UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
- ------ SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended
December 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
- ------ THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number
0-16890
-------
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
-------------------------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-1558614
- -------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
20875 Crossroads Circle
Suite 800
Waukesha, Wisconsin 53186
- -------------------------------- ----------------------------
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (414) 798-0900
--------------
Securities registered pursuant to Section 12(b) of the Act:
None
----
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
-----------------------------
(Title of Class)
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 requirement
for the past 90 days.
Yes X No
--------- ---------
RAL YIELD + EQUITIES IV
LIMITED PARTNERSHIP
1995 FORM 10-K
TABLE OF CONTENTS
-----------------
Part I
Item 1 Business
Item 2 Properties
Item 3 Legal Proceedings
Item 4 Submission of Matters to a Vote of
Security Holders
Part II
Item 5 Market for Registrant's Common Equity and
Related Stockholder Matters
Item 6 Selected Financial Data
Item 7 Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Item 8 Financial Statements and Supplementary
Data
Item 9 Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure
Part III
Item 10 Directors and Executive Officers of the
Partnership
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial
Owners and Management
Item 13 Certain Relationships and Related
Transactions
Part IV
Item 14 Exhibits, Financial Statement Schedules,
and Reports on Form 8-K
Signatures
Financial Statements and Supplementary Data
PART 1
Item 1. BUSINESS
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP (the "Registrant" or
"Partnership") is a Wisconsin Limited Partnership formed on August
8, 1986, under the Wisconsin Revised Uniform Limited Partnership
Act. The Registrant was organized to acquire, for cash (no debt),
real estate projects, including real estate for restaurants, mobile
home communities, apartment complexes and other commercial
properties. The Partnership sold $19,620,500 in Limited
Partnership Interests (19,620.5 Interests at $1,000 per unit)
pursuant to a registration statement on Form S-11 under the
Securities Act of 1933. The Partnership utilized the net offering
proceeds to acquire the real property investments described under
"Properties" (Item 2).
The Registrant originally acquired fourteen real property
investments, utilizing the net offering proceeds available for
investment. The Registrant sold three of the original properties
during 1993. A fourth property was sold February 15, 1994.
<TABLE>
Provided below is certain financial information by property type
for the three years covered by this report:
<CAPTION>
Apartment Mobile Home Commercial
Complexes Parks Properties
---------------- ---------------- ----------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of
properties 2 2 2 5 5 5 3 3 4
owned at December 31:
Gross rental
revenues $990 978 929 $1,028 1,000 1,185 $210 193 281
</TABLE>
The officers and employees of RAL Asset Management Group, a
Wisconsin General Partnership, and its affiliates, performed
services for the Registrant until June 1, 1993. RAL Asset
Management Group is controlled by the General Partners of the
Partnership. Effective June 1, 1993 the Partnership made separate
property and partnership management agreements.
The partnership management agreement is with an unrelated
management company. The property management agreement is with a
related entity with the same general partners as the Partnership.
The related property management firm simultaneously subcontracted
with the same unrelated management company handling the partnership
management. The terms and conditions of these agreements are
similar to the above related party agreements, which they replace.
The Registrant itself employs individual onsite managers and
maintenance personnel in the mobile home parks and apartment
complexes. The Registrant employed 17 at March 30, 1996.
Item 2. PROPERTIES
As of March 30, 1996, the Registrant owned the following
properties:
Name, Type of Date of
Property and Location Purchase Approximate Size
- --------------------- -------- ------------------------
South Hills 12/31/86 170 mobile home site on 40 acres
Mobile Home Park of land and a small vacant
Beaver Dam, WI* building formerly used as an
office.
Lakeshore Terrace 06/30/87 135 mobile home sites on
Mobile Home Park approximately 25 acres of land
Rice Lake, WI
Alexandria Estates 08/17/87 89 mobile home sites on
Mobile Home Park approximately 17 acres of land
Alexandria, MN
Maplewood 08/17/87 75 mobile home sites on
Mobile Home Park approximately 9 acres of land
Lake City, MN
Hardee's Restaurant 08/18/87 A 3,900 sq. ft. building on
Mundelein, IL (vacant) approximately 0.8 acres of land
Hardee's Restaurant 08/18/87 A 3,900 sq. ft. building on
Joliet, IL approximately 0.7 acres of land
Firestone 02/02/88 A 7,716 square foot building on
Retail/Service Center approximately 1.7 acres of land
Neenah, WI
Northrup Court 03/08/88 A 90 unit garden apartment
Apartments complex located on approximately
North Canton, OH* 7.6 acres of land
Parkwood Estates 06/10/88 113 mobile home sites on
Mobile Home Park approximately 37.5 acres of land
Willmar, MN
Cedar Crossing 08/19/88 Majority ownership (87.709%)
Apartments 12/23/88 in a 109 unit garden apartment
Frederick, MD* complex (RAL Income + Equity
Growth V Limited Partnership, an
affiliated limited partnership,
owns the remaining interest)
*Denotes a material property, having gross revenues greater than
10% of total revenues.
All the above properties were unencumbered as of March 30, 1996.
Leases on Investment Properties:
The Partnership operates five mobile home parks which lease rental
spaces. The Partnership also operates two apartment complexes.
The mobile home parks and apartment complexes receive income on a
monthly basis from tenant leases which normally have lease terms of
one year or less.
The restaurant properties are leased under 10-20 year leases with
some having two five-year options to renew the lease at the end of
the original terms. Rent on the restaurant properties, which is
payable monthly, is equal to the greater of (a) 6.00% or (b) 6.50%
of gross sales, depending on the lease, or a minimum base rental
stated in the lease. The leases are "triple net" to the
Partnership with the lessee being responsible for occupancy costs
such as maintenance, insurance, taxes and utilities.
The restaurant property in Mundelien, Illinois is now vacant.
However, the former tenant is still bound by the terms of the lease
and still continues to pay rent and real estate taxes as required
under the lease.
The real estate business is highly competitive and the Partnership
competes with many other real estate investment entities many of
which have greater financial resources. No one firm or group of
firms, in the opinion of the General Partners, is dominant in the
industry. The Partnership, therefore, faces substantial
competition from a variety of sources for attracting tenants to its
properties.
All commercial, residential and mobile home community properties
acquired by the Partnership have competition for tenants from
similar properties in the vicinity. To the extent that the
Partnership owns or acquires commercial properties, such as
restaurants, which have leases entitling the Partnership to
participate in gross receipts of tenants above fixed minimum
amounts, the success of the Partnership will depend in part on the
success of its tenants in competing with similar businesses in the
vicinity.
In the opinion of management of the Partnership, all properties are
adequately covered by insurance.
MATERIAL PROPERTIES
- -------------------
Following is information with respect to each property whose
revenues are greater than 10% of total revenues as denoted above.
<TABLE>
The following is a listing of the approximate average physical
occupancy rates for the Partnership's material properties during
each of the last five years:
<CAPTION>
Occupancy Rate
--------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cedar Crossings Apts. 100% 99% 96% 97% 92%
Northrup Court Apts. 99% 97% 89% 89% 95%
South Hills MHP 99% 99% 99% 99% 98%
</TABLE>
<TABLE>
The following is a listing of the average annual per unit rental
rates for the Partnership's material properties for each of the
last five years:
<CAPTION>
Annual Per Unit Rental Rate
--------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Cedar Crossings Apts. $5,639 5,596 5,610 5,457 5,435
Northrup Court Apts. $4,215 4,174 4,274 4,100 4,006
South Hills MHP $2,402 2,305 2,251 2,139 2,020
</TABLE>
The Federal tax basis for each of the material properties is
identical to the book basis as listed in Schedule III on page F-15
of the report. Depreciation information for tax purposes on the
properties is as follows:
Type of Asset Rate Method Depreciable Life
------------- ---- ------ ----------------
Land Improvements SL ACRS 15/19/20 Year
Building SL ACRS 19/31.5/40 Year
Equipment DDB ACRS/MACRS 5/7/12 Year
<TABLE>
Real estate tax information for the three years covered by this
report for material properties is as follows:
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Cedar Crossings Apts.
