SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended
September 30, 1997 Commission file #0-16599
JMB MORTGAGE PARTNERS, LTD. - IV
(Exact name of registrant as specified in its charter)
Illinois 36-3426138
(State of organization) (IRS Employer Identification No.)
900 N. Michigan Ave., Chicago, IL 60611
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 312/915-1987
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
<PAGE>
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements . . . . . . . . . . . . . . 3
Item 2. Management's Discussion and
Analysis of Financial Condition and
Results of Operations. . . . . . . . . . . . . . 11
PART II OTHER INFORMATION
Item 5. Other Information. . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 14
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
(UNAUDITED)
ASSETS
------
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 5,654,195 28,105,829
Interest and other receivables. . . . . . . . . . . . . . . . . . . 22,079 341,995
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . 5,676,274 28,447,824
------------ ------------
Investment in unconsolidated venture, at equity . . . . . . . . . . . 3,532,179 3,813,205
------------ ------------
$ 9,208,453 32,261,029
============ ============
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- -----------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 189,796 226,215
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . -- 97,373
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . 189,796 323,588
------------ ------------
Commitments and contingencies
Partners' capital accounts:
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . 1,928,454 1,904,412
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (1,874,260) (1,850,218)
------------ ------------
55,194 55,194
------------ ------------
Limited partners (43,276.25 interests):
Capital contributions, net of offering costs. . . . . . . . . . . 37,619,348 37,619,348
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . 21,845,256 21,394,865
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (50,501,141) (27,131,966)
------------ ------------
8,963,463 31,882,247
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . 9,018,657 31,937,441
------------ ------------
$ 9,208,453 32,261,029
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------- -------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Interest income . . . . . . . . . . . . . . . $ 68,765 437,888 379,790 1,823,400
----------- ---------- ---------- ----------
Expenses:
Mortgage investment servicing fees. . . . . . -- 12,995 -- 40,736
Professional services . . . . . . . . . . . . 1,487 15,032 42,164 54,378
Amortization of deferred expenses . . . . . . -- 9,028 -- 27,085
General and administrative. . . . . . . . . . 63,398 46,775 185,347 182,833
Provision for loan loss . . . . . . . . . . . -- 106,000 -- 106,000
----------- ---------- ---------- ----------
64,885 189,830 227,511 411,032
----------- ---------- ---------- ----------
Operating earnings (loss) . . . . . . 3,880 248,058 152,279 1,412,368
Partnership's share of operations
(loss) of unconsolidated ventures . . . . . . 133,797 71,768 322,154 468,369
----------- ---------- ---------- ----------
Net operating earnings (loss) . . . . 137,677 319,826 474,433 1,880,737
Gain on sale of property by
unconsolidated venture. . . . . . . . . . . . -- -- -- 980,379
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . . $ 137,677 319,826 474,433 2,861,116
=========== ========== ========== ==========
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
-------------------------- --------------------------
1997 1996 1997 1996
----------- ---------- ----------- ----------
Net earnings (loss) per
limited partnership
interest:
Net operating earnings (loss) . . $ 3.18 7.39 10.41 40.37
Gain on sale of property
by unconsolidated venture . . . -- -- -- 22.43
----------- ---------- ---------- ----------
$ 3.18 7.39 10.41 62.80
=========== ========== ========== ==========
Cash distributions per
limited partnership
interest . . . . . . . . . . . . . . $ -- 120.00 540.00 147.57
=========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
<CAPTION>
1997 1996
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 474,433 2,861,116
Items not requiring cash or cash equivalents:
Amortization of deferred expenses . . . . . . . . . . . . . . . . . . . -- 27,085
Partnership's share of operations of unconsolidated ventures,
net of distributions. . . . . . . . . . . . . . . . . . . . . . . . . (322,154) 993,546
Partnership's share of gain on sale of property by
unconsolidated venture. . . . . . . . . . . . . . . . . . . . . . . . -- (980,379)
Provision for loan loss . . . . . . . . . . . . . . . . . . . . . . . . -- 106,000
Changes in:
Interest and other receivables. . . . . . . . . . . . . . . . . . . . . . 319,916 73,982
Deferred interest receivable. . . . . . . . . . . . . . . . . . . . . . . -- (145,793)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (36,419) 17,621
Due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . -- 96,745
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (97,373) 372
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . 338,403 3,050,295
------------ -----------
Cash flows from investing activities:
Distributions from unconsolidated ventures. . . . . . . . . . . . . . . . 603,180 4,458,976
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . 603,180 4,458,976
------------ -----------
Cash flows from financing activities:
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (23,369,175) (6,386,147)
Distributions to general partners . . . . . . . . . . . . . . . . . . . . (24,042) (134,637)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . (23,393,217) (6,520,784)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . (22,451,634) 988,487
Cash and cash equivalents, beginning of year. . . . . . . . . . . 28,105,829 5,205,597
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . $ 5,654,195 6,194,084
============ ===========
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS - CONTINUED
1997 1996
------------ -----------
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest . . . . . . . . . . . . . . . . $ -- --
============ ===========
Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- --
============ ===========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1996
which are included in the Partnership's 1996 Annual Report, as certain
footnote disclosures which would substantially duplicate those contained in
such audited financial statements have been omitted from this report.
