<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
COMMISSION FILE NUMBER 0-15731
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
(Exact name of registrant as specified in its charter)
MARYLAND 52-1473440
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8065 LEESBURG PIKE
SUITE 400
VIENNA, VIRGINIA 22182
(Address of principal executive offices)
(Zip Code)
(703) 394-2400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed
since last report.)
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
----- -----
<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
September 30,
1996 December 31,
(Unaudited) 1995
----------- ------------
<S> <C> <C>
ASSETS
------
Cash and cash equivalents $ 44,226 $ 35,568
Prepaid insurance and tenant security deposits 104,757 83,404
Real estate tax escrow 508,108 546,236
Reserve for insurance premiums 48,571 42,583
Investments in and advances to Local Limited
Partnerships (Note 2) - -
Land 3,650,000 3,650,000
Building and improvements - less accumulated
depreciation of $4,199,906 and $3,929,088 10,004,547 10,138,765
Deferred finance costs 87,844 -
---------- ----------
$14,448,053 $14,496,556
========== ==========
LIABILITIES AND PARTNERS' DEFICIT
---------------------------------
Liabilities -
Accounts payable and accrued expenses from rental
operations $ 804,168 $ 950,835
Administrative and reporting fees payable to General
Partner (Note 3) 1,077,861 991,158
Due to General Partner (Note 3) 1,928,727 1,255,901
Accrued interest on Due to General Partner (Note 3) 1,418,859 1,183,574
Other accrued expenses 30,000 41,710
Mortgage note payable 13,140,000 13,700,000
---------- ----------
18,399,615 18,123,178
---------- ----------
Partners' deficit -
General Partner -- The National Housing
Partnership (NHP) (169,210) (165,960)
Original Limited Partner --
1133 Fifteenth Street Four Associates (174,110) (170,860)
Other Limited Partners -- 15,414 investment units (3,608,242) (3,289,802)
---------- ----------
(3,951,562) (3,626,622)
---------- ----------
$14,448,053 $14,496,556
========== ==========
</TABLE>
See notes to financial statements.
-1-
<PAGE> 3
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
RENTAL REVENUES $ 840,970 $ 827,128 $ 2,499,718 $ 2,396,014
-------- -------- ---------- ----------
RENTAL EXPENSES:
Interest 293,267 324,991 884,151 975,615
Renting and administrative 116,850 118,475 327,069 310,842
Operating and maintenance 161,353 197,683 491,905 520,757
Depreciation and amortization 99,207 89,485 290,175 268,453
Taxes and insurance 284,045 151,276 534,518 616,619
-------- -------- ---------- ----------
954,722 881,910 2,527,818 2,692,286
-------- -------- ---------- ----------
LOSS FROM RENTAL OPERATIONS (113,752) (54,782) (28,100) (296,272)
-------- -------- ---------- ----------
COSTS AND EXPENSES:
Interest on due to General Partner
(Note 3) 85,389 66,094 235,285 187,122
Administrative and reporting fees
to General Partner (Note 3) 28,901 28,901 86,703 86,703
Other operating expenses 9,489 12,530 41,652 41,164
-------- -------- ---------- ----------
123,779 107,525 363,640 314,989
-------- -------- ---------- ----------
OTHER REVENUES:
Distributions received in excess of
investment in and advances to
Local Limited Partnerships - - 63,756 -
Interest income 1,295 617 3,044 1,390
-------- -------- ---------- ----------
1,295 617 66,800 1,390
-------- -------- ---------- ----------
NET LOSS $(236,236) $(161,690) $ (324,940) $ (609,871)
======== ======== ========== ==========
NET LOSS ASSIGNABLE
TO LIMITED PARTNERS $(231,510) $(158,456) $ (318,440) $ (597,673)
======== ======== ========== ==========
NET LOSS PER LIMITED
PARTNERSHIP INTEREST $ (15) $ (10) $ (21) $ (39)
======== ======== ========== ==========
</TABLE>
See notes to financial statements.
-2-
<PAGE> 4
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
STATEMENT OF PARTNER'S DEFICIT
(UNAUDITED)
<TABLE>
<CAPTION>
The National 1133
Housing Fifteenth Other
Partnership Street Four Limited
(NHP) Associates Partners Total
--------------- ---------- --------- -----
<S> <C> <C> <C> <C>
Deficit at January 1, 1996 $(165,960) $(170,860) $(3,289,802) $(3,626,622)
Net loss -- nine months ended
September 30, 1996 (3,250) (3,250) (318,440) (324,940)
-------- -------- ---------- ----------
Deficit at September 30, 1996 $(169,210) $(174,110) $(3,608,242) $(3,951,562)
======== ======== ========== ==========
Percentage interest at
September 30, 1996 1% 1% 98% 100%
======== ======== ========== ==========
(A) (B) (C)
</TABLE>
(A) General Partner
(B) Original Limited Partner
(C) Consists of 15,414 investments units of 0.006358% held by 1,289 investors
See notes to financial statements.
