SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended
June 30, 1998 Commission file number 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. . . . . . . . . . . . . . 9
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 11
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
BALANCE SHEETS
JUNE 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
ASSETS
------
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 652,407 2,783,994
Interest and other receivables. . . . . . . . . . . . . . . . . . . 2,079 12,154
------------ ------------
Total current assets. . . . . . . . . . . . . . . . . . . . 654,486 2,796,148
------------ ------------
Investment in unconsolidated venture, at equity . . . . . . . . . . . 155,176 5,118,998
------------ ------------
$ 809,662 7,915,146
============ ============
<PAGE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
BALANCE SHEETS - CONTINUED
LIABILITIES AND PARTNERS' CAPITAL ACCOUNTS
------------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
------------- -----------
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,340 35,854
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . -- 7,683
------------ ------------
Total current liabilities . . . . . . . . . . . . . . . . . 27,340 43,537
------------ ------------
Commitments and contingencies
Partners' capital accounts:
General partners:
Capital contributions . . . . . . . . . . . . . . . . . . . . . . 1,000 1,000
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . 2,346,523 2,355,338
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (2,284,838) (2,164,626)
------------ ------------
62,685 191,712
------------ ------------
Limited partners (43,276.25 interests):
Capital contributions, net of offering costs. . . . . . . . . . . 37,619,348 37,619,348
Cumulative net earnings (losses). . . . . . . . . . . . . . . . . 23,149,430 23,228,766
Cumulative cash distributions . . . . . . . . . . . . . . . . . . (60,049,141) (53,168,217)
------------ ------------
719,637 7,679,897
------------ ------------
Total partners' capital accounts. . . . . . . . . . . . . . 782,322 7,871,609
------------ ------------
$ 809,662 7,915,146
============ ============
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
-------------------------- --------------------------
1998 1997 1998 1997
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Income:
Interest income . . . . . . . . . . . . . . . $ 7,485 68,549 66,234 311,025
----------- ---------- ---------- ----------
Expenses:
Professional services . . . . . . . . . . . . 7,550 19,159 33,828 40,677
General and administrative. . . . . . . . . . 53,130 74,305 116,215 121,949
----------- ---------- ---------- ----------
60,680 93,464 150,043 162,626
----------- ---------- ---------- ----------
(53,195) (24,915) (83,809) 148,399
Partnership's share of operations
(loss) of unconsolidated venture. . . . . . . (2,328) 94,738 (4,342) 188,357
----------- ---------- ---------- ----------
Net earnings (loss) . . . . . . . . . $ (55,523) 69,823 (88,151) 336,756
=========== ========== ========== ==========
Net earnings (loss) per limited
partnership interest. . . . . . . . $ (1.15) 1.12 (1.83) 7.23
=========== ========== ========== ==========
Cash distributions per limited
partnership interest. . . . . . . . $ -- 5.00 159.00 540.00
=========== ========== ========== ==========
<FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
JMB MORTGAGE PARTNERS, LTD. - IV
(A LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
<CAPTION>
1998 1997
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (88,151) 336,756
Items not requiring cash or cash equivalents:
Partnership's share of operations of unconsolidated ventures,
net of distributions. . . . . . . . . . . . . . . . . . . . . . . . . 4,342 (188,357)
Changes in:
Interest and other receivables. . . . . . . . . . . . . . . . . . . . . . 10,075 319,939
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,514) (26,336)
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7,683) (97,373)
------------ -----------
Net cash provided by (used in) operating activities . . . . . . . (89,931) 344,629
------------ -----------
Cash flows from investing activities:
Distributions from unconsolidated ventures. . . . . . . . . . . . . . . . 4,959,480 603,180
------------ -----------
Net cash provided by (used in) investing activities . . . . . . . 4,959,480 603,180
------------ -----------
Cash flows from financing activities:
Distributions to limited partners . . . . . . . . . . . . . . . . . . . . (6,880,924) (23,369,175)
Distributions to general partners . . . . . . . . . . . . . . . . . . . . (120,212) (24,042)
------------ -----------
Net cash provided by (used in) financing activities . . . . . . . (7,001,136) (23,393,217)
------------ -----------
Net increase (decrease) in cash and cash equivalents. . . . . . . (2,131,587) (22,445,408)
Cash and cash equivalents, beginning of year. . . . . . . . . . . 2,783,994 28,105,829
------------ -----------
Cash and cash equivalents, end of period. . . . . . . . . . . . . $ 652,407 5,660,421
============ ===========
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
JUNE 30, 1998 AND 1997
(UNAUDITED)
GENERAL
Readers of this quarterly report should refer to the Partnership's
audited financial statements for the fiscal year ended December 31, 1997
which are included in the Partnership's 1997 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.
Certain amounts in the 1997 financial statements have been
reclassified to conform with the 1998 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 June 30, 1998 and for the six months ended June 30, 1998
and 1997 were as follows:
Unpaid at
June 30,
1998 1997 1998
------- ------ -------------
Reimbursement (at cost) for
salary and salary-related
expenses related to the
on-site and other costs
for the Partnership and
its investment properties . $33,040 15,666 26,489
------- ------ ------
$33,040 15,666 26,489
======= ====== ======
The General Partners had deferred payment of certain of their
distributions of prior net cash flow from the Partnership and all of their
subordinated portion of sales and repayment proceeds, pursuant to the
subordination requirements of the Partnership Agreement. Such
subordination requirements will not be attained over the remaining
operating period of the Partnership. All amounts currently payable do not
bear interest.