Tax rate (per 1,000) .02260 .02260 .02260
Real estate taxes $39,285 38,816 38,818
Northrup Court Apts.
Tax rate (per 1,000) .04638 .05428 .05097
Real estate taxes $22,785 34,578 37,000
South Hills MHP
Tax rate (per 1,000) .02821 .02847 .02629
Real estate taxes $32,776 33,080 31,072
</TABLE>
Item 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal
action.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders
during 1995.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a)&(b) As of December 31, 1995, there were approximately
2,430 record holders of Interests of the Partnership. There
is no public market for Interests and it is not anticipated
that a public market for Interests will develop. The
General Partners will not redeem or repurchase Interests.
(c) All cash available for distribution other than sale or
refinancing proceeds will be distributed 95% to the
Limited Partners and 5% to the General Partners, at least
semiannually. See attached financial statements and
footnotes for a detailed discussion of amounts and timing
of distributions to Limited Partners.
Item 6. SELECTED FINANCIAL DATA
<TABLE>
Year Ended Year Ended Year Ended Year Ended Year Ended
12/31/95 12/31/94 12/31/93 12/31/92 12/31/91
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Rental Income$2,228,310 $2,161,239 $2,394,977 $2,452,779 $2,451,483
Interest Income 7,700 17,049 9,517 12,805 33,442
Net Income 549,106 529,276 918,686 420,951 703,465
Total Assets 10,581,715 10,979,236 14,049,594 14,506,738 15,489,261
Long Term Obligations 0 0 0 0 0
Distributions to
Limited Partners
Cash Flow 945,550 3,501,235 1,177,230 1,323,931 1,402,866
Return of Capital 0 2,429,000 0 0 0
Gain (Loss) on Sale
of Investment
Property 0 (20,535) 335,777 0 0
Per Unit Data:
Net Income 26.59 25.63 44.48 20.38 34.06
Distributions 48.19 178.45 60.00 67.48 71.50
<FN>
The above selected financial data should be read in conjunction
with financial statements and related footnotes elsewhere herein.
(A) The net income per Interest is computed on the basis of the
net income allocated to the Limited Partners divided by the
outstanding Interests at the end of the period.
</FN>
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP is a Wisconsin Limited
Partnership formed on August 8, 1986, under the Wisconsin Revised
Uniform Limited Partnership Act. The Partnership was formed to
acquire new and existing income-producing properties for cash.
The Partnership originally purchased a total of fifteen income-
producing properties. The Partnership purchased and is managing
five mobile home communities (two in Wisconsin and three in
Minnesota) and two garden apartment complexes located in Ohio and
Maryland. The Partnership also purchased and is leasing the
following commercial properties: two Hardee's restaurants, located
in Mundelein, Illinois and Joliet, Illinois and a retail auto
supply store in Neenah, Wisconsin. The Partnership has sold the
following properties: a restaurant building located in Longmont,
Colorado; a retail auto parts and service store located in Menasha,
Wisconsin; a mobile home park located in Little Chute, Wisconsin;
and a restaurant building located in Eagan, Minnesota.
Liquidity and Capital Resources:
Properties acquired by the Partnership are intended to be held for
approximately seven to ten years. Since the Partnership has
purchased the Properties for cash, liquidity is not reduced by debt
service payments. During the Properties' holding periods, the
investment strategy is to maintain (on the "triple net lease"
restaurant properties) and improve (on the residential properties)
occupancy rates through the application of professional property
management (including selective capital improvements). Cash flow
generated from property operations is distributed to the partners
on a quarterly basis. The Partnership also accumulates working
capital reserves for normal repairs, replacements, working capital,
and contingencies.
Net cash provided by operating activities was $1,188,000 in 1995,
$1,118,000 in 1994, and $1,218,000 in 1993. As of December 31,
1995, the Partnership had cash of approximately $293,000 consisting
of undistributed cash flow, working capital reserves, undistributed
sales proceeds and tenant security deposits. Liabilities totaled
approximately $425,000.
The Partnership has not experienced, and is not currently
experiencing any liquidity problems. It is not expected that the
Partnership will experience liquidity problems due to the nature of
the current liabilities. Approximately $139,000 of the current
liabilities represent tenant security deposits. The majority of
the remaining current liabilities are accrued and escrowed real
estate taxes payable in installments in 1996. The Partnership
expects to meet all of its obligations as they come due.
Total limited partner distributions made during 1995 were
approximately $945,550. II-2
Parkwood mobile home park, located in Willmar, Minnesota is being
offered for sale by the Partnership at $665,000. Vacant land next
to the mobile home park is being offered at $75,000. The
Partnership has received offers at the above noted asking prices
from two unrelated parties. As of March 30, 1996 no formal
purchase offer has been signed and accepted, but the General
Partners expect to accept the offers to purchase shortly.
Results of Operations:
<TABLE>
Gross revenues fluctuated during the three year period covered by
this report:
<CAPTION>
<S> <C>
1995 $2,228,000
1994 $2,161,000
1993 $2,731,000
</TABLE>
The decrease in revenues from 1993 to 1994 was incurred as a result
of lower rental income due to the sale of four of the Partnership's
properties in 1993 and 1994. The increase in revenues from 1994 to
1995 is a result of annual rent increases at the mobile home parks
and apartments.
Total expenses were $1,725,000 in 1995, $1,678,000 in 1994, and
$1,867,000 in 1993. Operating expenses have decreased as the
number of properties in the Partnership declined due to property
sales in 1993 and 1994. One additional significant items
contributed to the higher expenses in 1993.
As a result of the vacancies of the three commercial properties
located in Longmont, Colorado, Neenah and Menasha, Wisconsin (and
the continued poor local real estate market conditions) the
carrying value of the building improvements and the land were
written down to their estimated net realizable value. The write-
down resulted in a charge to income of $105,000 in 1993. All three
of these properties were subsequently sold.
Net income for 1995 was $549,000 compared to $529,000 in 1994, and
$919,000 in 1993. Increased net income in 1993 is primarily due to
the gains on the sales of the three investment properties sold
during 1993.
The lessees of the commercial properties are currently paying rent
based on the minimum lease payments. Certain tenant leases provide
for rental payments based on a percentage of purchase price of the
properties or a percentage of sales whichever is greater. The
tenant occupying the Joliet, Illinois and Mundelien, Illinois
commercial properties has been underpaying their monthly rent. A
rent increase which went into effect in 1991 has never been paid by
them, although they do continue to pay monthly rent based on the
original lease rate. Because the rent was personally guaranteed,
the Partnership has been recognizing the full amount of rent due
under the lease. At December 31, 1995, the amount of the rent
increase not paid by the tenant totaled $106,500. Due to the large
amount of this receivable, approximately half of it ($53,000) was
written off in 1995. The general partners will still pursue
collection of the full amount.
