UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K
(Mark One)
[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
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file 33-11907
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DIVERSIFIED HISTORIC INVESTORS IV
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2440837
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incorporation or organization (I.R.S. Employer
(State or other jurisdiction of Identification No.)
SUITE 500, 1521 LOCUST STREET, PHILADELPHIA, PA 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 735-5001
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Securities registered pursuant to Section 12(b) of the Act: NONE
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Securities registered pursuant to Section 12(g) of the Act: 8,285.7 Units
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UNITS OF LIMITED PARTNERSHIP INTEREST
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(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 ___ No __X__
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
Aggregate market value of Units held by non-affiliates of the Registrant:
Not Applicable*
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* Securities not quoted in any trading market to Registrant's knowledge.
<PAGE>
PART I
Item 1. Business
a. General Development of Business
Diversified Historic Investors IV ("Registrant") is a
limited partnership formed in 1987 under the Pennsylvania Uniform Limited
Partnership Act. As of December 31, 1995, Registrant had outstanding 8,285.7
units of limited partnership interest (the "Units").
Registrant is presently in its operating stage. It
currently owns three properties or interests therein. See Item 2. Properties,
for a description thereof. For a discussion of the operations of the Registrant,
See Part II, Item 7. Management's Discussion and Analysis of Financial
Conditions and Results of Operations.
The following is a summary of significant transactions
involving the Registrant's interests:
During 1994, the Registrant converted the Property
(Henderson Riverfront Apartments) owned by 700 Commerce Mall General
Partnership, a Louisiana general partnership in which the Registrant owns a 95%
interest, into condominiums ("the Units") and began offering the Units for sale.
As of December 31, 1995, 33 of the 61 Units have been sold. See Part II.a.
Properties - The Henderson Riverfront Apartments, for additional information.
a. Financial Information about Industry Segments
The Registrant operates in one industry segment.
c. Narrative Description of Business
Registrant is in the business of operating, holding,
selling, exchanging and otherwise dealing in and with real properties containing
improvements which are "Certified Historic Structures," as such term is defined
in the Internal Revenue Code (the "Code") for use as apartments, offices, hotels
and commercial spaces, or any combination thereof, or low income housing
eligible for the tax credit provided by Section 42 of the Code, and such other
uses as the Registrant's general partner may deem appropriate.
Since the Registrant's inception, all the properties
acquired either by the Registrant, or the subsidiary partnerships in which it
has an interest, have been rehabilitated and certified as Historic Structures
and have received the related Investment Tax Credit. All the properties are held
for rental operations, except for the Henderson Riverfront Apartments which are
being marketed for sale as condominiums. At this time it is anticipated that the
other two properties will continue to be held for this purpose until such time
as real property values begin to increase. At that time, the Registrant will
re-evaluate its investment strategy regarding the properties.
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<PAGE>
As of December 31, 1995, Registrant owned interests in
three properties, located in North Carolina (one), Pennsylvania (one), and
Louisiana (one). In total, the properties contain 22 apartment units, and 28
condominium units used as rental units. As of December 31, 1995, 35 of the
apartment and condominium units were under lease at monthly rental rates ranging
from $460 to $910. Rental of the apartments is not expected to be seasonal. For
a further discussion of the properties, see Item 2. Properties.
The Registrant is affected by and subject to the
general competitive conditions of the residential real estate industry. As a
result of the overbuilding that occurred in the 1980's, the competition for both
residential and commercial tenants in the local markets where the Registrant's
properties are located is generally strong. As a result, the Registrant is
forced to keep its rent levels competitively low in order to maintain moderate
to high occupancy levels. The properties held for rental by the Registrant are
located in Philadelphia and North Concord, North Carolina. In both areas there
are several similar historically certified rehabilitated buildings. However,
there is no organization which holds a dominant position in the residential
housing or commercial leasing market in any of the geographic areas in which the
Registrant's properties are located. The apartment market remains stable and new
construction remains virtually nonexistent although the availability of
favorable home financing has placed pressure on the rental tenant base. In New
Orleans, there are a few similar projects that are currently being marketed for
sale. However, the financing that has been made available by the Registrant has
given the Registrant a slight market advantage.
Registrant has no employees. Registrant's activities
are overseen by Brandywine Construction & Management, Inc., ("BCMI"), a real
estate management firm.
d. Financial Information About Foreign and Domestic Operations
and Export Sales.
See Item 8. Financial Statements and Supplementary
Data.
Item 2. Properties
As of the date hereof, Registrant owned three properties, or
interests therein. A summary description of each property held at December 31,
1995 is given below.
a. The Henderson Riverfront Apartments - consists of 61
condominium units located at 700 Commerce Street, New Orleans, Louisiana. In
July 1987, Registrant was admitted with a 95% general partner interest in 700
Commerce Mall General Partnership ("CMGP"), a Louisiana general partnership, for
a cash contribution of $4,620,000. CMGP contracted to acquire and rehabilitate
the Property for $4,520,000 ($89 per square feet ("sf") funded by the equity
contribution. During 1994, CMGP entered into agreements converting the Henderson
apartments into condominiums and began offering the Units for sale. The Units
are being marketed and sold by an affiliate of the Registrant's co-general
partner ("HRI"). The asking prices of the units range from $72,000 to $135,000,
depending on size, configuration and location within the building. Funds will be
necessary during the selling period for improvements and repairs to common
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<PAGE>
areas, individual unit upgrades, marketing, selling costs, and fees. During 1995
and 1994, these expenses were approximately $416,000 and $752,000, respectively
and were funded from the sales proceeds. It is anticipated that any additional
funds needed will be made available from the proceeds from sales. One of the
difficulties in selling condos in today's market is the buyers' frequent
inability to obtain financing. Most banks offering residential financing require
that their loans meet Federal National Mortgage Association ("FNMA")
requirements. One such requirement is that the condo unit being financed cannot
be a part of a project in which 30% or more of the units are owned by investors.
At conversion, the Henderson was owned 100% by CMGP, and, therefore, does not
meet FNMA requirements. Because of this and similar market conditions, the
seller, CMGP has provided financing for a large percentage of the units sold.
All loans require a minimum 10% down payment, and all purchasers must be
qualified by an independent mortgage brokerage company, using FNMA guidelines.
