utilities
and maintenance of their space, and payment of their proportionate share of
common area maintenance, utilities, insurance and real estate taxes. Tenants
are generally not required to pay a security deposit.
As of December 31, 1995, the Partnership had minimum future rentals under
noncancellable leases with terms ranging from twelve months to fifteen years.
1996 $ 2,345,452
1997 2,004,646
1998 1,811,313
1999 1,397,776
2000 947,915
Thereafter 2,758,125
$11,265,227
Note H - Ground Lease
Factory Merchants Mall is subject to three ground leases. The aggregate
annual lease expense for each of the years ended December 31, 1995 and 1994,
were $160,424 and $160,249, respectively. Such amounts are included in the
statements of operation as operating expenses. The terms of two of the leases
provide for increases every year, based on the consumer price index. The
terms of the third lease provide for increases every five years, based on the
consumer price index.
Note H - Ground Lease (continued)
As of December 31, 1995, the aggregate minimum rental payments under the land
leases are as follows:
1996 $ 160,424
1997 160,424
1998 160,424
1999 160,424
2000 160,424
Thereafter 4,378,250
$5,180,370
Note I - Abandonment of Limited Partnership Units
In 1994, the number of Limited Partnership Units decreased by 40 units due to
limited partners abandoning their units. In abandoning his or her Limited
Partnership Units, a limited partner relinquishes all right, title and
interest in the Partnership as of the date of abandonment. However, the
limited partner is allocated his or her share of income or loss in the year of
abandonment.
In 1994, the loss per limited partnership unit in the accompanying statements
of operations is calculated based on the number of units outstanding at the
beginning of the year. There were no abandonments in 1995.
Note J - Adjustment in Recording Equity Interests in Net Liabilities of Joint
Ventures
In the fourth quarter of 1995 the Partnership became aware of an overstatement
in the recorded amount of equity interests in the net liabilities of joint
venture due to an error in recording the equity interest in the loss of Fort
Worth in 1993. The statement of changes in partners' deficit has been
restated, resulting in a decrease in the deficit of $2,485,102. The
adjustment had no effect on the net loss for the year ended December 31, 1994.
The adjustment also had no effect on the taxable amounts reported to the
partners in the Partnership.
Item 8. Changes in and Disagreements with Accountant on Accounting and
Financial Disclosures
There were no disagreements with Ernst & Young LLP regarding the 1995 or
1994 audits of the Partnership's financial statements.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The name of the directors and executive officers of Angeles Realty
Corporation II ("ARC II"), the Partnership's General Partner as of December
31, 1995, their age and the nature of all positions with ARC II presently held
by them are as follows:
Name Age Position
Carroll D. Vinson 55 President
Robert D. Long, Jr. 28 Controller and
Principal Accounting
Officer
William H. Jarrard, Jr. 49 Vice President
John K. Lines 36 Secretary
Kelley M. Buechler 38 Assistant Secretary
Carroll D. Vinson has been President of Metropolitan Asset Enhancement, L.P.,
and subsidiaries since August of 1994. Prior to that, during 1993 to August
1994, Mr. Vinson was affiliated with Crisp, Hughes & Co. (regional CPA firm)
and engaged in various other investment and consulting activities. Briefly,
in early 1993, Mr. Vinson served as President and Chief Executive Officer of
Angeles Corporation, a real estate investment firm. From 1991 to 1993, Mr.
Vinson was employed by Insignia in various capacities including Managing
Director-President during 1991. From 1986 to 1990, Mr. Vinson was President
and a Director of U.S. Shelter Corporation, a real estate services company,
which sold substantially all of its assets to Insignia in December 1990.
Robert D. Long, Jr. is Controller and Principal Accounting Officer. Prior to
joining Metropolitan Asset Enhancement, L.P., and subsidiaries, he was an
auditor for the State of Tennessee and was associated with the accounting firm
of Harshman Lewis and Associates. He is a graduate of the University of
Memphis.
