5
<PAGE>
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 period ended June 30, 1999
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: 0-18147
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
(Exact name of registrant as specified in governing instrument)
Delaware 13-3378315
(State of organization) (IRS Employer
Identification No.)
2 World Trade Center, New York, NY 10048
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212)
392-1054
Former name, former address and former fiscal year, if changed
since last report: not applicable
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>
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
BALANCE SHEETS
<CAPTION>
June 30, December 31,
1999 1998
<S> <C>
<C>
ASSETS
Cash and cash equivalents $ 1,564,494 $
1,531,647
Investment in joint venture 8,593,393
8,552,095
Other assets 48,471
20,726
$10,206,358
$10,104,468
LIABILITIES AND PARTNERS' CAPITAL
Accounts payable and accrued liabilities $ 73,441 $
143,877
Partners' capital (deficiency):
General partners (5,443,292)
(5,460,525)
Limited partners ($500 per Unit, 304,437 Units issued)
15,576,209 15,421,116
10,132,917
9,960,591
$10,206,358
$10,104,468
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
INCOME STATEMENTS
Three and six months ended June 30, 1999 and 1998
<CAPTION>
Three months ended Six
months ended
June 30,
June 30,
1999 1998
1999 1998
<S> <C> <C> <C> <C>
Revenues:
Equity in earnings of
joint $ $ $ $
ventures 71,716 24,806,57 233,091 25,973,1
Interest and other 3 88
15,618 32,846
233,387 248,751
87,334 25,039,96 265,937 26,221,9
0 39
Expenses:
General and $ $ $ $
administrative 49,766 72,047 93,611 190,174
Net income $ $ $ $
37,568 24,967,91 172,326 26,031,7
3 65
Net income allocated to:
Limited partners $ $ $ $
General partners 33,811 24,944,83 155,093 25,902,3
3 00
3,757 17,233
23,080 129,465
$ $ $ $
37,568 24,967,91 172,326 26,031,7
3 65
Net income per Unit of
limited $ $ $ $
partnership interest 0.11 81.94 0.51 85.08
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
STATEMENT OF PARTNERS' CAPITAL
Six months ended June 30, 1999
<CAPTION>
Limited General
Partners Partners
Total
<S> <C> <C>
<C>
Partners' capital (deficiency)
at January 1, 1999 $15,421,116
$(5,460,525) $ 9,960,591
Net income 155,093
17,233 172,326
Partners' capital (deficiency)
at June 30, 1999 $15,576,209
$(5,443,292) $10,132,917
See accompanying notes to financial statements.
</page>
<PAGE>
</TABLE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
STATEMENTS OF CASH FLOWS
Six months ended June 30, 1999 and 1998
1999 1998
<S> <C>
<C>
Cash flows from operating activities:
Net income $ 172,326 $
26,031,765
Adjustments to reconcile net income to net cash (used in)
provided by operating activities:
Equity in earnings of joint ventures (233,091)
(25,973,188)
(Increase) decrease in other assets (27,745)
16,641
Decrease in accounts payable and accrued liabilities
(70,436) (69,587)
Net cash (used in) provided by operating activities
(158,946) 5,631
Cash flows from investing activities:
Distributions from joint ventures 288,798
53,050,666
Additional investments in joint ventures (97,005)
(496,986)
Net cash provided by investing activities
191,793 52,553,680
Cash flows used in financing activities:
Cash distributions -
(53,596,471)
Increase (decrease) in cash and cash equivalents
32,847 (1,037,160)
Cash and cash equivalents at beginning of period
1,531,647 1,868,422
Cash and cash equivalents at end of period $ 1,564,494 $
831,262
See accompanying notes to financial statements.
</TABLE>
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
Notes to Financial Statements
1. The Partnership
Dean Witter Realty Income Partnership IV, L.P. (the
"Partnership") is a limited partnership organized under
the laws of the State of Delaware on October 31, 1986.
The Partnership's interests in Taxter Park Associates
("Associates") and DWR Chesterbrook Associates, the
partnership which owned an interest in Chesterbrook
Corporate Center (sold 4/98), are accounted for on the
equity method.
The Partnership's records are maintained on the accrual
basis of accounting for financial and tax reporting
purposes.
