UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2001
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 33-11907
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DIVERSIFIED HISTORIC INVESTORS IV
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(Exact name of registrant as specified in its charter)
Pennsylvania 23-2440837
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1521 Locust Street, Philadelphia, PA 19102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (215) 557-9800
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N/A
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(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets - June 30, 2001 (unaudited)
and December 31, 2000
Consolidated Statements of Operations - Three Months and
Six Months Ended June 30, 2001 and 2000 (unaudited)
Consolidated Statements of Cash Flows - Six Months Ended
June 30, 2001 and 2000 (unaudited)
Notes to Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.
(1) Liquidity
As of June 30, 2001, Registrant had cash of
$350,303. The Registrant expects that those funds plus the cash
generated from operations at each property will be sufficient to
fund the operating expenses of the properties. The Registrant is
not aware of any additional sources of liquidity.
As of June 30, 2001, Registrant had restricted cash
of $21,507 consisting primarily of funds held as security
deposits, replacement reserves and escrows for taxes and
insurance. As a consequence of the restrictions as to use,
Registrant does not deem these funds to be a source of liquidity.
(2) Capital Resources
Any capital expenditures needed are generally
replacement items and are funded out of cash from operations.
The Registrant is not aware of any factors which would cause
historical capital expenditure levels not to be indicative of
capital requirements in the future and accordingly does not
believe that it will have to commit material resources to capital
investment for the foreseeable future.
(3) Results of Operations
During the second quarter of 2001, Registrant
incurred a loss of $3,007 ($.35 per limited partnership unit)
compared to a loss of $14,355 ($1.72 per limited partnership
unit) for the same period in 2000. For the first six months of
2001, the Registrant incurred a loss of $31,653 ($3.78 per
limited partnership unit) compared to a loss of $48,207 ($5.76
per limited partnership unit) for the same period in 2000.
Rental income increased $5,283 from $47,107 in the
second quarter of 2000 to $52,390 in the same period in 2001 and
increased $4,809 from $95,823 for the first six months of 2000 to
$100,632 in the same period in 2001. The increase in rental
income for the second quarter of 2001 from the same period in
2000 is due to an increase in average occupancy at Locke Mill
Plaza (73% to 100%). The increase in rental income from the first
six months of 2000 to the same period in 2001 is due to an
increase in rental income at the Brass Works due to an increase
in average monthly rental rates. Average monthly rental rates
increased from $735 to $950 during 2000 compared to $735 to
$1,095 during 2001.
Interest income decreased $105 from $2,583 in the
second quarter of 2000 to $2,478 in the same period of 2001 due
to a decrease in average invested cash balances. Interest income
increased $304 from $4,681 for the first six months of 2000 to
$4,985 in the same period of 2001 due to an increase in invested
cash balances.
Rental operation expenses increased by $6,162 from
$22,138 in the second quarter of 2000 to $28,300 in the same
period in 2001 and for the first six months increased by $218
from $65,901 for the first six months of 2000 to $66,119 in the
same period of 2001. The increase from the second quarter of
2000 to the same period in 2001 is due to an increase in leasing
commission expense at Locke Mill Plaza due to an increase in
average occupancy 73% to 100%. The increase from the first six
months of 2000 to the same period in 2001 is due to an increase
in leasing commission expense, and an increase in maintenance
expense at Locke Mill Plaza, partially offset by a decrease in
legal and accounting expense. The increase in leasing commission
is due to an increase in occupancy and the increase in
maintenance expense is due to an increase in maintenance repairs.
The decrease in legal and accounting expense is due to a decrease
is services rendered for the period.
Income recognized during the quarter at the
Registrant's two properties amounted to approximately $6,000 for
both 2000 and 2001. For the first six months of 2001, the
Registrant incurred a loss of approximately $1,481 compared to
income of approximately $4,000 for the same period in 2000.
In the second quarter of 2001, the Registrant
recognized net income of $7,000 at the Brass Works, including
$12,000 of depreciation expense, compared to net income of $9,000
including $12,000 of depreciation expense in the second quarter
of 2000. In the first six months of 2000, Registrant recognized
net income of $9,000 at the Brass Works, including $24,000 of
depreciation expense, compared to a net income of $6,000 for the
same period in 2000, including $24,000 of depreciation expense.
The increases in net income in the second quarter and first six
months of 2000 and 2001, is due to an increase in rental income.
Rental income increased due to an increase in average monthly
rental rates, $735 to $950 during 2000 compared to $735 to $1,095
during 2001.
