UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 2003
[ ] 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 0-11002
CONSOLIDATED CAPITAL PROPERTIES IV
(Exact Name of Registrant as Specified in Its Charter)
California 94-2768742
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
55 Beattie Place, PO Box 1089
Greenville, South Carolina 29602
(Address of principal executive offices)
(864) 239-1000
(Issuer's telephone number)
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED BALANCE SHEETS
(in thousands, except unit data)
September 30, December 31,
2003 2002
(Unaudited) (Note)
(Restated)
Assets
Cash and cash equivalents $ 1,474 $ 2,127
Receivables and deposits 1,269 1,166
Restricted escrows 347 656
Due from affiliates -- 149
Other assets 1,725 1,449
Assets held for sale -- 1,923
Investment properties:
Land 9,732 9,732
Buildings and related personal property 121,357 118,968
131,089 128,700
Less accumulated depreciation (106,378) (103,883)
24,711 24,817
$ 29,526 $ 32,287
Liabilities and Partners' Deficit
Liabilities
Accounts payable $ 148 $ 407
Tenant security deposit liabilities 521 523
Accrued property taxes 1,442 1,392
Other liabilities 1,011 820
Distributions payable 715 571
Mortgage notes payable 67,747 68,386
Liabilities related to assets held for sale -- 4,244
71,584 76,343
Partners' Deficit
General partners (7,066) (7,146)
Limited partners (342,773 units issued and
outstanding) (34,992) (36,910)
(42,058) (44,056)
$ 29,526 $ 32,287
Note: The balance sheet at December 31, 2002, has been derived from the audited
financial statements at that date but does not include all the information
and footnotes required by accounting principles generally accepted in the
United States for complete financial statements.
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per unit data)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
(Restated) (Restated)
Revenues:
Rental income $ 5,357 $ 5,595 $15,342 $17,798
Other income 697 713 1,979 1,959
Casualty gain 23 -- 23 --
Total revenues 6,077 6,308 17,344 19,757
Expenses:
Operating 2,682 2,524 7,578 7,474
General and administrative 383 378 1,005 1,393
Depreciation 777 811 2,516 2,713
Interest 1,214 1,321 3,647 3,986
Property taxes 454 518 1,264 1,563
Total expenses 5,510 5,552 16,010 17,129
Income from continuing operations 567 756 1,334 2,628
(Loss) income from discontinued operations (1) 124 8 413
Gain from sale of discontinued operations 83 -- 6,232 --
Net income $ 649 $ 880 $ 7,574 $ 3,041
Net income allocated to general partners (4%) $ 26 $ 35 $ 303 $ 122
Net income allocated to limited partners (96%) 623 845 7,271 2,919
$ 649 $ 880 $ 7,574 $ 3,041
Per limited partnership unit:
Income from continuing operations $ 1.59 $ 2.12 $ 3.74 $ 7.36
Income from discontinued operations -- 0.35 0.02 1.16
Gain from sale of discontinued operations 0.23 -- 17.45 --
Net income $ 1.82 $ 2.47 $ 21.21 $ 8.52
Distributions per limited partnership unit $ 2.90 $ 2.97 $ 15.62 $ 15.66
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' DEFICIT
(Unaudited)
(in thousands, except unit data)
Limited Total
Partnership General Limited Partners'
Units Partners Partners Deficit
Original capital contributions 343,106 $ 1 $171,553 $171,554
Partners' deficit at
December 31, 2001 342,773 $ (7,064) $(35,636) $(42,700)
Distributions to partners -- (253) (5,367) (5,620)
Net income for the nine months
ended September 30, 2002 -- 122 2,919 3,041
Partners' deficit at
September 30, 2002 342,773 $ (7,195) $(38,084) $(45,279)
Partners' deficit at
December 31, 2002 342,773 $ (7,146) $(36,910) $(44,056)
Distributions to partners -- (223) (5,353) (5,576)
Net income for the nine months
ended September 30, 2003 -- 303 7,271 7,574
Partners' deficit at
September 30, 2003 342,773 $ (7,066) $(34,992) $(42,058)
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended
September 30,
2003 2002
Cash flows from operating activities:
Net income $ 7,574 $ 3,041
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 2,572 2,877
Amortization of loan costs 156 156
Casualty gain (23) (120)
Loss on early extinguishment of debt 13 --
Gain on sale of discontinued operations (6,232) --
Change in accounts:
Receivables and deposits (103) (103)
Other assets (445) (149)
Accounts payable (276) (11)
Tenant security deposit liabilities (2) 33
Accrued property taxes 50 276
Other liabilities 191 477
Due from affiliates 149 --
Net cash provided by operating activities 3,624 6,477
Cash flows from investing activities:
Property improvements and replacements (2,431) (1,751)
Net withdrawals from restricted escrows 309 108
Insurance proceeds from casualties 23 168
Net proceeds from sale of discontinued operations 8,137 --
Net cash provided by (used in) investing activities 6,038 (1,475)
Cash flows from financing activities:
Payments on mortgage notes payable (654) (625)
Repayment of mortgage notes payable (4,229) --
Distributions to partners (5,432) (5,617)
Net cash used in financing activities (10,315) (6,242)
Net decrease in cash and cash equivalents (653) (1,240)
Cash and cash equivalents at beginning of period 2,127 2,729
Cash and cash equivalents at end of period $ 1,474 $ 1,489
Supplemental disclosures of cash flow information:
Cash paid for interest was approximately $4,084,000 and $4,044,000 for the nine
months ended September 30, 2003 and 2002, respectively. Distributions payable
and distributions to partners were adjusted by approximately $144,000 and $3,000
for non-cash activity for the nine months ended September 30, 2003 and 2002,
respectively.