Net income per Unit amounts are calculated by dividing
net income allocated to Limited Partners, in accordance
with the Partnership Agreement, by the weighted average
number of Units outstanding.
In the opinion of management, the accompanying
financial statements, which have not been audited,
include all adjustments, necessary to present fairly
the results for the interim period. Except for the gain
on the sale of the Chesterbrook property included in
equity in earnings of joint ventures in the second
quarter of 1998, such adjustments consist only of
normal recurring accruals.
These financial statements should be read in
conjunction with the annual financial statements and
notes thereto included in the Partnership's annual
report on Form 10-K filed with the Securities and
Exchange Commission for the year ended December 31,
1998. Operating results of interim periods may not be
indicative of the operating results for the entire
year.
2. Investment in Joint Venture
In 1987, Associates sold a leasehold interest in
approximately 20% of the space at Taxter Corporate Park
to KLM. In 1998, KLM accepted a $6.75 million purchase
offer for the leasehold interest,
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
Notes to Financial Statements
which Associates had the right to match. The partners
of Associates believe that inclusion of the KLM space
improves the value and salability of the property;
however, the partners did not have sufficient cash to
fund the purchase. Therefore, an affiliate of the
Managing General Partner (the "Affiliate"), as an
accommodation, purchased the leasehold interest on
February 8, 1999 for $6.75 million and assumed the
rights and obligations of KLM thereunder.
On February 4, 1999, Associates and KLM entered into a
new lease which allows KLM to continue to occupy 50% of
the space subject to the leasehold interest. On
February 8, 1999, the Affiliate also assumed the rights
and obligations of Associates under this new lease.
As part of the purchase of the leasehold interest,
Associates received an option to purchase the leasehold
interest and assume the new lease from the Affiliate
for a purchase price of $6.75 million plus the cost of
any tenant improvements, leasing commissions and
capital expenditures incurred by the Affiliate in
connection with the leasehold interest (collectively,
the "Resale Price"). Associates also granted the
Affiliate an option to require Associates to purchase
the leasehold interest and assume the new lease for the
Resale Price. When the property is sold, Associates
will be obligated to purchase the leasehold interest
and assume the new lease from the Affiliate for the new
Resale Price.
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
Notes to Financial Statements
Summarized financial information of Associates is as
follows:
<CAPTION>
Quarter ended June 30, Six months
ended June 30,
1999 1998
1999 1998
<S> <C> <C> <C> <C>
Revenues $1,509,10 $1,302,87 $2,817,31 $2,712,36
7 7 6 9
Expenses
1,332,465 1,079,746 2,243,199 2,156,904
Net $ $ $ $
income 176,642 223,131 574,117 555,465
3. Related Party Transactions
In 1998, an affiliate of the Managing General Partner
provided property management services for Taxter
Corporate Park and five buildings at the Chesterbrook
Corporate Center (until the buildings were sold in
April 1998). The Partnership paid the affiliate
management fees of approximately $43,000 in 1998. This
amount was recorded as expenses of the joint ventures.
In 1999, property management services for Taxter
Corporate Park are provided by an unaffiliated party.
Another affiliate of the Managing General Partner
performs administrative functions, processes investor
transactions and prepares tax information for the
Partnership. Effective January 1, 1999, the affiliate
reduced its fees for these services because of the
greatly decreased level of partnership activity. For
the six-month periods ended June 30, 1999 and 1998, the
Partnership incurred approximately $40,000 and $108,000
for these services, respectively. These amounts are
included in general and administrative expenses.
4. Subsequent Event
In July 1999, the Partnership received $ 80,000, its
share of the balance of the escrow deposit returned to
DWR Chesterbrook Associates by the buyer of the
Chesterbrook property.
</TABLE>
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Liquidity and Capital Resources
The Partnership raised $152,218,500 in a public
offering of 304,437 units which was terminated in 1988.
The Partnership has no plans to raise additional
capital.
The Partnership's interest in the Taxter property is
the Partnership's sole property interest. The
partnership which owns the Taxter Corporate Park
property (the "Taxter Partnership") has accepted a bid
from an unaffiliated third party to purchase the
property, and the parties are currently negotiating the
terms of a purchase and sale agreement. However, there
can be no assurance that the Taxter property will be
sold.
