Item 1. BUSINESS
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP (the "Registrant" or "Partnership") is a Wisconsin Limited Partnership formed on August 8, 1986, under the Wisconsin Revised Uniform Limited Partnership Act. The Registrant was organized to acquire, for cash (no debt), real estate projects, including real estate for restaurants, mobile home communities, apartment complexes and other commercial properties. The Partnership sold $19,620,500 in Limited Partnership Interests (19,620.5 Interests at $1,000 per unit) pursuant to a registration statement on Form S-11 under the Securities Act of 1933. The Partnership utilized the net offering proceeds to acquire the real property investments described under "Properties" (Item 2).
The Registrant originally acquired fourteen real property investments, utilizing the net offering proceeds available for investment. The Registrant sold three of the original properties during 1993. A fourth property was sold during 1994, and a fifth was sold in 1996.
The officers and employees of RAL Asset Management Group, a Wisconsin General Partnership, and its affiliates, performed services for the Registrant until June 1, 1993. RAL Asset Management Group is controlled by the General Partners of the Partnership. Effective June 1, 1993 the Partnership made separate property and partnership management agreements.
The partnership management agreement is with an unrelated management company. The property management agreement is with a related entity with the same general partners as the Partnership. The related property management firm simultaneously subcontracted with the same unrelated management company handling the partnership management. The terms and conditions of these agreements are similar to the above related party agreements, which they replace.
The Registrant itself employs individual onsite managers and maintenance personnel in the mobile home parks and apartment complexes. The Registrant employed 16 at March 28, 1997.
Item 2.

Item 2. PROPERTIES
As of March 28, 1997, the Registrant owned the following properties:
Name, Type of Date of Property and Location Purchase Approximate Size - --------------------- -------- ------------------------
South Hills 12/31/86 170 mobile home site on 40 acres Mobile Home Park of land and a small vacant Beaver Dam, WI* building formerly used as an office.
Lakeshore Terrace 06/30/87 135 mobile home sites on Mobile Home Park approximately 25 acres of land Rice Lake, WI
Alexandria Estates 08/17/87 89 mobile home sites on Mobile Home Park approximately 17 acres of land Alexandria, MN
Maplewood 08/17/87 75 mobile home sites on Mobile Home Park approximately 9 acres of land Lake City, MN
Hardee's Restaurant 08/18/87 A 3,900 sq. ft. building on Mundelein, IL (vacant) approximately 0.8 acres of land
Hardee's Restaurant 08/18/87 A 3,900 sq. ft. building on Joliet, IL (vacant) approximately 0.7 acres of land
Firestone 02/02/88 A 7,716 square foot building on Retail/Service Center approximately 1.7 acres of land Neenah, WI
Northrup Court 03/08/88 A 90 unit garden apartment Apartments complex located on approximately North Canton, OH* 7.6 acres of land
Cedar Crossing 08/19/88 Majority ownership (87.709%) Apartments 12/23/88 in a 109 unit garden apartment Frederick, MD* complex (RAL Income + Equity Growth V Limited Partnership, an affiliated limited partnership, owns the remaining interest)
*Denotes a material property, having gross revenues greater than 10% of total revenues.
All the above properties were unencumbered as of March 28, 1997.
Leases on Investment Properties:
The Partnership operates four mobile home parks which lease rental spaces. The Partnership also operates two apartment complexes. The mobile home parks and apartment complexes receive income on a monthly basis from tenant leases which normally have lease terms of one year or less.
The restaurant properties are leased under 10-20 year leases with some having two five-year options to renew the lease at the end of the original terms. Rent on the restaurant properties, which is payable monthly, is equal to the greater of (a) 6.00% or (b) 6.50% of gross sales, depending on the lease, or a minimum base rental stated in the lease. The leases are "triple net" to the Partnership with the lessee being responsible for occupancy costs such as maintenance, insurance, taxes and utilities.
Both restaurant properties are now vacant. These properties have been classified in the Partnership's financial statements as properties held for sale or re-lease.