-3-
<PAGE> 5
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Rent collections $ 2,404,052 $ 2,316,747
Distributions received in excess of investment in Local
Limited Partnerships 63,756 -
Interest received 3,044 1,390
Other income 81,856 81,716
Operating expenses paid, including rental expenses (1,545,683) (1,613,850)
Mortgage interest paid (893,907) (968,088)
---------- ----------
Net cash provided by (used in) operating activities 113,118 (182,085)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (136,600) (65,743)
Deposits to real estate tax escrow (586,953) (439,520)
Withdrawals from real estate tax escrow 625,081 593,124
Deposits to reserve for insurance premiums (40,212) (24,390)
Withdrawals from reserve for insurance premiums 34,224 69,224
---------- ----------
Net cash (used in) provided by investing activities (104,460) 132,695
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from General Partner - 35,874
---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 8,658 (13,516)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 35,568 14,317
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 44,226 $ 801
========== ==========
SUPPLEMENTAL INFORMATION
Loan from General Partner for reduction of mortgage principal
and refinancing costs $ 667,201 $ -
========== ==========
</TABLE>
See notes to financial statements.
-4-
<PAGE> 6
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
(UNAUDITED)
(CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------------------
1996 1995
---- ----
RECONCILIATION OF NET LOSS TO NET CASH PROVIDED
BY (USED IN) OPERATING ACTIVITIES:
<S> <C> <C>
Net loss $ (324,940) $ (609,871)
----------- ---------
Adjustments to reconcile net loss to net cash used in operating
activities -
Depreciation 270,818 235,389
Amortization of deferred finance costs 19,357 33,064
Increase in prepaid insurance, utility and tenant security deposits (21,353) (35,232)
Decrease in accounts payable and accrued expenses from
rental operations (146,667) (78,260)
Increase in administrative and reporting fees payable to
General Partner 86,703 86,703
Increase in due to General Partner 5,625 5,625
Increase in accrued interest on due to General Partner 235,285 187,122
Decrease in other accrued expenses (11,710) (6,625)
----------- ---------
Total adjustments 438,058 427,786
----------- ---------
Net cash provided by (used in) operating activities $ 113,118 $ (182,085)
=========== =========
</TABLE>
See notes to financial statements.
-5-
<PAGE> 7
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(1) ACCOUNTING POLICIES
NATURE OF BUSINESS
National Housing Partnership Realty Fund IV (the "Partnership") is a
limited partnership organized on January 8, 1986 under the laws of the
State of Maryland under the Maryland Revised Uniform Limited
Partnership Act. The Partnership was formed for the purpose of raising
capital by offering and selling limited partnership interests and then
investing in limited partnerships ("Local Limited Partnerships"), each
of which owns and operates an existing rental housing project which is
financed and/or operated with one or more forms of rental assistance
or financial assistance from the U.S. Department of Housing and Urban
Development ("HUD").
The General Partner raised capital for the Partnership by offering and
selling to additional limited partners 15,414 investment units at a
price of $1,000 per unit. The Partnership acquired limited partnership
interests of 99% in four Local Limited Partnerships, each of which was
organized to acquire and operate an existing rental housing project.
In addition, the Partnership directly purchased Trinity Apartments, a
conventionally financed rental apartment project.
BASIS OF PRESENTATION
The accompanying unaudited interim financial statements reflect all
adjustments which are, in the opinion of management, necessary for a
fair statement of the financial condition and results of operations
for the interim periods presented. All such adjustments are of a
normal recurring nature.