See Accompanying Notes to Consolidated Financial Statements
CONSOLIDATED CAPITAL PROPERTIES IV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note A - Basis of Presentation
The accompanying unaudited consolidated financial statements of Consolidated
Capital Properties IV (the "Partnership" or "Registrant") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of ConCap Equities, Inc. ("CEI" or the "General
Partner"), all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three and nine months ended September 30, 2003, are not necessarily indicative
of the results that may be expected for the fiscal year ending December 31,
2003. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Partnership's Annual Report on Form 10-K
for the fiscal year ended December 31, 2002. The General Partner is a subsidiary
of Apartment Investment and Management Company ("AIMCO"), a publicly traded real
estate investment trust.
Effective January 1, 2002, the Partnership adopted Statement of Financial
Accounting Standards ("SFAS") No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets", which established standards for the way that
business enterprises report information about long-lived assets that are either
being held for sale or have already been disposed of by sale or other means. The
standard requires that results of operations for a long-lived asset that is
being held for sale or has already been disposed of be reported as discontinued
operations on the statement of operations. As a result, the accompanying balance
sheet as of December 31, 2002 and the consolidated statements of operations as
of January 1, 2002 have been restated to reflect the operations of South Port
Apartments, which was sold March 28, 2003, as (loss) income from discontinued
operations.
Note B - Transactions with Affiliated Parties
The Partnership has no employees and is dependent on the General Partner and its
affiliates for the management and administration of all Partnership activities.
The Partnership Agreement provides for (i) certain payments to affiliates for
services and (ii) reimbursements of certain expenses incurred by affiliates on
behalf of the Partnership.
Affiliates of the General Partner are entitled to receive 5% of gross receipts
from all the Partnership's properties as compensation for providing property
management services. The Partnership paid to such affiliates approximately
$881,000 and $1,074,000 for the nine months ended September 30, 2003 and 2002,
respectively, which is included in operating expenses and income (loss) from
discontinued operations.
An affiliate of the General Partner received reimbursement of accountable
administrative expenses amounting to approximately $624,000 and $776,000 for the
nine months ended September 30, 2003 and 2002, respectively, which is included
in general and administrative expenses and investment properties. Included in
these amounts are fees related to construction management services provided by
an affiliate of the General Partner of approximately $50,000 and $38,000 for the
nine months ended September 30, 2003 and 2002, respectively. The construction
management service fees are calculated based on a percentage of current year
additions to investment properties. During the nine months ended September 30,
2003, an affiliate of the General Partner refunded the Partnership approximately
$111,000 for overpayment of management reimbursements during 2002.
The Partnership Agreement provides for a special management fee equal to 9% of
the total distributions made to the limited partners from cash flow provided by
operations to be paid to the General Partner for executive and administrative
management services. The Partnership paid approximately $158,000 and $477,000
under this provision of the Partnership Agreement to the General Partner during
the nine months ended September 30, 2003 and 2002, respectively, which is
included in general and administrative expenses.
For acting as real estate broker in connection with the sale of South Port
Apartments, the General Partner was paid a real estate commission of
approximately $295,000 during the nine months ended September 30, 2003. When the
Partnership terminates, the General Partner will have to return this commission
if the limited partners do not receive their original invested capital plus a 6%
per annum cumulative return.
The Partnership insures its properties up to certain limits through coverage
provided by AIMCO which is generally self-insured for a portion of losses and
liabilities related to workers compensation, property casualty and vehicle
liability. The Partnership insures its properties above the AIMCO limits through
insurance policies obtained by AIMCO from insurers unaffiliated with the General
Partner. During the nine months ended September 30, 2003 and 2002, the
Partnership was charged by AIMCO and its affiliates approximately $350,000 and
$423,000, respectively, for insurance coverage and fees associated with policy
claims administration.
Note C - Casualty Gains
In March 2000, South Port Apartments had wind and hail damage, which damaged the
majority of the 240 rental units. The repairs included roof replacements to the
majority of units. Insurance proceeds of approximately $168,000 were received
during the nine months ended September 30, 2002. The Partnership recognized a
casualty gain of approximately $120,000 during the nine months ended September
30, 2002 which represents the excess of the proceeds received as of September
30, 2002 over the write-off of the undepreciated damaged assets. This amount is
included in (loss) income from discontinued operations in the accompanying
consolidated statements of operations.
In January 2003, The Apartments had a fire which damaged five apartment units
and a hallway. Insurance proceeds of approximately $23,000 were received during
the nine months ended September 30, 2003. The Partnership recognized a casualty
gain of approximately $23,000 for the three and nine months ended September 30,
2003. The damaged assets were fully depreciated at the time of the fire.
Note D - Disposition of Investment Property
On March 28, 2003, the Partnership sold South Port Apartments to an unrelated
third party, for a gross sale price of $8,625,000. The net proceeds realized by
the Partnership were approximately $8,137,000 after payment of closing costs of
approximately $488,000. The Partnership used approximately $4,229,000 of the net
proceeds to repay the mortgage encumbering the property. The Partnership
realized a gain of approximately $6,232,000 for the nine months ended September
30, 2003, as a result of this sale. This amount is shown as gain from sale of
discontinued operations in the accompanying consolidated statements of
operations. The property's operations, income of approximately $8,000 and
$413,000 for the nine months ended September 30, 2003 and 2002, respectively,
are included in (loss) income from discontinued operations and include revenues
of approximately $327,000 and $1,199,000, respectively. In addition, the
Partnership recorded a loss on early extinguishment of debt of approximately
$13,000 for the nine months ended September 30, 2003 due to the write-off of
unamortized loan costs, which is also included in (loss) income from
discontinued operations in the accompanying consolidated statements of
operations.