The real estate business is highly competitive and the Partnership competes with many other real estate investment entities many of which have greater financial resources. No one firm or group of firms, in the opinion of the General Partners, is dominant in the industry. The Partnership, therefore, faces substantial competition from a variety of sources for attracting tenants to its properties.
All commercial, residential and mobile home community properties acquired by the Partnership have competition for tenants from similar properties in the vicinity. To the extent that the Partnership owns or acquires commercial properties, such as restaurants, which have leases entitling the Partnership to participate in gross receipts of tenants above fixed minimum amounts, the success of the Partnership will depend in part on the success of its tenants in competing with similar businesses in the vicinity.
In the opinion of management of the Partnership, all properties are adequately covered by insurance.
MATERIAL PROPERTIES - -------------------
Following is information with respect to each property whose revenues are greater than 10% of total revenues as denoted above.
The Federal tax basis for each of the material properties is identical to the book basis as listed in Schedule III on page of the report. Depreciation information for tax purposes on the properties is as follows:
Type of Asset Rate Method Depreciable Life ------------- ---- ------ ---------------- Land Improvements SL ACRS 15/19/20 Year Building SL ACRS 19/31.5/40 Year Equipment DDB ACRS/MACRS 5/7/12 Year
Item 3.

Item 3. LEGAL PROCEEDINGS
The Partnership is not subject to any material pending legal action.
Item 4.

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during 1996.
PART II
Item 5.

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a)&(b) As of December 31, 1996, there were approximately 2,430 record holders of Interests of the Partnership. There is no public market for Interests and it is not anticipated that a public market for Interests will develop. The General Partners will not redeem or repurchase Interests.
(c) All cash available for distribution other than sale or refinancing proceeds will be distributed 95% to the Limited Partners and 5% to the General Partners, at least semiannually. See attached financial statements and footnotes for a detailed discussion of amounts and timing of distributions to Limited Partners.
Item 6.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP is a Wisconsin Limited Partnership formed on August 8, 1986, under the Wisconsin Revised Uniform Limited Partnership Act. The Partnership was formed to acquire new and existing income-producing properties for cash.
The Partnership originally purchased a total of fifteen income- producing properties. The Partnership is managing four mobile home communities (two in Wisconsin and two in Minnesota) and two garden apartment complexes located in Ohio and Maryland. The Partnership is leasing the retail auto supply store in Neenah, Wisconsin. The Partnership has sold the following properties: a restaurant building located in Longmont, Colorado; a retail auto parts and service store located in Menasha, Wisconsin; a mobile home park located in Little Chute, Wisconsin; a mobile home park located in Willmar, Minnesota; and a restaurant building located in Eagan, Minnesota. The Partnership also owns restaurant properties in Mundelein, Illinois and Joliet, Illinois which are vacant. The lessee vacated both properties during 1996. The properties have been classified as properties available for sale or re-lease in the Partnership's financial statements.
Liquidity and Capital Resources:
Properties acquired by the Partnership are intended to be held for approximately seven to ten years. Since the Partnership has purchased the Properties for cash, liquidity is not reduced by debt service payments. During the Properties' holding periods, the investment strategy is to maintain (on the "triple net lease" restaurant properties) and improve (on the residential properties) occupancy rates through the application of professional property management (including selective capital improvements). Cash flow generated from property operations is distributed to the partners on a quarterly basis. The Partnership also accumulates working capital reserves for normal repairs, replacements, working capital, and contingencies.
Net cash provided by operating activities was $921,000 in 1996, $1,188,000 in 1995, and $1,118,000 in 1994. During 1996 and 1994 cash provided from the sale of income-producing properties amounted to $475,000 and $285,000 respectively. As of December 31, 1996, the Partnership had cash of approximately $382,000 consisting of undistributed cash flow, working capital reserves, and tenant security deposits. Liabilities totaled approximately $338,000.
The Partnership has not experienced, and is not currently experiencing any liquidity problems. It is not expected that the Partnership will experience liquidity problems due to the nature of the current liabilities. Approximately $135,000 of the current liabilities represent tenant security deposits. The majority of the remaining current liabilities are accrued and escrowed real estate taxes payable in installments in 1997. The Partnership expects to meet all of its obligations as they come due.