Except for property sales, future net income should increase as a
result of rent increases on the mobile home communities, re-leasing
or selling the vacant commercial properties, and base rent
increases on the "triple net" lease commercial properties.
Inflation:
Due to the relatively low level of inflation since the Partnership
commenced operations, the effect of inflation on the Partnership
has not been material to date. Should the rate of inflation
increase substantially over the life of the Partnership, it is
likely to influence ongoing operations, in particular, the
operating expenses of the Partnership. The commercial leases
contain clauses permitting pass-through of certain increased
operating costs. Residential leases are typically of one year or
less in duration; this allows the Partnership to react quickly
(through rental increases) to changes in the level of inflation.
These factors should serve to reduce, to a certain degree, any
impact of rising costs on the Partnership.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedule
on page F-1, incorporated herein by reference.
The supplemental financial information specified by Item 302 of
Regulation S-K is not applicable.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
a. Effective November 11, 1994, RAL Yield & Equities IV
Limited Partnership (RAL IV) dismissed its prior certifying
accountants, Ernst & Young LLP (E & Y), and retained Kolb Lauwasser
& Company, S.C. as its new certifying accountants. E & Y's report
on RAL IV's financial statements for the fiscal year ended December
31, 1993 contained no adverse opinion or a disclaimer of opinion,
and was not qualified as to uncertainty, audit scope or accounting
principles. The decision to change accountants was approved by RAL
IV's general partners.
During the fiscal year ended December 31, 1993, there were no
disagreements between RAL IV and E & Y on any matters of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved
to the satisfaction of E & Y, would have caused it to make a
reference to the subject matter of the disagreements in connection
with its reports.
None of the "reportable events" described in Item 304(a)(1)(ii)
occurred with respect to RAL IV within the fiscal year ended
December 31, 1993.
b. Effective November 11, 1994, RAL IV engaged Kolb Lauwasser
& Company, S.C. as its principal accountants. During the two
fiscal years ended December 31, 1993 and the subsequent interim
period to the date hereof, RAL IV did not consult Kolb Lauwasser &
Company, S.C. regarding any of the matters or events set forth in
Item 301(a)(2)(i) and (ii) of Regulation S-K.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The General Partners of RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
(the "Partnership") are Robert A. Long, John A. Hanson, Thomas R.
Brophy and Bart Starr. The General Partners manage and control
the Partnership's affairs and have the general responsibility and
the ultimate authority in all matters affecting the Partnership's
business. The Partnership has available to it the services,
personnel, and experience of certain other organizations affiliated
with the General Partners, including RAL Asset Management Group.
Some of the General Partners are also General Partners of an
affiliate, RAL Asset Management Group. The responsibilities of RAL
Asset Management Group were subcontracted to an unrelated third
party beginning June 1, 1993.
The general partners and significant employees of First Financial
Realty Management are as follows:
Position with Ral Asset
Name Management Group
- ---- -----------------------
Robert A. Long General Partner
John A. Hanson General Partner
Thomas R. Brophy General Partner
Bart Starr General Partner
Douglas C. Heston President (FFRM)
Christine D. Kennedy Controller (FFRM)
There is no family relationship among any of the foregoing
officers. The business experience of the General Partners and
significant employees includes the following:
Robert A. Long, age 54, has, since January 1982, been a partner in
RAL Asset Management Group. He is co-founder of RAL Asset
Management Group. Since 1966 Mr. Long has been involved in real
estate consulting, development and syndication. Mr. Long is a
licensed securities agent. Since 1981 Mr. Long has been involved
as an individual, general partner, or affiliate in ownership and
management of twenty-six (26) mobile home parks totaling over 2,600
pads in the states of Wisconsin and Minnesota. Prior to 1981, Mr.
Long developed or purchased over 200 commercial properties in six
states and currently owns individually or through partnerships over
50 restaurants (land and building) leased to restaurant operators,
including Pizza Hut, Hardee's, Taco Bell, and Rocky Rococo (or
their franchisees). Mr. Long also played professional football for
the Green Bay Packers, Atlanta Falcons, and Washington Redskins.
Mr. Long received a Bachelor of Science Degree in Business from
Wichita State University in 1965 and is currently Executive
Director of the Vince Lombardi Scholarship Fund for Wichita State
University. Mr. Long is also on the Board of Directors of Roundy's
Inc., a major Midwest food distributor and originator of the Pick
'N Save stores.
John A. Hanson, age 54, has, since March 1982, been a partner in
RAL Asset Management Group. Mr. Hanson is involved individually,
as a general partner, or as an affiliate, in the ownership and
management of twenty-six (26) mobile home parks in the states of
Wisconsin and Minnesota. Mr. Hanson has been involved in pension
and profit-sharing and tax consulting for 25 years. In 1975 he
founded, and since that time has been president of Pension
Designers, Inc., of Appleton, Wisconsin, a firm that specializes in
structuring and consulting with respect to qualified retirement
plans, estate planning, investment sales and sales of life, health
and disability insurance products to individuals, groups or
corporations. From 1966 to 1971 Mr. Hanson was engaged in tax
consulting, having management and tax accounting responsibilities
for a farm management firm with approximately 200 clients. Mr.
Hanson is past president of the Fox River Valley Association of
Life Underwriters, and the General Agents and Managers Association,
an associate member of the American Society of Pension Actuaries,
a member of the International Association of Financial Planners, a
qualifying and life member of the Million Dollar Round Table, and
a registered principal with the National Association of Securities
Dealers. Mr. Hanson received his Bachelor of Science Degree in
Agri-Business from the University of Wisconsin - River Falls in
1966. Mr. Hanson is a licensed securities agent.
Thomas R. Brophy, CLU, ChFC., age 50, has, since March 1982, been
a partner of RAL Asset Management Group. Mr. Brophy is involved
individually, as a general partner, or as an affiliate in the
ownership and management of twenty-six (26) mobile home parks in
the states of Wisconsin and Minnesota which total approximately
2,600 pads. Mr. Brophy has been a NASD registered securities
representative since 1969, active in the marketing and sales of
mutual funds, unit investment trusts, stocks, bonds, limited
partnerships and private ventures. Since 1967 Mr. Brophy has also
been active in the marketing, selling, training, supervising and
managing of personnel, with respect to qualified retirement plans
and personal or business life, health and disability insurance
plans. He is active in the financial planning field, having been
conferred the degree of Chartered Financial Consultant, by the
American College, Bryn Mawr, PA, in 1984. He is associated with
the Principal Financial Group. Mr. Brophy is an active member of
the National and Wisconsin Association of Life Underwriters,
Million Dollar Round Table, Fox Valley Estate Planning Council and
International Association of Financial Planners. He is recipient
of the Fox River Valley Association of Life Underwriters' 1983
"Agent of the Year" award. A 1967 Bachelor of Science graduate
from Marquette University, Mr. Brophy went on for advanced studies
in insurance, receiving his Chartered Life Underwriter (CLU) degree
from the American College, Bryn Mawr, PA, in 1975. Mr. Brophy is
a licensed securities agent.
Bart Starr, age 63, has, since January 1984, been a partner in RAL
Asset Management Group. He is a University of Alabama graduate
with a B.S. Degree in Education. Since 1970, he has been a partner
in the Bart Starr Motor Company, Birmingham, Alabama. Since 1979
he has been a member of the Board of Directors of the Sentry
Insurance Company, Stevens Point, Wisconsin. He was a Green Bay
Packer football player from 1956-1972, the Green Bay Packer Head
Coach from 1975-1983, the NFL Most Valuable Player in 1966, and the
Most Valuable Player in Super Bowls I and II. Mr. Starr was a CBS
Game Analyst in 1973 and 1974 and the first winner of the Byron
White Award in 1967. Mr. Starr has been the recipient of numerous
civic and sports awards and is actively engaged in many charitable
and public service organizations.