Note E - Legal Proceedings
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its General Partner and several of
their affiliated partnerships and corporate entities. The action purported to
assert claims on behalf of a class of limited partners and derivatively on
behalf of a number of limited partnerships (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia Financial Group, Inc.
("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units;
management of the partnerships by the Insignia affiliates; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief, including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint (the "Heller action") was filed against the same defendants that are
named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or
about August 6, 2001, plaintiffs filed a first amended complaint. The Heller
action was brought as a purported derivative action, and asserted claims for,
among other things, breach of fiduciary duty, unfair competition, conversion,
unjust enrichment, and judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
filed an appeal seeking to vacate and/or reverse the order approving the
settlement and entering judgment thereto. The General Partner intends to file a
respondent's brief in support of the order approving settlement and entering
judgment thereto.
The General Partner does not anticipate that any costs to the Partnership,
whether legal or settlement costs, associated with these cases will be material
to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a Complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act (FLSA) by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. The Complaint is styled as a
Collective Action under the FLSA and seeks to certify state subclasses in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate maintenance workers for
time that they were required to be "on-call". Additionally, the Complaint
alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating
maintenance workers for time that they worked in responding to a call while
"on-call". The Complaint also attempts to certify a subclass for salaried
service directors who are challenging their classification as exempt from the
overtime provisions of the FLSA. AIMCO Properties L.P. has filed an answer to
the Complaint denying the substantive allegations. Although the outcome of any
litigation is uncertain, in the opinion of the General Partner the claims will
not result in any material liability to the Partnership.
The Partnership is unaware of any other pending or outstanding litigation
matters involving it or its investment properties that are not of a routine
nature arising in the ordinary course of business.
Note F - Redevelopment of Chimney Hill
The General Partner has determined that Chimney Hill Apartments suffers from
severe structural defects in the building's foundation and as such, has vacated
the property. The General Partner has designed and approved a redevelopment plan
for the property that requires the complete demolition and reconstruction of the
apartment complex. Site work on the redevelopment is scheduled to begin during
the fourth quarter of 2003.The General Partner does not believe there has been
an impairment of the property based on the estimated fair value of the land.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The matters discussed in this report contain certain forward-looking statements,
including, without limitation, statements regarding future financial performance
and the effect of government regulations. Actual results may differ materially
from those described in the forward-looking statements and will be affected by a
variety of risks and factors including, without limitation: national and local
economic conditions; the terms of governmental regulations that affect the
Registrant and interpretations of those regulations; the competitive environment
in which the Registrant operates; financing risks, including the risk that cash
flows from operations may be insufficient to meet required payments of principal
and interest; real estate risks, including variations of real estate values and
the general economic climate in local markets and competition for tenants in
such markets; litigation, including costs associated with prosecuting and
defending claims and any adverse outcomes, and possible environmental
liabilities. Readers should carefully review the Registrant's financial
statements and the notes thereto, as well as the risk factors described in the
documents the Registrant files from time to time with the Securities and
Exchange Commission.
The Partnership's investment properties consist of fourteen apartment complexes.
The following table sets forth the average occupancy of the properties for the
nine months ended September 30, 2003 and 2002:
Average Occupancy
Property 2003 2002
The Apartments 94% 91%
Omaha, NE
Arbours of Hermitage Apartments 95% 93%
Nashville, TN
Briar Bay Racquet Club Apartments 91% 95%
Miami, FL
Chimney Hill Apartments 2% 81%
Marietta, GA
Citadel Apartments 95% 93%
El Paso, TX
Citadel Village Apartments 78% 88%
Colorado Springs, CO
Foothill Place Apartments 90% 89%
Salt Lake City, UT
Knollwood Apartments 95% 94%
Nashville, TN
Lake Forest Apartments 95% 94%
Omaha, NE
Nob Hill Villa Apartments 92% 91%
Nashville, TN
Point West Apartments 89% 93%
Charleston, SC
Post Ridge Apartments 95% 91%
Nashville, TN
Rivers Edge Apartments 92% 94%
Auburn, WA
Village East Apartments 70% 83%
Cimarron Hills, CO
The increase in occupancy at The Apartments and Post Ridge Apartments is
attributable to a more aggressive marketing campaign and the use of competitive
pricing strategies in their respective markets. The decrease in occupancy at
Briar Bay Racquet Club Apartments and Point West Apartments is due to more
tenants purchasing houses due to lower mortgage interest rates and changing
economic conditions in their respective local markets. The decrease in occupancy
at Village East Apartments and Citadel Village Apartments is due to recent
military deployments as both properties are located near military bases and an
increase in competitive pricing strategies used by competition in their
respective local markets.
The General Partner has determined that Chimney Hill Apartments suffers from
severe structural defects in the building's foundation and as such, has vacated
the property. The General Partner has designed and approved a redevelopment plan
for the property that requires the complete demolition and reconstruction of the
apartment complex. Site work on the redevelopment is scheduled to begin during
the fourth quarter of 2003.The General Partner does not believe there has been
an impairment of the property based on the estimated fair value of the land.
