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
September 30, 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 SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
<CAPTION>
UNAUDITED AUDITED
SEPTEMBER 30, DECEMBER 31,
ASSETS 1998 1997
- -------------------------------- ----------- ------------
<S> <C> <C>
INVESTMENT PROPERTIES, less
accumulated depreciation of
$3,742,778 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 7,333,956 7,505,136
CASH AND CASH EQUIVALENTS 549,309 1,441,372
RENT AND OTHER RECEIVABLES 33,082 14,057
OTHER ASSETS 43,994 23,495
DEFERRED CHARGES (less accumulated
amortization of $3,625 in 1998
and $3,047 in 1997) 61,888 19,623
----------- -----------
TOTAL ASSETS 8,022,229 9,003,683
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
- ---------------------------------
ACCOUNTS PAYABLE AND ACCRUED EXPENSES 137,275 134,183
DEFERRED RENTS 11,163 40,164
TENANT SECURITY DEPOSITS 131,005 122,440
AFFILIATE'S PARTICIPATION IN
JOINT VENTURE 412,163 402,830
----------- -----------
TOTAL LIABILITIES 691,606 699,617
GENERAL PARTNERS' CAPITAL (116,592) (103,823)
LIMITED PARTNERS' CAPITAL 7,447,215 8,407,889
----------- -----------
PARTNERS' CAPITAL 7,330,623 8,304,066
----------- -----------
TOTAL LIABILITIES AND PARTNERS'
CAPITAL 8,022,229 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 three months and nine months ended September 30, 1998 and 1997
Unaudited
<CAPTION>
3 MONTHS 9 MONTHS 3 MONTHS 9 MONTHS
ENDED SEPT ENDED SEPT ENDED SEPT ENDED SEPT
30, 1998 30, 1998 30, 1997 30, 1997
---------- ---------- ---------- ----------
<S>
REVENUE: <C> <C> <C> <C>
Rental income 505,839 1,497,487 489,071 1,467,238
Interest income 10,079 45,848 3,895 11,643
Other Income 15,825 55,128 25,374 76,957
------- --------- ------- ---------
531,743 1,598,463 518,340 1,555,838
OPERATING EXPENSES:
Property operation
and administrative
expenses 228,088 695,354 243,378 773,578
Management fees 25,827 76,877 25,914 76,728
Bad debts (358) 400 (136) 4,429
Depreciation and
amortization 76,616 230,350 79,264 237,823
------- --------- ------- ---------
330,173 1,002,981 348,420 1,092,558
------- --------- ------- ---------
NET INCOME BEFORE AFFILIATE'S
PARTICIPATION IN INCOME
FROM JOINT VENTURE 201,570 595,482 169,920 463,280
------- ------- ------- --------
AFFILIATE'S PARTICIPATION
IN INCOME FROM
JOINT VENTURE (8,673) (27,770) (9,765) (26,375)
------- ------- ------- --------
NET INCOME 192,897 567,712 160,155 436,905
======= ======= ======= =======
<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 nine months ended September 30, 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, Dec. 31, 1997 (103,823) 8,407,889 8,304,066
======== ========= =========
NET INCOME 28,386 539,326 567,712
CASH DISTRIBUTIONS (41,155) (1,500,000) 1,541,155
-------- --------- ---------
BALANCE,
September 30, 1998 (116,592) 7,447,215 7,330,623
======== ========= =========
<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 nine months ended September 30, 1998 and 1997
UNAUDITED
<CAPTION>
9 MONTHS 9 MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
1998 1997
--------------- ---------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES:
Net income 567,712 436,905
ADJUSTMENTS TO RECONCILE NET
INCOME TO NET CASH PROVIDED
BY OPERATING ACTIVITIES:
Depreciation and amortization 230,350 237,823
Affiliate's participation in
income from joint venture 27,770 26,375
Changes in assets and
liabilities:
Accounts receivable (19,025) (501)
Other assets (63,344) (10,219)
Accounts payable and
accrued expenses 3,092 (22,442)
Deferred rents (29,001) 6,039
Tenant security deposits 8,565 (13,075)
-------- --------
Net Cash provided by
operating activities: 726,119 660,905
-------- --------
CASH FLOWS FROM (USED FOR)
INVESTING ACTIVITIES:
Additions to property and
equipment (58,590) (54,234)
-------- --------
Net Cash provided from (used for)
investing activities (58,590) (54,234)
-------- --------
I-4
CASH FLOWS FROM FINANCING
ACTIVITIES:
Cash distributions
to Partners (1,541,155) (582,520)
Allocated distributions of
cash flow to joint venture
partner-affiliate (18,437) (29,498)
-------- --------
Net Cash provided from (used
for) financing activities (1,559,592) (612,018)
--------- --------
Increase (Decrease) in
cash balance (892,063) (5,347)
Cash balance beginning
of period 1,441,372 381,659
--------- -------
Cash balance end of period 549,309 376,312
========== ========
<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
a 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 nine months
ended September 30 was $726,119 in 1998 and $660,905 in 1997. The
increase in operating cash flow from 1998 to 1997 was due to the
following:
1. Increase in rental income at the mobile home parks of $30,200.
2. Increase in interest income of $45,800.
3. The water leaks at Cedar Crossings Apartments were repaired,
therefore sewer and water expense decreased by $11,000.
I-7
As of September 30, 1998 the Partnership had cash of approximately
$549,000 consisting of undistributed cash flow, working capital
reserves, and tenant security deposits. Current liabilities
totaled approximately $279,000.
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 $131,000 of the current
liabilities represent tenant security deposits. The majority of
current liabilities are accrued and escrowed real estate taxes
payable in installments during 1998 and 1999. The Partnership
expects to meet all of its obligations as they come due.
A distribution of cash flow from operations and sales proceeds of
$200,000 and $700,000, respectively, were was made to the Limited
Partners in August, 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 have 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 nine months ended September 30 were
$1,598,463 in 1998 compared to $1,555,838 in 1997. Total expenses
for the nine months ended September 30 were $1,002,981 in 1998 and
$1,092,558 in 1997.
I-8
Net income for the nine months ended September 30 was $595,482 in
1998 compared to $436,905 in 1997.
The increase in gross revenues is due primarily to the increase
in interest income and rental income at the mobile home parks.
Expenses were reduced by approximately $90,000 as follows:
1. Decrease in insurance expense of $20,200 from rate reductions
and refunds.
2. Decrease in maintenance expenses of $20,900.
3. Decrease in sewer and water of $11,000 as noted above.
4. Decrease in real estate taxes of $22,400 related to the
Hardee's properties which were sold.
The leases 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 nine months ended September 30, 1998 and calendar year
1997:
<CAPTION>
9 Months ended
September 30, 1998 1997
-------------- ----
<S> <C> <C>
1. South Hills MHP 99% 99%
2. Lakeshore Terrace MHP 98% 94%
3. Maplewood MHP 95% 96%
4. Alexandria MHP 92% 82%
5. Northrup Court Apartments 92% 91%
6. Cedar Crossing Apartments 99% 97%
</TABLE>
I-9
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.
Subsequent Event:
On October 26, 1998, the Partnership sold all of its properties for
$8,466,000. The Partnership intends to distribute the net proceeds
from the sale and dissolve the Partnership by December 31, 1998.
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: November 10, 1998 Robert A. Long
----------------------
Robert A. Long
General Partner
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 549,309
<SECURITIES> 0
<RECEIVABLES> 33,082
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 626,385
<PP&E> 11,076,734
<DEPRECIATION> 3,742,778
<TOTAL-ASSETS> 8,022,229
<CURRENT-LIABILITIES> 279,443
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,330,623
<TOTAL-LIABILITY-AND-EQUITY> 8,022,229
<SALES> 0
<TOTAL-REVENUES> 1,598,463
<CGS> 0
<TOTAL-COSTS> 1,002,981
<OTHER-EXPENSES> 27,770
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 567,712
<INCOME-TAX> 0
<INCOME-CONTINUING> 567,712
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 567,712
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