The loans are collateralized by the condominium units and bear interest at rates
ranging from 6 1/2% to 8 1/4%. The loans consist of two types, a 30-year fixed
rate mortgage and a 7/23 loan. The interest rate on the 7/23 loan during the
initial 7-year term will be fixed. Interest after the 7th anniversary of the
loan will be reset at 250 basis points in excess of the 10-year Treasury Note as
reported in the Wall Street Journal for the next business day immediately
preceding such 7th anniversary, rounded upward to the next highest 1/8% of 1%,
with a cap of 13.5%. Interest and principal are due monthly and all principal
payments are based on a 30-year amortization schedule. As of December 31, 1995,
33 of the 61 Units have been sold for an aggregate amount of $3,524,090
($2,356,090 net of selling expenses and capital expenditures, including those
described above). It is anticipated that the remaining Units will be sold by
July 1996. The Units sold ranged in price from $71,250 to $127,065. Of the Units
sold, 24 of the 33 sellers opted for the seller provided financing with loans
ranging from $62,700 to $181,900. The property is managed by a property
management firm which is an affiliate of the Registrant's co-general partner of
CMGP. At December 31, 1995, 15 of the remaining 28 units were under lease (54%)
at a monthly rental range of $500 to $910 as the units are being prepared for
sale.
All leases are renewable, one-year leases. The
occupancy for the previous four years was 85% for 1994, 92% for 1993, 93% for
1992 and 90% for 1991. The monthly rental range has been approximately the same
since 1991. For tax purposes at December 31, 1995, this property has a federal
tax basis of $1,881,753 and is depreciated using the straight-line method with a
useful life of 27.5 years. The annual real estate taxes are $13,444 which is
based on an assessed value of $124,650 taxed at a rate of $10.79 per $100. Real
estate tax expense for CMGP in 1995 was lower due to the reimbursement of a
portion of the year's taxes from the buyers of the Units. No one tenant occupies
ten percent or more of the building. It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.
b. The Brass Works - consists of 12 apartments located at
231-237 Race Street, Philadelphia, Pennsylvania. In May 1987, Registrant
acquired and rehabilitated the Property for $1,200,000 ($111 per sf) funded by
the equity contribution. The Property is managed by BCMI. At December 31, 1995,
11 of the apartment units were under lease (92%) with monthly rents ranging from
$550 to $765.
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All leases are renewable, one-year leases. The
occupancy for the previous four years was 88% for 1994, 78% for 1993, 73% for
1992 and 83% for 1991. The monthly rental range has been approximately the same
since 1991. For tax purposes, this property has a federal tax basis of
$1,036,203 and is depreciated using the straight-line method with a useful life
of 27.5 years. The annual real estate taxes are $10,313 which is based on an
assessed value of $124,800 taxed at a rate of $8.264 per $100. No one tenant
occupies ten percent or more of the building. It is the opinion of the
management of the Registrant that the property is adequately covered by
insurance.
c. Locke Mill Plaza -consists of 10 residential apartment
condominium units in a 169 condominium unit project located on Buffalo Avenue at
Union Street in North Concord, North Carolina. In November 1988, Registrant
acquired the units for $665,0000 funded by its equity contribution. Until
September 1995, the Property was managed by an independent property management
firm. At that time, BCMI took over management of the units. As of December 31,
1995, 9 of the units were under lease (90%) with monthly rates ranging from $460
to $515.
All leases are renewable, one-year leases. The
occupancy for the previous four years was 98% for 1994, 100% for 1993, 100% for
1992 and 100% for 1991. The monthly rental range has been approximately the same
since 1991. For tax purposes, this property has a federal tax basis of $614,229
and is depreciated using the straight-line method with a useful life of 27.5
years. The annual real estate taxes are $4,887 which is based on an assessed
value of $452,540 taxed at a rate of $1.08 per $100. No one tenant occupies ten
percent or more of the building. It is the opinion of the management of the
Registrant that the property is adequately covered by insurance.
Item 3. Legal Proceedings
a. To the best of its knowledge, Registrant is not a party to,
nor is any of its property the subject of, any pending material legal
proceeding.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the fiscal years covered by
this report to a vote of security holders.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
a. There is no established public trading market for the
Units. Registrant does not anticipate any such market will develop. Trading in
the Units occurs solely through private transactions. The Registrant is not
aware of the prices at which trades occur. Registrant's records indicate that
48.3 units were sold or exchanged in 1995.
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<PAGE>
b. As of December 31, 1995, there were 990 record holders of
Units.
c. In 1995 and 1994 Registrant made distributions in the
amounts of $291,206 and $0 respectively, out of available cash flow.
Item 6. Selected Financial Data
The following selected financial data are for the five years
ended December 31, 1995. The data should be read in conjunction with the
consolidated financial statements included elsewhere herein. This data is not
covered by the independent auditors' report.
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
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<S> <C> <C> <C> <C> <C>
Rental income $ 393,751 $ 607,399 $ 692,195 $ 686,601 $ 662,989
Interest income 125,505 11,907 3,787 6,474 8,264
Net (loss) earnings (119,070) 528,832 (71,064) (85,946) (137,936)
Net (loss) earnings (13.03) 63.18 (7.72) (10.27) (16.48)
per Unit
Total assets (net of 6,095,438 6,479,965 5,637,971 5,763,685 6,165,469
depreciation and
amortization)
Dividends (distribu- 291,206 -0- -0- 345,236 161,111
tions)
</TABLE>
Note: See Part II, Item 7.2 Results of Operations for a discussion of factors
which materially affect the comparability of the information reflected in the
above table.
Item 7. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
(1) Liquidity
At December 31, 1995, Registrant had total unrestricted
cash of $346,511. This balance is comprised of $19,854 held by the Registrant
and $326,657 which is held by the properties in which the Registrant holds a
majority interest. The Registrant expects that the $326,657 plus the cash
generated from operations at each property and sales of the Units at CMGP will
be sufficient to fund the operating expenses of the properties. In addition to
the operating expenses of the properties, the Registrant distributed $277,000 to
the limited partners in March 1995. The Registrant is not aware of any
additional sources of liquidity.
As of December 31, 1995, Registrant had restricted cash
of $366,524 consisting primarily of funds held as security deposits, replacement
reserves and escrows for taxes and insurance and unpaid conversion fees. As a
consequence of these restrictions as to use, Registrant does not deem these
funds to be a source of liquidity.
