UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
- ------- SECURITIES EXCHANGE ACT OF 1934
For the quarter ended
March 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
- -------- THE SECURITIES EXCHANGE ACT OF 1934
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 requirements
for the past 90 days.
Yes X No
------ ------
RAL YIELD + EQUITIES IV
LIMITED PARTNERSHIP
FORM 10-Q
TABLE OF CONTENTS
PAGES
PART I FINANCIAL INFORMATION
Item 1. Financial Statements I-1
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations I-7
PART II OTHER INFORMATION (none)
Item 6. Exhibits and Reports on Form 8-K (None)
Signatures
<TABLE>
RAL YIELD + EQUITIES IV
LIMITED PARTNERSHIP
BALANCE SHEETS AT MARCH 31, 1998 AND DECEMBER 31, 1997
<CAPTION>
UNAUDITED AUDITED
MAR 31, DECEMBER 31,
ASSETS 1998 1997
- -------------------------------- ----------- ------------
<S> <C> <C>
INVESTMENT PROPERTIES, less
accumulated depreciation of
$3,589,694 in 1998 and
$3,513,008 in 1997 and an
allowance to reduce carrying
value of $124,297 in 1998 and
$124,297 in 1997 7,436,840 7,505,136
CASH AND CASH EQUIVALENTS 1,489,689 1,441,372
RENT AND OTHER RECEIVABLES 19,111 14,057
OTHER ASSETS 12,026 23,495
DEFERRED CHARGES (less accumulated
amortization of $3,262 in 1998
and $3,045 in 1997) 19,406 19,623
----------- -----------
TOTAL ASSETS 8,977,072 9,003,683
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 144,307 134,183
DEFERRED RENTS 13,738 40,164
TENANT SECURITY DEPOSITS 126,572 122,440
AFFILIATE'S PARTICIPATION IN
JOINT VENTURE 394,186 402,830
----------- -----------
TOTAL LIABILITIES 678,803 699,617
GENERAL PARTNERS' CAPITAL (94,113) (103,823)
LIMITED PARTNERS' CAPITAL 8,392,382 8,407,889
----------- -----------
PARTNERS' CAPITAL 8,298,269 8,304,066
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL 8,977,072 9,003,683
=========== ===========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-1
<TABLE>
RAL YIELD + EQUITIES IV
LIMITED PARTNERSHIP
Statement of Operations
For the three months ended March 31, 1998 and 1997
Unaudited
<CAPTION>
3 MONTHS 3 MONTHS
ENDED MARCH ENDED MARCH
31, 1998 31, 1997
----------- -----------
<S>
REVENUE: <C> <C>
Rental income 490,391 487,013
Interest income 19,464 4,235
Other Income 20,273 27,622
------- -------
530,128 518,870
OPERATING EXPENSES:
Property operation
and administrative
expenses 224,258 267,046
Management fees 25,295 25,534
Bad Debts (Received) (324) 3,694
Depreciation and
amortization 76,904 79,279
------- -------
326,133 375,553
------- -------
NET INCOME BEFORE AFFILIATE'S
PARTICIPATION IN INCOME
FROM JOINT VENTURE 203,995 143,317
------- -------
AFFILIATE'S PARTICIPATION
IN INCOME FROM
JOINT VENTURE (9,792) (8,612)
------- -------
NET INCOME 194,203 134,705
======= =======
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
I-2
<TABLE> RAL YIELD + EQUITIES IV
LIMITED PARTNERSHIP
Statements of Changes in Partners' Capital
For the three months ended March 31, 1998 and
for the year ended December 31, 1997
UNAUDITED
<CAPTION>
General Limited
Partner Partners
(5% ownership) (95% ownership) Total
------------- ------------ ---------
<S> <C> <C> <C>
BALANCE, January 1, 1997 (98,014) 8,518,270 8,420,256
-------- ----------- -----------
NET INCOME 33,988 645,763 679,751
CASH DISTRIBUTIONS (39,797) (756,144) (795,941)
-------- ----------- -----------
BALANCE, December 31, 1997 (103,823) 8,407,889 8,304,066
======== =========== ===========
NET INCOME 9,710 184,493 194,203
CASH DISTRIBUTIONS 0 (200,000) (200,000)
-------- ----------- -----------
BALANCE, March 31, 1998 (94,113) 8,392,382 8,298,269
======== =========== ===========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-3
<TABLE>
RAL YIELD + EQUITIES IV
LIMITED PARTNERSHIP
Statements of Cash Flows
For the three months ended March 31, 1998 and 1997
UNAUDITED
<CAPTION>
3 MONTHS 3 MONTHS
ENDED MAR 31, ENDED MAR 31,
1998 1997