The following individuals are the employees of the General Partner
who make significant contributions to the business of the
Partnership:
Douglas C. Heston, age 42, is President of First Financial Realty
Management (FFRM). FFRM and affiliates own and/or manage over 50
investment properties. Mr. Heston received a B.A. degree from Duke
University (North Carolina) with a double major in Economics and
Public Policy Analysis (Statistics) in 1975. He received an M.S.
degree in Real Estate Investment Analysis from the University of
Wisconsin in 1979. Previously he worked for real estate appraisal
firms in Atlanta and Milwaukee. He co-founded RAL Asset Management
Group in 1982 and left at the end of 1984 to found his current
firm.
Christine D. Kennedy, age 30, joined RAL Asset Management Group in
December, 1990, as Assistant Controller. In November, 1991 she was
promoted to Controller. She is now Controller for First Financial
Realty Management. Prior to that she worked in the audit
department of Arthur Young & Company in Milwaukee, Wisconsin for
approximately three years. She received her B.B.A. in Accounting
from the University of Wisconsin-Whitewater in 1987. She is a
Certified Public Accountant.
Item 11. EXECUTIVE COMPENSATION
(a,b,c, and d)
The Registrant has not paid and does not propose to pay
any executive compensation to the General Partners or any
of their affiliates (other than described in Item 13
below).
(e) There are no compensatory plans or arrangements regarding
termination of employment or change of control.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) No person owns of record or is known by the Registrant to
own beneficially more than 5% of the outstanding Interests
of the Registrant as of March 30, 1996.
<TABLE>
(b) As of March 30, 1996, the General Partners beneficially
owned the following Interests in the Partnership:
<CAPTION>
Title of Class Name of Partner Percent of Class
- -------------- --------------- ----------------
<S> <C> <C>
General Partnership Robert A. Long 46.73%
Interests John A. Hanson 22.14
Thomas R. Brophy 19.68
Bart Starr 11.45
------
100.00
========
</TABLE>
<TABLE>
As of March 30, 1996, the General Partners owned as a group the
following Limited Partnership Interests in the Registrant:
<CAPTION>
Title of Class Amount Beneficially Owned Percent of Class
- -------------- ------------------------- ----------------
<S> <C> <C>
Limited Partnership 6 Interests Less than 1%
Interests
(c) None
</TABLE>
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a and b)
The Partnership sold Hickory Lane Mobile Home Park to
Wisconsin Homesites III Limited Partnership. Doug Heston
is the President of the Corporate General Partner of
Wisconsin Homesites III. Mr. Heston is also the President
of First Financial Realty Management, the company which
now manages RAL Yield & Equities IV.
Certain General Partners own or control businesses which
have agreed to perform a variety of services for the
Partnership.
In consideration for these services, the General Partners
and related parties receive certain compensation at
amounts which were established by the General Partners.
The following table sets forth the types, amounts and
recipients of compensation related to the Partnership.
Affiliate and Service Amount of Compensation
--------------------- ----------------------
Selling commissions paid to 9% of total subscriptions. No
the Managing Dealer commissions were incurred in
1995, 1994, and 1993.
Commissions incurred prior to
1991 were $1,765,845.
Acquisition fee paid to RAL Up to 2% of the gross offering
Asset Management Group for proceeds. No fees were
selection, negotiation and incurred in 1995, 1994 and
purchase of properties. 1993. Fees incurred prior to
1991 were $392,411.
Management consulting and A fee of up to 6.0% of gross
technical analysis fee paid offering proceeds payable upon
to RAL Asset Management Group. the initial closing of each
property. No fees were
incurred in 1995, 1994 and
1993. Total fees incurred
prior to 1991 were $1,177,230.
General partners' and affiliates At lower of cost or prevailing
reimbursable expenses. rates at which comparable
services could have been
obtained in the same
geographic area for similar
services. Expenses reimbursed
were $0 in 1995, $0 in 1994
and $7,481 in 1993.
Property management fee payable Residential Property: At
to RAL Asset Management Group rates prevailing for
for property management and comparable services where
rental services. the properties are located,
but not to exceed 5%
(including all rent-up
services leasing and re
-leasing fees and bonuses, and
leasing related service, paid
to any person) of gross
revenues from property.
Other than residential
properties:
At rates prevailing for
comparable services where the
properties are located, but
not to exceed 6% of gross
revenues from the property if
an Affiliate provides leasing,
re-leasing and leasing related
services, or 3% if it does not
provide such services. If a
property is leased under a net
lease with a term of 10 years
or more, the fee shall be
limited to an annual fee of
1.6% of gross revenues per
year for the first 5 years of
the lease and an annual fee of
1% of gross revenues per year
thereafter. Management fees
of $0, $0 and $28,400
were incurred in 1995, 1994
and 1993, respectively.
Real estate commissions payable The total compensation paid
to RAL Asset Management Group or to all persons for the sale
other related party on sale of of properties shall be
Partnership properties. limited to a competitive real
estate commission not to
exceed 6% of the contract
price for the sale of the
property. An affiliate may
receive up to one-half of such
compensation, where it
provides brokerage services,
subject to certain limitations
based on a subordinated return
to limited partners. No fees
have been paid to date.
General Partner's share of The General Partners receive
Partnership Cash Available 5% of all Cash Available for
for Distribution. Distribution. Distributions
paid to the General Partners
were $50,000 in 1995, $56,000
in 1994, and $61,000 in 1993.
(c) No management person is indebted to the Registrant.
(d) Not applicable.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a) (1 and 2) See Index to Financial Statements and Financial
Statement Schedule on Page F-1
(b) Reports on Form 8-K
None.
(c) Exhibits
See Exhibit 27.
(d) Financial Statement Schedule
See Index to Financial Statements and Financial Statement
Schedule on Page F-1.
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
(A Wisconsin Limited Partnership)
TABLE OF CONTENTS TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
COVERED BY REPORTS OF INDEPENDENT AUDITORS
Item 14(a)
Reports of Independent Auditors
Consolidated Balance Sheets at
December 31, 1995 and 1994
Consolidated Statements of Income for the years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Partners' Equity for the
years ended December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
Financial Statement Schedule: III - Real Estate
and Accumulated Depreciation
Schedules, other than those listed, are omitted for the reason that
they are inapplicable or equivalent information has been included
elsewhere herein.
INDEPENDENT AUDITOR'S REPORT
January 22, 1996
To the Partners of
RAL Yield & Equities IV Limited Partnership
We have audited the accompanying Consolidated Balance Sheets of RAL
Yield & Equities IV Limited Partnership as of December 31, 1995 and
1994, and the related Consolidated Statements of Income, Partners'
Equity and Cash Flows for the years then ended. Our audits also
included the financial statement schedule listed in the Table of
Contents at Item 14. These consolidated financial statements and
financial statement schedule are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these consolidated financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the 1995 and 1994 consolidated financial statements
referred to above present fairly, in all material respects, the
financial position of RAL Yield & Equities IV Limited Partnership
as of December 31, 1995 and 1994, and the results of their
operations and cash flows for the years then ended in conformity
with generally accepted accounting principles. Also, in our
opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a
whole, presents fairly in material respects the information set
forth therein.