William H. Jarrard, Jr. is Managing Director - Partnership Administration of
Insignia Financial Group, Inc. ("Insignia"). During the five years prior to
joining Insignia in 1991, he served in a similar capacity for U.S. Shelter.
He was previously associated with the accounting firm, Ernst & Whinney, for
eleven years. Mr. Jarrard is a graduate of the University of South Carolina
and a certified public accountant.
John K. Lines has been General Counsel and Secretary of Insignia since June
1994. From May 1993 until June 1994, Mr. Lines was the Assistant General
Counsel and Vice President of Ocwen Financial Corporation in West Palm Beach,
Florida. From October 1991 until April 1993, Mr. Lines was a Senior Attorney
with Banc One Corporation in Columbus, Ohio. From May 1984 until October
1991, Mr. Lines was employed as an Associate Attorney with Squire Sanders &
Dempsey in Columbus, Ohio.
Kelley M. Buechler is Assistant Secretary of Insignia. During the five years
prior to joining Insignia in 1991, she served in a similar capacity for U.S.
Shelter. Ms. Buechler is a graduate of the University of North Carolina.
Item 10. Executive Compensation
No direct form of compensation or remuneration was paid by the Partnership
to any officer or director of ARC II. The Partnership has no plan, nor does
the Partnership presently propose a plan, which will result in any
remuneration being paid to any officer or director upon termination of
employment. However, fees and other payments have been made to the
Partnership's General Partner and its affiliates, as described in "Note D" of
the Financial Statements included under "Item 7", which is incorporated herein
by reference.
Item 11. Security Ownership of Certain Beneficial Owners and Management
As of January 1, 1996, no person owned of record more than 5% of the
Limited Partnership Units of the Partnership nor was any person known by the
Partnership to own of record and beneficially, or beneficially only, more than
5% of such securities.
The Partnership knows of no contractual arrangements, the operation or the
terms of which may at a subsequent date result in a change in control of the
Partnership, except for: Article 12.1 of the Agreement, which provide that
upon a vote of the Limited Partners holding more than 50% of the then
outstanding Limited Partnership Units the General Partner may be expelled from
the Partnership upon 90 days written notice. In the event that a successor
general partner has been elected by Limited Partners holding more than 50% of
the then outstanding Limited Partnership Units and if said Limited Partners
elect to continue the business of the Partnership, the Partnership is required
to pay in cash to the expelled General Partner an amount equal to the accrued
and unpaid management fee described in Article 10 of the Agreement and to
purchase the General Partner's interest in the Partnership on the effective
date of the expulsion, which shall be an amount equal to the difference
between (i) the balance of the General Partner's capital account and (ii) the
fair market value of the share of Distributable Net Proceeds to which the
General Partner would be entitled. Such determination of the fair market
value of the share of Distributable Net Proceeds is defined in Article 12.2(b)
of the Agreement.
Item 12. Certain Relationships and Related Transactions
No transactions have occurred between the Partnership and any officer or
director of ARC II.
During the years ended December 31, 1995, and December 31, 1994, the
transactions that occurred between the Partnership and ARC II and affiliates
of ARC II pursuant to the terms of the Agreement are disclosed under "Note D"
of the Partnership's Financial Statements included under "Item 7", which is
hereby incorporated by reference.
PART IV
Item 13. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-B: Refer to
Exhibit Index.
(b) Reports on Form 8-K:
None.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ANGELES INCOME PROPERTIES, LTD. IV
(A California Limited Partnership)
(Registrant)
By: Angeles Realty Corporation II
By: /s/ Carroll D. Vinson
Carroll D. Vinson
President
Date: March 27, 1996
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities on
the date indicated.