Results of Operations
The Partnership's net income for the three and nine months ended September 30,
2003 was approximately $649,000 and $7,574,000, compared to net income of
approximately $880,000 and $3,041,000 for the three and nine months ended
September 30, 2002, respectively. The increase in net income for the nine months
ended September 30, 2003 is primarily due to the recognition of a gain on sale
of discontinued operations and a decrease in total expenses partially offset by
decreases in income from discontinued operations and total revenues. Net income
for the three months ended September 30, 2003 decreased due to decreases in
income from discontinued operations and total revenues partially offset by a
decrease in total expenses and a gain on sale of discontinued operations.
On March 28, 2003, the Partnership sold South Port Apartments to an unrelated
third party, for a gross sale price of $8,625,000. The net proceeds realized by
the Partnership were approximately $8,137,000 after payment of closing costs of
approximately $488,000. The Partnership used approximately $4,229,000 of the net
proceeds to repay the mortgage encumbering the property. The Partnership
realized a gain of approximately $6,232,000 for the nine months ended September
30, 2003, as a result of this sale. This amount is shown as gain from sale of
discontinued operations. The property's operations, income of approximately
$8,000 and $413,000 for the nine months ended September 30, 2003 and 2002,
respectively, are included in (loss) income from discontinued operations. These
amounts include revenues of approximately $327,000 and $1,199,000 for the nine
months ended September 30, 2003 and 2002, respectively.
The Partnership also recorded a loss on early extinguishment of debt of
approximately $13,000 for the nine months ended September 30, 2003 due to the
write-off of unamortized loan costs, which is also included in (loss) income
from discontinued operations.
In March 2000, South Port Apartments had wind and hail damage, which damaged the
majority of the 240 rental units. The repairs included roof replacements to the
majority of units. Insurance proceeds of approximately $168,000 were received
during the nine months ended September 30, 2002. The Partnership recognized a
casualty gain of approximately $120,000 during the nine months ended September
30, 2002, which represents the excess of the proceeds received as of September
30, 2002 over the write-off of the undepreciated damaged assets. This amount is
included in (loss) income from discontinued operations.
Excluding the impact of (loss) income from discontinued operations and the gain
from sale of discontinued operations, the Partnership's income from continuing
operations for the three and nine months ended September 30, 2003 was
approximately $567,000 and $1,334,000, compared to income from continuing
operations of approximately $756,000 and $2,628,000 for the three and nine
months ended September 30, 2002, respectively. The decrease in total revenues
for the three and nine months ended September 30, 2003 is due to a decrease in
rental income partially offset by the recognition in 2003 of a casualty gain at
The Apartments. Rental income decreased due to a decrease in occupancy at six of
the fourteen investment properties, including a substantial decrease at Chimney
Hill Apartments as discussed above, a decrease in average rental rates at all of
the Partnership's investment properties and an overall increase in concessions
and special promotions given in an effort to increase or maintain occupancy
levels.
In January 2003, The Apartments had a fire which damaged five apartment units
and a hallway. Insurance proceeds of approximately $23,000 were received during
the nine months ended September 30, 2003. The Partnership recognized a casualty
gain of approximately $23,000 for the three and nine months ended September 30,
2003. The damaged assets were fully depreciated at the time of the fire.
Total expenses for the nine months ended September 30, 2003 decreased due to
decreases in general and administrative, depreciation, interest, and property
tax expenses partially offset by an increase in operating expenses. Total
expenses for the three months ended September 30, 2003 decreased due to
decreases in depreciation, interest and property tax expenses partially offset
by an increase in operating expenses. Depreciation expense decreased due to
depreciable assets becoming fully depreciated at The Apartments and Lake Forest
Apartments during 2002 partially offset by an increase in the depreciation on
capital improvements placed into service during the past twelve months. Interest
expense decreased during 2003 due to the capitalization of approximately
$292,000 of interest expense related to the renovation project at Chimney Hill
Apartments and due to the payment of scheduled principal payments on the
mortgages encumbering the Partnership's investment properties which has reduced
the average outstanding balance over the past twelve months. Property tax
expense decreased due to the capitalization of approximately $183,000 of taxes
related to the renovation project at Chimney Hill Apartments and refunds
received at Citadel Apartments and Foothill Place Apartments for prior year
taxes. The increase in operating expenses was due to increases in advertising,
insurance and property expenses partially offset by decreases in maintenance
expense and property management fees. Advertising expense increased due to an
increase in periodical and web advertising at many of the Partnership's
investment properties partially offset by a decrease in resident relations at
Chimney Hill Apartments. Insurance expense increased due to an increase in
hazard insurance premiums at many of the Partnership's investment properties.
Property expense increased due to increases in salaries and related benefits,
leasing renewal incentives, utility processing fees and water and gas utility
bills at many of the Partnership's investment properties. Maintenance expense
decreased due to the capitalization of approximately $312,000 of construction
period operating costs related to the rehabilitation project at Chimney Hill
Apartments partially offset by an increase in contract labor and payroll
expenses at many of the Partnership's investment properties. Property management
fees are based on a percentage of revenues and decreased as a result of
decreases in rental income at many of the investment properties.
General and administrative expense decreased for the nine months ended September
30, 2003 due to a decrease in management reimbursements to the General Partner
as allowed under the Partnership Agreement and management fees paid to the
General Partner in connection with distributions made from operations. Included
in general and administrative expenses are costs associated with the quarterly
and annual communications with investors and regulatory agencies and the annual
audit required by the Partnership Agreement.
