FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
OR
( ) 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..............
Commission file number 0-17713
SILVER SCREEN PARTNERS IV, L.P.
(A Delaware Limited Partnership)
(Exact name of registrant as specified in its
Certificate and Agreement of Limited Partnership)
Delaware 06-1236433
- ---------------------------------------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Chelsea Piers, Pier 62 - Suite 300
New York, New York 10011
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 336-6700
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
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, and (2) has been subject to such requirements for the
past 90 days.
YES X NO
----- -----
1
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
The financial information set forth below is set forth in the March 31,
1997 First Quarter Report of Silver Screen Partners IV, L.P. (the "Partnership")
filed herewith as Exhibit 20 and is incorporated herein by reference.
Balance Sheets -- March 31, 1998 and December 31, 1997.
Statement of Operations -- For the Three Months ended
March 31, 1998 and 1997.
Statements of Partners' Equity -- For the Three Months
ended March 31, 1998 and the Year ended December 31,
1997.
Statements of Cash Flows -- For the Three Months ended
March 31, 1998 and 1997.
Notes to Financial Statements.
The financial statements included herein are unaudited. In the opinion of
the management of the Partnership, all adjustments necessary for a fair
presentation of the results of operations have been included and all adjustments
are of a normal recurring nature. The results of operations for the three months
ended March 31, 1998 are not necessarily indicative of the results of operations
which may be expected for the entire year.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Results of Operations
---------------------
Revenues for the three months ended March 31, 1998 were approximately
$3,985,000, as compared with approximately $4,986,000 for the comparable three
months in 1997. Revenues for the first three months of 1998 consisted of income
from the Joint Venture of approximately $3,919,000 and interest income of
approximately $66,000, while those for the comparable period in 1997 consisted
of income from the Joint Venture of approximately $4,904,000 and interest income
of approximately $83,000. Most of the films in which the Partnership has an
interest have been released in the theatrical, home video and pay cable markets.
Income from the Joint Venture decreased by approximately $985,000. Interest
rates for the first three months of 1998 ranged from 5.1% to 5.63%, while those
for the comparable period in 1997 ranged from 4.8% to 5.5%. The decrease in
funds available for investment resulted in a decrease in interest income of
approximately $17,000.
2
<PAGE>
Expenses for the three months ended March 31, 1998 were approximately
$208,000 as compared with approximately $171,000 for the comparable period in
1997. Expenses relating to reporting to partners increased by approximately
$12,000 while payroll expenses increased by $5,000.
The Partnership generated net income of approximately $3,777,000 for the
three months ended March 31, 1998, as compared with net income of approximately
$4,815,000 for the comparable period in 1997. The decrease in net income is the
result of a decrease in film revenues and an increase in expenses as stated
above.
The Partnership has commitments to thirty-three films, all of which have
been completed and released, with total budgets amounting to approximately
$599,000,000, of which approximately $598,838,000 has been expended as of March
31, 1998. The Joint Venture Films are: "The Good Mother," released November 4,
1988; "Beaches," released December 21, 1988; "Three Fugitives," released January
27, 1989; "Disorganized Crime," released April 14, 1989; "The Dead Poets
Society," released June 2, 1989; "Turner and Hooch," released July 28, 1989; "An
Innocent Man," released October 6, 1989; "Gross Anatomy," released October 20,
1989; "The Little Mermaid," released November 15, 1989; "Blaze," released
December 13, 1989; "Where the Heart Is," released February 23, 1990; "Pretty
Woman," released March 23, 1990; "Ernest Goes to Jail," released April 6, 1990;
"Spaced Invaders," released April 27, 1990; "Dick Tracy," released June 15,
1990; "Betsy's Wedding," released June 22, 1990; "Taking Care of Business,"
released August 17, 1990; "Mr. Destiny," released October 12, 1990; "Rescuers
Down Under," released November 16, 1990; "White Fang," released January 18,
1991; "Run," released February 1, 1991; "Scenes From A Mall," released February
22, 1991; "The Marrying Man," released April 5, 1991; "Oscar," released April
26, 1991; "One Good Cop," released May 3, 1991; "Wild Hearts Can't Be Broken,"
released May 24, 1991; "The Rocketeer," released June 21, 1991; "The Doctor,"
released July 24, 1991; "V.I. Warshawski," released July 26, 1991; "True
Identity," released August 23, 1991; "Deceived," released September 27, 1991;
"Beauty and the Beast," released November 15, 1991; and "Blame it on the
Bellboy," released February 28, 1992.
