EXHIBIT 99.2
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Financial Statements and Schedules
November 30, 1999 and 1998
(With Independent Auditors' Report Thereon)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Table of Contents
Page
Independent Auditors' Reports
KPMG LLP 1
Deloitte & Touche LLP 2
Balance Sheet and Statement of Net Liabilities in Liquidation 3
Statements of Operations and Loss in Liquidation 4
Statements of Partners' Deficit and Net Liabilities in Liquidation 5
Statements of Cash Flows 6
Notes to Financial Statements 7
Schedules
1 Reconciliation of Partners' Deficit 16
2 Real Estate and Accumulated Depreciation 17
Independent Auditors' Report
To the Partners of
Maxus Real Property Investors-Four, L.P.:
We have audited the accompanying balance sheet of Maxus Real Property
Investors-Four, L.P. (formerly known as Nooney Real Property Investors-Four,
L.P.) (the Partnership) as of November 30, 1999, and the related statements of
operations, partners' deficit, and cash flows for the year then ended. Our audit
also included the 1999 information included in the financial statement schedules
listed in the accompanying table of contents. These financial statements and
financial statement schedules are the responsibility of the Partnership's
general partners. Our responsibility is to express an opinion on these 1999
financial statements and financial statement schedules based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As discussed in note 1, the Partnership discontinued the plan of liquidation
previously approved by the partners of the Partnership. As a result, the
Partnership's 1999 financial statements are no longer on the liquidation basis
of accounting.
In our opinion, the 1999 financial statements referred to above present fairly,
in all material respects, the financial position of Maxus Real Property
Investors-Four, L.P. as of November 30, 1999 and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles. Also, in our opinion, the 1999 financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
/s/ KPMG LLP
February 11, 2000
INDEPENDENT AUDITORS' REPORT
To the Partners of
Nooney Real Property Investors-Four, L.P.:
We have audited the accompanying statement of net liabilities in liquidation of
Nooney Real Property Investors-Four, L.P. (a limited partnership) as of November
30, 1998, and the related statements of loss in liquidation, changes in net
liabilities in liquidation and cash flows in liquidation for the year then
ended. In addition, we have audited the accompanying statements of operations
(going-concern basis), partners' deficit (going-concern basis) and cash flows
(going-concern basis) of Nooney Real Property Investors-Four, L.P. for the year
ended November 30, 1997. Our audits also included the financial statement
schedules for 1998 and 1997 listed in the index at Item 14(a)2. These financial
statements and financial statement schedules are the responsibility of the
Partnership's general partners. Our responsibility is to express an opinion on
these financial statements and financial statement schedules 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 financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As discussed in Note 1 to the financial statements, the partners of Nooney Real
Property Investors-Four, L.P. approved a plan of liquidation on January 21,
1999. As a result, the Partnership has changed its basis of accounting from the
going-concern basis to the liquidation basis.
In our opinion, such financial statements present fairly, in all material
respects, the net liabilities in liquidation of Nooney Real Property
Investors-Four, L.P., a partnership as of November 30, 1998, and the related
statements of loss in liquidation, changes in net liabilities in liquidation and
cash flows in liquidation for the year then ended and the statements of
operations (going-concern basis), partnership deficit (going-concern basis) and
cash flows (going-concern basis) for the year ended November 30, 1997, in
conformity with generally accepted accounting principles. Also, in our opinion,
such 1998 and 1997 financial statement schedules, when considered in relation to
the basic financial statements taken as a whole, present fairly in all material
respects the information set forth therein.