HRI, the Partnership's co-general partner in CMGP, is
to be paid a 10% conversion fee (the "Conversion Fee") on the sale of any Unit
at or above the agreed-upon sales price. Such fee is payable upon the closing of
the sale of each Unit, provided that the Conversion Fee from the sale of the
first 30 Units shall be deferred and paid as follows:
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(i) $125,000 at the closing of the 31st unit
(ii) the remaining portion ("the Remainder") at the
rate of 5% of the Remainder at the closing of
the sale of each of the 42nd through 61st Units
In October 1995, the 31st unit was sold and the $125,000 was earned by HRI of
which $100,000 has been paid to HRI. The Remainder, amounting to $240,468
related to the sale of the first 31 units is included in restricted cash. The
conversion fees from the sales of units 31, 32 and 33 in the amount of $34,025
are included in accounts payable - related party as of December 31, 1995 along
with $25,000 from the first 31 units which has not yet been paid to HRI. In
addition, HRI will be paid a selling commission equal to 3.5% of the selling
price of each Unit. Commissions paid to HRI during 1994 and 1995 were $73,417
and $49,499, respectively.
(2) Capital Resources
Due to the recent rehabilitations of the properties,
any capital expenditures needed are generally replacement items and are funded
out of cash from operation or replacement reserves, if any. At the Henderson
Apartments, funds will be necessary during the selling period for improvements
and repairs to common areas, individual unit upgrades, marketing, selling costs,
and fees. During 1995 and 1994, these expenses were approximately $416,000 and
$752,000, respectively and were funded by sales proceeds. It is anticipated that
any additional funds needed will be available from the proceeds from sales.
Other than the above, the Registrant is not aware of any factors which would
cause historical capital expenditures levels not to be indicative of capital
requirements in the future and accordingly, does not believe that it will have
to commit material resources to capital investments for the foreseeable future
Statement of Cash Flows
Net cash (used in) provided by operating activities
amounted to ($9,139) in 1995 compared to $178,996 in 1994 and $120,860 in 1993.
The decrease from 1994 to 1995 and the increase from 1993 to 1994 is mainly due
to the sale of Units at the Henderson partially offset by an increase in
deferred income. The decrease from the sales is due to a decrease in the gain on
the sales and an overall decrease in operating activities. The increase in
deferred income is due to insurance proceeds received but not expended relating
to flood damage at the Henderson.
Net cash (used in) provided by investing activities was
($4,423) in 1995 compared to $306,800 in 1994 and ($59,361) in 1993. The
decrease from 1994 to 1995 and the increase from 1993 to 1994 is mainly due to
the sale of Units and capital expenditures at the Henderson. Capital
expenditures increased from 1993 to 1994 and decreased from 1994 to 1995 while
the sales proceeds decreased from 1994 to 1995 due to higher costs associated
with the sales.
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Net cash used in financing activities was $291,206 in
1995 compared to $0 in 1994 and $8,000 in 1993. The increase from 1994 to 1995
and the decrease from 1993 to 1994 is due to the cash distributions made by the
Registrant in 1995 and 1993. In 1993, in anticipation of a distribution to both
the limited and General Partner, the General Partner received $8,000. The
distribution was delayed until 1995. At that time the limited partners received
a distribution in the amount of $269,286 while the General Partner received its
portion less the $8,000 previously received.
Results of Operations
During 1995, Registrant incurred a net loss of $119,070
($13.03 per limited partnership unit) compared to income of $528,832 ($63.18 per
limited partnership unit) in 1994 and a net loss of $71,000 ($7.72 per limited
partnership unit) in 1993. Included in the loss for 1995 is a gain of $33,305
due to the sale of Units at the Henderson. Included in income in 1994 is a gain
of $652,000 due to the sale of Units at the Henderson. In March 1995, the
Registrant distributed approximately $277,000 to the limited partners and
General Partner.
Rental income decreased from $692,195 in 1993 to
$607,399 in 1994 to $393,751 in 1995. The decrease from 1994 to 1995 is the
result of a decrease in rental income at Henderson due to the sale of Units,
partially offset by an increase at one of the other properties due to an
increase in average occupancy. There was also a decrease in average occupancy at
the Henderson in the units not sold, as they are being prepared for sale. The
decrease from 1993 to 1994 is the result of a decrease in rental income at
Henderson due to the sale of Units, partially offset by an increase in rental
income at Brass Works due to an increase from 1994 to 1995 in average occupancy
(78% to 88%).
Interest income increased from $3,787 in 1993 to
$11,907 in 1994 to $125,505 in 1995. The increase from 1994 to 1995 is the
result of a combination of an increase in interest earned on deposits due to a
higher average cash balance and an increase in interest earned on notes
receivable. The increase from 1993 to 1994 is the result of an interest earned
on the notes receivable in connection with the sale of Units at the Henderson.
Rental operations expense increased from $371,715 in
1993 to $403,438 in 1994 to and decreased to $385,284 in 1995. The decrease from
1994 to 1995 is the result of an increase in marketing expenses at Henderson due
to the sales of Units and an increase in condominium fees partially offset by an
overall decrease in operating expenses. In addition, commissions expense and
wages and wages and salaries at Locke Mill. The increase from 1993 to 1994 is
due to condominium fees expense at the Henderson which was condominiumized in
1994, and an increase in rental commissions expense at one of the other
properties due to a higher turnover of units, partially offset by an overall
decrease in operating expenses at all of the properties due to operational
efficiencies achieved at the properties.
General and administrative expenses decreased from
$128,981 in 1993 to $108,000 in 1994 and remained constant to $108,000 in 1995.
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Depreciation and amortization expense decreased from
$266,350 in 1993 to $231,677 in 1994 to $178,347 in 1995. The decrease from 1994
to 1995 and from 1993 to 1994 is due to the sale of Units at Henderson resulting
in a lower balance on which depreciation is calculated.
In 1995, income of $3,000 was recognized at the
Registrant's three properties compared to income of $666,000 in 1994 and income
of $71,000 in 1993. Included in income in 1995 and 1994 is a gain of $33,000 and
$652,000, respectively, due to the sale of Units at the Henderson. A discussion
of property operations/activities follows:
In 1995, Registrant recognized income of $24,000 at The
Henderson Riverfront Apartments including depreciation expense of $89,000
compared to income of $689,000, including depreciation expense of $142,000 in
1994 and income of $110,000 including depreciation expense of $173,000 in 1993.