Total limited partner distributions made during 1995 were approximately $1,199,000.
Results of Operations:
The increase in revenues from 1994 to 1995 is a result of annual rent increases at the mobile home parks and apartments. The decrease in revenues from 1995 to 1996 is a result of the sale of Parkwood Estates mobile home park, reductions in the occupancy rates at the apartment complexes and offset by the increased rates at the apartment complexes and remaining mobile home parks.
Total expenses were $2,317,000 in 1996, $1,725,000 in 1995, and $1,678,000 in 1994. Operating expenses have decreased in 1995 compared to 1994 as the number of properties in the Partnership declined due to property sales in 1993 and 1994. The operating expenses rose significantly in 1996 due to several factors. The Partnership incurred a loss on sale of the Parkwood Estates mobile home park of $339,000. Bad debt expense for 1996 amounted to $217,000 as a result of the two restaurant properties in Mundelein, Illinois and Joliet, Illinois being vacated by the lessor prior to the expiration of the lease. As a result of the vacancies of the two restaurant properties the carrying value of the building improvements and the land were written down to their estimated net realizable value. The writedown resulted in a charge to income of $159,000 in 1996.
The Partnership incurred a net loss of $71,000 in 1996 compared to net income of $549,000 in 1995 and $529,000 in 1994. The decrease in 1996 is attributable to the factors discussed in the previous paragraph.
Except for property sales, future net income should increase as a result of rent increases on the mobile home communities, re-leasing or selling the vacant commercial properties, and base rent increases on the "triple net" lease commercial properties.
Inflation:
Due to the relatively low level of inflation since the Partnership commenced operations, the effect of inflation on the Partnership has not been material to date. Should the rate of inflation increase substantially over the life of the Partnership, it is likely to influence ongoing operations, in particular, the operating expenses of the Partnership. The commercial leases contain clauses permitting pass-through of certain increased operating costs. Residential leases are typically of one year or less in duration; this allows the Partnership to react quickly (through rental increases) to changes in the level of inflation. These factors should serve to reduce, to a certain degree, any impact of rising costs on the Partnership.
Item 8.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Financial Statements and Financial Statement Schedule on page, incorporated herein by reference.
The supplemental financial information specified by Item 302 of Regulation S-K is not applicable.
Item 9.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
a. None.
b. None.
PART III
Item 10.

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE PARTNERSHIP
The General Partners of RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP (the "Partnership") are Robert A. Long, John A. Hanson, Thomas R. Brophy and Bart Starr. The General Partners manage and control the Partnership's affairs and have the general responsibility and the ultimate authority in all matters affecting the Partnership's business. The Partnership has available to it the services, personnel, and experience of certain other organizations affiliated with the General Partners, including RAL Asset Management Group. Some of the General Partners are also General Partners of an affiliate, RAL Asset Management Group. The responsibilities of RAL Asset Management Group were subcontracted to an unrelated third party beginning June 1, 1993.
The general partners and significant employee of First Financial Realty Management are as follows:
Position with Ral Asset Name Management Group - ---- -----------------------
Robert A. Long General Partner John A. Hanson General Partner Thomas R. Brophy General Partner Bart Starr General Partner Douglas C. Heston President (FFRM)
There is no family relationship among any of the foregoing officers. The business experience of the General Partners and significant employees includes the following:
Robert A. Long, age 55, has, since January 1982, been a partner in RAL Asset Management Group. He is co-founder of RAL Asset Management Group. Since 1966 Mr. Long has been involved in real estate consulting, development and syndication. Mr. Long is a licensed securities agent. Since 1981 Mr. Long has been involved as an individual, general partner, or affiliate in ownership and management of twenty-six (26) mobile home parks totaling over 2,600 pads in the states of Wisconsin and Minnesota. Prior to 1981, Mr. Long developed or purchased over 200 commercial properties in six states and currently owns individually or through partnerships over 50 restaurants (land and building) leased to restaurant operators, including Pizza Hut, Hardee's, Taco Bell, and Rocky Rococo (or their franchisees). Mr. Long also played professional football for the Green Bay Packers, Atlanta Falcons, and Washington Redskins. Mr. Long received a Bachelor of Science Degree in Business from Wichita State University in 1965 and is currently Executive Director of the Vince Lombardi Scholarship Fund for Wichita State University. Mr. Long is also on the Board of Directors of Roundy's Inc., a major Midwest food distributor and originator of the Pick 'N Save stores.