/s/ DELOITTE & TOUCHE LLP
St. Louis, Missouri
January 22, 1999
2
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Balance Sheets as of November 30, 1999 and
Statements of Net Liabilities in Liquidation as of November 30, 1998
Assets 1999 1998
---------- ----------
Investment property (note 2):
Land $ 1,013,858 ----
Buildings and improvements 15,225,310 ----
---------- ----------
16,239,168 ----
Less accumulated depreciation 8,655,278 ----
7,583,890 ----
Investment property held for sale 3,400,000 17,585,000
---------- ----------
Total investment property 10,983,890 17,585,000
Cash 21,021 227,373
Accounts receivable, less allowance for doubtful accounts 188,579 106,023
Prepaid expenses 19,100 ----
Deferred expenses, less accumulated amortization 101,673 ----
---------- ----------
$11,314,263 17,918,396
========== ==========
Liabilities and Partners' Deficit
Liabilities:
Mortgage notes payable (note 2) $13,825,996 13,500,465
Accounts payable and accrued expenses 465,484 263,459
Refundable tenant deposits 69,327 72,976
Deferred gain on investment property held for sale (note 1) ---- 7,200,029
Reserve for estimated costs during the period
of liquidation (note) ---- 10,000
---------- ----------
Total liabilities 14,360,807 21,046,929
Partners' deficit (3,046,544) ----
---------- ----------
Total liabilities and partners' deficit $11,314,263 ----
========== ----------
Net liabilities in liquidation $(3,128,533)
==========
See accompanying notes to financial statements.
3
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Statements of Operations for the years ended November 30, 1999 and 1997
and Loss in Liquidation for the year ended November 30, 1998
1999 1998 1997
---------- --------- ---------
Revenues
Rental (note 3) $ 2,817,943 2,793,517 2,873,818
Other
432,130 494,053 532,748
---------- --------- ---------
Total revenues 3,250,073 3,287,570 3,406,566
---------- --------- ---------
Expenses:
Depreciation and amortization 611,674 547,161 480,851
Repairs and maintenance, including common
area maintenance 499,533 466,870 433,263
Real estate taxes 377,545 445,064 459,618
Interest, net 1,101,890 1,146,496 1,130,602
Professional fees 352,598 203,831 156,971
General and administrative 210,751 232,710 241,728
Utilities 181,553 178,500 197,538
Property management fees -- related parties 101,408 176,292 180,921
Other 316,593 292,345 318,822
--------- --------- ---------
Total expenses 3,753,545 3,689,269 3,600,314
--------- --------- ---------
Loss before adjustment to liquidation basis (503,472) (401,699) (193,748)
Adjustment to liquidation basis (note 1) 585,461 (1,038,889) ----
--------- --------- ---------
Net income (loss) $ 81,989 (1,440,588) (193,748)
========= ========= =========
Net income (loss) allocation:
General partners $ 1,423 (24,995) (3,357)
Limited partners 80,566 (1,415,593) (190,391)
--------- --------- ---------
81,989 (1,440,588) (193,748)
========= ========= =========
Limited partners' data:
Net income (loss) per unit:
Loss before adjustment to liquidation basis $ (36.56) (29.18) (14.07)
Adjustments to liquidation basis 42.52 (75.45) ----
--------- --------- ---------
Total $ 5.96 (104.63) (14.07)
========= ========= =========
Weighted average limited partnership units outstanding 13,529 13,529 13,529
========= ========= =========
See accompanying notes to financial statements
4
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Statements of Partners" Deficit for the years ended November 30, 1999 and 1997
and Statements of Changes in Net Liabilities in Liquidation for the year ended
November 30, 1998
Limited General
partners partners Total
-------- -------- -----
Balance at November 30, 1996 $(1,201,711) (292,486) (1,494,197)
Net loss (190,391) (3,357) (193,748)
---------- -------- ----------
Balance at November 30, 1997 (1,392,102) (295,843) (1,687,945)
Net loss (1,415,593) (24,995) (1,440,588)
---------- -------- ----------
Balance at November 30, 1998 (2,807,695) (320,838) (3,128,533)
Net income 80,566 1,423 81,989
---------- -------- ----------
Balance at November 30, 1999 $(2,727,129) (319,415) (3,046,544)
=========== ======== ==========
See accompanying notes to financial statements
5
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Statements of Cash Flows for the years ended November 30, 1999
and 1997 and Statements of Cash Flows in Liquidation
for the year ended November 30, 1998
1999 1998 1997
---- ---- ----
Cash flows from operating activities:
Net income (loss) $ 81,989 (1,440,588) (193,748)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Adjustment to liquidation basis (585,461) 1,038,889 ---
Depreciation and amortization 611,674 547,161 480,851
Changes in accounts affecting operations:
Accounts receivable (82,556) 5,330 88,004
Prepaid expenses 55,832 (47,160) 28,907
Deferred expenses 47,857 (200,387) ---
Accounts payable and accrued expenses 202,025 (100,886) 277,394
Refundable tenant deposits (3,649) (7,311) (9,108)
-------- ---------- -------
Net cash provided by (used in)
operating activities 327,711 (204,952) 672,300
Cash flows from investing activities -- capital
expenditures (859,594) (524,657) (898,139)
-------- -------- --------
Cash flows from financing activities
Principal payments on mortgage notes payable (174,003) (12,871,393) (34,307)
Proceeds from mortgage notes payable 499,534 13,500,465 376,216
------- ---------- -------
Net cash provided by financing activities 325,531 629,072 341,909
------- ------- -------
Net (decrease) increase in cash (206,352) (100,537) 116,070
Cash, beginning of year 227,373 327,910 211,840
------- ------- -------
Cash, end of year $ 21,021 227,373 327,910
=========== ======= =======
Supplemental disclosure of cash flow information --
cash paid during the year for interest $ 1,004,663 1,150,263 1,183,922
=========== ========= =========
See accompanying notes to financial statements.