During the quarter ended March 31, 1998, the Partnership made cash
distributions to the Partners of $4,888,889. The Partnership made one
distribution on January 23, 1998 in the amount of $5.50 per unit. Although all
of the Joint Venture Films have been released, the Partnership anticipates that
future revenues will be derived from the sale of its interest in the Joint
Venture (see Investment in Joint Venture, below) and that it will continue to
receive revenues and make quarterly cash distributions in the future. However,
revenues in upcoming quarters may be insufficient to justify making a cash
distribution.
3
<PAGE>
Investment in Joint Venture
---------------------------
The Partnership entered into the Buyout Agreement with Disney dated
September 11, 1995 providing for the sale to Disney of all of the Partnership's
interest in the Joint Venture. The Buyout Agreement provides for the payment of
the purchase price of $330,000,000, in cash (subject to certain adjustments with
respect to revenues received from the exploitation of animated films). Closing
is scheduled to occur on November 30, 1998 subject to satisfaction of certain
customary conditions. In addition to the purchase price, the Buyout Agreement
provides that Buena Vista Pictures Distribution, Inc. ("BV") will continue to
account for and make payments to the Joint Venture, as required by the
Distribution Agreement for all revenues received by BV through April 30, 1998.
As a result of the Buyout Agreement the Partnership is using the cost
method of accounting starting January 1, 1996. Under the cost method,
distributions received are recognized as income and investments will be reduced
in proportion that actual cash received bears to ultimate revenues expected.
Liquidity and Capital Resources
-------------------------------
Inasmuch as the funding obligations of the Partnership with respect to the
financing of the Joint Venture Films have been fully complied with or reserved
against, the Partnership has no material commitments for capital expenditures
and does not intend to enter into any such commitments. Receipts from temporary
investments and from the Joint Venture, less reserves established as determined
by the Managing General Partner, are the sources of liquidity for the
Partnership. The Partnership has no material requirements for liquidity other
than its general and administrative expenses and quarterly distributions to
holders of units of limited partnership interests. Such sources are considered
adequate for such needs.
Closing under the Buyout Agreement with Disney is scheduled to occur
November 30, 1998. The Partnership currently expects to dissolve by the end of
1998 upon disposition of its remaining assets and distribution of cash to the
partners.
4
<PAGE>
ITEM 3. SELECTED FINANCIAL DATA.
SILVER SCREEN PARTNERS IV, L.P.
-------------------------------
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
-------------- --------------
REVENUES:
Income from Joint Venture ..................... $ 3,918,926 $ 4,903,755
Interest income ............................... 65,926 82,665
------------ ------------
3,984,852 4,986,420
EXPENSES:
General and administrative
expenses ................................... 207,933 171,377
------------ ------------
Net income ...................................... $ 3,776,919 $ 4,815,043
============ ============
Net income per $500 limited
partnership unit (based on
800,000 units outstanding) ................... $ 4.25 $ 5.42
============ ============
Cash distribution
per $500 limited
partnership unit ............................. $ 5.50 $ 0.00
============ ============
March 31, 1998 March 31, 1997
-------------- --------------
Total assets .................................... $ 76,604,296 $ 81,338,786
============ ============
See notes to financial statements.
5
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits:
Exhibit 20 -- 1998 First Quarter Report
(b) The Partnership did not file any reports on Form
8-K during the quarter ended March 31, 1998.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SILVER SCREEN PARTNERS IV, L.P.,
a Delaware limited partnership
By: Silver Screen Management Services, Inc.,
Managing General Partner
Date: May 15, 1998 By: /s/ Roland W. Betts
--------------------------------
Roland W. Betts, President
7
<PAGE>
S I L V E R S C R E E N P A R T N E R S I V, L. P.