John A. Hanson, age 55, has, since March 1982, been a partner in RAL Asset Management Group. Mr. Hanson is involved individually, as a general partner, or as an affiliate, in the ownership and management of twenty-six (26) mobile home parks in the states of Wisconsin and Minnesota. Mr. Hanson has been involved in pension and profit-sharing and tax consulting for 25 years. In 1975 he founded, and since that time has been president of Pension Designers, Inc., of Appleton, Wisconsin, a firm that specializes in structuring and consulting with respect to qualified retirement plans, estate planning, investment sales and sales of life, health and disability insurance products to individuals, groups or corporations. From 1966 to 1971 Mr. Hanson was engaged in tax consulting, having management and tax accounting responsibilities for a farm management firm with approximately 200 clients. Mr. Hanson is past president of the Fox River Valley Association of Life Underwriters, and the General Agents and Managers Association, an associate member of the American Society of Pension Actuaries, a member of the International Association of Financial Planners, a qualifying and life member of the Million Dollar Round Table, and a registered principal with the National Association of Securities Dealers. Mr. Hanson received his Bachelor of Science Degree in Agri-Business from the University of Wisconsin - River Falls in 1966. Mr. Hanson is a licensed securities agent.
Thomas R. Brophy, CLU, ChFC., age 51, has, since March 1982, been a partner of RAL Asset Management Group. Mr. Brophy is involved individually, as a general partner, or as an affiliate in the ownership and management of twenty-six (26) mobile home parks in the states of Wisconsin and Minnesota which total approximately 2,600 pads. Mr. Brophy has been a NASD registered securities representative since 1969, active in the marketing and sales of mutual funds, unit investment trusts, stocks, bonds, limited partnerships and private ventures. Since 1967 Mr. Brophy has also been active in the marketing, selling, training, supervising and managing of personnel, with respect to qualified retirement plans and personal or business life, health and disability insurance plans. He is active in the financial planning field, having been conferred the degree of Chartered Financial Consultant, by the American College, Bryn Mawr, PA, in 1984. He is associated with the Principal Financial Group. Mr. Brophy is an active member of the National and Wisconsin Association of Life Underwriters, Million Dollar Round Table, Fox Valley Estate Planning Council and International Association of Financial Planners. He is recipient of the Fox River Valley Association of Life Underwriters' 1983 "Agent of the Year" award. A 1967 Bachelor of Science graduate from Marquette University, Mr. Brophy went on for advanced studies in insurance, receiving his Chartered Life Underwriter (CLU) degree from the American College, Bryn Mawr, PA, in 1975. Mr. Brophy is a licensed securities agent.
Bart Starr, age 64, has, since January 1984, been a partner in RAL Asset Management Group. He is a University of Alabama graduate with a B.S. Degree in Education. Since 1970, he has been a partner in the Bart Starr Motor Company, Birmingham, Alabama. Since 1979 he has been a member of the Board of Directors of the Sentry Insurance Company, Stevens Point, Wisconsin. He was a Green Bay Packer football player from 1956-1972, the Green Bay Packer Head Coach from 1975-1983, the NFL Most Valuable Player in 1966, and the Most Valuable Player in Super Bowls I and II. Mr. Starr was a CBS Game Analyst in 1973 and 1974 and the first winner of the Byron White Award in 1967. Mr. Starr has been the recipient of numerous civic and sports awards and is actively engaged in many charitable and public service organizations.