6
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(1) Summary of Significant Accounting Policies
(a) Description of Business
Maxus Real Property Investors-Four, L.P. (formerly known as Nooney
Real Property Investors-Four, L.P.) (the Partnership) is a limited
partnership organized under the laws of the State of Missouri on
February 9, 1982. The Partnership was organized to invest
primarily in income-producing real properties such as shopping
centers, office buildings and other commercial properties,
apartment buildings, warehouses and light industrial properties.
The Partnership's portfolio is comprised of an apartment building
located in West St. Louis County, Missouri (Woodhollow Apartments)
which generated 76% of total revenues for the year ended November
30, 1999, and a retail shopping center (Cobblestone Court) located
in Burnsville, Minnesota, a suburb of Minneapolis, which generated
the remaining 24% of total revenues for the year ended November
30, 1999. On December 21, 1999, the Partnership's Certificate of
Limited Partnership was amended to change the name of the
Partnership to Maxus Real Property Investors-Four, L.P.
(b) Basis of Accounting
On January 21, 1999, a plan to sell the Partnership's Woodhollow
Apartments property and Cobblestone Court property was approved by a
majority of the limited partners by proxy. The Partnership entered
into sales contracts on both properties with American Spectrum
Realty, Inc., an affiliate of Nooney Capital Corporation, corporate
general partner of the Partnership at that time.
As a result of the partners approval to sell the properties and
liquidate the Partnership, the Partnership's financial statements as
of November 30, 1998, and for the year then ended were prepared on a
liquidation basis. Accordingly, assets were valued at estimated net
realizable value and liabilities included estimated costs associated
with carrying out the plan of liquidation. The Cobblestone sales
contract provided for a net sale price of $3,100,000. Accordingly, a
loss of $753,428 was recognized in 1998 to reduce the carrying value
of the property to its fair value less costs to sell. The Woodhollow
sales contract provided for a sale price of $14,600,000. The
expected gain of $7,200,029, net of sales costs, was included as a
deferred gain at November 30, 1998. Adjustments to convert to the
liquidation basis of accounting in 1998 are summarized as follows:
Writedown to net realizable value of Cobblestone $ (753,428)
Increase to reflect net realizable value of Woodhollow 7,200,029
Deferral of gain on increase in net realizable value of
Woodhollow (7,200,029)
Write-off of deferred debt costs and prepaid expenses (275,461)
Estimated liabilities associated with the liquidation of the
Partnership (10,000)
-------
$(1,038,889)
==========
7 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
In 1999, certain contingencies of the sale contracts were not
fulfilled and the sale contracts were rendered null and void. As a
result of the cancellation of the planned liquidation and the
partners' intent to continue operations of the Woodhollow property,
the 1999 financial statements are no longer presented on the
liquidation basis of accounting. The cost of liquidation and other
accruals made in 1998 when adopting the liquidation basis were
reversed in 1999 as follows:
Commission payables related to sale of Cobblestone $300,000
Write-off of deferred debt costs and prepaid expenses 275,461
Estimated liabilities associated with liquidation of
the Partnership 10,000
------
$585,461
========
As discussed in note 7, the Cobblestone property is under contract
to be sold in 2000.