In the second quarter of 2001, the Registrant
incurred a net loss of $1,000 at Locke Mill Plaza, including
$7,000 of depreciation expense, compared to a net income of
$3,000 including $7,000 of depreciation expense in the second
quarter of 2000. In the first six months of 2001, the Registrant
incurred a net loss of $10,000 including $13,000 of depreciation
expense, compared to a net income of $2,000, including $13,000 of
depreciation expense for the same period in 2000. The decrease
in net income from the second quarter of 2000 to the same period
in 2001 is due to an increase in maintenance expense due to an
increase in average occupancy from (73% to 100%) at Locke Mill
Plaza. The increase in net loss from the first six months of 2000
to the same period in 2001 is due to an increase leasing
commission expense due to an increase average occupancy.
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
CONSOLIDATED BALANCE SHEETS
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Assets
June 30, 2001 December 31, 2000
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(Unaudited)
Assets:
Rental properties, at cost:
Land $ 74,324 $ 74,324
Buildings and improvements 2,246,555 2,246,555
Furniture and fixtures 29,814 29,814
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2,350,693 2,350,693
Less-accumulated depreciation (1,180,700) (1,135,171)
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1,169,993 1,215,522
Cash and cash equivalents 350,303 330,149
Restricted cash 21,506 22,787
Other assets 23,646 22,056
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Total $1,565,448 $1,590,514
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Liabilities and Partners' Equity
Liabilities:
Accounts payable - trade $ 49,733 $ 44,677
Other liabilities 913 1,378
Tenant security deposits 14,260 12,265
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Total liabilities 64,906 58,320
Partners' equity 1,500,542 1,532,194
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Total $1,565,448 $1,590,514
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The accompanying notes are an integral part of these financial statements.
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited)
Three months Six months
ended June 30, ended June 30,
2001 2000 2001 2000
Revenues:
Rental income $52,390 $47,107 $100,632 $ 95,823
Interest income 2,478 2,583 4,985 4,681
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Total revenues 54,868 49,690 105,617 100,504
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Costs and expenses:
Rental operations 28,299 22,138 66,119 65,898
General and
administrative 6,811 19,000 25,621 37,000
Depreciation and
amortization 22,765 22,907 45,530 45,813
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Total costs and
Expenses 57,875 64,045 137,270 148,711
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Net loss ($ 3,007) ($14,355) ($ 31,653) ($ 48,207)
======= ======= ======== ========
Net loss per limited
limited partnership
unit ($ .35) ($ 1.72) ($ 3.78) ($ 5.76)
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The accompanying notes are an integral part of these financial statements.
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
Six months ended
June 30,
2001 2000
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Cash flows from operating activities:
Net loss ($ 31,653) ($ 48,207)
Adjustments to reconcile net loss to
net cash provided by operating
activities:
Depreciation and amortization 45,529 45,813
Changes in assets and liabilities:
Decrease in restricted cash 1,281 2,251
(Increase) decrease in other assets (1,591) 3,153
Increase in accounts payable - trade 5,057 14,837
(Decrease) increase in other
liabilities (465) 322
Increase (decrease) in tenant
security deposits 1,995 (660)
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Net cash provided by operating
activites 20,153 17,509
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Increase in cash and cash equivalents 20,153 17,509
Cash and cash equivalents at
beginning of period 330,149 325,890
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Cash and cash equivalents at end of
period $350,302 $343,399
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The accompanying notes are an integral part of these financial statements.
DIVERSIFIED HISTORIC INVESTORS IV
(a Pennsylvania limited partnership)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements of Diversified
Historic Investors IV (the "Registrant") and related notes have
been prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been omitted pursuant to such
rules and regulations. The accompanying consolidated financial
statements and related notes should be read in conjunction with
the audited financial statements and notes thereto in the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 2000.
The information furnished reflects, in the opinion of management,
all adjustments, consisting of normal recurring accruals,
necessary for a fair presentation of the results of the interim
periods presented.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
To the best of its knowledge, Registrant is not a
party to, nor is any of its property the subject of, any pending
material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to a vote of security
holders during the quarter covered by this report.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Number Document
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3 Registrant's Amended and
Restated Certificate of Limited
Partnership and Agreement of
Limited Partnership, previously
filed as part of Amendment No.
2 of Registrant's Registration
Statement on Form S-11, are
incorporated herein by
reference.
21 Subsidiaries of the Registrant
are listed in Item 2.
Properties on Form 10-K,
previously filed and
incorporated herein by
reference.
(b) Reports on Form 8-K:
No reports were filed on Form 8-K during the quarter
ended June 30, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Date: September 23, 2002 DIVERSIFIED HISTORIC INVESTORS IV
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By: Dover Historic Advisors III,
General Partner
By: EPK, Inc., General Partner
By: /s/ Spencer Wertheimer
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SPENCER WERTHEIMER
President