SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1995
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OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
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EXCHANGE ACT OF 1934.
For the transition period from to
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Commission file number 0-15648
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BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
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(Exact name of registrant as specified in its charter)
Illinois 36-3447130
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Balcor Plaza
4849 Golf Road, Skokie, Illinois 60077-9894
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (708) 677-2900
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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
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BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
BALANCE SHEETS
March 31, 1995 and December 31, 1994
(Unaudited)
ASSETS
1995 1994
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Cash and cash equivalents $ 3,313,253 $ 3,612,180
Accounts and accrued interest receivable 117,384 70,246
Prepaid expenses 14,238
Deferred expenses, net of accumulated
amortization of $5,588 in 1995
and $4,191 in 1994 50,296 51,693
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3,495,171 3,734,119
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Investment in real estate:
Land 6,958,341 6,958,341
Buildings and improvements 24,248,600 24,248,600
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31,206,941 31,206,941
Less accumulated depreciation 8,565,952 8,363,940
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Investment in real estate, net of
accumulated depreciation 22,640,989 22,843,001
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Investment in joint venture
with affiliates 1,456,406 1,433,471
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$ 27,592,566 $ 28,010,591
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LIABILITIES AND PARTNERS' CAPITAL
Accounts payable $ 27,977 $ 44,724
Due to affiliates 84,023 54,646
Accrued liabilities, principally
real estate taxes 994,940 1,176,087
Security deposits 103,816 108,108
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Total liabilities 1,210,756 1,383,565
Partners' capital (185,486 Limited
Partnership Interests issued and
outstanding) 26,381,810 26,627,026
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$ 27,592,566 $ 28,010,591
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The accompanying notes are an integral part of the financial statements.
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BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF INCOME AND EXPENSES
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Income:
Rental $ 920,219 $ 893,019
Service 200,604 236,077
Interest on short-term investments 51,556 27,506
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Total income 1,172,379 1,156,602
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Expenses:
Depreciation 202,012 202,012
Property operating 220,333 309,285
Real estate taxes 307,374 272,764
Property management fees 60,326 100,159
Administrative 81,682 92,096
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Total expenses 871,727 976,316
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Income before participation in
loss of joint venture with
affiliates 300,652 180,286
Participation in loss of joint
venture with affiliates (15,984) (18,117)
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Net income $ 284,668 $ 162,169
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Net income allocated to General Partner $ 46,774 $ 38,513
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Net income allocated to Limited Partners $ 237,894 $ 123,656
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Net income per Limited Partnership
Interest (185,486 issued
and outstanding) $ 1.28 $ .67
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Distribution to General Partner $ 52,987 $ 53,201
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Distribution to Limited Partners $ 476,897 $ 478,806
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Distribution per Limited
Partnership Interest:
Taxable $ 3.24 $ 2.50
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Tax-exempt $ 2.50 $ 2.59
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
STATEMENTS OF CASH FLOWS
for the quarters ended March 31, 1995 and 1994
(Unaudited)
1995 1994
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Operating activities:
Net income $ 284,668 $ 162,169
Adjustments to reconcile net income
to net cash provided by
operating activities:
Participation in loss of joint
venture with affiliates 15,984 18,117
Depreciation of properties 202,012 202,012
Amortization of deferred
expenses 1,397
Net change in:
Accounts and accrued interest
receivable (47,138) 490,224
Prepaid expenses (14,238)
Accounts payable (16,747) 20,514
Due to affiliates 29,377 58,220
Accrued liabilities (181,147) (172,235)
Security deposits (4,292) (2,760)
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Net cash provided by
operating activities 269,876 776,261
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Investing activity:
Capital contribution to joint
venture - affiliates (38,919)
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Cash used in investing activity (38,919)
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Financing activities:
Distribution to Limited Partners (476,897) (478,806)
Distribution to General Partner (52,987) (53,201)
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Cash used in financing activities (529,884) (532,007)
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Net change in cash and cash equivalents (298,927) 244,254
Cash and cash equivalents at beginning
of period 3,612,180 2,733,081
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Cash and cash equivalents at
end of period $ 3,313,253 $ 2,977,335
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The accompanying notes are an integral part of the financial statements.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
NOTES TO FINANCIAL STATEMENTS
1. Accounting Policy:
In the opinion of management, all adjustments necessary for a fair presentation
have been made to the accompanying statements for the quarter ended March 31,
1995, and all such adjustments are of a normal and recurring nature.