The preparation of financial statements in accordance with GAAP
requires the Partnership to make estimates and assumptions that affect the
reported or disclosed amount of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results may differ from such
estimates.
The Partnership adopted Statement of Financial Accounting Standards
No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of" ("SFAS 121") as required in the first
quarter of 1996. The Partnership's policy is to consider a property to be
held for sale or disposition when the Partnership has committed to a plan
to sell such property and active marketing activity has commenced or is
expected to commence in the near term. In accordance with SFAS 121, any
properties identified as "held for sale or disposition" are no longer
depreciated. The accompanying financial statements include $322,154 and
$468,369, respectively, of the Partnership's share of total property
operations of $961,369 and $1,320,157 the nine months ended September 30,
1997 and 1996 for unconsolidated properties held for sale or sold during
the past two years.
During the second quarter of 1997, Statements of Financial Accounting
Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of
Information about Capital Structure") were issued. As the Partnership's
capital structure only has general and limited partnership interests, the
Partnership does not expect any significant impact on its financial
statements upon adoption of these standards when required at the end of
1997.
Certain amounts in the 1996 financial statements have been
reclassified to conform with the 1997 presentation.
TRANSACTIONS WITH AFFILIATES
The Partnership, pursuant to the Partnership Agreement, is permitted
to engage in various transactions involving the Corporate General Partner
and its affiliates including the reimbursement for salaries and salary-
related expenses of its employees, certain of its officers, and other
direct expenses relating to the administration of the Partnership and the
operation of the Partnership's investments. Fees and other expenses
required to be paid by the Partnership to the General Partners and their
affiliates as of September 30, 1997 and for the nine months ended September
30, 1997 and 1996 were as follows:
<PAGE>
Unpaid at
September 30,
1997 1996 1997
------- ------ -------------
Mortgage investment
servicing fees. . . . . . . $ -- 41,763 --
Reimbursement (at cost) for
salary and salary-related
expenses related to the
on-site and other costs
for the Partnership and
its investment properties . 23,519 17,919 16,407
------- ------- ------
$23,519 59,682 16,407
======= ======= ======
The General Partners have deferred payment of approximately $442,000
of their distributions of prior net cash flow from the Partnership and
approximately $877,000 of their subordinated portion of sales and repayment
proceeds at September 30, 1997, in accordance with the subordination
requirements of the Partnership Agreement. Such subordination requirements
are not expected to be attained over the remaining expected operating
period of the Partnership. All amounts deferred or currently payable do
not bear interest.
NORTH RIVERS MARKET SHOPPING CENTER
Occupancy increased to 88% at September 30, 1997, from 87% at June 30,
1997. The property manager has been attempting to lease the remaining
vacant space in the center and as a result, the center is currently 94%
leased. As the venture has committed to a plan to sell the property, the
property was classified as held for sale or disposition as of December 31,
1996 and, therefore, is not subject to continued depreciation. In such
regard, the venture has reached an agreement in principle to sell the
property by the end of 1997 to an independent third party. However, the
sale is subject to various contingencies including final documentation and
therefore there can be no assurance that a sale transaction will be
completed in the near term with this or any other purchaser. If the sale
is completed on the proposed terms, the venture would recognize a gain in
1997 for financial reporting purposes (due in part to the $2,300,000 value
impairment provision recorded by the venture in 1995) and a gain in 1997
for Federal income tax purposes, approximately 33.5% of which would be
allocated to the Partnership.