While the General Partner believes that the disclosures presented are
adequate to make the information not misleading, it is suggested that
these financial statements be read in conjunction with the financial
statements and the notes included in NHP Realty Fund IV's Annual
Report filed in Form 10-K for the year ended December 31, 1995.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
-6-
<PAGE> 8
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
(2) INVESTMENTS IN AND ADVANCES TO LOCAL LIMITED PARTNERSHIPS
The Partnership owns a 99% limited partnership interest in four Local
Limited Partnerships. In addition, the Partnership directly owns
Trinity Apartments. Because the Partnership, as a limited partner,
does not exercise control over the activities of the four Local
Limited Partnerships in accordance with the partnership agreements,
the investments in the Local Limited Partnerships are accounted for
using the equity method. Thus, the investments (and the advances made
to the Local Limited Partnerships as discussed below) are carried at
cost less the Partnership's share of the Local Limited Partnerships'
losses and distributions. However, because the Partnership is not
legally liable for the obligations of the Local Limited Partnerships,
and is not otherwise committed to provide additional support to them,
it does not recognize losses once its investment, reduced for its
share of losses and cash distributions, reaches zero in each of the
individual Local Limited Partnerships. As of September 30, 1996 and
December 31, 1995 investments in all four Local Limited Partnerships
had been reduced to zero. As a result, the Partnership did not
recognize $1,369,487 and $994,615 of losses from Local Limited
Partnerships during the nine months ended September 30, 1996 and 1995,
respectively. As of September 30, 1996 and December 31, 1995, the
Partnership had not recognized $7,620,401 and $6,250,914,
respectively, of its allocated share of cumulative losses from the
Local Limited Partnerships in which its investment is zero.
Advances made by the Partnership to the individual Local Limited
Partnerships are considered part of the Partnership's investment in
Local Limited Partnerships. When advances are made, they are charged
to operations as a loss on investment in the Local Limited Partnership
using previously unrecognized cumulative losses. As discussed above,
due to the cumulative losses incurred by the Local Limited
Partnerships, the aggregate balance of investments in and advances to
the Local Limited Partnerships has been reduced to zero at September
30, 1996 and December 31, 1995. To the extent these advances are
repaid by the Local Limited Partnerships in the future, the repayments
will be credited as distributions and repayments received in excess of
investments in Local Limited Partnerships. These advances are carried
as a payable to the Partnership by the Local Limited Partnerships.
No working capital advances or repayments occurred between the
Partnership and the Local Limited Partnerships during the nine months
ended September 30, 1996 and 1995. The combined amount carried as
payable to the Partnership by the Local Limited Partnerships was
$12,400 as of September 30, 1996.
The following are combined statements of operations for the three
months and nine months ended September 30, 1996 and 1995,
respectively, of the Local Limited Partnerships in which the
Partnership has invested. The statements are compiled from financial
statements
-7-
<PAGE> 9
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
of the Local Limited Partnerships, prepared on the accrual basis of
accounting, as supplied by the management agents of the projects, and
are unaudited.
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------- -------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Rental income $ 1,110,400 $ 1,171,981 $ 3,430,353 $ 3,475,780
Other income 28,678 91,589 82,035 210,962
---------- ---------- ---------- ----------
Total income 1,139,078 1,263,570 3,512,388 3,686,742
---------- ---------- ---------- ----------
Operating expenses 785,747 772,255 2,405,061 2,362,793
Interest, taxes and
insurance 600,791 561,830 1,747,746 1,684,496
Depreciation 247,634 217,828 742,901 644,115
---------- ---------- ---------- ----------
Total expenses 1,634,172 1,551,913 4,895,708 4,691,404
---------- ---------- ---------- ----------
Net loss $ (495,094) $ (288,343) $(1,383,320) $(1,004,662)
========== ========== ========== ==========
National Housing
Partnership Realty
Fund IV share of
losses $ (490,143) $ (285,459) $(1,369,487) $ (994,615)
========== ========== ========== ==========
</TABLE>
(3) TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES OF THE GENERAL
PARTNER
During the nine month periods ended September 30, 1996 and 1995, the
Partnership accrued administrative and reporting fees payable to the
General Partner in the amount of $86,703 for services provided to the
Partnership. The Partnership has not made any payments to the General
Partner for these fees during the nine months ended September 30, 1996
and 1995. The amount due the General Partner by the Partnership was
$1,077,861 and $991,158 at September 30, 1996 and December 31, 1995,
respectively.
During the nine months ended September 30, 1996, the General Partner
made a payment on behalf of Trinity Apartments to General Electric
Capital Corporation (GECC) of $667,201
-8-
<PAGE> 10
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
as a condition of a new mortgage modification agreement, effective
March 15, 1996. During the nine months ended September 30, 1995, the
General Partner made working capital advances of $35,874 to the
Partnership. No repayments of working capital advances were made
during the nine months ended September 30, 1996 and 1995. The amount
owed to the General Partner at September 30, 1996 and December 31,
1995, was $1,915,602 and $1,248,401, respectively. Interest is charged
on borrowings at the Chase Manhattan Bank rate of prime plus 2%.
Accrued interest on this loan amounted to $1,418,859 and $1,183,574 at
September 30, 1996 and December 31, 1995, respectively. The advances
will be repaid as cash flow permits or from the sale or refinancing of
the Local Limited Partnerships.