Included in income in 1995 is an extraordinary gain of $33,000 related to the
sale of Units. In 1995, the Henderson incurred a net loss of $9,000 exclusive of
the gain related to the sale of Units. Overall, exclusive of the gain resulting
from the sale of Units, the income decrease from 1994 to 1995 resulted from a
decrease in rental income and the related operating expenses due to the sale of
Units. The loss was partially offset by an increase in marketing expenses
related to the sale of Units and an increase in condominium fees. There was also
a decrease in average occupancy in the units not sold, as they are being
prepared for sale. Included in income in 1994 is $652,000 of gain related to the
sale of Units. Overall income, exclusive of the gain resulting from the sale of
Units, decreased from 1993 to 1994, due to a decrease in rental income due to
the sale of Units and the payment of monthly condominium fees for the Units
still owned by CMGP which was condominiumized in 1994.
In 1995 Registrant incurred a loss of $22,000 including
$48,000 in depreciation expense at the Brass Works, compared to a loss of
$30,000 including $48,000 depreciation expense in 1994 and a loss of $41,000,
including $51,000 of depreciation expense in 1993. The decreased loss from 1994
to 1995 relates to an increase in rental income due to an average higher
occupancy at the property. The decreased loss from 1993 to 1994 is the result of
an increase in rental income due to higher occupancy experienced, partially
offset by an increase in commissions expense which directly relates to the
increase in occupancy. Registrant anticipates that the property's results of
operations for 1996 will be similar to those experienced during 1995.
In 1995, Registrant recognized income of $1,000 at
Locke Mill Plaza including $26,000 of depreciation expense, compared to income
of $7,000 including $26,000 of depreciation expense in 1994 and income of
$2,000, including $26,000 of depreciation expense in 1993. The decrease in
income from 1994 to 1995 is the result of an increase in commissions expense and
wages and salaries. The increases are due to the change in management companies
at the property. The increase in income from 1993 to 1994 is the result of an
increase in rental income due to higher average rents combined with a decrease
in certain operating expenses due to operational efficiencies achieved at the
property. Registrant expects that the property's results of operations for 1996
will be similar to those experienced during 1995.
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Effective January 1, 1995, the Partnership adopted the
provisions of Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of." There was no cumulative effect of the adoption of SFAS No. 121.
Item 8. Financial Statements and Supplementary Data
Registrant is not required to furnish the supplementary
financial information referred to in Item 302 of Regulations S-K.
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Independent Auditor's Report
To the Partners of
Diversified Historic Investors IV
We have audited the accompanying consolidated balance sheets of Diversified
Historic Investors IV (a Pennsylvania Limited Partnership) and subsidiaries as
of December 31, 1995 and 1994 and the related consolidated statements of
operations, changes in partners' equity and cash flows for the years ended
December 31, 1995, 1994 and 1993. These consolidated financial statements are
the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 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 in the first
paragraph present fairly, in all material respects, the financial position of
Diversified Historic Investors IV as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for the years ended December
31, 1995, 1994 and 1993, in conformity with generally accepted accounting
principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Schedule of Real Estate and
Accumulated Depreciation on page 24 is presented for the purposes of additional
analysis and is not a required part of the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Gross, Kreger & Passio
Philadelphia, Pennsylvania
February 5, 1996
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DIVERSIFIED HISTORIC INVESTORS IV
---------------------------------
(a limited partnership)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
AND FINANCIAL STATEMENT SCHEDULES
---------------------------------
Consolidated financial statements: Page
----
Consolidated Balance Sheets at December 31, 1995 and 1994 13
Consolidated Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993 14
Consolidated Statements of Changes in Partners' Equity for
the Years Ended December 31, 1995, 1994, and 1993 15
Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994, and 1993 16
Notes to consolidated financial statements 17-23
Financial statement schedules:
Schedule XI - Real Estate and Accumulated Depreciation 24
Notes to Schedule XI 25
All other schedules are omitted because they are not applicable or the required
information is shown in the consolidated financial statements or notes thereto.
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DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
---------------------------------------------
(a limited partnership)
CONSOLIDATED BALANCE SHEETS
---------------------------
December 31, 1995 and 1994
Assets
------
1995 1994
-------- --------
Rental properties at cost:
Land $ 297,724 $ 411,954
Buildings and improvements 4,246,803 5,343,568
Furniture and fixtures 21,000 21,000
---------- ----------
4,565,527 5,776,522
Less - accumulated depreciation (1,285,912) (1,399,309)
---------- ----------
3,279,615 4,377,213
Cash and cash equivalents 346,511 651,279
Restricted cash 366,524 259,753
Notes receivable 2,099,457 1,142,478
Other assets 3,331 49,242
---------- ----------
Total $ 6,095,438 $ 6,479,965
========== ==========
Liabilities and Partners' Equity
--------------------------------
Liabilities:
Accounts payable:
Trade $ 244,984 $ 332,549
Related parties 59,725 19,239
Deferred income 81,777 -0-
Tenant security deposits 13,093 22,042
---------- ----------
Total liabilities 399,579 373,830
---------- ----------
Partners' equity 5,695,859 6,106,135
---------- ----------
Total $ 6,095,438 $ 6,479,965
========== ==========
The accompanying notes are an integral part of these financial statements.
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DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
---------------------------------------------
(a limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
For the Years Ended December 31, 1995, 1994 and 1993
1995 1994 1993
---------- ----------- ----------
Revenues:
Rental income $ 393,751 $ 607,399 $ 692,195
Gain on sale of units 33,305 652,641 -0-
Interest income 125,505 11,907 3,787
--------- ---------- ---------
Total revenues 552,561 1,271,947 695,982
--------- ---------- ---------
Costs and expenses:
Rental operations 385,284 403,438 371,715
General and administrative 108,000 108,000 128,981
Depreciation and amortization 178,347 231,677 266,350
--------- ---------- ---------
Total costs and expenses 671,631 743,115 767,046
--------- ---------- ---------
Net (loss) income ($ 119,070) $ 528,832 ($ 71,064)
========= ========== =========
Net (loss) income per limited partnership
unit: ($ 13.03) $ 63.18 ($ 7.72)
========= ========== =========
The accompanying notes are an integral part of these finanical statements.