Respectfully submitted,
KOLB LAUWASSER & CO., S.C.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
The Partners
RAL Yield & Equities IV Limited Partnership
We have audited the accompanying consolidated balance sheet of RAL
Yield & Equities IV Limited Partnership, a Wisconsin Limited
Partnership (the Partnership) as of December 31, 1993, and the
related statements of income, Partners' equity and cash flows for
each of the two years in the period ended December 31, 1993. Our
audits also included the financial statement schedule listed in the
Index at Item 14 (a). These financial statements and schedule are
the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of the Partnership at December 31, 1993, and the
consolidated results of its operations and its cash flows for each
of the two years in the period ended December 31, 1993, in
conformity with generally accepted accounting principles. Also, in
our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as
a whole, presents fairly, in all material respects, the information
set forth therein.
Milwaukee, Wisconsin ERNST & YOUNG LLP
January 26, 1994
<TABLE>
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
Consolidated Balance Sheets
---------------------------
As of December 31,
<CAPTION>
ASSETS 1995 1994
------ ---- ----
<S> <C> <C>
Income-Producing Properties - Notes #1, #3, #4 and #5
- ---------------------------
Buildings and land improvements 10,971,048 10,891,286
Equipment 468,891 467,841
---------- ----------
11,439,939 11,359,127
Less: Accumulated depreciation 3,324,125 2,916,170
---------- ----------
8,115,814 8,442,957
Land 1,943,781 1,943,781
---------- ----------
Total Income-Producing Property 10,059,595 10,386,738
---------- ----------
Other
- -----
Cash and cash equivalents - Note #1 293,125 230,502
Rent and other receivables - Note #1 76,653 81,157
Deposits 560 560
Deferred charges - Note #1 128,199 260,853
Prepaid expenses 23,583 19,426
---------- ---------
Total Other 522,120 592,498
---------- ---------
Total Assets 10,581,715 10,979,236
========== ==========
LIABILITIES AND PARTNERS' EQUITY
--------------------------------
Liabilities
- -----------
Accounts payable and accrued expenses 242,573 201,922
Deferred rents 43,157 30,146
Tenants' security deposits 139,006 128,727
---------- ---------
Total Liabilities 424,736 360,795
---------- ---------
Minority interest in joint venture - Note #6 419,781 435,033
---------- ---------
Partners' Equity (Deficit)
- --------------------------
General partners (47,167) (24,856)
Limited partners 9,784,365 10,208,264
---------- ----------
Total Partners' Equity 9,737,198 10,183,408
---------- ----------
Total Liabilities and Partners' Equity 10,581,715 10,979,236
========== ==========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE STATEMENTS.
</FN>
</TABLE>
<TABLE>
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
Consolidated Statements of Income
---------------------------------
For the years ended December 31,
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Revenues
- --------
Rental income 2,228,310 2,161,239 2,394,977
Gain on sale of property - - 335,777
--------- --------- ---------
Total Revenues 2,228,310 2,161,239 2,730,754
--------- --------- ---------
Expenses
- --------
Property management fees 107,388 104,548 85,019
Property management fees-affiliates - - 28,400
Administrative expenses 408,545 400,840 346,551
Administrative expenses- affiliates - - 7,481
Property operating expenses 613,325 582,328 693,449
Bad debt expense 54,716 1,360 4,817
Amortization and depreciation 540,612 568,520 596,347
Loss on sale of property - 20,535 -
Write down of income-producing
properties - - 105,193
--------- --------- ---------
Total Expenses 1,724,586 1,678,131 1,867,257
--------- --------- ---------
Income Before Other Income
and Minority Interest 503,724 483,108 863,497
--------- --------- ---------
Other Income (Expense)
- ----------------------
Interest income 7,700 17,049 9,517
Interest expense (6,109) (9,491) (2,657)
Miscellaneous 77,703 68,499 73,756
--------- --------- ---------
Total Other Income 79,294 76,057 80,616
--------- --------- ---------
Net Income Before
Minority Interest 583,018 559,165 944,113
Minority interest (33,912) (29,889) (25,427)
--------- --------- ---------
Net Income 549,106 529,276 918,686
========= ========= =========
Net income per limited
partnership interest 26.59 25.63 44.48
========= ========= =========
Allocation of Income:
Limited partners 521,651 502,812 872,751
General partners 27,455 26,464 45,935
--------- --------- ---------
549,106 529,276 918,686
========= ========= =========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
STATEMENTS.
</FN>
</TABLE>
<TABLE>
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
Consolidated Statements of Partners' Equity
-------------------------------------------
For the years ended December 31,
<CAPTION>
Limited General 1995 1994 1993
Partners Partners Total Total Total
---------- -------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
Capital contributions:
Contributed 19,620,500 1,000 19,621,500 19,621,500 19,621,500
Less: Syndication
costs 2,057,653 - 2,057,653 2,057,653 2,057,653
----------- ------ ---------- ----------- ----------
Net contributions
17,562,847 1,000 17,563,847 17,563,847 17,563,847
----------- ------ ---------- ---------- ----------
Accumulated income:
Balance, beginning
4,530,147 471,950 5,002,097 4,472,821 3,554,135
Current net income
521,651 27,455 549,106 529,276 918,686
----------- ------- ---------- ---------- ---------
Balance, ending
5,051,798 499,405 5,551,203 5,002,097 4,472,821
----------- ------- ---------- ---------- ---------
Accumulated distributions:
Balance, beginning
(11,884,730)(497,806)(12,382,536)(8,824,868)(7,587,076)
Current distributions
(945,550) (49,766) (995,316)(3,557,668)(1,237,792)
---------- ------- ---------- ---------- ----------
Balance, ending
(12,830,280)(547,572)(13,377,852)(12,382,536)(8,824,868)
---------- ------- ---------- ---------- ----------
Total Partners' Equity
(Deficit) 9,784,365 (47,167) 9,737,198 10,183,408 13,211,800
========== ======== ========= ========== =========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
STATEMENTS.
</FN>
</TABLE>
<TABLE>
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
For the years ended December 31,
<CAPTION>
Cash Increase or (Decrease)
- ----------------------------------
1995 1994 1993
------ ------ ------
<S> <C> <C> <C>
Cash Flows From Operating Activities
- ------------------------------------
Net income 549,106 529,276 918,686
Adjustments to reconcile net income to
net cash provided by operating activities:
Amortization and depreciation 540,612 568,520 596,347
(Gain) loss on sale of property - 20,535 (335,777)
Minority interest in jt venture 33,912 29,889 25,427
Additions to reserve for doubtful
accounts 53,000 - -
Payment of legal fees - - (100,000)
Write-down of income-producing
properties - - 105,193
Decrease (increase) in
- ----------------------
Rent and other receivables, net (48,496) 1,578 (23,470)
Prepaid expenses (4,157) (36) 51,629
Deferred charges - (8,700) -
Increase (decrease) in
- ----------------------
Accounts payable and
accrued expenses 53,662 (31,401) (10,213)
Tenants' security deposits 10,279 8,710 (9,619)
--------- --------- ---------
Net Cash Provided by
Operating Activities 1,187,918 1,118,371 1,218,203
--------- --------- ---------
Cash Flows From Investing Activities
- ------------------------------------
Additions to income-
producing properties (80,815) (103,303) (185,699)
Proceeds from sale of
income-producing property - 284,893 2,485,626
--------- --------- ---------
Net Cash Provided (Used) by
Investing Activities (80,815) 181,590 2,299,927
--------- --------- ---------
Cash Flows From Financing Activities
- ------------------------------------
Distributions to partners (995,316)(3,557,668)(1,237,792)
Distributions to joint
venture partner (49,164) (49,164) (43,633)
--------- --------- ---------
Net Cash (Used) by
Financing Activities (1,044,480)(3,606,832)(1,281,425)
--------- ---------- ---------
Net Increase (Decrease) in Cash 62,623 (2,306,871) 2,236,705
Cash and cash equivalents -
Beginning of Year 230,502 2,537,373 300,668
--------- ---------- ---------
Cash and cash equivalents -
End of Year 293,125 230,502 2,537,373
========= ========== =========
Supplementary Information
Interest Paid 6,109 9,491 2,657
========= ========== =========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
STATEMENTS.