UNCONSOLIDATED VENTURE - SUMMARY INFORMATION
Pursuant to the requirements of the Securities and Exchange
Commission, the following is a summary of historical income statement
information for the North Rivers Market Shopping Center Venture for the
nine months ended September 30, 1997 and 1996.
1997 1996
---------- ---------
Total revenues . . . . . . . . . . $1,378,877 1,299,474
========== =========
Operating income (loss). . . . . . $ 961,369 705,957
========== =========
Net income (loss) to Partnership . $ 322,154 236,566
========== =========
ADJUSTMENTS
In the opinion of the Corporate General Partner, all adjustments
(consisting solely of normal recurring adjustments) necessary for a fair
presentation have been made to the accompanying figures as of September 30,
1997 and for the three and nine months ended September 30, 1997 and 1996.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Reference is made to the notes to the accompanying financial
statements for additional information concerning the Partnership's
investments.
During 1996, some of the Holders of Interests in the Partnership
received from unaffiliated third parties unsolicited tender offers to
purchase up to 4.9% of the Interests in the Partnership at $425 per
Interest. The Partnership recommended against acceptance of these offers
on the basis that, among other things, the offer prices were inadequate.
Such offers have expired. The Partnership had also received a request from
another unaffiliated third party for the list of Holders of Interests. It
is possible that other offers for Interests may be made by unaffiliated
third parties in the future, although there is no assurance that any other
third party will commence an offer for Interests, the terms of any such
offer or whether any such offer, if made, will be consummated, amended or
withdrawn. The board of directors of JMB Realty Corporation ("JMB"), the
corporate general partner of the Partnership, has established a special
committee (the "Special Committee") consisting of certain directors of JMB
to deal with all matters relating to tender offers for Interests in the
Partnership, including any and all responses to such tender offers. The
Special Committee has retained independent counsel to advise it in
connection with any potential tender offers for Interests and has retained
Lehman Brothers Inc. as financial advisor to assist the Special Committee
in evaluating and responding to any additional potential tender offers for
Interests.
The Partnership has been made aware that in July and September 1997,
two unsolicited tender offers to some of the Holders of Interests were made
by an unaffiliated third party. These offers sought to purchase up to 4.9%
of the Interests in the Partnership at $105 per Interest. One offer was
extended to October 1997 and has now expired and the second offer is
scheduled to expire in mid-November. The Special Committee recommended
against acceptance of these offers on the basis that, among other things,
the offer price was inadequate. As of the date of this report, the
Partnership is aware that 2.49% of the outstanding Interests have been
purchased in 1996 and 1997 by all such unaffiliated third parties either
pursuant to such tender offers or through negotiated purchases.
The affairs of the Partnership are expected to be wound up in the
1997-1998 time frame, barring unforeseen economic developments. However,
the Partnership's goal of capital appreciation will not be achieved.
Although the Partnership expects to distribute sale proceeds from the
planned disposition of the Partnership's remaining investment in North
Rivers Market, aggregate sale and repayment distributions received by
Holders of Interests over the entire term of the Partnership are expected
to be less than their original investment.
It is currently anticipated that the Partnership will distribute
approximately $2.6 million ($60 per Interest) to the Holders of Interests
in late November, 1997.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at September 30, 1997 as
compared to December 31, 1996 is due primarily to distributions of
approximately $23,153,000 ($535 per Interest) made to the Limited Partners
in February 1997 representing substantially all of the proceeds from the
repayment of the Franklin Farm Village Center and Riverpoint Shopping
Center mortgage loans in 1996. The Partnership also distributed
approximately $240,000 of operating cash flow in May 1997 ($24,042 of which
was the General Partners' share).
<PAGE>
The decrease in interest and other receivables at September 30, 1997
as compared to December 31, 1996 is due primarily to the 1997 receipt from
the affiliated venture partner (Mortgage Partners-III) of the final
distribution of cash from Calibre Point Apartments, which was sold in May
1996. An additional decrease in interest and other receivables is due to a
decrease in accrued interest as a result of a decrease in cash and cash
equivalents at September 30, 1997 as described above.
The decrease in accounts payable at September 30, 1997 as compared to
December 31, 1996 is due primarily to the 1997 payment of accrued mortgage
investment servicing fees and recurring professional fees.
The decrease in other liabilities at September 30, 1997 as compared to
December 31, 1996 is due primarily to deposits held for real estate taxes
and insurance for the Riverpoint Shopping Center at December 31, 1996 which
were remitted to the borrower in 1997 in conjunction with the December 1996
loan payoff.