-14-
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
---------------------------------------------
(a limited partnership)
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' EQUITY
------------------------------------------------------
For the Years Ended December 31, 1995, 1994 and 1993
Dover Historic Limited
Advisors III (1) Partners (2) Total
--------------- ----------- --------
Percentage participation in profit or loss 1% 99% 100%
== === ====
Balance at December 31, 1992 (86,349) 5,742,716 5,656,367
Net loss (711) (70,353) (71,064)
Distribution to partners (8,000) 0 (8,000)
-------- ---------- ----------
Balance at December 31, 1993 (95,060) 5,672,363 5,577,303
Net income 5,288 523,544 528,832
-------- ---------- ----------
Balance at December 31, 1994 (89,772) 6,195,907 6,106,135
Net loss (1,191) (117,879) (119,070)
Distribution to partners (21,921) (269,285) (291,206)
-------- ---------- ----------
Balance at December 31, 1995 ($ 112,884) $ 5,808,743 $ 5,695,859
======== ========== ==========
(1) General Partner.
(2) 8,285.7 limited partnership units outstanding at December 31, 1995, 1994,
and 1993.
The accompanying notes are an integral part of these financial statements.
-15-
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
---------------------------------------------
(a limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
For the Years Ended December 31, 1995, 1994 and 1993
1995 1994 1993
---------- ----------- -----------
Cash flows from operating activities:
Net (loss) income ($ 119,070) $ 528,832 $ (71,064)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Gain on sale of units (33,305) (652,641) -0-
Depreciation and amortization 178,347 231,677 266,350
Changes in assets and liabilities:
Increase in restricted cash (106,771) (192,992) (27,751)
Decrease (increase) in other assets 45,911 (49,042) (25)
(Decrease) increase in accounts
payable - trade (87,565) 316,174 (1,703)
Increase (decrease) in accounts
payable - related parties- 40,486 17,336 (45,571)
Increase in deferred income 81,777 -0- -0-
(Decrease) increase in tenant
security deposits (8,949) (20,348) 624
----------- ----------- -----------
Net cash (used in) provided
by operating activities: (9,139) 178,996 120,860
----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures (415,718) (751,820) (59,361)
Decrease in notes receivable 20,546 -0- -0-
Proceeds from sale of units 390,749 1,058,620 -0-
----------- ----------- -----------
Net cash (used in) provided
by investing activities (4,423) 306,800 (59,361)
----------- ----------- -----------
Cash flows from financing activities:
Distribution to partners (291,206) -0- (8,000)
----------- ----------- -----------
Net cash used in financing
activities (291,206) -0- (8,000)
=========== =========== -----------
(Decrease) increase in cash and cash
equivalents (304,768) 485,796 53,499
Cash and cash equivalents at beginning
of year 651,279 165,483 111,984
----------- ----------- -----------
Cash and cash equivalents at end of year $ 346,511 $ 651,279 $ 165,483
=========== =========== ===========
Supplemental Schedule of Non-Cash
Investing Activities:
Net assets transferred $ 1,626,713 $ 1,471,723 -0-
Notes receivable received from the
sale of Units 977,525 1,142,478 -0-
-16-
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
---------------------------------------------
(a limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
NOTE A - ORGANIZATION
Diversified Historic Investors IV (the "Partnership") was formed in January
1987, with Dover Historic Advisors III (a general partnership whose partners are
Mr. Gerald Katzoff and DHP, Inc.,) as the General Partner and DHP, Inc.,
(formerly Dover Historic Properties, Inc.,) as the limited partner. Upon the
admittance of additional limited partners, the initial limited partner withdrew.
The Partnership was formed to acquire, rehabilitate, and manage real properties
which are certified historic structures as defined in the Internal Revenue Code
(the "Code"), or which were eligible for designation as such, utilizing the net
proceeds from the sale of limited partnership units. Any rehabilitations
undertaken by the Partnership were done with a view to obtaining certification
of expenditures therefor as "qualified rehabilitation expenditures" as defined
in the Code.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies consistently applied in the
preparation of the accompanying consolidated financial statements follows:
1. Principles of Consolidation
The accompanying consolidated financial statements of the Partnership include
the accounts of one subsidiary partnership (the "Venture"), in which the
Partnership has a controlling interest, with appropriate elimination of
inter-partnership transactions and balances. These financial statements reflect
all adjustments (consisting only of normal recurring adjustments) which, in the
opinion of the Partnership's General Partner, are necessary for a fair statement
of the results for the year.
2. Costs of Issuance
Costs incurred in connection with the offering and sale of limited partnership
units were charged against partners' equity as incurred.
3. Depreciation
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Buildings and improvements are depreciated over 25
years and furniture and fixtures over five years.
-17-
<PAGE>
4. Net Loss Per Limited Partnership Unit
The net income (loss) per limited partnership unit is based on the weighted
average number of limited partnership units outstanding during the period
(8,285.7 in 1995, 1994, and 1993).
5. Income Taxes
Federal and state income taxes are payable by the individual partners;
therefore, no provision or liability for income taxes is reflected in the
financial statements.
6. Cash and Cash Equivalents
The Partnership considers all highly liquid investments purchased with a
maturity of less than three months to be cash equivalents.
7. Concentration of Credit Risk
Financial instruments which potentially subject the Partnership to concentration
of credit risk consist principally of cash and cash equivalents. The Partnership
maintains its cash and cash equivalents in financial institutions insured by the
Federal Deposit Insurance Corporation up to $100,000 per company. At December
31, 1995, uninsured funds held at one institution approximate $348,000.
8. Restricted Cash
Restricted cash includes amounts held for tenant security deposits, real estate
tax reserves and other cash restricted as to use.
9. Revenue Recognition
Revenues are recognized when rental payments are due on a straight-line basis.
Rental payments received in advance are deferred until earned.