</FN>
</TABLE>
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
Notes to Consolidated Financial Statements
------------------------------------------
For the years ended December 31, 1995, 1994 and 1993
Note #1 Summary of Significant Accounting Policies
- ------- ------------------------------------------
A. Organization and Nature of the Business
---------------------------------------
RAL Yield + Equities IV Limited Partnership (the Partnership) is
Wisconsin limited partnership formed on August 8, 1986, under the
provisions of the Wisconsin Uniform Limited Partnership Act, to
acquire for cash, operate, lease, develop and eventually sell real
estate properties. The Partnership owns and operates five mobile
home parks and an apartment complex located throughout the upper
midwest. It is a majority owner of another apartment complex
located in Maryland. The Partnership also leases two commercial
properties to a restaurant franchisor and another commercial
property to a retail/service business in the upper midwest. The
Partnership will terminate December 31, 2016, except in the event
of prior sale of the Partnership's properties, action by a majority
interest of the Limited Partners or certain other events.
Effective July 26, 1988, the Partnership completed its offering of
limited partnership interests. A total of 19,620.5 interests were
sold for an aggregate contribution of $19,620,500. In connection
with the sale of limited partnership interests, the Partnership
incurred approximately $2,058,000 of costs to raise capital
including sales commissions of $1,766,000 and other offering costs
of $292,000, which were charged against partners' equity.
B. Method of Accounting
--------------------
Assets, liabilities, revenue and expenses are recognized on the
accrual basis method of accounting.
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 these estimates.
C. Basis of Presentation
---------------------
The consolidated financial statements include the accounts of RAL
Yield + Equities IV Limited Partnership and its majority owned
investment in Cedar Crossing Apartments. All intercompany
transactions and accounts have been eliminated in the
consolidation. The Partnership records are maintained in
accordance with generally accepted accounting principles.
D. Income-Producing Properties
---------------------------
Income-producing properties are carried at the lower of cost less
accumulated depreciation or fair value. Cost includes acquisition
fees paid to RAL Asset Management Group. Management periodically
evaluates a property's fair value based upon occupancy rate and
comparison to similar properties in the same geographic area.
<TABLE>
For financial statement purposes, depreciation is determined using
the straight-line method. For income tax reporting purposes,
building and land improvements are depreciated using the straight
- -line method, while equipment is depreciated using accelerated
methods. Depreciable lives for financial statement and income tax
purposes are set forth below:
<CAPTION>
Depreciable Lives
---------------------------
Financial Income Tax
Reporting Reporting
--------- ----------
<S> <C> <C>
Land improvements 30 years 15-40 years
Buildings 30 years 31.5-40years
Equipment 5-7 years 5-12 years
</TABLE>
E. Allowance for Doubtful Accounts
- -------------------------------
Receivables are reviewed periodically by management to determine
the adequacy of the allowance for doubtful accounts. Based upon
managements' evaluation, an allowance for doubtful accounts of
$53,000 and $0 was necessary as of December 31, 1995 and 1994,
respectively.
F. Deferred Charges
- ----------------
Costs incurred with respect to organizing the Partnership were
deferred and have been fully amortized. Prepaid management fees
incurred in the initial public offering are amortized to expense on
the straight-line method over the term (ten years) of the
management agreement. Commission fees incurred to lease the
properties are deferred and amortized over the respective lease
term.
<TABLE>
Deferred charges consist of the following at December 31:
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
Deferred management fees 1,177,230 1,177,230
Leasing commission 8,700 8,700
--------- ---------
1,185,930 1,185,930
Less: Accumulated amortization 1,057,731 925,077
--------- ---------
128,199 260,853
========= =========
</TABLE>
G. Leases
------
The Partnership has determined that all leases relating to the
income-producing properties are properly classified as operating
leases; therefore, rental income is reported when earned and the
cost of each of the properties, excluding cost of land, is
depreciated over its estimated useful life.
H. Income Taxes
------------
No income taxes will be payable or provided for by the Partnership
since net income or loss is includable in the respective tax
returns of the partners. In the initial year of ownership of
partnership interests, each partner's share of taxable income or
loss, tax credits and distributions is allocated to them on a pro
rata basis that considers the number of days in the year during
which their respective interests were held.
<TABLE>
The Partnership files its income tax return on the accrual basis of
accounting. The following reconciles the income reported in the
accompanying Statements of Income to that reported in the tax
returns.
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Net income per Statements of Income 549,106 529,276 918,686
Difference in depreciation (64,681) (46,671) (77,414)
Difference in gain/loss on the sale of
investment properties - (108,920) (107,815)
Bad debt expense and asset writedown 53,000 - 105,193
Prepaid rent and other differences (3,202) (28,776) (10,636)
------- -------- --------
Net income for tax purposes 534,223 344,909 828,014
======= ======== ========
</TABLE>
I. Cash and Cash Equivalents
- -------------------------
For purposes of the Consolidated Statements of Cash Flows, the
Partnership considers all short-term investments in
interest-bearing bank accounts and certificates of deposits with a
maturity of three months or less, to be equivalent to cash.
Several demand deposit accounts are at one financial institution.
Such funds on deposit exceeded the federally insured limit by
$152,319 and $67,306 for the years ended December 31, 1995 and
1994, respectively.
J. Reclassifications
- ----------------
Certain information contained in the 1993 consolidated financial
statements has been reclassified to conform with the 1995 and 1994
presentation.
Note #2 General Provision of the Limited Partnership Agreement
- ------- ------------------------------------------------------
Pursuant to the terms of the partnership agreement, net income or
losses of the Partnership from operations are generally allocated
95% to the limited partners and 5% to the general partners.
Notwithstanding the foregoing, all depreciation from tax-exempt use
properties is allocated to tax-exempt limited partners.
In general, subject to certain limitations, all income from the
sale of income-producing properties will be allocated first to the
Partners with deficit capital accounts, then to each limited
partner in an amount equal to the limited partner's original
capital contribution, less prior distributions of sale or
refinancing proceeds, then to the limited partners in the amount,
if any, of the investment preference that is paid from sale or
refinancing proceeds and the remainder shall be allocated 85% to
the limited partners and 15% to the general partners, provided that
the general partners shall be allocated at least 1% of such income.
The partnership agreement requires that distributions to limited
partners of Cash Available for Distribution (as defined in the
partnership agreement) shall be made in such amounts and at such
times as the general partners may determine, but not less
frequently than semi-annually.