Annual partnership administrative fees of $5,625 were accrued on
behalf of Trinity Apartments during the nine months ended September
30, 1996 and 1995. These fees are payable to the General Partner
without interest from cash available for distribution to partners. No
payments were made during the nine months ended September 30, 1996 and
1995. The balance owed to the General Partner for these fees was
$13,125 and $7,500 at September 30, 1996 and December 31, 1995,
respectively, and is included in Due to General Partner.
The advances and accrued administrative and reporting fees payable to
the General Partner will be paid as cash flow permits or from proceeds
generated from the sale or refinancing of one or more of the
underlying properties of the Local Limited Partnerships.
(4) ADOPTION OF NEW ACCOUNTING STANDARD
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121 "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of" (the "Statement") effective for financial statements for
fiscal years beginning after December 15, 1995. This Statement
requires an impairment loss to be recognized if the sum of estimated
future cash flows (undiscounted and without interest charges) is less
than the carrying amount of rental property. The impairment loss would
be the amount by which the carrying value exceeds the fair value of
the rental property. If the rental property is to be disposed of, fair
value is calculated net of costs to sell. The Partnership's
implementation of this Statement during 1996 did not have any effect
on its results of operations for the nine months ended September 30,
1996, or its financial position.
-9-
<PAGE> 11
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
LIQUIDITY AND CAPITAL RESOURCES
The properties in which the Partnership has invested, through its investments
in the Local Limited Partnerships, receive one or more forms of assistance from
Federal, state or local governments or agencies. As a result, the Local Limited
Partnerships' ability to transfer funds either to the Partnership or among
themselves in the form of cash distributions, loans or advances is generally
restricted by these government-assistance programs. These restrictions,
however, are not expected to impact the Partnership's ability to meet its cash
obligations.
Net cash provided by operations for the nine months ended September 30, 1996
was $113,118 as compared to net cash used in operations of $182,085 for the
nine months ended September 30, 1995. The increase to cash provided by
operations resulted primarily from a decrease in operating expenses and
mortgage interest paid and an increase in rent collections and distributions
received in excess of investment in Local Limited Partnerships.
No working capital advances or repayments occurred between the Partnership and
the Local Limited Partnerships during the nine months ended September 30, 1996
and 1995. The combined amount carried as due to the Partnership by the Local
Limited Partnerships was $12,400 as of September 30, 1996. Future advances made
will be charged to operations; likewise, future repayments will be credited to
operations.
Distributions received from Local Limited Partnerships represent the
Partnership's proportionate share of the excess cash available for distribution
from the Local Limited Partnerships. As a result of the use of the equity
method of accounting for the Partnership's investments, as of September 30,
1996, investments in all four Local Limited Partnerships had been reduced to
zero. For these investments, cash distributions received are recorded as
distributions received in excess of investment in Local Limited Partnerships.
Cash distributions of $63,756 were received from three of the Local Limited
Partnerships during the nine months ended September 30, 1996. There were no
distributions during the nine months ended September 30, 1995. The receipt of
distributions in future quarters is dependent upon the operations of the
underlying properties of the Local Limited Partnerships.
Cash and cash equivalents amounted to $44,226 at September 30, 1996. The
ability of the Partnership to meet its on-going cash requirements, in excess of
cash on hand at September 30, 1996, is dependent on operations of Trinity
Apartments, distributions received from the Local Limited Partnerships, General
Partner advances, proceeds from the sales or refinancing of the
-10-
<PAGE> 12
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
underlying properties. There can be no assurance that future distributions will
be adequate to fund the operations beyond the current year. As of September 30,
1996, the Partnership owes the General Partner $1,077,861 for administrative
and reporting services performed. During the nine months ended September 30,
1996, the General Partner made a payment on behalf of Trinity Apartments of
$667,201 as a condition of a new mortgage modification agreement (Modification
Agreement) effective March 15, 1996. As of September 30, 1996, the Partnership
owes the General Partner $1,928,727 plus accrued interest of $1,418,859. The
payment of the unpaid administrative and reporting fees and advances from the
Partnership and the General Partner to the Local Limited Partnerships will most
likely result from the sale or refinancing of the underlying Properties of the
Local Limited Partnerships as defined by the Partnership agreement, rather than
through recurring operations. The General Partner will continue to manage the
Partnership's assets prudently in an effort to achieve positive cash flow. The
General Partner will evaluate lending the Partnership additional funds as such
funds are needed, but is no way legally obligated to make such loans.