10. Rental Properties
Rental properties are stated at cost. A provision for impairment of value is
recorded when a decline in value of property is determined to be other than
temporary as a result of one or more of the following: (1) a property is offered
for sale at a price below its current carrying value, (2) a property has
significant balloon payments due within the foreseeable future for which the
Partnership does not have the resources to meet, and anticipates it will be
unable to obtain replacement financing or debt modification sufficient to allow
-18-
<PAGE>
a continued hold of the property over a reasonable period of time, (3) a
property has been, and is expected to continue, generating significant operating
deficits and the Partnership is unable or unwilling to sustain such deficit
results of operations, and has been unable to, or anticipates it will be unable
to, obtain debt modification, financing or refinancing sufficient to allow a
continued hold of the property for a reasonable period of time or, (4) a
property's value has declined based on management's expectations with respect to
projected future operational cash flows and prevailing economic conditions. An
impairment loss is indicated when the undiscounted sum of estimated future cash
flows from an asset, including estimated sales proceeds, and assuming a
reasonable period of ownership up to 5 years, is less than the carrying amount
of the asset. The impairment loss is measured as the difference between the
estimated fair value and the carrying amount of the asset. In the absence of the
above circumstances, properties and improvements are stated at cost. An analysis
is done on an annual basis at December 31, 1995.
11. New Accounting Pronouncement
Effective January 1, 1995, the Partnership adopted the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of."
There was no cumulative effect of the adoption of SFAS No. 121.
12. Notes Receivable
The notes receivable are mortgage notes arising from seller - provided financing
on the Units sold at one of the Partnership's properties. The notes are
collateralized by the condominium units and bear interest at rates ranging from
6 1/2% to 8 1/4%. The notes consist of two types, a 30-year fixed rate mortgage
and a 7/23 loan. The interest rate on the 7/23 loan during the initial 7-year
term will be fixed. Interest after the 7th anniversary of the loan will be reset
at 250 basis points in excess of the 10-year Treasury Note as reported in the
Wall Street Journal for the next business day immediately preceding such 7th
anniversary, rounded upward to the next highest 1/8% of 1%, with a cap of 13.5%.
Interest and principal are due monthly and all principal payments are based on a
30-year amortization schedule. Interest income is recognized as interest becomes
due.
NOTE C - PARTNERSHIP AGREEMENT
The Significant terms of the amended and restated Agreement of Limited
Partnership (the "Agreement"), as they relate to the financial statements,
follow:
The Agreement provides that beginning with the date of the admission of
subscribers as limited partners, all distributable cash from operations (as
defined) will be distributed 90% to the limited partners and 10% to the General
Partner. In 1993, in anticipation of a distribution to both the limited and
General Partner, the General Partner received $8,000. The distribution was
delayed until 1995. At that time the limited partners received a distribution in
the amount of $269,286 while the General Partner received their portion less the
$8,000 previously received.
All distributable cash from sales or dispositions (as defined) will be
distributed to the limited partners up to their original capital contributions
plus an amount equal to six percent of their original capital contributions per
-19-
<PAGE>
annum on a cumulative basis, less the sum of all prior distributions to them;
thereafter, after receipt by the general partner or its affiliates of any
accrued but unpaid real estate brokerage commissions, the balance will be
distributed 15% to the general partner and 85% to the limited partners.
Net income or loss from operations of the Partnership is allocated one percent
to the general partner and 99% to the limited partners.
Pursuant to certain agreements, the developer of one property, and the partner
in the Venture, are entitled to share in the following:
a. 46% of net cash flow from operations after the Partnership
receives its priority distribution (as defined).
b. 25% of the net proceeds (as defined) from the sale or
refinancing of the property. The Partnership is entitled
to a priority distribution of such proceeds prior to any
payment to the developer.
NOTE D - ACQUISITIONS
The Partnership acquired two properties and one general partnership interest in
the Venture during the period from May 1987 to November 1988, as discussed
below.
In May 1987, the Partnership purchased a three story building located in
Philadelphia, Pennsylvania consisting of 12 apartment units. The cost to acquire
and rehabilitate this property was approximately $1,200,000.
In July 1987, the Partnership was admitted, with a 95% general partnership
interest, to a Pennsylvania general partnership which owns a building located in
New Orleans, Louisiana consisting of 61 apartment units, for cash contributions
of $4,620,000.
In November 1988, the Partnership purchased a building located in North Concord,
North Carolina, consisting of 10 condominium units, for $665,000.
NOTE E - TRANSACTIONS WITH RELATED PARTIES
The following is a summary of transactions with related parties of the
Partnership and the General Partner:
Historic Restoration, Inc. ("HRI"), the Partnership's co-general
partner in Commerce Mall General Partnership ("CMGP"), is to be paid a
10% conversion fee (the "Conversion Fee") on the sale of any Unit at or
above the agreed-upon sales price. Such fee is payable upon the closing
of the sale of each Unit, provided that the Conversion Fee from the
sale of the first 30 Units shall be deferred and paid as follows:
-20-
<PAGE>
(i) $125,000 at the closing of the 31st unit
(ii) the remaining portion ("the Remainder") at the rate of 5%
of the Remainder at the closing of the sale of each of the
42nd through 61st Units
In October 1995, the 31st unit was sold and the $125,000 was earned by
HRI of which $100,000 has been paid to HRI. The Remainder, amounting to
$240,468 related to the sale of the first 31 units is included in
restricted cash. The conversion fees from the sales of units 31, 32 and
33 in the amount of $34,025 are included in accounts payable - related
party as of December 31, 1995 along with $25,000 from the first 31
units which has not yet been paid to HRI. In addition, HRI will be paid
a selling commission equal to 3.5% of the selling price of each Unit.
Commissions paid to HRI during 1994 and 1995 were $73,417 and $49,499,
respectively.
NOTE F - SALE OF UNITS AT HENDERSON
During 1994, CMGP entered into agreements converting the Henderson apartments
into condominiums and began offering the Units for sale. The Units are being
marketed and sold by an affiliate of the Registrant's co-general partner
("HRI"). The asking prices of the units range from $72,000 to $135,000,
depending on size, configuration and location within the building. Funds will be
necessary during the selling period for improvements and repairs to common
areas, individual unit upgrades, marketing, selling costs, and fees. During 1995
and 1994, these expenses were approximately $416,000 and $752,000, respectively
and were funded by sales proceeds. It is anticipated that any additional funds
needed will be available from the proceeds from sales.