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income 194,203 134,705
ADJUSTMENTS TO RECONCILE NET
INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Depreciation and amortization 76,904 79,279
Affiliate's participation in
income from joint venture 9,792 8,612
Changes in assets and
liabilities:
Accounts receivable (5,054) 4,323
Other assets 11,469 9,849
Accounts payable and
accrued expenses 10,124 (12,092)
Tenant security deposits (26,426) 17,611
Deferred rents 4,132 4,048
-------- --------
Net Cash provided by
operating activities: 275,144 246,335
-------- --------
CASH FLOWS FROM (USED FOR)
INVESTING ACTIVITIES:
Additions to property and
equipment (8,390) 0
-------- --------
Net Cash used for
investing activities (8,390) 0
-------- --------
I-4
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash Distributions
to Partners (200,000) (222,257)
Allocated distributions of
cash flow to joint venture
partner-affiliate (18,437) (11,062)
-------- ----------
Net Cash provided from (used
for) financing activities (218,437) (233,319)
-------- ----------
Increase (Decrease) in
cash balance 48,317 13,016
Cash balance beginning
of period 1,441,372 381,659
--------- ---------
Cash balance end of period 1,489,689 394,675
========== ===========
<FN>
The accompanying notes are an integral part of these
statements.
</FN>
</TABLE>
I-5
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
Pursuant to Rule 10-01(a)(5) of Regulation S-X (17 CFR Part 210)
RAL Yield + Equities IV Limited Partnership is omitting its
footnote disclosure. The disclosure is being omitted since it
substantially duplicates the disclosure contained in the most
recent annual report to security holders, Form 10-K for the fiscal
year ended December 31, 1997. The Registrant has presumed that
users of the interim financial information have read or have access
to the audited financial statements for the preceding fiscal year.
Copies of the audited financial statements will be furnished upon
request.
In the opinion of management, the unaudited interim financial
statements presented herein reflect all adjustments necessary to a
fair statement of the results for the interim periods presented.
Events which have occurred subsequent to the end of the most recent
fiscal year which would have a material impact on the Partnership
are discussed in the following section.
I-6
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 purchased a total of fifteen income-producing
properties. The Partnership originally purchased six mobile home
communities (three in Wisconsin and three in Minnesota) and two
garden apartment complexes located in Ohio and Maryland. The
Partnership also originally purchased the following commercial
properties: a restaurant located in Longmont, Colorado;
two retail auto parts and service stores located in Menasha,
Wisconsin and Neenah, Wisconsin; a mobile home park office located
in Beaver Dam, Wisconsin and three Hardee's restaurants, located in
Mundelein, Illinois; Joliet, Illinois; and Eagan, Minnesota.
The Partnership sold one of the mobile home communities and two of
the commercial properties during 1993. An additional commercial
property was sold in 1994. On July 31, 1996 the Partnership sold
the mobile home community in Willmar, Minnesota. In December 1997
the Partnership sold the Hardee's Restaurants located in Mundelein,
Illinois and Joliet, Illinois.
Liquidity and Capital Resources:
Properties acquired by the Partnership are intended to be held for
approximately seven to ten years. 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 for the three months
ended March 31 was $275,144 in 1998 and $246,335 in 1997. The
increase in operating cash flow from 1997 to 1998 is a result
of several items:
1. Expenses, principally real estae taxes, associated with the
vacant Hardee's Restaurants which were sold in 1997 decreased by
$8,600.
