UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________________ to _____________
Commission file number 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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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
1609 Walnut Street, Philadelphia, PA 19103
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
N/A
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(Former name, former address and former fiscal year, if changed since
last report)
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
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets - March 31, 1999 (unaudited)
and December 31, 1998
Consolidated Statements of Operations - Three Months
Ended March 31, 1999 and 1998 (unaudited)
Consolidated Statements of Cash Flows - Three Months
Ended March 31, 1999 and 1998 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
(1) Liquidity
As of March 31, 1999, Registrant had cash of
$600,951. The Registrant expects that the funds plus the cash
generated from operations at each property will be sufficient to fund
the operating expenses of the properties. The Registrant is not aware
of any additional sources of liquidity.
As of March 31, 1999, Registrant had restricted
cash of $20,541 consisting primarily of funds held as security
deposits and escrows for taxes and insurance. As a consequence of the
restrictions as to use, Registrant does not deem these funds to be a
source of liquidity.
(2) Capital Resources
Any capital expenditures needed are generally
replacement items and are funded out of cash from operations. The
Registrant is not aware of any factors which would cause historical
capital expenditure 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 investment for the
foreseeable future.
(3) Results of Operations
During the first quarter of 1999, Registrant
incurred a loss of $26,372 ($3.15 per limited partnership unit)
compared to income of $18,285 ($2.19 per limited partnership unit) for
the same period in 1998.
Rental income increased $2,656 from $45,742 in the
first quarter of 1998 to $48,398 in the same period in 1999. The
increase in rental income is the result of an increase in average
rental rates at Brass Works.
Interest income decreased $20,740 from $24,352 in
the first quarter 1998 to $3,612 in the same period in 1999. The
decrease is the result of a decrease in the amount of available cash
which generated the interest income.
Expense for rental operations decreased by $2,607
from $40,271 in the first quarter of 1998 to $37,664 in the same
period in 1999. The decrease is mainly the result of a decrease in
expenses incurred in connection with the 1998 distribution to the
limited partners. In addition, at Locke Mill, there was an increase
in wages and salaries expense due to cost of living increases
partially offset by a decrease in the maintenance expense due to a
lower turnover of apartment units.
Losses incurred during the quarter at the
Registrant's two properties amounted to $4,000, compared to income of
approximately $6,000 for the same period in 1998.
In the first quarter of 1999, Registrant incurred
a loss of $5,000 at the Brass Works, including $12,000 of depreciation
expense, compared to a loss of $7,000 including $12,000 of
depreciation expense in the first quarter of 1998. The decrease in
the loss from the first quarter of 1998 to the first quarter of 1999
is due to an increase in rental income due to an increase in the
average rental rates.
In the first quarter of 1999, Registrant
recognized income of $1,000 at the Locke Mill Plaza, including $7,000
of depreciation expense, compared to income of $1,000 including $7,000
of depreciation expense in the first quarter of 1998. Although there
was no overall change in income from the first quarter of 1998 to the
same period in 1999, there was an increase in wages and salaries
expense due to cost of living increases partially offset by a decrease
in maintenance expense due to a lower turnover of apartment units.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
Assets
March 31, 1999 December 31, 1998
(Unaudited)
Rental properties, at cost:
Land $ 74,324 $ 74,324
Buildings and improvements 2,246,555 2,246,555
Furniture and fixtures 26,054 26,054
--------- ---------
2,346,933 2,346,933
Less - Accumulated depreciation (974,950) (952,232)
--------- ---------
1,371,983 1,394,701
Cash and cash equivalents 600,951 603,499
Restricted cash 20,541 23,673
Other assets 10,064 7,477
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Total $2,003,539 $2,029,350
========= =========
Liabilities and Partners' Equity
Liabilities:
Accounts payable:
Trade $ 29,789 $ 30,876
Other liabilities 54 821
Tenant security deposits 12,880 10,465
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Total liabilities 42,723 42,162
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Partners' equity 1,960,816 1,987,188
--------- ---------
Total $2,003,539 $2,029,350
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
Three months Three months
Ended Ended
March 31, March 31,
1999 1998
Revenues:
Rental income $ 48,398 $ 45,742
Interest income 3,612 24,352
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Total revenues 52,010 70,094
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Costs and expenses:
Rental operations 37,664 40,271
General and administrative 18,000 25,500
Depreciation and amortization 22,718 22,608
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Total costs and expenses 78,382 88,379
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Net loss ($ 26,372) ($ 18,285)
====== ======
Net loss per limited partnership unit ($ 3.15) ($ 2.19)
====== ======
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1999 and 1998
(Unaudited)
Three months ended
March 31,
1999 1998
Cash flows from operating activities:
Net loss ($ 26,372) ($ 18,285)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 22,718 22,608
Changes in assets and liabilities:
Decrease in restricted cash 3,132 24,285
(Increase) decrease in other assets (2,587) 151,719
Decrease in accounts payable - trade (1,087) (184,821)
Decrease in other liabilities (767) (715)
Increase (decrease) in tenant security deposits 2,415 (265)
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Net cash used in operating activities (2,548) (5,474)
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Distributions 0 (252,954)
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Net cash used in investing activities 0 (252,954)
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Decrease in cash and cash equivalents (2,548) (258,428)
Cash and cash equivalents at beginning of period 603,499 3,102,030
------- ---------
Cash and cash equivalents at end of period $600,951 $2,843,602
======= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND
(a Pennsylvania limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Diversified
Historic Investors IV Income Fund (the "Registrant") and related notes
have been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information
and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations. The
accompanying consolidated financial statements and related notes
should be read in conjunction with the audited financial statements in
Form 10-K of the Registrant, and notes thereto, for the year ended
December 31, 1998.
The information furnished reflects, in the opinion of management, all
adjustments, consisting of normal recurring accruals, necessary for a
fair presentation of the results of the interim periods presented.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the best of its knowledge, Registrant is not party
to, nor is any of its property the subject of, any pending material
legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted during the quarter covered by
this report to a vote of security holders.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Document
Number
3 Registrant's Amended and Restated Certificate
of Limited Partnership and Agreement of
Limited Partnership, previously filed as part
of Amendment No. 2 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 on Form 10-K, previously
filed and incorporated herein by reference.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the
quarter ended March 31, 1999.
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
Date: June 7, 1999 DIVERSIFIED HISTORIC INVESTORS IV Income Fund
------------
By: Dover Historic Advisors III, General Partner
By: EPK, Inc., General Partner
By: /s/ Spencer Wertheimer
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SPENCER WERTHEIMER
President and Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 600,951
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,346,933
<DEPRECIATION> 974,950
<TOTAL-ASSETS> 2,003,539
<CURRENT-LIABILITIES> 29,789
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,960,816
<TOTAL-LIABILITY-AND-EQUITY> 2,003,539
<SALES> 0
<TOTAL-REVENUES> 48,398
<CGS> 0
<TOTAL-COSTS> 37,664
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (26,372)
<INCOME-TAX> 0
<INCOME-CONTINUING> (26,372)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (26,372)
<EPS-BASIC> 0
<EPS-DILUTED> (3.15)
</TABLE>
