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 June 30, 2000
---------------------------------
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
------------------------------------------
DIVERSIFIED HISTORIC INVESTORS IV
-----------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2440837
------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1609 Walnut Street, Philadelphia, PA 19103
-----------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
--------------
N/A
-----------------------------------------------------------------
(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 - June 30, 2000 (unaudited)
and December 31, 1999
Consolidated Statements of Operations - Three Months and
Six Months Ended June 30, 2000 and 1999 (unaudited)
Consolidated Statements of Cash Flows - Six Months Ended
June 30, 2000 and 1999 (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 June 30, 2000, Registrant had cash of
$343,399. The Registrant expects that those 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 June 30, 2000, Registrant had restricted cash
of $22,918 consisting primarily of funds held as security
deposits, replacement reserves 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 second quarter of 2000, Registrant
incurred a loss of $14,355 ($1.72 per limited partnership unit)
compared to a loss of $19,324 ($2.30 per limited partnership
unit) for the same period in 1999. For the first six months of
2000, the Registrant incurred a loss of $48,207 ($5.76 per
limited partnership unit) compared to a loss of $45,695 ($5.45
per limited partnership unit) for the same period in 1999.
Rental income decreased $1,623 from $48,730 in the
second quarter of 1999 to $47,107 in the same period in 2000 and
decreased $1,305 from $97,128 for the first six months of 1999 to
$95,823 in the same period in 2000. The decrease in rental
income for the second quarter and the first six months of 2000
from the same periods in 1999 is the result of a decrease in
average occupancy at Locke Mill Plaza for the second quarter
(100% to 73%) and for the first six months (99% to 80%),
partially offset by an increase in average occupancy at the Brass
Works for the second quarter (94% to 100%) and for the first six
months (95% to 98%).
Interest income increased $189 from $2,394 in the
second quarter of 1999 to $2,583 in the same period of 2000 due
to higher average invested cash balances. Interest income
decreased $1,325 from $6,006 for the first six months of 1999 to
$4,681 in the same period of 2000 due to lower average invested
cash balances.
Expenses for rental operations decreased by $7,591
from $29,729 in the second quarter of 1999 to $22,138 in the same
period in 2000 and for the first six months of 2000 decreased by
$1,494 from $67,392 for the first six months of 1999 to $65,898
in the same period of 2000. The decreases for the second quarter
and the first six months of 2000 from the same periods in 1999
are the result of a decrease in maintenance expense at Locke Mill
Plaza as a result of a decrease in average occupancy, partially
offset by an increase in commissions expense at the Brass Works
as a result of an increase in average occupancy.
Income recognized during the quarter at the
Registrant's two properties amounted to approximately $6,000,
compared to income of approximately $7,000 for the same period in
1999. For the first six months of 2000, the Registrant
recognized income of approximately $4,000 compared to income of
approximately $2,000 for the same period in 1999.
In the second quarter of 2000, Registrant recognized
income of $9,000 at the Brass Works, including $12,000 of
depreciation expense, compared to income of $5,000 including
$12,000 of depreciation expense in the second quarter of 1999. In
the first six months of 2000, Registrant recognized income of
$6,000 at the Brass Works, including $24,000 of depreciation
expense, compared to a loss of $1,000 for the same period in
1999, including $24,000 of depreciation expense. The increases
in income for the second quarter and first six months of 2000
from the same periods in 1999 are due to an increase in rental
income partially offset by an increase in commissions expense.
Rental income increased due to an increase in average occupancy
for the second quarter (94% to 100%) and for the first six months
(95% to 98%). The increase in commissions expense is the result
of the increase in average occupancy.
In the second quarter of 2000, Registrant incurred a
loss of $3,000 at Locke Mill Plaza, including $7,000 of
depreciation expense, compared to income of $2,000 including
$7,000 of depreciation expense in the second quarter of 1999. In
the first six months of 2000, Registrant incurred a loss of
$2,000 including $13,000 of depreciation expense, compared to
income of $3,000, including $13,000 of depreciation expense for
the same period in 1999. The loss incurred at Locke Mill Plaza
is due to the decrease in rental income partially offset by a
decrease in maintenance expense. The decrease in average
occupancy for the second quarter (100% to 73%) and for the first
six months (99% to 80%) is the cause of both the decrease in
rental income and maintenance expense.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
Assets
June 30, 2000 December 31, 1999
------------- -----------------
(Unaudited)
Rental properties, at cost:
Land $ 74,324 $ 74,324
Buildings and improvements 2,246,555 2,246,555
Furniture and fixtures 29,814 29,814
---------- ----------
2,350,693 2,350,693
Less-accumulated depreciation (1,089,358) (1,043,546)
---------- ----------
1,261,335 1,307,147
Cash and cash equivalents 343,399 325,890
Restricted cash 22,918 25,169
Other assets 13,859 17,012
---------- ----------
Total $1,641,511 $1,675,218
========== ==========
Liabilities and Partners' Equity
Liabilities:
Accounts payable - trade $ 58,294 $ 43,456
Other liabilities 1,860 1,538
Tenant security deposits 10,775 11,435
--------- ---------
Total liabilities 70,929 56,429
Partners' equity 1,570,582 1,618,789
---------- ----------
Total $1,641,511 $1,675,218
========== ==========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months Six months
ended June 30, ended June 30,
2000 1999 2000 1999
------ ------ ------ ------
Revenues:
Rental income $47,107 $48,730 $ 95,823 $ 97,128
Interest income 2,583 2,394 4,681 6,006
------- ------- -------- --------
Total revenues 49,690 51,124 100,504 103,134
------- ------- -------- --------
Costs and expenses:
Rental operations 22,138 29,729 65,898 67,392
General and
administrative 19,000 18,000 37,000 36,000
Depreciation and
amortization 22,907 22,719 45,813 45,437
------- ------- -------- --------
Total costs and
expenses 64,045 70,448 148,711 148,829
------- ------- -------- --------
Net loss ($14,355) ($19,324) ($ 48,207) ($ 45,695)
======= ======= ======== ========
Net loss per limited
partnership unit ($ 1.72) ($ 2.30) ($ 5.76) ($ 5.45)
======= ======= ======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
June 30,
2000 1999
------ ------
Cash flows from operating activities:
Net loss ($ 48,207) ($ 45,695)
Adjustments to reconcile net loss to
net cash provided by
operating activities:
Depreciation and amortization 45,813 45,437
Changes in assets and liabilities:
Decrease in restricted cash 2,251 93
Decrease in other assets 3,153 1,059
Increase (decrease) in accounts
payable - trade 14,837 (2,965)
Increase in other liabilities 322 1,920
Increase (decrease) in tenant
security deposits (660) 535
-------- --------
Net cash provided by operating activities 17,509 384
-------- --------
Increase in cash and cash equivalents 17,509 384
Cash and cash equivalents at
beginning of period 325,890 603,499
-------- --------
Cash and cash equivalents at end
of period $343,399 $603,883
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DIVERSIFIED HISTORIC INVESTORS IV
(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 (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 and notes thereto in the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1999.
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 a 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 to a vote of security holders
during the quarter covered by this report.
Item 6. Exhibits and Reports on Form 8-K
(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.
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 June 30, 2000.
<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: October 24, 2000 DIVERSIFIED HISTORIC INVESTORS IV
----------------
By: Dover Historic Advisors III,
General Partner
By: EPK, Inc., General Partner
By: /s/ Spencer Wertheimer
----------------------
SPENCER WERTHEIMER
President