The following individual is an employee of the unaffiliated property management firm who makes significant contributions to the business of the Partnership:
Douglas C. Heston, age 43, is President of First Financial Realty Management (FFRM). FFRM and affiliates own and/or manage over 50 investment properties. Mr. Heston received a B.A. degree from Duke University (North Carolina) with a double major in Economics and Public Policy Analysis (Statistics) in 1975. He received an M.S. degree in Real Estate Investment Analysis from the University of Wisconsin in 1979. Previously he worked for real estate appraisal firms in Atlanta and Milwaukee. He co-founded RAL Asset Management Group in 1982 and left at the end of 1984 to found his current firm.
Item 11.

Item 11. EXECUTIVE COMPENSATION
(a,b,c, and d) The Registrant has not paid and does not propose to pay any executive compensation to the General Partners or any of their affiliates (other than described in Item 13 below).
(e) There are no compensatory plans or arrangements regarding termination of employment or change of control.
Item 12.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) No person owns of record or is known by the Registrant to own beneficially more than 5% of the outstanding Interests of the Registrant as of March 28, 1997.
Item 13.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a and b) The Partnership sold Hickory Lane Mobile Home Park to Wisconsin Homesites III Limited Partnership. Doug Heston is the President of the Corporate General Partner of Wisconsin Homesites III. Mr. Heston is also the President of First Financial Realty Management, the company which now manages RAL Yield + Equities IV.
Certain General Partners own or control businesses which have agreed to perform a variety of services for the Partnership.
In consideration for these services, the General Partners and related parties receive certain compensation at amounts which were established by the General Partners. The following table sets forth the types, amounts and recipients of compensation related to the Partnership.
Real estate commissions payable The total compensation paid to RAL Asset Management Group or to all persons for the sale other related party on sale of of properties shall be Partnership properties. limited to a competitive real estate commission not to exceed 6% of the contract price for the sale of the property. An affiliate may receive up to one-half of such compensation, where it provides brokerage services, subject to certain limitations based on a subordinated return to limited partners. No fees have been paid to date.
General Partner's share of The General Partners receive Partnership Cash Available 5% of all Cash Available for for Distribution. Distribution. Distributions paid to the General Partners were $47,000 in 1996, $50,000 in 1995, and $56,000 in 1994.
(c) No management person is indebted to the Registrant. (d) Not applicable.
PART IV
Item 14.

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1 and 2) See Index to Financial Statements and Financial Statement Schedule on Page
(b) Reports on Form 8-K
None.
(c) Exhibits
See Exhibit 27.
(d) Financial Statement Schedule See Index to Financial Statements and Financial Statement Schedule on Page.
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP (A Wisconsin Limited Partnership)
TABLE OF CONTENTS TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
COVERED BY REPORTS OF INDEPENDENT AUDITORS
Item 14(a)
Report of Independent Auditors
Consolidated Balance Sheets at December 31, 1996 and 1995
Consolidated Statements of Income for the years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Partners' Equity for the years ended December 31, 1996, 1995 and 1994
Consolidated Statements of Cash Flows for the years ended December 31, 1996, 1995 and 1994
Notes to Consolidated Financial Statements to
Financial Statement Schedule: III - Real Estate and Accumulated Depreciation to
Schedules, other than those listed, are omitted for the reason that they are inapplicable or equivalent information has been included elsewhere herein.
INDEPENDENT AUDITOR'S REPORT
January 16, 1997
To the Partners of RAL Yield + Equities IV Limited Partnership
We have audited the accompanying Consolidated Balance Sheets of RAL Yield + Equities IV Limited Partnership (a Wisconsin Limited partnership) as of December 31, 1996 and 1995, and the related Consolidated Statements of Income, Partners' Equity and Cash Flows for each of the three years in the period ended December 31, 1996. Our audit also included the financial statement schedule listed in the Index at Item 14. These consolidated financial statements and are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of RAL Yield + Equities IV Limited Partnership as of December 31, 1996 and 1995, and the results of its operations and cash flows for each of the three years in the period ended December 31, 1996 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in material respects the information set forth therein.
KOLB LAUWASSER & CO., S.C.