The financial statements include only those assets, liabilities and
results of operations of the partners which relate to the business
of the Partnership. The statements do not include any assets,
liabilities, revenues or expenses attributable to the partners'
individual activities. No provision has been made for federal and
state income taxes since these taxes are the personal responsibility
of the partners.
(c) Ownership and Management
Prior to October 31, 1997, Nooney Capital Corp., the corporate
general partner, was a 75% owned subsidiary of Nooney Company.
Gregory J. Nooney, Jr., one of the individual general partners, was
an officer, director and shareholder of Nooney Company. The spouse
of John J. Nooney, the other individual general partner, was a
shareholder of Nooney Company. Nooney Krombach Company, a wholly
owned subsidiary of Nooney Company, managed the Partnership's real
estate for a management fee. Property management fees paid to Nooney
Krombach Company were $166,624 for the year ended November 30, 1997.
Additionally, the Partnership paid Nooney Krombach Company $36,667
in 1997 as reimbursement for management services and indirect
expenses in connection with the management of the Partnership.
On October 31, 1997, Nooney Company sold its 75% interest in Nooney
Capital Corp. to S-P Properties, Inc., which in turn is a wholly
owned subsidiary of CGS Real Estate Company, Inc. (CGS).
Simultaneously, Gregory J. Nooney, Jr., an individual general
partner and PAN, Inc., a corporate general partner, sold their
economic interests to S-P Properties, Inc. and resigned as general
partners. CGS also purchased the real estate management business of
Nooney Krombach Company and formed Nooney, Inc. to perform the
management of the Partnership. Property management fees paid to
Nooney, Inc. were $89,627, $176,292, and $14,297 for the years ended
November 30, 1999, 1998, and 1997, respectively. Additionally, the
Partnership paid Nooney, Inc. $0, $40,000, and $3,333 in 1999, 1998,
and 1997, respectively, as reimbursement for management services and
indirect expenses in connection with the management of the
Partnership.
8 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
On June 25, 1999, a complaint was filed by Bond Purchase, L.L.C.
(Bond Purchase) against the Partnership and its general partner,
Nooney Capital Corp. The complaint alleged that the defendants
arranged for the sale of Partnership assets at a price which was
less than another entity affiliated with the plaintiff was willing
to pay. The complaint further alleged that Nooney Capital Corp., as
a general partner of the Partnership, filed a proxy statement
relating to the sale of Partnership assets which omitted certain
unspecified material facts and which otherwise failed to provide
completed information to the limited partners. In addition, the
complaint alleged that the defendants refused to allow the plaintiff
access to the books and records of the Partnership. The complaint
sought injunctive relief against the proposed sale of the
Partnership assets, damages for alleged violations of the Securities
Exchange Act, damages for alleged breaches of fiduciary duty,
appointment of a receiver for the Partnership, and an accounting.
The Partnership and the general partner moved to dismiss the
complaint on various grounds, including the fact that the sale
transaction did not take place. Plaintiff has dismissed its federal
securities law claim and claim for injunction against the sale.
On November 9, 1999, S-P Properties, Inc. sold all outstanding stock
of Nooney Capital Corp. to Bond Purchase, L.L.C. for $177,000. In
connection with the sale, Nooney Capital Corp. changed its name to
Maxus Capital Corp., Nooney, Inc. terminated its management
agreement with the Partnership, and the Partnership entered into a
property management agreement with Maxus Properties, Inc., an
affiliate of Bond Purchase. Property management fees payable to
Maxus Properties, Inc. were $11,781 for 1999.
The sale was part of a larger agreement entered into by CGS and its
affiliates with Bond Purchase and certain affiliates, pursuant to
which Bond Purchase and CGS agreed (i) to stipulate to the dismissal
of certain lawsuits among the parties (including the complaint filed
by Bond Purchase against the Partnership, (ii) to settle certain
disputes between CGS and Bond Purchase, and (iii) to transfer stock
and/or Partnership units in various private and publicly traded
entities controlled at that time by CGS.