CMGP has provided financing for a large percentage of the units sold. All loans
require a minimum 10% down payment, and all purchasers must be qualified by an
independent mortgage brokerage company, using FNMA guidelines (see Note B,
paragraph 12 Notes Receivable. As of December 31, 1995, 33 of the 61 Units have
been sold. The Units sold ranged in price from $71,250 to $127,065. Of the Units
sold, 24 of the 33 sellers opted for the seller provided financing. The
Partnership recognized a gain of $33,305 and $652,641 in 1995 and 1994,
respectively, based on the selling price less the original cost of the unit plus
any improvements, selling costs and fees.
-21-
<PAGE>
NOTE G - INCOME TAX BASIS RECONCILIATION
Certain items enter into the determination of the results of operations in
different time periods for financial reporting ("book") purposes and for income
tax ("tax") purposes. A reconciliation of net loss and partners' equity follows:
For the Years Ended December 31,
--------------------------------------------
1995 1994 1993
--------- -------- ---------
Net (loss) income - book ($ 119,070) $ 528,832 $ (71,064)
Excess of book over tax
depreciation 36,354 54,195 79,417
Gain on sale of units (2,817) (324,105) 0
Timing differences (8,570) (1,933) (250)
Minority interest (tax only) (1,327) (19,802) (8,461)
--------- --------- ---------
Net (loss) income - tax ($ 95,430) $ 237,187 $ (358)
========= ========= =========
For the Years Ended December 31,
--------------------------------------------
1995 1994 1993
--------- ---------- ---------
Partners' equity - book $5,695,859 $6,106,135 $5,577,303
Costs of issuance 1,077,141 1,077,141 1,077,141
Cumulative tax over book loss (273,679) (297,318) (5,673)
--------- --------- ---------
Partners' equity - tax $6,499,321 $6,885,958 $6,648,771
========= ========= =========
-22-
<PAGE>
SUPPLEMENTAL INFORMATION
-23-
<PAGE>
<TABLE>
DIVERSIFIED HISTORIC INVESTORS IV
---------------------------------
(a limited partnership)
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1995
Costs
Capitalized
Subsequent Gross Amount at which Carried at
Initial Cost to Partnership(b) to Acquisition December 31, 1995
----------------------------- -------------- -----------------
<CAPTION>
Buildings Buildings
and and Accumulated Date of Date
Description (a) Land Improvements Improvements Land Improvements Total (c)(d) Depr. (d)(e) Constr.(a) Acquired
- - --------------- ---- ------------ ------------ ---- ------------ ------------ ------------ ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12 apartment units
in Philadelphia, PA $ 54,000 $1,209,858 - $54,000 $1,209,858 $1,263,858 $371,484 1988 5/22/87
61 apartment units
in New Orleans, LA* 500,000 4,410,360 59,361 223,400 2,365,423 2,588,823 720,522 1987-1988 7/2/87
10 apartment units
in North Concord, NC 20,324 692,522 - 20,324 692,522 712,846 93,906 1988 11/30/88
---------------------------------------------- ------------ ------------ -----------
$574,324 $6,312,740 $59,361 $297,724 $4,267,803 $4,565,527 $1,285,912
============================================== ============ ============ ===========
* As of December 31, 1995 there were 28 remaining units.
</TABLE>
-24-
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
---------------------------------------------
(a limited partnership)
NOTES TO SCHEDULE XI
--------------------
December 31, 1995
(A) All three properties are certified historic structures as defined in
the Internal Revenue Code of 1986. The "date of construction" refers to
the period in which such properties were rehabilitated.
(B) Includes development/rehabilitation costs incurred pursuant to
development agreements entered into when the properties were acquired.
(C) The aggregate cost of real estate owned at December 31, 1995, for
Federal income tax purposes is approximately $3,769,810. The
depreciable basis of buildings and improvements is further reduced for
Federal income tax purposes by the historic rehabilitation credit
obtained.
(D) Reconciliation of real estate:
1995 1994 1993
----------- ----------- -----------
Balance at beginning of year $ 5,776,522 $ 6,496,425 $ 6,887,064
Additions during the year:
Improvements 415,718 751,820 59,361
Deductions during the year:
Sale of units (1,626,713) (1,471,723) -0-
----------- ----------- -----------
Balance at end of year $ 4,565,527 $ 5,776,522 $ 6,946,425
=========== =========== ===========
Reconciliation of accumulated
depreciation:
1995 1994 1993
----------- ----------- -----------
Balance at beginning of year $ 1,399,309 $ 1,540,898 $ 1,274,548
Depreciation expense for the year 178,347 231,677 266,350
Sale of units (291,744) (373,266) -0-
----------- ----------- -----------
Balance at end of year $ 1,285,912 $ 1,399,309 $ 1,540,898
=========== =========== ===========
(E) See Note B to the consolidated financial statements for depreciation methods
and lives.
-25-
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of Registrant
a. Identification of Directors - Registrant has no directors.
b. Identification of Executive Officers
The General Partner of the Registrant is Dover Historic
Advisors III (DoHA-III), a Pennsylvania general partnership. The partners of
DoHA-III are as follows:
Name Age Position Term of Office Period Served
- - ---- --- -------- -------------- -------------
Gerald Katzoff 48 Partner in No fixed term Since January
DoHA-III 1987
DHP, Inc. -- Partner in No fixed term Since January
(Formerly Dover Historic DoHA-III 1987
Properties, Inc.)
For further description of DHP, Inc., see paragraph e. of this
Item. There is no arrangement or understanding between either person named above
and any other person pursuant to which any person was or is to be selected as an
officer.
c. Identification of Certain Significant Employees. Registrant
has no employees. Its administrative and operational functions are carried out
by a property management and partnership administration firm.
d. Family Relationships. There is no family relationship
between or among the executive officers and/or any person nominated or chosen by
Registrant to become an executive officer.
e. Business Experience. DoHA-III is a general partnership
formed in 1987. The partners of DoHA-III are DHP, Inc. and Gerald Katzoff. The
General Partner is responsible for the management and control of the
Registrant's affairs and has general responsibility and authority in conducting
its operations.
-26-
<PAGE>
Gerald Katzoff (age 48) has been involved in various aspects
of the real estate industry since 1974. Mr. Katzoff is the owner of Katzoff
Resorts, which controls various hotel and spa resorts in the United States. Mr.
Katzoff is a principal in an entity which is the owner of a property in Avalon,
New Jersey which has filed a petition pursuant to Chapter 11 of the U.S.
Bankruptcy Code. Mr. Katzoff is a former President and director of D, LTD.,
(formerly The Dover Group, Ltd., the corporate parent of DHP, Inc.).