On February 8, 1999, an affiliate of the Managing
General Partner, as an accommodation to the Taxter
Partnership, purchased the leasehold interest of KLM in
approximately 20% of the property's space. See Note 2
to the financial statements.
Currently, the overall vacancy levels in the office
market in Westchester County, New York and the west
Westchester sub-market in which Taxter Corporate Park
is located are approximately 18% and 14%, respectively.
Also, during the three months ended June 30, 1999,
occupancy at the property decreased from 83% to 76%
primarily because Cityscape, a tenant which filed for
bankruptcy protection in 1998, vacated approximately 9%
of the property's space. Leases aggregating
approximately 39% of the property's space expire in
2001.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
During the six months ended June 30, 1999, the Taxter
property generated positive cash flow from operations,
and it is anticipated that it will continue to do so
during the remainder of 1999.
The Taxter Partnership expects to buy the former KLM
leasehold interest at the time that the property is
sold, using a portion of the proceeds from the sale of
the Taxter property. As of June 30, 1999, the
Partnership had commitments to fund approximately
$137,000 for its share of tenant improvements and
leasing commissions at the Taxter property.
During the six-months ended June 30, 1999,
distributions received from the Taxter joint venture
exceeded cash used in operations and contributions to
the Taxter joint venture.
The Partnership did not pay any distributions during
the six months ended June 30, 1999. Generally, future
cash distributions will be paid from proceeds received
from the sale of the Taxter property and cash reserves.
Except as discussed above and in the financial
statements, the Managing General Partner is not aware
of any trends or events, commitments or uncertainties
that may have a material impact on liquidity.
Operations
Fluctuations in the Partnership's operating results for
the three- and six-month periods ended June 30, 1999
compared to 1998 are primarily attributable to the
following:
Equity in earnings of joint ventures and general and
administrative expenses decreased in 1999 compared to
1998 primarily due to the sale of the Chesterbrook
Corporate Center in April 1998.
In 1999, interest and other revenues decreased due to
interest earned in 1998 on the proceeds from the sale
of the Chesterbrook property before such proceeds were
distributed to the Limited Partners.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
There were no other individually significant factors
which caused changes in revenues or expenses.
Inflation
Inflation has been consistently low during the periods
presented in the financial statements and, as a result,
has not had a significant effect on the operations of
the Partnership or its properties.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits.
An exhibit index has been filed as part of
this Report on Page E1.
b) Reports on Form 8-K.
None.
<PAGE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
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.
DEAN WITTER REALTY INCOME
PARTNERSHIP IV, L.P.
By: Dean Witter Realty
Fourth Income Properties
Inc.
Managing General Partner
Date: August 12, 1999 By: /s/E. Davisson
Hardman, Jr.
E. Davisson Hardman, Jr.
President
Date: August 12, 1999 By: /s/Charles M.
Charrow
Charles M. Charrow
Controller
(Principal Financial and
Accounting Officer)
<PAGE>
<TABLE>
DEAN WITTER REALTY INCOME PARTNERSHIP IV, L.P.
Quarter Ended June 30, 1999
Exhibit Index
<CAPTION>
Exhibit
No. Description
<S> <C>
27 Financial Data Schedule
E1
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Registrant is a limited partnership which invests in a real estate joint
ventures. In accordance with industry practice, its balance sheet is
unclassified. For full information, refer to the accompanying unaudited
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,564,494
<SECURITIES> 0
<RECEIVABLES> 48,471
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,206,358<F1>
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 10,132,917<F2>
<TOTAL-LIABILITY-AND-EQUITY> 10,206,358<F3>
<SALES> 0
<TOTAL-REVENUES> 265,937<F4>
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 93,611
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 172,326
<INCOME-TAX> 0
<INCOME-CONTINUING> 172,326
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 172,326
<EPS-BASIC> 0.51<F5>
<EPS-DILUTED> 0
<FN>
<F1>In addition to cash and receivables, total assets include an investment
in joint venture of $8,593,393.
<F2>Represents partners' capital.
<F3>Liabilities include accounts payable and accrued liabilities of $73,441.
<F4>Total revenues include equity in earnings of joint venture of $233,091
and interest and other revenue of $32,846.
<F5>Represents net income per Unit of limited partnership interest.
</FN>
</TABLE>