Milwaukee, Wisconsin
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP Notes to Consolidated Financial Statements ------------------------------------------ For the years ended December 31, 1996, 1995 and 1994
Note #1 Nature of the Business and Summary of Significant - ------- ------------------------------------------------- Accounting Policies -------------------
A. Nature of the Business ---------------------- RAL Yield + Equities IV Limited Partnership (the Partnership) is a Wisconsin limited partnership formed on August 8, 1986, under the provisions of the Wisconsin Uniform Limited Partnership Act, to acquire for cash, operate, lease, develop and eventually sell real estate properties. Currently, the Partnership owns nine properties. It operates four mobile home parks located in the upper midwest and two apartment complexes located in Maryland and Ohio. The partnership also leases a commercial property to a retail/service business in the upper midwest. As of December 31, 1996, two commercial restaurant properties, located in the upper midwest, which had been leased to a franchisee, are vacant. The Partnership will terminate December 31, 2016, except in the event of prior sale of the Partnership's properties, action by a majority interest of the Limited Partners or certain other events.
Effective July 26, 1988, the Partnership completed its offering of limited partnership interests. A total of 19,620.5 interests were sold for an aggregate contribution of $19,620,500. In connection with the sale of limited partnership interests, the Partnership incurred approximately $2,058,000 of costs to raise capital including sales commissions of $1,766,000 and other offering costs of $292,000, which were charged against partners' equity.
B. Method of Accounting -------------------- Assets, liabilities, revenue and expenses are recognized on the accrual basis method of accounting.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.
C. Basis of Presentation --------------------- The consolidated financial statements include the accounts of RAL Yield + Equities IV Limited Partnership and its majority owned
investment in Cedar Crossing Apartments. All intercompany transactions and accounts have been eliminated in the consolidation. The Partnership records are maintained in accordance with generally accepted accounting principles.
D. Income-Producing Properties --------------------------- Income-producing properties are carried at the lower of cost less accumulated depreciation or fair value. Cost includes acquisition fees paid to RAL Asset Management Group. Management periodically evaluates a property's fair value based upon occupancy rate and comparison to similar properties in the same geographic area.
E. Allowance for Doubtful Accounts ------------------------------- Receivables are reviewed periodically by management to determine the adequacy of the allowance for doubtful accounts. Based upon management's evaluation, an allowance for doubtful accounts of $261,729 and $53,000 was necessary as of December 31, 1996 and 1995, respectively.
F. Deferred Charges ---------------- Costs incurred with respect to organizing the Partnership were deferred and have been fully amortized. Prepaid management fees incurred in the initial public offering were amortized to expense on the straight-line method over the term (ten years) of the management agreement and have been fully amortized. Commission fees incurred to lease the properties have been deferred and amortized over the respective lease term.
G. Leases ------ The Partnership has determined that all leases relating to the income-producing properties are properly classified as operating leases; therefore, rental income is reported when earned and the cost of each of the properties, excluding cost of land, is depreciated over its estimated useful life.
H. Income Taxes ------------ No income taxes will be payable or provided by the Partnership since net income or loss is includable in the respective tax returns of the partners. In the initial year of ownership of partnership interests, each partner's share of taxable income or loss, tax credits and distributions is allocated to them on a pro rata basis that considers the number of days in the year during which their respective interests were held.
I. Cash and Cash Equivalents ------------------------- For purposes of the Consolidated Statements of Cash Flows, the Partnership considers all short-term investments in interest-bearing bank accounts and certificates of deposit with a maturity of three months or less, to be equivalent to cash. Several demand deposit accounts are at one financial institution. Such funds on deposit exceeded the federally insured limit by $253,004 and $152,319 for the years ended December 31, 1996 and 1995, respectively.
Note #2 General Provisions of the Limited Partnership Agreement - ------- ------------------------------------------------------ Pursuant to the terms of the partnership agreement, net income or losses of the Partnership from operations and losses on sale of income-producing properties are allocated 95% to the limited partners and 5% to the general partners. Notwithstanding the foregoing, all depreciation from tax-exempt use properties is allocated to tax-exempt limited partners.