2. The water leaks in the Cedar Crossings Apartments were
repaired, therefore sewer and water expense decreased by $10,000.
3. Interest income increased by approximately $15,000.
I-7
The Partnership has not experienced, and is not currently experi-
encing any liquidity problems.
A distribution of cash flow from operations totaling approximately
$200,000 was made to the Limited Partners in March, 1998. Total
limited partner distributions made during 1997 were approximately
$756,000.
South Hills mobile home park, located in Beaver Dam, Wisconsin, has
been experiencing problems with frequent leaks in its water lines.
The solution to this problem is a complete replacement of the water
lines. The total cost to do this has been estimated at $300,000.
To begin to cover this expense, the Partnership reserved $100,000
of the proceeds from the sale of Parkwood Estates Mobile Home Park.
The rest of this expense will probably be paid for through a loan.
Near the site of the Northrup Court Apartments in North Canton,
Ohio a series of sinkholes has been occurring; the latest sinkhole
was directly across the street from Northrup Court Apartments. It
measured 5-6 feet deep and eight feet across, and is apparently
caused by the settling of abandoned mine shafts. Should a
sinkhole(s) occur at Northrup Court, it could cause extensive
damage. While insurance is in place for sinkhole damage, the
protection amount is limited. Therefore, the Partnership could
suffer extensive uninsured losses if a sinkhole strikes the
apartment project.
Results of Operations:
Gross revenues for the three months ended March 31 were
$530,128 in 1998 compared to $518,870 in 1997. Total expenses
for the three months ended March 31 were $326,133 in 1998 and
$375,553 in 1997.
The increase in gross revenues is due primarily to the increase
in interest income.
I-8
Expenses were reduced by approximated $45,000 as follows:
1. Decrease in real estate taxes and other expenses of
$12,000 related to the Hardee's properties which were sold.
2. Decrease in sewer and water of $10,000 as noted above.
3. Decrease in repairs and maintenance of $6,000 at Northrup
Court Apartments.
4. Decrease in various operating expenses including payroll
cost, snow removal and insurance of approximately $14,000.
Net income for the three months ended March 31 was $194,203 in
1998 compared to $134,705 in 1997.
The leasees 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. None of
the Partnership's tenants are currently generating a sales volume
which would trigger percentage rent.
<TABLE>
The following is a listing of approximate average physical
occupancy rates for the Partnership's residential properties during
the three months ended March 31, 1998 and calendar year 1997:
<CAPTION>
3 Months ended
Mar. 31, 1998 1997
-------------- ----
<S> <C> <C>
1. South Hills MHP 99% 99%
2. Lakeshore Terrace MHP 97% 94%
3. Maplewood MHP 96% 96%
4. Alexandria MHP 92% 82%
5. Northrup Court Apartments 90% 91%
6. Cedar Crossing Apartments 100% 97%
</TABLE>
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. All 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.
I-9
Potential Sale of Partnership Properties
The Partnership has received an offer from a prospective purchaser
for all or substantially all of the Partnership's properties.
Accordingly, the Partnership has entered into an asset purchase
agreement with the potential purchaser subject to Securities and
Exchange Commission review of the necessary proxy statement/consent
document, approval of the limited partners and the receipt of an
acceptable fairness opinion.
I-10
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.
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
(Registrant)
Date: May 14, 1998 Robert A. Long
----------------------
Robert A. Long
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 1,489,689
<SECURITIES> 0
<RECEIVABLES> 19,111
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,520,826
<PP&E> 11,026,534
<DEPRECIATION> 3,589,694
<TOTAL-ASSETS> 8,977,072
<CURRENT-LIABILITIES> 284,617
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 8,298,269
<TOTAL-LIABILITY-AND-EQUITY> 8,977,072
<SALES> 0
<TOTAL-REVENUES> 530,128
<CGS> 0
<TOTAL-COSTS> 326,133
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 194,203
<INCOME-TAX> 0
<INCOME-CONTINUING> 194,203
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 194,203
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