The Modification Agreement, effective March 15, 1996, is for a mortgage
principal balance of $13,140,000. The reduction of principal of $560,000 plus
closing costs of $107,201 were loaned to the Partnership by the General
Partner. Interest only, at the Contract Index Rate, as defined in the
Modification Agreement, on the mortgage is payable monthly from April 1, 1996
through March 1, 1999. In addition, from April 1, 1996 and continuing each
July, October, December and April, installments of principal in an amount equal
to 100% of the net cash flow (as defined) is due and payable. On March 15,
1999, the entire unpaid principal and interest is due and payable. The Contract
Index Rate is equal to 3.25% per annum in excess of the GECC Composite
Commercial Paper Rate.
Except for Trinity, all the properties in which the Partnership has invested
carry deferred acquisition notes due to the original owners of the properties.
In the event of a default on these notes, the noteholders would assume
ownership of the General Partner's and the Partnership's interests in the Local
Limited Partnerships. Due to the rental market conditions where the properties
are located, the General Partner believes the amounts due on the acquisition
notes may exceed the value to be obtained by sale or refinancing opportunities.
The deferred acquisition notes mature in 2001.
In prior years, Trinity Apartments, a rental property wholly-owned by the
Partnership, has generated substantial losses from operations which have
resulted in the accumulation of significant accounts payable and accrued
expenses at September 30, 1996 and has also necessitated significant funding
from the General Partner in prior years. The General Partner's intentions are
to continue to manage Trinity prudently so that the property can maintain
positive cash flows and pay its general obligations, however, there can be no
assurance that the General Partner will be successful.
-11-
<PAGE> 13
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Partnership has invested as a limited partner in four Local Limited
Partnerships which operate four rental housing properties. In addition, the
Partnership directly owns Trinity Apartments. Results of operations are
significantly impacted by the losses on rental operations of Trinity
Apartments, and in prior years, by the Partnership's share of the losses of the
Local Limited Partnerships. These losses included depreciation and accrued
interest on deferred acquisition notes which are noncash in nature. Because
the investments in and advances to Local Limited Partnerships have been reduced
to zero, the Partnership's share of the operations of the Local Limited
Partnerships is no longer being recorded.
The Partnership's net loss decreased to $324,940 for the nine months ended
September 30, 1996 from a net loss of $609,871 for the nine months ended
September 30, 1995. Net loss per unit of limited partnership interest decreased
from $39 to $21 for the 15,414 units outstanding throughout both periods. The
primary reasons for the decrease in net loss is the increase in distributions
received in excess of investment in and advances to Local Limited Partnerships
and the increase in profit from rental operations at Trinity Apartments, which
was primarily due to an increase in rental income and a decrease in mortgage
interest expense and real estate tax expense. The decrease in mortgage interest
was the result of the decrease in mortgage principal balance related to the new
Modification Agreement, effective March 15, 1996, and a decrease in the
variable interest rate on the mortgage for the respective period. The decrease
in real estate tax expense was the result of a lower assessment of the property
which also resulted in tax refund, net of related fees, of approximately
$60,000 for the year ended December 31, 1995, which was received during the
nine months ended September 30, 1996. The Partnership did not recognize
$1,369,487 of its allocated share of losses from the four Local Limited
Partnerships for the nine months ended September 30, 1996, as the Partnership's
net carrying basis in these Local Limited Partnerships was reduced to zero in
prior years. The Partnership's share of losses from the Local Limited
Partnerships, if not limited to its investment account balance, would have
increased $374,872 between periods, primarily due to a decrease in other income
and an increase in operating expenses.
-12-
<PAGE> 14
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
(A MARYLAND LIMITED PARTNERSHIP)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONAL HOUSING PARTNERSHIP REALTY FUND IV
-------------------------------------------
(Registrant)
By: The National Housing Partnership,
its sole General Partner
By: National Corporation for Housing
Partnerships, its sole General Partner
November 7, 1996 By: /s/
- ---------------- ----------------------------------------------
Jeffrey J. Ochs
As Vice President and Chief Accounting Officer
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 705,662
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 705,662
<PP&E> 17,854,453
<DEPRECIATION> 4,199,906
<TOTAL-ASSETS> 14,448,053
<CURRENT-LIABILITIES> 5,259,615
<BONDS> 13,140,000
0
0
<COMMON> 0
<OTHER-SE> (3,951,562)
<TOTAL-LIABILITY-AND-EQUITY> 14,448,053
<SALES> 0
<TOTAL-REVENUES> 2,566,518
<CGS> 0
<TOTAL-COSTS> 1,353,492
<OTHER-EXPENSES> 418,530
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,119,436
<INCOME-PRETAX> (324,940)
<INCOME-TAX> 0
<INCOME-CONTINUING> (324,940)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (324,940)
<EPS-PRIMARY> (21)
<EPS-DILUTED> (21)
</TABLE>