As part of the ongoing business plan of the Partnership, the General Partner
monitors the rental market environment of each of its investment properties to
assess the feasibility of increasing rents, maintaining or increasing occupancy
levels and protecting the Partnership from increases in expenses. As part of
this plan, the General Partner attempts to protect the Partnership from the
burden of inflation-related increases in expenses by increasing rents and
maintaining a high overall occupancy level. However, the General Partner may use
rental concessions and rental rate deductions to offset softening market
conditions, accordingly, there is no guarantee that the General Partner will be
able to sustain such a plan.
Liquidity and Capital Resources
At September 30, 2003, the Partnership had cash and cash equivalents of
approximately $1,474,000 compared to approximately $1,489,000 at September 30,
2002. The decrease in cash and cash equivalents of approximately $653,000 from
the Partnership's year ended December 31, 2002, is due to approximately
$10,315,000 of cash used in financing activities partially offset by
approximately $6,038,000 of cash provided by investing activities and
approximately $3,624,000 of cash provided by operating activities. Cash used in
financing activities consisted of payments of principal made on the mortgage
indebtedness encumbering the Partnership's properties, repayment of the mortgage
encumbering South Port Apartments and distributions to the partners. Cash
provided by investing activities consisted of net proceeds received from the
sale of South Port Apartments, net withdrawals from escrow accounts maintained
by the mortgage lenders, and insurance proceeds received from the casualty at
The Apartments, partially offset by property improvements and replacements. The
Partnership invests its working capital reserves in interest bearing accounts.
The sufficiency of existing liquid assets to meet future liquidity and capital
expenditure requirements is directly related to the level of capital
expenditures required at the properties to adequately maintain the physical
assets and other operating needs of the Partnership and to comply with Federal,
state, and local legal and regulatory requirements. The General Partner monitors
developments in the area of legal and regulatory compliance and is studying new
federal laws, including the Sarbanes-Oxley Act of 2002. The Sarbanes-Oxley Act
of 2002 mandates or suggests additional compliance measures with regard to
governance, disclosure, audit and other areas. In light of these changes, the
Partnership expects that it will incur higher expenses related to compliance,
including increased legal and audit fees. Capital improvements planned for each
of the Partnership's properties are detailed below.
The Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $104,000 of capital improvements at The Apartments, consisting
primarily of building improvements, fire damage repairs, floor covering and
water heater replacements and major landscaping. These improvements were funded
from operating cash flow and insurance proceeds. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $9,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of floor
covering and appliance replacements. Additional capital improvements may be
considered and will depend on the physical condition of the property as well as
the anticipated cash flow generated by the property.
Arbours of Hermitage Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $98,000 of capital improvements at Arbours of Hermitage
Apartments, consisting primarily of structural improvements, water heater
replacements, and floor covering and appliance replacements. These improvements
were funded from operating cash flow. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $17,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of structural
upgrades and floor covering and appliance replacements. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
Briar Bay Racquet Club Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $73,000 of capital improvements at Briar Bay Racquet Club
Apartments, consisting primarily of appliance and floor covering replacements,
roof replacements, structural upgrades and major landscaping. These improvements
were funded from operating cash flow and replacement reserves. The Partnership
evaluates the capital improvement needs of the property during the year and
currently expects to complete an additional $5,000 in capital improvements
during the remainder of 2003. The additional capital improvements will consist
primarily of appliance and floor covering replacements. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as replacement reserves and the anticipated cash flow generated
by the property.
Chimney Hill Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $993,000 of capital improvements at Chimney Hill Apartments
consisting primarily of architect fees and capitalized construction period
interest of approximately $292,000, taxes of approximately $183,000 and other
construction period operating expenses of approximately $312,000. These
expenditures were funded from operating cash flow and partnership reserves. The
Partnership is currently planning a complete demolition and reconstruction of
the apartment complex.
Citadel Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $56,000 of capital improvements at Citadel Apartments, consisting
primarily of water and sewer upgrades, water heater replacements, floor covering
replacements, and plumbing fixtures. These improvements were funded from
operating cash flow. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$35,000 in capital improvements during the remainder of 2003. The additional
capital improvements will consist primarily of structural upgrades and appliance
and floor covering replacements. Additional capital improvements may be
considered and will depend on the physical condition of the property as well as
the anticipated cash flow generated by the property.
Citadel Village Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $130,000 of capital improvements at Citadel Village Apartments,
consisting primarily of office computers, gutter replacements, appliance and
floor covering replacements and structural upgrades. These improvements were
funded from operating cash flow. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $18,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of cabinet
replacements, interior building improvements and appliance and floor covering
replacements. Additional capital improvements may be considered and will depend
on the physical condition of the property as well as the anticipated cash flow
generated by the property.
Foothill Place Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $346,000 of capital improvements at Foothill Place Apartments,
consisting primarily of swimming pool improvements, water heater replacements,
parking area resurfacing, plumbing fixtures, appliance, floor and wall covering
replacements and structural upgrades. These improvements were funded from
operating cash flow. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$97,000 in capital improvements during the remainder of 2003. The additional
capital improvements will consist of major landscaping, plumbing improvements,
structural and electrical upgrades and appliance and floor covering
replacements. Additional capital improvements may be considered and will depend
on the physical condition of the property as well as the anticipated cash flow
generated by the property.
Knollwood Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $91,000 of capital improvements at Knollwood Apartments,
consisting primarily of appliance and floor covering replacements, roof
replacements, and structural upgrades. These improvements were funded from
operating cash flow. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$29,000 in capital improvements during the remainder of 2003. The additional
capital improvements will consist primarily of floor covering, appliance and
cabinet replacements. Additional capital improvements may be considered and will
depend on the physical condition of the property as well as the anticipated cash
flow generated by the property.