2. Transactions with Affiliates:
Fees and expenses paid and payable by the Partnership to affiliates during the
quarter ended March 31, 1995 are:
Paid Payable
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Mortgage servicing fees $ 1,484 None
Reimbursement of expenses to
the General Partner, at cost None $ 84,023
3. Investment in Joint Venture with Affiliates:
The Partnership and three affiliates previously funded a $23,000,000 loan on
the 45 West 45th Street Office Building. In February 1995, the participants
received title to the property through foreclosure. The Partnership owns a
15.22% joint venture interest in the property.
4. Subsequent Event:
In May 1995, the Partnership made a distribution of $472,201 ($2.98 per Taxable
Interest and $2.50 per Tax-exempt Interest) to the holders of Limited
Partnership Interests, representing the quarterly distribution for the first
quarter of 1995.
<PAGE>
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
(An Illinois Limited Partnership)
MANAGEMENT'S DISCUSSION AND ANALYSIS
Balcor Equity Pension Investors-IV A Real Estate Limited Partnership (the
"Partnership") is a limited partnership formed in 1986 to make first mortgage
loans and to invest in and operate income-producing real property. The
Partnership raised $46,371,500 through the sale of Limited Partnership
Interests and utilized these proceeds to fund one acquisition loan and acquire
two real property investments. As of March 31, 1995, the Partnership owns two
properties and a minority interest in a joint venture with affiliates.
Inasmuch as the management's discussion and analysis below relates primarily to
the time period since the end of the last fiscal year, investors are encouraged
to review the financial statements and the management's discussion and analysis
contained in the annual report for 1994 for a more complete understanding of
the Partnership's financial position.
Operations
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Summary of Operations
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Improved operations at the Evanston Plaza Shopping Center resulting primarily
from lower tenant improvement expenses was the primary reason for the increase
in net income for the quarter ended March 31, 1995 as compared to the same
period in 1994. Further discussion of the Partnership's operations is
summarized below.
1995 Compared to 1994
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Decreased real estate tax and common area maintenance reimbursements from
tenants at the Evanston Plaza Shopping Center resulted in lower service income
for the quarter ended March 31, 1995 as compared to the same period in 1994.
Property management fees, which are earned as a percentage of rental and
service income collected, also decreased for this period.
As a result of higher interest rates earned on short-term investments, interest
income on short-term investments increased during the quarter ended March 31,
1995 as compared to the same period in 1994.
Lower tenant improvement expenses and snow removal expenditures at the Evanston
Plaza Shopping Center were the primary reasons for the decrease in property
operating expenses during the quarter ended March 31, 1995 as compared to the
same period in 1994.
In January 1994, the Partnership received a refund of prior year taxes from
taxing authorities for the Gleneagles Apartments, which resulted in an increase
in real estate taxes during the quarter ended March 31, 1995 as compared to the
same period in 1994.
<PAGE>
As a result of lower data processing costs, accounting and legal fees,
administrative expenses decreased during the quarter ended March 31, 1995 as
compared to the same period in 1994. Higher printing costs partially offset the
decrease.
Liquidity and Capital Resources
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The cash position of the Partnership at March 31, 1995 decreased when compared
to December 31, 1994. Operating activities included cash flow from the
operation of the Partnership's properties and short-term investments, which
were partially offset by the payment of administrative expenses. The investing
activity consisted of capital contributed to the joint venture with affiliates,
while financing activities consisted of distributions to the Partners.