<PAGE>
NORTH RIVERS MARKET SHOPPING CENTER
On December 30, 1997, the North Rivers Market Associates venture
("NRMA") sold the land and related improvements of the North Rivers Market
shopping center. The sale price of the property was $14,708,742, which was
received in cash at closing by NRMA (net of selling costs and prorations).
The sale resulted in a gain of approximately $4,640,000 to NRMA for
financial reporting purposes (of which the Partnership's share was
$1,554,939), due in part to the value impairment provision of $2,300,000
recorded by NRMA in 1995. In addition, NRMA recognized a gain on sale of
approximately $2,245,000 for Federal income tax reporting purposes in 1997
(of which the Partnership's share was $752,467).
In connection with the sale of this property, as is customary in such
transactions, NRMA agreed to certain representations and warranties, with a
stipulated survival period which expires in late September, 1998. Although
it is not expected, NRMA may ultimately have some liability under such
representations and warranties, which is not to exceed $500,000 (of which
the Partnership's share would be $167,550). It is expected that the
Partnership will make its final distributions and wind up its affairs
during 1998 after the expiration of the survival period, barring unforeseen
circumstances.
As NRMA had 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, was not subject to continued depreciation.
An affiliate of the General Partners of the Partnership managed the
property under an agreement which provided for a fee computed as 6% of the
gross income of the property. Such property management fees for the six
months ended June 30, 1997 were $51,731.
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 six
months ended June 30, 1997.
1998 1997
---------- ---------
Total revenues . . . . . . . . . . $ -- 814,048
========== =========
Operating income (loss). . . . . . $ -- 562,092
========== =========
Net income (loss) to Partnership . $ -- 188,357
========== =========
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 June 30, 1998
and for the three and six months ended June 30, 1998 and 1997.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The Partnership had cash and cash equivalents of approximately
$652,000 at June 30, 1998, which funds (together with amounts received from
the Partnership's unconsolidated venture, North Rivers Market Associates)
are available to pay for the Partnership's remaining expenses and
liabilities, with any remaining amounts expected to be distributed to the
Limited and General Partners, pursuant to the provisions of the Partnership
Agreement, upon the expected liquidation of the Partnership in late 1998.
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.
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 had been made aware that in July and September 1997
and January 1998, three 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 prices ranging
from $45 to $105 per Interest. All of such offers have now expired. 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 2.67% of the outstanding
Interests have been purchased by all such unaffiliated third parties either
pursuant to such tender offers or through negotiated purchases. As the
Partnership is currently winding up its affairs and expects to make a final
liquidating distribution in late 1998, it is unlikely that any further
tender offers for Interests will be made.
The affairs of the Partnership are expected to be wound up in 1998,
barring unforeseen economic developments. However, the Partnership's goal
of capital appreciation will not be achieved. Aggregate sale and repayment
distributions received by Holders of Interests over the entire term of the
Partnership will be less than their original investment.
RESULTS OF OPERATIONS
The decrease in cash and cash equivalents at June 30, 1998 as compared
to December 31, 1997 is due primarily to distributions of approximately
$6,881,000 ($159 per Interest) made to the Limited Partners in February
1998, which included $109 per Interest from the distributions received from
North Rivers Market Associates relating to the December 1997 sale of the
North Rivers Market shopping center and $50 per Interest from Partnership
operational cash flow and reserves, including those from offering proceeds.
The Partnership also paid a distribution of $120,212 to the General
Partners, which represented their share of Partnership operational cash
flow and reserves, including those from offering proceeds. The General
Partners will not receive their share of any distribution of proceeds from
the sale due to subordination requirements of the Partnership Agreement.
<PAGE>
The decrease in investment in unconsolidated venture, at equity, at
June 30, 1998 as compared to December 31, 1997 is due primarily to
distributions totaling approximately $4,959,000 received by the Partnership
from the North Rivers Market Associates venture in 1998, a substantial
portion of which represented the Partnership's share of the proceeds from
the December 1997 sale of the North Rivers Market shopping center.
The decrease in interest income for the three and six months ended
June 30, 1998 as compared to the three and six months ended June 30, 1997
is due primarily to the interest earned in 1997 on the temporary investment
of the proceeds from the repayment of the Riverpoint Center and Franklin
Farm Village Center mortgage loans during the fourth quarter of 1996.
The decrease in Partnership's share of operations of unconsolidated
venture for the three and six months ended June 30, 1998 as compared to the
three and six months ended June 30, 1997 is due primarily to the sale of
the North Rivers Market shopping center in December 1997.
<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.
10-C. Real Property Purchase Agreement between North Rivers
Market Associates and KRC Acquisition Corp., dated December 4, 1997.*
10-D. Assignment of Real Property Purchase Agreement from KRC
Acquisition Corp. to Kimco North Rivers 692, Inc., dated December 17,
1997.*
10-E. Letter Agreement between North Rivers Market Associates
and Kimco North Rivers 692, Inc., dated December 29, 1997.*
27. Financial Data Schedule
--------------------
* Hereby incorporated herein by reference to the Partnership's
Report on Form 8-K (File No. 0-16599) dated December 4, 1997.
(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 registrant 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: August 12, 1998
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: August 12, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 652,407
<SECURITIES> 0
<RECEIVABLES> 2,079
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 654,486
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 809,662
<CURRENT-LIABILITIES> 27,340
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 782,322
<TOTAL-LIABILITY-AND-EQUITY> 809,662
<SALES> 0
<TOTAL-REVENUES> 66,234
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 150,043
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (83,809)
<INCOME-TAX> 0
<INCOME-CONTINUING> (88,151)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (88,151)
<EPS-PRIMARY> (1.83)
<EPS-DILUTED> (1.83)
</TABLE>