In general, subject to certain limitations, all income from the sale of income-producing properties will be allocated first to the Partners with deficit capital accounts, then to each limited partner in an amount equal to the limited partner's original capital contribution, less prior distributions of sale or refinancing proceeds, then to the limited partners in the amount, if any, of the investment preference that is paid from sale or refinancing proceeds and the remainder shall be allocated 85% to the limited partners and 15% to the general partners, provided that general partners shall be allocated at least 1% of such income.
The partnership agreement requires that distributions to limited partners of Cash Available for Distribution (as defined in the partnership agreement) shall be made in such amounts and at such times as the general partners may determine, but not less frequently than semi-annually.
Note #3 Income-Producing Properties - ------- ---------------------------
During 1994, the Partnership recorded a loss on the sale of one retail property in the amount of $20,535.
During 1996, the Partnership recorded a loss on the sale of one mobile home park in the amount of $338,622.
Note #4 Leases of Income-Producing Properties - ------- -------------------------------------
The Partnership also operates mobile home parks, four in 1996 and five in 1995, which have a total of 467 and 577 rental spaces, respectively. As of December 31, 1996 and 1995, a total of 438 and 516 spaces, respectively, were leased. The mobile home parks receive income on a monthly basis from tenant leases which normally have lease terms of one year or less. Rental revenue for the parks was approximately $983,000, $1,028,000 and $1,000,000 in 1996, 1995 and 1994, respectively.
The Partnership also operates two apartment complexes which have a total of 199 rental spaces. As of December 31, 1996 and 1995, a total of 187 and 191 spaces, respectively, were leased. The apartment complexes receive income on a monthly basis from tenant leases which also normally have lease terms of one year or less. Rental revenue for the apartment complexes was approximately $998,000, $995,000, $972,400 in 1996, 1995 and 1994, respectively.
Note #5 Properties Held for Sale or Re-Lease - ------- ------------------------------------ At December 31, 1996, two commercial properties were vacant and are being held for sale or re-lease. Accordingly, these properties have been reclassified in the accompanying consolidated balance sheet at December 31, 1996.
At December 31, 1996, the Partnership recorded an allowance of $158,859 for these properties. Management recorded this allowance to reduce the carrying value of the properties to the respective estimated net realizable values in light of the area's real estate market conditions and the vacant status of the properties.
Note #6 Affiliate's Participation in Joint Venture - ------- ------------------------------------------ The Cedar Crossing Apartments are owned by a joint venture between the Partnership and an affiliated partnership. All assets, liabilities, revenue and expenses of the joint venture are included in the financial statements of the Partnership with the appropriate adjustment of income for the affiliate's interest in the joint venture. Profits, losses and distributions are allocated 87.709% to the Partnership and 12.291% to the affiliate.
RAL-YIELD EQUITIES IV LIMITED PARTNERSHIP (A Wisconsin Limited Partnership) NOTES TO SCHEDULE III
(a) All properties are unencumbered at December 31, 1996.
(b) Includes personal property. The Joliet and Mundelien, Illinois properties were written down to management's estimated net realizable value during 1996. The write-downs were based on the current real estate market conditions in the respective areas.
(c) The Cedar Crossing Apartments are owned by a joint venture between the Partnership and the affiliated partnership. All assets of the joint venture are included in the financial statements of the Partnership. For tax purposes, the Partnership includes only its portion of the joint venture's assets on its tax balance sheet.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
RAL YIELD + EQUITIES IV LIMITED PARTNERSHIP
BY: Robert A. Long ------------------------------- Robert A. Long, General Partner
DATE: March 28, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature Title Date - ----------------------------------------------------------------
Robert A. Long General Partner of RAL 3/28/97 - -------------------- Yield + Equities IV ------- Robert A. Long Limited Partnership
John A. Hanson General Partner of RAL 3/28/97 - -------------------- Yield + Equities IV ------- John A. Hanson Limited Partnership
Douglas C. Heston President, First Financial 3/28/97 - -------------------- Realty Management ------- Douglas C. Heston