(d) Partnership Interests
Pursuant to the terms of the Partnership Agreement, net income
(loss) and cash distributions are allocated l% to the general
partners and the remainder pro rata to the general and limited
partners based upon the relationship of their original capital
contributions.
Limited partnership per unit computations are based on the weighted
average number of limited partnership units outstanding during the
year.
9 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(e) Investment Property
Investment property is carried at cost less accumulated
depreciation. Investment property held for sale is carried at the
lower of cost or fair value less cost to sell. The Partnership
applies Statement of Financial Accounting Standards (SFAS) No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of, for the recognition and
measurement of impairment of long-lived assets to be held and used
and assets to be disposed of. Management reviews each property for
impairment whenever events or changes in circumstances indicate that
the carrying value of a property may not be recoverable. The review
of recoverability is based on an estimate of undiscounted future
cash flows expected to result from its use and eventual disposition.
If impairment exists due to the inability to recover the carrying
value of a property, an impairment loss is recorded to the extent
that the carrying value of the property exceeds its estimated fair
value.
The properties are depreciated over their estimated useful lives of
thirty years using the straight-line method. Tenant alterations are
depreciated over the term of the lease on a straight-line basis.
Depreciation is not recorded on investment property held for sale.
(f) Deferred Expenses
Deferred expenses consist of financing costs and are amortized over
the terms of the respective notes payable.
(g) Revenues
Lease agreements are accounted for as operating leases and rentals
from such leases are reported as revenues ratably over the terms of
the leases.
Included in other revenues are amounts received from tenants under
provisions of lease agreements which require the tenants to pay
additional rent equal to specified portions of certain expenses such
as real estate taxes, insurance, utilities and common area
maintenance. The income is recorded in the same period that the
related expense is incurred.
(h) Use of Estimates
Management of the Partnership has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and
the disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
10 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(2) Mortgage Notes Payable
Mortgage notes payable as of November 30, 1999 and 1998 consist of
the following:
1999 1998
---- ----
Cobblestone Court Shopping Center mortgage note
payable in monthly principal payments of $4,697,
plus interest payments at LIBOR plus 2.75%
(8.34% at November 30, 1999), with final payment
of $4,494,261 due November 30, 2001, secured
by real property with a carrying value of $3,400,000 $ 4,555,328 4,607,000
Woodhollow Apartments mortgage note payable in
monthly principal payments of $11,121, plus interest
payments at LIBOR plus 2.75% (8.34% at
November 30, 1999), with final payment of $9,126,094
due November 30, 2001, secured by real property
with depreciated cost of $7,583,890 9,270,668 8,893,465
--------- ----------
$13,825,996 13,500,465
=========== ==========
The mortgage notes are collateralized by deeds of trust and
assignments of rents on all investment properties. The aggregate
annual maturities of mortgage notes payable subsequent to November
30, 1999 are as follows: 2000, $205,641 and 2001, $13,620,355.
(3) Rental Revenues Under Operating Leases
Minimum future rental revenues under noncancelable operating leases
on properties other than apartment units in effect as of November
30, 1999 are as follows:
2000 $327,742
2001 110,140
2002 67,857
2003 69,638
2004 59,746
Thereafter 186,865
-------
Total $ 821,988
===========
In addition, certain lease agreements require tenant participation
in certain operating expenses and additional contingent rentals
based upon percentages of tenant sales in excess of minimum amounts.
Tenant participation in expenses included in revenues approximated
$266,000, $368,000, and $387,000 for the years ended November 30,
1999, 1998, and 1997, respectively. Contingent rentals were not
significant for the years ended November 30, 1999, 1998, and 1997.
11 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(4) Federal Income Tax Status
The general partners believe, based upon opinion of legal counsel,
that Maxus Real Property Investors-Four, L.P. is considered a
partnership for income tax purposes.
Selling commissions and offering expenses incurred in connection
with the sale of limited partnership units are not deductible for
income tax purposes and therefore increase the partners' basis.
Investment properties are depreciated for income tax purposes using
rates which differ from rates used for computing depreciation for
financial statement reporting. Rents received in advance are
includable in taxable income in the year received. Rent concessions,
recognized ratably over lease terms for financial statement
purposes, are includable in taxable income in the year rents are
received. Insurance premiums are deductible for tax purposes in the
year paid. Gains and losses in connection with the write-up and
write-down of investment property are not recognized for income tax
purposes until the property is disposed of.