F i r s t
Q u a r t e r
R e p o r t
M a r c h 3 1 , 1 9 9 8
F-1
<PAGE>
DEAR LIMITED PARTNER:
The 1998 first quarter cash distribution totals $4.8 million, bringing
total distributions since the Partnership's inception in 1988 to $600 million.
First quarter revenue was generated principally from the theatrical
re-release of "The Little Mermaid," and from sales of merchandise related to the
film. "Pretty Woman" contributed a substantial amount of revenue from the U.S.
home video and syndicated television markets.
Partnership revenue in the future is expected to be generated principally
from the Disney buyout of the Silver Screen IV-Disney Joint Venture. As always,
distributions depend on the amount of revenue generated each quarter, and there
may be quarters when revenue may be insufficient to justify making a cash
distribution.
Between now and the dissolution of the Partnership, current expectations
are that, after the current distribution and expenses, Silver Screen Partners IV
will distribute approximately $274 to $304 per unit to investors (this amount
includes all anticipated future quarterly distributions and the buyout proceeds
from Disney). The closing of the purchase by Disney is scheduled to occur on
November 30, 1998. The final distribution and dissolution of the Partnership is
expected to take place before December 31, 1998. These figures and dates
represent our best estimates as of today. Please note that due to the expected
dissolution, requests to transfer Partnership units as a result of secondary
sales will not be accepted after August 15, 1998.
Our Second Quarter Report will be mailed in July. If you need any
assistance in the meantime, please contact our Investor Relations Department
between the hours of 10 A.M. and 2 P.M., Eastern Standard Time.
Sincerely,
/s/ Roland W. Betts /s/ Tom A. Bernstein
- -------------------- ---------------------
Roland W. Betts Tom A. Bernstein
President Executive Vice President
F-2
<PAGE>
B A L A N C E S H E E T S
(Unaudited)
- ---------------------------
March 31, December 31,
1998 1997
------------ ------------
ASSETS
Current assets:
Cash ........................................... $ 132,879
Temporary investments (at cost plus accrued
interest, which approximates market) ......... $ 7,571,695 7,180,956
----------- -----------
Total current assets ........................... 7,571,695 7,313,835
Investment in Joint Venture .................... 69,032,601 70,121,760
----------- -----------
$76,604,296 $77,435,595
=========== ===========
LIABILITIES AND PARTNERS' EQUITY
Current liabilities:
Cash overdraft ................................. $ 242,586
Due to managing general partner ................ 73,781 $ 35,696
Accrued unincorporated business tax ............ 126,157 126,157
----------- -----------
Total liabilities .............................. 442,524 161,853
----------- -----------
Partners' equity:
General partners ............................... -- --
Limited partners ............................... 76,161,772 77,273,742
----------- -----------
Total partners' equity ......................... 76,161,772 77,273,742
----------- -----------
$76,604,296 $77,435,595
=========== ===========
See notes to financial statements.
F-3
<PAGE>
S T A T E M E N T S O F O P E R A T I O N S
(Unaudited)
- -----------------------------------------------
Three Months Three Months
Ended Ended
March 31, March 31,
1998 1997
----------- -----------
REVENUES:
Income from Joint Venture ........................ $3,918,926 $4,903,755
Interest income .................................. 65,926 82,665
---------- ----------
3,984,852 4,986,420
COSTS AND EXPENSES:
General and administrative expenses .............. 207,933 171,377
---------- ----------
Net income ....................................... $3,776,919 $4,815,043
========== ==========
Net income allocated to:
General partners ................................. $ 377,692 $ 481,504
Limited partners ................................. 3,399,227 4,333,539
---------- ----------
$3,776,919 $4,815,043
========== ==========
Net income per a $500 limited partnership
unit (based on 800,000 units outstanding) ...... $ 4.25 $ 5.42
========== ==========
See notes to financial statements.