/s/ Carroll D. Vinson President March 27, 1996
Carroll D. Vinson
/s/Robert D. Long, Jr. Controller and March 27, 1996
Robert D. Long, Jr. Principal Accounting
Officer
ANGELES INCOME PROPERTIES, LTD. IV
Exhibit Index
Exhibit Number Description of Exhibit
3.1 Amended Certificate and Agreement of the
Limited Partnership filed in Amendment Number
2 to Form S-11 dated April 25, 1985 which is
incorporated herein by reference
10.1 Agreement of Purchase and Sale of Real
Property with Exhibits - Northtown Mall filed
in Form 8K dated July 15, 1985 which is
incorporated herein by reference
10.2 Agreement of Purchase and Sale of Real
Property with Exhibits-Burlington Mall
Partners filed in Form 8K dated December 19,
1985 which is incorporated herein by reference
10.3 Agreement of Purchase and Sale of Real
Property with Exhibits - Moraine West
Carrollton Partners filed in Form 8K dated
December 20, 1985 which is incorporated herein
by reference
10.4 Agreement of Purchase and Sale of Property
with Exhibits - Factory Merchants Etc. Mall-
Phase I and Phase II filed in Form 8K dated
May 22, 1986 which is incorporated herein by
reference
10.5 Promissory Note - Fort Worth Center and the
W.T. Waggoner Building filed in Form 8K dated
July 16, 1986 which is incorporated herein by
reference
10.6 Deed of Trust, Assignment of Leases and Rents
and Security Agreement - Fort Worth Center and
the W.T. Waggoner Building filed in Form 8K
dated July 16, 1986 which is incorporated
herein by reference
10.7 Deed of Trust - Option - Fort Worth Center and
the W.T. Waggoner Building filed in Form 8K
dated July 16, 1986 which is incorporated
herein by reference
10.8 Security Agreement - Fort Worth Center and the
W.T. Waggoner Building filed in Form 8K dated
July 16, 1986 which is incorporated herein by
reference
ANGELES INCOME PROPERTIES, LTD. IV
Exhibit Index
Exhibit Number Description of Exhibit
10.9 Option Agreement - Fort Worth Center and the
W.T. Waggoner Building filed in Form 8K dated
July 16, 1986 which is incorporated herein by
reference
10.10 Covenant not to compete - Fort Worth Center
and the W.T. Waggoner Building filed in Form
8K dated July 16, 1986 which is incorporated
herein by reference
10.12 Acquisition or Disposition of Assets - Fort
Worth Option Joint Venture - filed in form 8K
dated November 1, 1987, which is incorporated
herein by reference
10.13 Promissory Note - Northtown Mall. Filed in
Form 10-K dated December 31, 1990, Exhibit
10.13, which is incorporated herein by
reference
10.14 Stock Purchase Agreement dated November 24,
1992 showing the purchase of 100% of the
outstanding stock of Angeles Realty
Corporation II, a subsidiary of MAE GP
Corporation, filed in Form 8-K dated December
31, 1992, which is incorporated herein by
reference
10.15 Acquisition or Disposition of Assets - Moraine
West Carrollton - filed in Form 8-K dated July
21, 1994, which is incorporated herein by
reference.
16 Letter from Registrant's former accountant
regarding its concurrence with the statements
made by the Registrant is incorporated by
reference to the Exhibit filed with Form 8-K
dated September 1, 1993.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Angeles
Income Properties Ltd IV 1995 Year-End 10-KSB and is qualified in its entirety
by reference to such 10-KSB filing.
</LEGEND>
<CIK> 0000763049
<NAME> ANGELES INCOME PROPERTIES LTD IV
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,425,583
<SECURITIES> 0
<RECEIVABLES> 407,712
<ALLOWANCES> 189,729
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 22,738,923
<DEPRECIATION> 10,458,097
<TOTAL-ASSETS> 16,622,678
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 14,469,438
0
0
<COMMON> 0
<OTHER-SE> (11,009,914)
<TOTAL-LIABILITY-AND-EQUITY> 16,622,678
<SALES> 0
<TOTAL-REVENUES> 3,702,709
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 3,605,140
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,482,686
<INCOME-PRETAX> 1,447,217
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,447,217
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,447,217
<EPS-PRIMARY> 10.98
<EPS-DILUTED> 0
<FN>
<F1>The Registrant has an unclassified balance sheet.
</FN>
</TABLE>