Lake Forest Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $78,000 of capital improvements at Lake Forest Apartments,
consisting primarily of major landscaping, air conditioning upgrades, fitness
equipment, fire safety upgrades and floor covering and appliance replacements.
These improvements were funded from operating cash flow and replacement
reserves. The Partnership evaluates the capital improvement needs of the
property during the year and currently expects to complete an additional $34,000
in capital improvements during the remainder of 2003. The additional capital
improvements will consist primarily of appliance and floor covering replacements
and major landscaping. Additional capital improvements may be considered and
will depend on the physical condition of the property as well as the anticipated
cash flow generated by the property.
Nob Hill Villa Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $192,000 of capital improvements at Nob Hill Villa Apartments,
consisting primarily of major landscaping, appliance and floor covering
replacements, structural improvements, electrical upgrades, water heater
replacements and plumbing fixtures. These improvements were funded from
operating cash flow. The Partnership evaluates the capital improvement needs of
the property during the year and currently expects to complete an additional
$253,000 in capital improvements during the remainder of 2003. The additional
capital improvements will consist primarily of roof replacements, interior
building improvements, and floor covering, cabinet and HVAC replacements.
Additional capital improvements may be considered and will depend on the
physical condition of the property as well as replacement reserves and the
anticipated cash flow generated by the property.
Point West Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $36,000 of capital improvements at Point West Apartments,
consisting primarily of appliance and floor covering replacements. These
improvements were funded from operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $10,000 in capital improvements during the remainder
of 2003. The additional capital improvements will consist primarily of floor
covering and appliance replacements. Additional capital improvements may be
considered and will depend on the physical condition of the property as well as
the anticipated cash flow generated by the property.
Post Ridge Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $73,000 of capital improvements at Post Ridge Apartments,
consisting primarily of parking area improvements, swimming pool improvements,
floor covering replacements and plumbing fixtures. These improvements were
funded from operating cash flow. The Partnership evaluates the capital
improvement needs of the property during the year and currently expects to
complete an additional $31,000 in capital improvements during the remainder of
2003. The additional capital improvements will consist primarily of roof repairs
and floor covering, HVAC and appliance replacements. Additional capital
improvements may be considered and will depend on the physical condition of the
property as well as the anticipated cash flow generated by the property.
Rivers Edge Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $52,000 of capital improvements at Rivers Edge Apartments,
consisting primarily of appliance and floor covering replacements. These
improvements were funded from operating cash flow. The Partnership evaluates the
capital improvement needs of the property during the year and currently expects
to complete an additional $25,000 in capital improvements during the remainder
of 2003. The additional capital improvements will consist primarily of
structural upgrades and floor covering and appliance replacements. Additional
capital improvements may be considered and will depend on the physical condition
of the property as well as the anticipated cash flow generated by the property.
South Port Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $21,000 of capital improvements at South Port Apartments,
consisting primarily of floor covering and appliance replacements. These
improvements were funded from operating cash flow. The property was sold on
March 28, 2003.
Village East Apartments
During the nine months ended September 30, 2003, the Partnership completed
approximately $88,000 of capital improvements at Village East Apartments,
consisting primarily of air conditioning upgrades, floor covering replacements
and exterior painting. These improvements were funded from operating cash flow.
The Partnership evaluates the capital improvement needs of the property during
the year and currently expects to complete an additional $34,000 in capital
improvements during the remainder of 2003. The additional capital improvements
will consist primarily of appliance and floor covering replacements and exterior
painting. Additional capital improvements may be considered and will depend on
the physical condition of the property as well as the anticipated cash flow
generated by the property.
Additional capital expenditures will be incurred only if cash is available from
operations or from Partnership reserves. To the extent that such budgeted
capital improvements are completed, the Partnership's distributable cash flow,
if any, may be adversely affected at least in the short term.
The Partnership's assets are currently thought to be sufficient for any
near-term needs (exclusive of capital improvements) of the Partnership. The
mortgage indebtedness encumbering the Partnership's properties of approximately
$67,747,000 matures at various dates between 2005 and 2022. The General Partner
will attempt to refinance such indebtedness and/or sell the properties prior to
such maturity dates. If the properties cannot be refinanced or sold for a
sufficient amount, the Partnership will risk losing such properties through
foreclosure.
The Partnership declared distributions in the following amounts during the nine
months ended September 30, 2003 and 2002 (in thousands, except per unit data):
Nine Months Per Nine Months Per
Ended Limited Ended Limited
September 30, Partnership September 30, Partnership
2003 Unit 2002 Unit
Operations $1,827 $ 5.12 $5,515 $ 15.45
Sale (1) 3,743 10.50 -- --
Refinance (2) -- -- 76 .21
Total $5,570 $15.62 $5,591 $ 15.66
(1) Proceeds from the sale of South Port Apartments in March 2003.
(2) Proceeds from the refinance of Post Ridge Apartments in December 2001.
In conjunction with the transfer of funds from their certain majority-owned
sub-tier limited partnerships to the Partnership, approximately $6,000 and
$29,000 was distributed to the general partner of the majority owned sub-tier
limited partnerships during the nine months ended September 30, 2003 and 2002,
respectively.
The Partnership's cash available for distribution is reviewed on a monthly
basis. Future cash distributions will depend on the levels of net cash generated
from operations, the availability of cash reserves, and the timing of debt
maturities, refinancings and/or property sales. There can be no assurance,
however, that the Partnership will generate sufficient funds from operations,
after planned capital improvement expenditures, to permit additional
distributions to its partners during the remainder of 2003 or subsequent
periods.