The Partnership classifies the cash flow performance of its properties as
either positive, a marginal deficit, or a significant deficit, each after
consideration of debt service payments unless otherwise indicated. A deficit is
considered significant if it exceeds $250,000 annually or 20% of the property's
rental and service income. The Partnership defines cash flow generated from its
properties as an amount equal to the property's revenue receipts less property
related expenditures. During the quarters ended March 31, 1995 and 1994, the
Gleneagles Apartments and Evanston Plaza Shopping Center generated positive
cash flow. The property in which the Partnership holds a minority joint venture
interest with affiliates, the 45 West 45th Street office building, generated a
marginal deficit during the quarters ended March 31, 1995 and 1994. Significant
leasing costs were incurred in 1995 at the 45 West 45th Street office building
to lease vacant space and renew existing tenant leases. These non-recurring
expenditures were not included in classifying the cash flow performance of the
property. Had these costs been included, this property would have generated a
significant deficit during the first quarter of 1995. As of March 31, 1995, the
Gleneagles Apartments and Evanston Plaza Shopping Center both had occupancy
rates of 96%, while the 45 West 45th Street office building had an occupancy
rate of 94%. Many rental markets continue to remain extremely competitive;
therefore, the General Partner's goals are to maintain high occupancy levels
while increasing rents where possible and to monitor and control operating
expenses and capital improvement requirements at both of the properties.
The Partnership and three affiliates (the "Participants"), previously funded a
$23,000,000 loan on the 45 West 45th Street Office Building. In February 1995,
the Participants received title to the property through foreclosure. The
Partnership owns a 15.22% joint venture interest in the property.
In May 1995, the Partnership made a cash distribution of $472,201 ($2.98 per
Taxable Interest and $2.50 per Tax-exempt Interest) to Limited Partners,
representing the quarterly distribution for the first quarter of 1995. In
addition, during May 1995, the Partnership paid $39,350 to the General Partner
as its share of the first quarter of 1995 distribution, and made a $13,117
contribution to the Repurchase Fund. Including the May 1995 distribution,
Limited Partners have received cumulative distributions of $76.78 per $250
Taxable Interest, of which $76.53 represents cash flow from operations and $.25
represents a return of original capital, and $75.20 per $250 Tax-exempt
Interest, of which $74.95 represents cash flow from operations and $.25
represents a return of capital.
<PAGE>
The General Partner expects that the cash flow from property operations should
enable the Partnership to continue making quarterly distributions to Limited
Partners. However, the level of future distributions will be dependent on the
amount of cash flow generated from property operations as to which there can be
no assurances.
Inflation has several types of potentially conflicting impacts on real estate
investments. Short-term inflation can increase real estate operating costs
which may or may not be recovered through increased rents and/or sales prices,
depending on general or local economic conditions. In the long-term, inflation
can be expected to increase operating costs and replacement costs and may lead
to increased rental revenues and real estate values.
Item 6. Exhibits and Reports on Form 8-K
________________________________________
(a) Exhibits:
(4) Form of Subscription Agreement set forth as Exhibit 4.1 to Amendment No. 1
to Registrant's Registration Statement on Form S-11 dated November 28, 1986
(Registration No. 33-7133) and Form of Confirmation regarding Interests in the
Registrant set forth as Exhibit 4.2 to the Registrant's Report on Form 10-Q for
the quarter ended June 30, 1992 (Commission File No. 0-15648) are incorporated
herein by reference.
(27) Financial Data Schedule of the Registrant for the three month period
ending March 31, 1995 is attached hereto.
(b) Reports on Form 8-K: No reports were filed on Form 8-K during the quarter
ended March 31, 1995.
<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.
BALCOR EQUITY PENSION INVESTORS-IV
A REAL ESTATE LIMITED PARTNERSHIP
By: \s\Thomas E. Meador
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Thomas E. Meador
President and Chief Executive Officer
(Principal Executive Officer) of Balcor
Equity Partners-IV, the General Partner
By: \s\Brian Parker
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Brian Parker
Senior Vice President, and Chief Financial
Officer (Principal Accounting and Financial
Officer) of Balcor Equity Partners-IV, the
General Partner
Date: May 10, 1995
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<PAGE>
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