Note #3 Income-Producing Properties
- ------- ---------------------------
<TABLE>
A summary of income-producing properties as of December 31
follows:
<CAPTION>
1995 1994
---------- ---------
<S> <C> <C>
Apartment complexes (two in 1995 and 1994) 6,710,810 6,710,810
Mobile home park (five in 1995 and 1994) 4,889,321 4,808,509
Restaurant properties
(two in 1995 and 1994) 1,424,657 1,424,657
Retail (one in 1995 and 1994) 358,932 358,932
---------- ----------
13,383,720 13,302,908
Less: Accumulated depreciation 3,324,125 2,916,170
__________ __________
10,059,595 10,386,738
========== ==========
</TABLE>
During 1993, the Partnership recorded a net gain on the sale of one
mobile home park and two restaurants in the amount of $335,777.
During 1994, the Partnership recorded a loss on the sale of one
retail property in the amount of $20,535.
Note #4 Income-Producing Properties Held for Sale or Re-Lease
- ------- -----------------------------------------------------
Following is a summary of the occupancy status of the Partnership
properties:
Longmont, Colorado - This property which had been leased to a
related party was vacated in 1992. The valuation allowance on
the property was increased in prior years to a total of $270,237.
The property was subsequently sold in 1993.
Menasha, Wisconsin - Due to the vacancy of the property, a
valuation allowance of $100,896 was established in prior years.
The property was sold in 1994 for its carrying value.
Neenah, Wisconsin - Because the property was vacant, the total of
$124,297 valuation allowance on the property was increased by
$44,297 in 1993. The property remained vacant until August 1994,
when it was leased to a retail/service center tenant.
The valuation allowances were recorded in 1993 to reduce the
carrying value of the properties to their respective estimated net
realizable values in light of the area's real estate market
conditions and the vacant status of the properties.
<TABLE>
Properties held for sale or re-lease at December 31, 1993,
consisted of the following:
<S> <C>
Land 352,874
Building 599,962
-------
952,836
Less: Accumulated depreciation 117,643
Estimated net realizable valuation allowance 225,193
-------
610,000
=======
</TABLE>
Note #5 Leases of Income-Producing Properties
- ------- -------------------------------------
<TABLE>
The Partnership leases space to tenants under noncancellable
operating leases, ranging from ten to fifteen years. Future
minimum annual rental commitments receivable under long-term lease
agreements in effect and not in default at December 31, 1995, are
as follows:
<CAPTION>
<S> <C>
1996 210,000
1997 222,000
1998 238,000
1999 238,000
2000 238,000
Thereafter 1,548,000
---------
2,694,000
=========
</TABLE>
Note #6 Affiliate's Participation in Joint Venture
- ------- ------------------------------------------
The Cedar Crossing Apartments are owned by a joint venture between
the Partnership and an affiliated partnership. All assets,
liabilities, revenue and expenses of the joint venture are included
in the financial statements of the Partnership with the appropriate
adjustment of income for the affiliate's interest in the joint
venture. Profits, losses and distributions are allocated 87.709%
to the Partnership and 12.291% to the affiliate.
Note #7 Related-Party Transactions
- ------- --------------------------
Certain general partners own or control businesses which have
agreed to perform a variety of services for the Partnership. In
addition, certain general partners were securities agents for the
managing dealer which originally offered the limited partnership
interests.
In consideration for these services, the general partners and their
affiliates have received or will in the future receive certain
compensation at amounts which are provided by the partnership
agreement. The following table sets forth the types, amounts and
recipients of compensation paid annually by the Partnership to the
general partners and their affiliates.
Affiliate and Service Amount of Compensation
General partners' and affiliates At lower of cost or prevailing
rates at reimbursable expenses.
which comparable services could
have been obtained in the same
geographic area for similar
services. The amount of
expenses reimbursed was $7,481
in 1993.
Property management fee payable Residential property:
to RAL Asset Management Group for
property management and rental At rates prevailing for
comparable services where the
properties are located, but not
to exceed 5% of gross
revenues.
Other than residential
properties:
At rates prevailing for
comparable services where
properties are located,
but not to exceed 6% of gross
revenues where leasing and
related services are
provided, or 3% if such
services are not provided.
Property under a net
lease with a term of ten years
or more is subject to an annual
fee of 1.6% of gross revenues
per year for the first
five years plus an annual fee
of 1% of gross revenues per
year thereafter.
Total property management fees
were $28,400 in 1993.
Effective June 1, 1993, the Partnership entered into new property
and partnership management agreements. The partnership agreement
is with an unrelated management company. The property management
agreement is with a related entity owned by the same general
partners. The related property management firm simultaneously
subcontracted with the same unrelated management company handling
the partnership management. The terms and conditions of these
agreements are similar to the above related party agreements, which
they replace.
Note #8 Settled Litigation
- ------- ------------------
The Partnership was one of several defendants in an action in the
United States District Court for the District of Maryland which
alleged various violations in connection with a shareholder
agreement and related transactions for the development of the Rocky
Rococo franchise for the Washington, D.C., metropolitan area. The
parties agreed to a settlement, pursuant to which the Partnership
made a cash payment in the amount of $125,000 upon execution of the
settlement agreement in 1992, in total satisfaction of all claims
against the Partnership. In connection with the terms of
settlement, the Partnership and one of its affiliated companies had
agreed to share equally the legal costs incurred in connection with
that lawsuit. During 1991, the Partnership incurred legal expenses
of $15,000 relating to its defense in this suit. Since the
affiliated company had already liquidated, the Partnership accrued
$100,000 of legal fee expense, which approximated the early 1993
settlement of the legal fees, and which were subsequently paid by
the Partnership.