Other
In addition to its indirect ownership of the general partner interest in the
Partnership, AIMCO and its affiliates owned 193,572.50 limited partnership units
(the "Units") in the Partnership representing 56.47% of the outstanding Units at
September 30, 2003. A number of these Units were acquired pursuant to tender
offers made by AIMCO or its affiliates. It is possible that AIMCO or its
affiliates will acquire additional Units in exchange for cash or a combination
of cash and units in AIMCO Properties, L.P., the operating partnership of AIMCO,
either through private purchases or tender offers. Pursuant to the Partnership
Agreement, unitholders holding a majority of the Units are entitled to take
action with respect to a variety of matters that include, but are not limited
to, voting on certain amendments to the Partnership Agreement and voting to
remove the General Partner. As a result of its ownership of 56.47% of the
outstanding Units, AIMCO and its affiliates are in a position to influence all
voting decisions with respect to the Partnership. Although the General Partner
owes fiduciary duties to the limited partners of the Partnership, the General
Partner also owes fiduciary duties to AIMCO as its sole stockholder. As a
result, the duties of the General Partner, as general partner, to the
Partnership and its limited partners may come into conflict with the duties of
the General Partner to AIMCO, as its sole stockholder.
Critical Accounting Policies and Estimates
The consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States which require the Partnership
to make estimates and assumptions. The Partnership believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.
Impairment of Long-Lived Assets
Investment properties are recorded at cost, less accumulated depreciation,
unless considered impaired. If events or circumstances indicate that the
carrying amount of a property may be impaired, the Partnership will make an
assessment of its recoverability by estimating the undiscounted future cash
flows, excluding interest charges, of the property. If the carrying amount
exceeds the aggregate future cash flows, the Partnership would recognize an
impairment loss to the extent the carrying amount exceeds the fair value of the
property.
Real property investments are subject to varying degrees of risk. Several
factors may adversely affect the economic performance and value of the
Partnership's investment properties. These factors include, but are not limited
to, changes in the national, regional and local economic climate; local
conditions, such as an oversupply of multifamily properties; competition from
other available multifamily property owners and changes in market rental rates.
Any adverse changes in these factors could cause impairment of the Partnership's
assets.
Revenue Recognition
The Partnership generally leases apartment units for twelve-month terms or less.
Rental income attributable to leases is recognized monthly as it is earned and
the Partnership fully reserves all balances outstanding over thirty days. The
Partnership will offer rental concessions during particularly slow months or in
response to heavy competition from other similar complexes in the area. Any
concessions given at the inception of the lease are amortized over the life of
the lease.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Partnership is exposed to market risks from adverse changes in interest
rates. In this regard, changes in U.S. interest rates affect the interest earned
on the Partnership's cash and cash equivalents as well as interest paid on its
indebtedness. As a policy, the Partnership does not engage in speculative or
leveraged transactions, nor does it hold or issue financial instruments for
trading purposes. The Partnership is exposed to changes in interest rates
primarily as a result of its borrowing activities used to maintain liquidity and
fund business operations. To mitigate the impact of fluctuations in U.S.
interest rates, the Partnership maintains its debt as fixed rate in nature by
borrowing on a long-term basis. Based on interest rates at September 30, 2003, a
100 basis point increase or decrease in market interest rates would not have a
material impact on the Partnership.
The following table summarizes the Partnership's debt obligations at September
30, 2003. The interest rates represent the weighted-average rates. The fair
value of the debt obligations approximated the recorded value as of September
30, 2003.
Principal amount by expected maturity:
Long Term Debt
Fixed Rate Debt Average Interest Rate
(in thousands)
2003 $ 221 7.89%
2004 931 7.89%
2005 43,138 7.42%
2006 875 7.68%
2007 944 7.68%
Thereafter 21,638 7.68%
Total $67,747
ITEM 4. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures. The Partnership's management, with the
participation of the principal executive officer and principal financial officer
of the General Partner, who are the equivalent of the Partnership's principal
executive officer and principal financial officer, respectively, has evaluated
the effectiveness of the Partnership's disclosure controls and procedures (as
such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the
period covered by this report. Based on such evaluation, the principal executive
officer and principal financial officer of the General Partner, who are the
equivalent of the Partnership's principal executive officer and principal
financial officer, respectively, have concluded that, as of the end of such
period, the Partnership's disclosure controls and procedures are effective.
(b) Internal Control Over Financial Reporting. There have not been any changes
in the Partnership's internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fiscal quarter to which this report relates that have materially affected, or
are reasonably likely to materially affect, the Partnership's internal control
over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1998, several putative unit holders of limited partnership units of the
Partnership commenced an action entitled Rosalie Nuanes, et al. v. Insignia
Financial Group, Inc., et al. (the "Nuanes action") in the Superior Court of the
State of California for the County of San Mateo. The plaintiffs named as
defendants, among others, the Partnership, its General Partner and several of
their affiliated partnerships and corporate entities. The action purported to
assert claims on behalf of a class of limited partners and derivatively on
behalf of a number of limited partnerships (including the Partnership) that are
named as nominal defendants, challenging, among other things, the acquisition of
interests in certain General Partner entities by Insignia Financial Group, Inc.
("Insignia") and entities that were, at one time, affiliates of Insignia; past
tender offers by the Insignia affiliates to acquire limited partnership units;
management of the partnerships by the Insignia affiliates; and the series of
transactions which closed on October 1, 1998 and February 26, 1999 whereby
Insignia and Insignia Properties Trust, respectively, were merged into AIMCO.