Dover Historic Properties, Inc. was incorporated in
Pennsylvania in December 1984 for the purpose of sponsoring investments in,
rehabilitating, developing and managing historic (and other) properties. In
February 1992, Dover Historic Properties, Inc.'s name was changed to DHP, Inc.
DHP, Inc. is a subsidiary of The Dover Group, Ltd., an entity formed in 1985 to
act as the holding company for DHP, Inc. and certain other companies involved in
the development and operation of both historic properties and conventional real
estate as well as in financial (non-banking) services. In February 1992, Dover
Group's name was changed.
The executive officers, directors, and key employees of DHP,
Inc. are described below.
Michael J. Tuszka (age 49) was appointed Chairman of DHP, Inc.
and D, LTD. on January 27, 1993. Mr. Tuszka has been associated with DHP, Inc.
and its affiliates since 1984.
Donna M. Zanghi (age 39) was appointed Secretary/Treasurer of
DHP, Inc. She is also a Director and Secretary/Treasurer of D, LTD. She has been
associated with DHP, Inc. and its affiliates since 1984, except for the period
from December 1986 to June 1989 and the period from November 1, 1992 to June 14,
1993.
Michele F. Rudoi (age 31) was appointed on January 27, 1993 as
Assistant Secretary of both D, LTD and DHP, Inc.
Item 11. Executive Compensation
a. Cash Compensation - During 1995, Registrant paid no cash
compensation to DoHA-III, any partner therein or any person named in paragraph
c. of Item 10.
b. Compensation Pursuant to Plans - Registrant has no plan
pursuant to which compensation was paid or distributed during 1995, or is
proposed to be paid or distributed in the future, to DoHA-III, any partner
therein, or any person named in paragraph c. of Item 10 of this report.
c. Other Compensation - No compensation not referred to in
paragraph a. or paragraph b. of this Item was paid or distributed during 1995 to
DoHA-III, any partner therein, or any person named in paragraph c. of Item 10.
-27-
<PAGE>
d. Compensation of Directors - Registrant has no directors.
e. Termination of Employment and Change of Control Arrangement
- - - Registrant has no compensatory plan or arrangement, with respect to any
individual, which results or will result from the resignation or retirement of
any individual, or any termination of such individual's employment with
Registrant or from a change in control of Registrant or a change in such
individual's responsibilities following such a change in control.
Item 12. Security Ownership of Certain Beneficial Owners and Management
a. Security Ownership of Certain Beneficial Owners - No person
is known to Registrant to be the beneficial owner of more than five percent of
the issued and outstanding Units.
b. Security Ownership of Management - No equity security of
Registrant are beneficially owned by any person named in paragraph c. of Item
10.
c. Changes in Control - Registrant does not know of any
arrangement, the operation of which may at a subsequent date result in a change
in control of Registrant.
Item 13. Certain Relationships and Related Transactions
Pursuant to Registrant's Amended and Restated Agreement of
Limited Partnership, DoHA-III is entitled to 10% of Registrant's distributable
cash from operations in each year. The amount allocable to DoHA-III for 1995,
1994 and 1993, was $21,921, $0, and $8,000, respectively.
a. Certain Business Relationships - Registrant has no
directors.
b. Indebtedness of Management - No employee of Registrant,
Registrant's general partner (or any employee thereof), or any affiliate of any
such person, is or has at any time been indebted to Registrant.
-28-
<PAGE>
PART IV
Item 14. (A) Exhibits, Financial Statement Schedules and Reports on Form 8-K.
1. Financial Statements:
a. Consolidated Balance Sheets at December 31, 1995 and 1994.
b. Consolidated Statements of Operations for the Years Ended
December 31, 1995, 1994 and 1993.
c. Consolidated Statements of Changes in Partners' Equity for
the Years Ended December 31, 1995, 1994 and 1993.
d. Consolidated Statements of Cash Flows for the Years Ended
December 31, 1995, 1994 and 1993.
e. Notes to consolidated financial statements.
2. Financial statement schedules:
a. Schedule XI - Real Estate and Accumulated Depreciation.
b. Notes to Schedule XI.
3. Exhibits:
(a) Exhibit Number Document
-------------- --------
3 Registrant's Amended and Restated
Certificate of Limited Partnership
and Agreement of Limited Partnership,
previously filed as part of Amendment
No. 1 of Registrant's Registration
Statement on Form S-11, are incorporated
herein by reference.
21 Subsidiaries of the Registrant are
listed in Item 2. Properties of
this Form 10-K.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter ended
December 31, 1995.
(c) Exhibits:
See Item 14(A)(3) above.
-29-
<PAGE>
SIGNATURES
Pursuant to the requirement of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
DIVERSIFIED HISTORIC INVESTORS IV -
INCOME FUND
Date: June 26, 1996 By: Dover Historic Advisors III, General Partner
-------------
By: /s/ Gerald Katzoff
-----------------------------------
GERALD KATZOFF,
Partner
By: /s/ Michele F. Rudoi
----------------------------------
MICHELE F. RUDOI,
Assistant Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
Registrant and in the capacities and on the dates indicated.
Signature Capacity Date
--------- -------- ----
DOVER HISTORIC ADVISORS III General Partner
By: /s/ Gerald Katzoff
-------------------------- June 26, 1996
GERALD KATZOFF, -------------
Partner
By: /s/ Michele F. Rudoi June 26, 1996
--------------------------- -------------
MICHELE F. RUDOI,
Assistant Secretary
-30-
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000810623
<NAME> DHI IV
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 346,511
<SECURITIES> 0
<RECEIVABLES> 2,099,457
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 369,856
<PP&E> 4,565,527
<DEPRECIATION> 1,285,912
<TOTAL-ASSETS> 6,095,438
<CURRENT-LIABILITIES> 304,709
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 5,695,859
<TOTAL-LIABILITY-AND-EQUITY> 6,095,438
<SALES> 0
<TOTAL-REVENUES> 552,561
<CGS> 0
<TOTAL-COSTS> 493,284
<OTHER-EXPENSES> 178,347
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (119,070)
<INCOME-TAX> 0
<INCOME-CONTINUING> (119,070)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (119,070)
<EPS-PRIMARY> (13.03)
<EPS-DILUTED> 0
</TABLE>