S T A T E M E N T S O F P A R T N E R S ' E Q U I T Y
(Unaudited)
- ----------------------------------------------------------
Year Ended December 31, 1997
and Three Months Ended March 31, 1998
<TABLE>
<CAPTION>
General Limited
Partners Partners Total
------------- ----------- -----------
<S> <C> <C> <C> <C>
Balance, January 1, 1997 ..................... $ -- $ 76,323,648 $ 76,323,648
Net income, 1997 ............................. 1,450,565 13,055,085 14,505,650
Distributions, 1997 .......................... (1,355,556) (12,200,000) (13,555,556)
Allocation under Treasury Regulation
Section 1.704-1(b) ........................ (95,009) 95,009 --
------------ ------------ ------------
Balance, December 31, 1997 ................... -- 77,273,742 77,273,742
Net income, three months 1998 ................ 377,692 3,399,227 3,776,919
Distributions during three months 1998 (488,889) (4,400,000) (4,888,889)
Allocation under Treasury Regulation
Section 1.704-1(b) ........................ 111,197 (111,197) --
------------ ------------ ------------
$ -- $ 76,161,772 $ 76,161,772
============ ============ ============
</TABLE>
See notes to financial statements.
F-4
<PAGE>
S t a t e m e n t s o f C a s h F l o w s
(Unaudited)
- -----------------------------------------------
Three Months Three Months
Ended Ended
March 31, 1998 March 31, 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ..................................... $ 3,776,919 $ 4,815,043
Adjustments to reconcile net income to net
cash provided by operating activities:
(Increase) decrease in accrued
interest receivable .......................... (2,915) 136,621
Charge on overhead fee payable ................. -- 13,244
Net change in operating assets
and liabilities:
Increase in due to managing general partner .... 38,085 41,716
------------ ------------
Net cash provided by operating activities ...... 3,812,089 5,006,624
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in investment in Joint Venture ........ 1,089,159 1,362,866
(Purchase) sale of temporary investments, net .. (387,824) 17,437,468
------------ ------------
Net cash provided by (used in)
investing activities ......................... 701,335 18,800,334
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to partners ...................... (4,888,889) --
Decrease in overhead fee payable ............... -- (23,852,664)
------------ ------------
Net cash used in financing activities .......... (4,888,889) (23,852,664)
------------ ------------
Net decrease in cash ........................... (375,465) (45,706)
Cash, beginning of year ........................ 132,879 314,835
------------ ------------
(Cash overdraft) cash at end of three months ... $ (242,586) $ 269,129
============ ============
See notes to financial statements.
F-5
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Temporary Investments
- ---------------------
Temporary investments represent investments in commercial paper.
Investment in Joint Venture
- ---------------------------
The Partnership entered into a Letter Agreement (the "Buyout Agreement") with
Disney dated September 11, 1995 providing for the sale to Disney of all of the
Partnership's interest in the Joint Venture. The Buyout Agreement provides for
the payment of the purchase price of $330,000,000 in cash (subject to certain
adjustments with respect to revenues received from the exploitation of animated
films). Closing is scheduled to occur on November 30, 1998 subject to
satisfaction of certain customary conditions. In addition to the purchase price,
the Buyout Agreement provides that Buena Vista Pictures Distribution, Inc.
("BV") will continue to account for and make payments to the Joint Venture, as
required by the Distribution Agreement for all revenues received by BV through
April 30, 1998.
As a result of the Buyout Agreement, the Partnership began using the cost method
of accounting starting January 1, 1996. Under the cost method, distributions
received are recognized as income and investments will be reduced in proportion
to the actual cash received to ultimate revenues expected to be received.
F-6
<PAGE>
(C) 1998 Silver Screen Management Services, Inc. Design: Pentagram
F-7
<PAGE>
Silver Screen Management Services, Inc.
Chelsea Piers-Pier 62
Suite 300
New York, NY 10011
(212) 336-6700
Recorded News Update:
(800) 444-SILV
F-7
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED BALANCE SHEET AS OF MARCH 31, 1998, AND THE STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED MARCH 31, 1998, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1998
<PERIOD-END> Mar-31-1998
<CASH> 0
<SECURITIES> 7,572
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,572
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 76,604
<CURRENT-LIABILITIES> 0
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 76,162
<TOTAL-LIABILITY-AND-EQUITY> 76,604
<SALES> 3,919
<TOTAL-REVENUES> 3,985
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 208
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 3,777
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,777
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,777
<EPS-PRIMARY> 4.25
<EPS-DILUTED> 0
</TABLE>