The plaintiffs sought monetary damages and equitable relief, including judicial
dissolution of the Partnership. In addition, during the third quarter of 2001, a
complaint (the "Heller action") was filed against the same defendants that are
named in the Nuanes action, captioned Heller v. Insignia Financial Group. On or
about August 6, 2001, plaintiffs filed a first amended complaint. The Heller
action was brought as a purported derivative action, and asserted claims for,
among other things, breach of fiduciary duty, unfair competition, conversion,
unjust enrichment, and judicial dissolution.
On January 8, 2003, the parties filed a Stipulation of Settlement in proposed
settlement of the Nuanes action and the Heller action.
In general terms, the proposed settlement provides for certification for
settlement purposes of a settlement class consisting of all limited partners in
this Partnership and others (the "Partnerships") as of December 20, 2002, the
dismissal with prejudice and release of claims in the Nuanes and Heller
litigation, payment by AIMCO of $9.9 million (which shall be distributed to
settlement class members after deduction of attorney fees and costs of class
counsel and certain costs of settlement) and up to $1 million toward the cost of
independent appraisals of the Partnerships' properties by a Court appointed
appraiser. An affiliate of the General Partner has also agreed to make at least
one round of tender offers to purchase all of the partnership interests in the
Partnerships within one year of final approval, if it is granted, and to provide
partners with the independent appraisals at the time of these tenders. The
proposed settlement also provided for the limitation of the allowable costs
which the General Partner or its affiliates will charge the Partnerships in
connection with this litigation and imposes limits on the class counsel fees and
costs in this litigation. On April 11, 2003, notice was distributed to limited
partners providing the details of the proposed settlement.
On June 13, 2003, the Court granted final approval of the settlement and entered
judgment in both the Nuanes and Heller actions. On August 12, 2003, an objector
filed an appeal seeking to vacate and/or reverse the order approving the
settlement and entering judgment thereto. The General Partner intends to file a
respondent's brief in support of the order approving settlement and entering
judgment thereto.
The General Partner does not anticipate that any costs to the Partnership,
whether legal or settlement costs, associated with these cases will be material
to the Partnership's overall operations.
On August 8, 2003 AIMCO Properties L.P., an affiliate of the General Partner,
was served with a Complaint in the United States District Court, District of
Columbia alleging that AIMCO Properties L.P. willfully violated the Fair Labor
Standards Act (FLSA) by failing to pay maintenance workers overtime for all
hours worked in excess of forty per week. The Complaint is styled as a
Collective Action under the FLSA and seeks to certify state subclasses in
California, Maryland, and the District of Columbia. Specifically, the plaintiffs
contend that AIMCO Properties L.P. failed to compensate maintenance workers for
time that they were required to be "on-call". Additionally, the Complaint
alleges AIMCO Properties L.P. failed to comply with the FLSA in compensating
maintenance workers for time that they worked in responding to a call while
"on-call". The Complaint also attempts to certify a subclass for salaried
service directors who are challenging their classification as exempt from the
overtime provisions of the FLSA. AIMCO Properties L.P. has filed an answer to
the Complaint denying the substantive allegations. Although the outcome of any
litigation is uncertain, in the opinion of the General Partner the claims will
not result in any material liability to the Partnership.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
3.1 Certificate of Limited Partnership, (incorporated by reference to the
Registration statement of the Partnership (file No. 2-74353), filed
October 9, 1981, as amended to date).
3.2 Limited Partnership Agreement (Exhibit to the Prospectus of the
Partnership, filed October 12, 1981).
31.1 Certification of equivalent of Chief Executive Officer pursuant to
Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 Certification of equivalent of Chief Financial Officer pursuant to
Securities Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
b) Reports on Form 8-K:
None filed during the quarter ended September 30, 2003.
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.
CONSOLIDATED CAPITAL PROPERTIES IV
By: CONCAP EQUITIES, INC.
General Partner
By: /s/Patrick J. Foye
Patrick J. Foye
Executive Vice President
By: /s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and
Chief Financial Officer
Date: November 13, 2003
Exhibit 31.1
CERTIFICATION
I, Patrick J. Foye, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Consolidated Capital
Properties IV;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: November 13, 2003
/s/Patrick J. Foye
Patrick J. Foye
Executive Vice President of ConCap Equities,
Inc., equivalent of the chief executive officer
of the Partnership
Exhibit 31.2
CERTIFICATION
I, Paul J. McAuliffe, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Consolidated Capital
Properties IV;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about
the effectiveness of the disclosure controls and procedures, as of
the end of the period covered by this report based on such
evaluation; and
(c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal quarter (the registrant's fourth
fiscal quarter in the case of an annual report) that has materially
affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: November 13, 2003
/s/Paul J. McAuliffe
Paul J. McAuliffe
Executive Vice President and Chief Financial
Officer of ConCap Equities, Inc., equivalent of
the chief financial officer of the Partnership
Exhibit 32.1
Certification of CEO and CFO
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Consolidated Capital
Properties IV (the "Partnership"), for the quarterly period ended September 30,
2003 as filed with the Securities and Exchange Commission on the date hereof
(the "Report"), Patrick J. Foye, as the equivalent of the chief executive
officer of the Partnership, and Paul J. McAuliffe, as the equivalent of the
chief financial officer of the Partnership, each hereby certifies, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to the best of his knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Partnership.
/s/Patrick J. Foye
Name: Patrick J. Foye
Date: November 13, 2003
/s/Paul J. McAuliffe
Name: Paul J. McAuliffe
Date: November 13, 2003
This certification is furnished with this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Partnership for
purposes of Section 18 of the Securities Exchange Act of 1934, as amended.