<TABLE>
RAL- YIELD EQUITIES IV LIMITED PARTNERSHIP
(A Wisconsin Limited Partnership)
Schedule of Real Estate and Accumulated Depreciation
December 31, 1995
<CAPTION>
Col. A Col. B Col. C Col.D
- --------------------- ------- ---------------------- ------------
<S> <C> <C> <C> <C>
Initial cost to Costs
Partnership Capitalized
----------------------- Subsequent to
Acquisition
Encum- Buildings& -------------
Description brances Land Improvements
Improvements(b)
- --------------------- ------- ---------- ------------ ------------
South Hills MHP
Beaver Dam, WI (a) $100,000 $1,078,221 $477,542
Vacant Auto Service Center
Menasha, WI (a) 195,095 274,512 (469,607)
Vacant Restaurant
Longmont, Co (a) 261,258 358,887 (620,145)
Lakeshore Terrace MHP
Rice Lake, WI (a) 51,227 794,416 19,842
Alexandria Estates MHP
Alexandria, MN (a) 110,650 556,197 39,124
Maplewood MHP
Lake City, MN (a) 54,300 385,138 64,380
Hardee's Restaurant
Mundelein, IL (a) 339,125 398,817 0
Hardee's Restaurant
Joliet, IL (a) 238,720 447,995 0
South Hills Office
Beaver Dam, WI (a) 15,245 113,244 0
Hardee's Restaurant
Eagan, MN (a) 368,834 425,630 (794,464)
Hickory Lane MHP
Little Chute, WI (a) 300,190 917,186 (1,217,376)
Firestone Auto Service Center
Neenah, WI (a) 157,779 316,650 (115,497)
Northrup Court Apartments
North Canton, OH (a) 254,086 2,167,507 30,254
Parkwood Estates MHP
Willmar, MN (a) 151,632 778,599 99,564
Cedar Crossing Apartments
Frederick, MD (a) 471,017 3,768,843 19,103
---------- ---------- ----------
Total $3,069,158 12,781,842 (2,467,280)
========== ========== ==========
</TABLE>
<TABLE>
RAL- YIELD EQUITIES IV LIMITED PARTNERSHIP
(A Wisconsin Limited Partnership)
Schedule of Real Estate and Accumulated Depreciation
December 31, 1995
<CAPTION>
Col. A Col. E
- ------------------------- ---------------------------------------
Gross Amount at which Carried
at Close of Period
---------------------------------------
Buildings and
Description Land Improvements(b) Total
- -------------------------- ----------- --------------- -----------
<S> <C> <C> <C>
South Hills MHP
Beaver Dam, WI $100,000 $1,555,763 $1,655,763
Vacant Auto Service Center
Menasha, WI 0 0 0
Vacant Restaurant
Longmont, Co 0 0 0
Lakeshore Terrace MHP
Rice Lake, WI 51,227 814,258 865,485
Alexandria Estates MHP
Alexandria, MN 110,650 595,321 705,971
Maplewood MHP
Lake City, MN 54,300 449,518 503,818
Hardee's Restaurant
Mundelein, IL 339,125 398,817 737,942
Hardee's Restaurant
Joliet, IL 238,720 447,995 686,715
South Hills Office
Beaver Dam, WI 15,245 113,244 128,489
Hardee's Restaurant
Eagan, MN 0 0 0
Hickory Lane MHP
Little Chute, WI 0 0 0
Firestone Auto Service Center
Neenah, WI 157,779 201,153 358,932
Northrup Court Apartments
North Canton, OH 254,086 2,197,761 2,451,847
Parkwood Estates MHP
Willmar, MN 151,632 878,163 1,029,795
Cedar Crossing Apartments
Frederick, MD 471,017 3,787,946 4,258,963
--------- ---------- ----------
Total 1,943,781 11,439,939 13,383,720
========= ========== ==========
</TABLE>
<TABLE>
RAL- YIELD EQUITIES IV LIMITED PARTNERSHIP
(A Wisconsin Limited Partnership)
Schedule of Real Estate and Accumulated Depreciation
December 31, 1995
<CAPTION>
Col. A Col. F Col. G Col. H Col. I
- -------------------- ----------- ----------- ---------- --------
Depreciable
Accumulated Date Life per
Depreciation Date of Acquired by Income
Description (Book basis) Construction P-shp Statement
- -------------------- ------------ ------------ --------- ----------
<S> <C> <C> <C> <C>
South Hills MHP
Beaver Dam, WI $437,923 VAR 12/31/86 (d)
Vacant Auto Service Center
Menasha, WI 0 1987 04/16/87 (d)
Vacant Restaurant
Longmont, Co 0 1987 04/28/87 (d)
Lakeshore Terrace MHP
Rice Lake, WI 230,351 VAR 06/30/87 (d)
Alexandria Estates MHP
Alexandria, MN 164,423 VAR 08/17/87 (d)
Maplewood MHP
Lake City, MN 117,034 VAR 08/17/87 (d)
Hardee's Restaurant
Mundelein, IL 111,888 1986 08/18/87 (d)
Hardee's Restaurant
Joliet, IL 125,683 1986 08/18/87 (d)
South Hills Office
Beaver Dam, WI 31,455 VAR 09/03/87 (d)
Hardee's Restaurant
Eagan, MN 0 1987 09/10/87 (d)
Hickory Lane MHP
Little Chute, WI 0 VAR 10/30/87 (d)
Firestone Auto Service Center
Neenah, WI 80,628 1987 02/02/88 (d)
Northrup Court Apartments
North Canton, OH 661,161 1986 03/08/88 (d)
Parkwood Estates MHP
Willmar, MN 205,054 VAR 06/10/88 (d)
Cedar Crossing Apartments 8/19/88
Frederick, MD 1,158,525 1986 12/23/88 (d)
---------
Total 3,324,125
=========
</TABLE>
RAL-YIELD EQUITIES IV LIMITED PARTNERSHIP
(A Wisconsin Limited Partnership)
NOTES TO SCHEDULE III
(a) All properties are unencumbered at December 31, 1995.
(b) Includes personal property. The Longmont property was written
down to management's estimated net realizable value during 1989 and
1992. The Neenah, Wisconsin and Menasha, Wisconsin properties
were written down to management's estimated net realizable value in
1992 and 1993. The write-down was based on the current real estate
market conditions in the respective areas.
(c) The Cedar Crossing Apartments are owned by a joint venture
between the Partnership and the affiliated partnership. All assets
of the joint venture are included in the financial statements of
the Partnership. For tax purposes, the Partnership includes only
its portion of the joint venture's assets on its tax balance
sheet.
<TABLE>
(d) Depreciation expense is computed based upon the following
estimated useful lives:
<CAPTION>
Years
--------------------------------
Financial Income
Statement Tax
Purposes Purposes
--------- --------
<S> <C> <C>
Buildings and Improvements 30 15-40
Personal Property 5-7 5-12
</TABLE>
<TABLE>
(e) Reconciliation of Real Estate
- -------------------------------------
<S> <C>
Balance at January 1, 1993 $15,952,156
Acquisitions 0
Improvements 185,699
Reduction of net realizable value (105,193)
Cost of investments property sold (2,464,343)
------------
Balance at December 31, 1993 13,568,319
Acquisitions 0
Improvements 103,300
Cost of investment property sold (368,711)
------------
Balance at December 31, 1994 13,302,908
Acquisitions 0
Improvements 80,812
Cost of investment property sold 0
-----------
Balance at December 31, 1995 $13,383,720
</TABLE>
<TABLE>
RAL-YIELD EQUITIES IV LIMITED PARTNERSHIP
(A Wisconsin Limited Partnership)
Reconciliation of Accumulated Depreciation
<CAPTION>
<S> <C>
Balance at January 1, 1993 $2,393,086
Depreciation expense for the period 464,563
Sale of investment property (313,494)
-----------
Balance at December 31, 1993 2,543,155
Depreciation expense for the period 436,298
Sale of investment property (63,283)
-----------
Balance at December 31, 1994 2,916,170
Depreciation expense for the period 407,955
Sale of investment property 0
----------
Balance at December 31, 1995 $3,324,125
==========
</TABLE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
BY: Robert A. Long
-------------------------------
Robert A. Long, General Partner
DATE: March 30, 1996
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Signature Title Date
- ----------------------------------------------------------------
Robert A. Long General Partner of RAL 3/30/96
- -------------------- Yield + Equities IV -------
Robert A. Long Limited Partnership
John A. Hanson General Partner of RAL 3/30/96
- -------------------- Yield + Equities IV -------
John A. Hanson Limited Partnership
Christine D. Kennedy Controller, First Financial 3/30/96
- -------------------- Realty Management -------
Christine D. Kennedy
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 293,125
<SECURITIES> 0
<RECEIVABLES> 76,653
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 522,120
<PP&E> 10,059,595
<DEPRECIATION> 3,324,125
<TOTAL-ASSETS> 10,581,715
<CURRENT-LIABILITIES> 424,736
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 9,737,198
<TOTAL-LIABILITY-AND-EQUITY> 10,581,715
<SALES> 0
<TOTAL-REVENUES> 2,313,713
<CGS> 0
<TOTAL-COSTS> 1,724,586
<OTHER-EXPENSES> 33,912
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 6,109
<INCOME-PRETAX> 549,106
<INCOME-TAX> 0
<INCOME-CONTINUING> 549,106
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 549,106
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