The decreases in interest income, mortgage investment servicing fees,
and amortization of deferred expenses for the three and nine months ended
September 30, 1997 as compared to the same periods in 1996 are due
primarily to the repayment of the Riverpoint Center and Franklin Farm
Village Center mortgage loans in 1996.
The decrease in Partnership's share of operations of unconsolidated
ventures for the nine months ended September 30, 1997 as compared to the
nine months ended September 30, 1996 is due primarily to the sale of the
Calibre Pointe Apartments in May 1996. The increase in the Partnership's
share of operations of unconsolidated ventures for the three months ended
September 30, 1997 as compared to the three months ended September 30, 1996
is primarily due to the suspension of depreciation in 1997 on the North
Rivers Market property as such property was classified by the venture as
held for sale or disposition as of December 31, 1996.
An additional provision for loan loss on the loan secured by the
Riverpoint Center was recorded by the lenders in July 1996, of which the
Partnership's share was $106,000.
Gain on sale of property by unconsolidated venture of approximately
$980,000 for the nine months ended September 30, 1996 represents the
Partnership's share of gain from the sale of the Calibre Pointe Apartments
in May 1996.
<PAGE>
<TABLE>
PART II. OTHER INFORMATION
ITEM 5. OTHER INFORMATION
OCCUPANCY
The following is a listing of approximate occupancy levels by quarter for the Partnership's investment
property owned during 1997.
<CAPTION>
1996 1997
------------------------------- -------------------------------
At At At At At At At At
3/31 6/30 9/30 12/31 3/31 6/30 9/30 12/31
---- ---- ---- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1. North Rivers Market
Shopping Center
North Charleston,
South Carolina. . . . . 85% 83% 83% 81% 87% 87% 88%
</TABLE>
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
3-A. The Prospectus of the Partnership dated September 18,
1986, as supplemented January 22, 1987, April 23, 1987, June 12, 1987,
August 6, 1987, September 14, 1987, and September 28, 1987 as filed with
the commission pursuant to Rules 424 (b) and 424 (c), is hereby
incorporated herein by reference to the Partnership's Report on Form S-11
(File No. 33-4036) dated September 18, 1986.
3-B. Amended and Restated Agreement of Limited Partnership
set forth as Exhibit A to the Prospectus, which is hereby incorporated
herein by reference to the Partnership's Registration Statement on Form S-
11 (File No. 33-4036) dated September 18, 1986.
3-C. Acknowledgement of rights and duties of the General
Partners of the Partnership between AGPP Associates, L.P. (a successor
Associated General Partner of the Partnership) and JMB Realty Corporation
as of December 31, 1995 is hereby incorporated herein by reference to the
Partnership's Report for June 30, 1996 on Form 10-Q (File No. 0-16599)
dated August 9, 1996.
10-A. Loan documents related to the Partnership's
participation in the funding of a first mortgage loan secured by the North
Rivers Market Shopping Center located in North Charleston, South Carolina,
are hereby incorporated herein by reference to the Partnership's
Registration Statement on Form S-11 (File No. 33-4036) dated September 18,
1986, as amended.
10-B. Agreement of Partnership of North Rivers Market
Associates between JMB Mortgage Partners, Ltd. - III and the Partnership,
dated April 26, 1993 hereby incorporated herein by reference to the
Partnership's Report for June 30, 1997 on Form 10-Q (File No. 0-16599)
dated August 8, 1997.
27. Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last quarter
of the period covered by this report.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
JMB MORTGAGE PARTNERS, LTD. - IV
BY: JMB Realty Corporation
(Corporate General Partner)
GAILEN J. HULL
By: Gailen J. Hull, Senior Vice President
Date: November 12, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following person in the capacity
and on the date indicated.
GAILEN J. HULL
By: Gailen J. Hull, Principal Accounting Officer
Date: November 12, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 5,654,195
<SECURITIES> 0
<RECEIVABLES> 22,079
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 5,676,274
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,208,453
<CURRENT-LIABILITIES> 189,796
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 9,018,657
<TOTAL-LIABILITY-AND-EQUITY> 9,208,453
<SALES> 0
<TOTAL-REVENUES> 379,790
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 227,511
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 152,279
<INCOME-TAX> 0
<INCOME-CONTINUING> 474,433
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 474,433
<EPS-PRIMARY> 10.41
<EPS-DILUTED> 10.41
</TABLE>