The comparison of financial statement and income tax reporting is as
follows:
Financial Income
statement tax
----------- -----------
1999:
Net income $ 81,989 (49,413)
Partners' deficit (3,046,544) (6,677,324)
========== ==========
1998:
Net loss $ 1,440,588 (124,725)
Net liabilities in liquidation (3,128,533) ----
Partners' deficit ---- (6,627,911)
========== ==========
1997:
Net loss $ (193,748) (307,511)
Partners' deficit (1,687,945) (6,503,186)
========== ==========
(5) Fair Value of Financial Instruments
SFAS No. 107, Disclosures About Fair Value of Financial Instruments,
requires the Partnership to disclose fair value information of all
financial instruments, whether or not recognized in the balance
sheet, for which it is practicable to estimate fair value. The
Partnership's financial instruments, other than debt, are generally
short-term in nature and contain minimal credit risk. These
instruments consist of cash, accounts receivable, accounts payable,
accrued liabilities, and refundable security deposits. The carrying
value of these assets and liabilities in the balance sheet are
assumed to be at fair value.
The Partnership's mortgage notes payable are at a variable rate,
which results in a carrying value that approximates its fair value.
12 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(6) Segment Reporting
During 1999, the Partnership adopted SFAS No. 131, Disclosure About
Segments of an Enterprise and Related Information, which establishes
standards for the way that public business enterprises report
information about operating segments in financial statements, as
well as related disclosures about products and services, geographic
areas, and major customers.
The accounting policies of the segments are the same as those
described in note 1.
The Partnership has two reportable operating segments--Cobblestone
Court and Woodhollow Apartments. The Partnership's management
evaluates performance of each segment based on profit or loss from
operations before allocation of general and administrative expenses,
unusual and extraordinary items, and interest.
1999 1998 1997
---- ---- ----
Revenues:
Cobblestone Court $ 789,371 911,124 1,036,061
Woodhollow Apartments 2,452,272 2,372,154 2,371,681
Reconciling items -- corporate
and other 8,430 4,292 (1,176)
---------- --------- ---------
$3,250,073 3,287,570 3,406,566
========== ========= =========
Depreciation and amortization:
Cobblestone Court $ 17,522 1,240 3,265
Woodhollow Apartments 593,990 545,677 477,342
Reconciling items -- corporate 162 244 244
and other ---------- --------- ------
$ 611,674 547,161 480,851
========== ========= =======
Loss before adjustment to
liquidation basis:
Cobblestone Court $ (223,819) (215,858) (119,986)
Woodhollow Apartments (264,919) (192,197) (70,344)
Reconciling items -- corporate
and other (14,734) 6,356 (3,418)
---------- --------- --------
$ (503,472) (401,699) (193,748)
========== ========= ========
13 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
1999 1998 1997
---- ---- ----
Interest expense, net:
Cobblestone Court $ 368,451 378,137 361,584
Woodhollow Apartments 733,495 772,126 774,644
Reconciling items -- interest
income (56) (3,767) (5,626)
----------- --------- ---------
$ 1,101,890 1,146,496 1,130,602
========== ========= =========
Capital expenditures
Cobblestone Court $ ---- ---- 376,218
Woodhollow Apartments 859,594 524,657 521,921
---------- --------- ---------
$ 859,594 524,657 898,139
========== ========= =========
Assets:
Cobblestone Court $3,511,619 3,257,061
Woodhollow Apartments 7,789,732 14,520,859
Reconciling items -- corporate
and other 12,912 140,476
---------- ---------
$11,314,263 17,918,396
=========== ==========
Two major tenants occupied 35%, 35%, and 34% of Cobblestone's
rentable square footage in 1999, 1998, and 1997, respectively. These
tenants' leases expire in 2000 and 2001.
(7) Subsequent Event
On January 28, 2000, a sales agreement was signed on the Cobblestone
property that provides for a sale price of $5,100,000. The sale is
subject to a due diligence period and, if completed, is expected to
close by the end of the second quarter of 2000.
14 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(8) Supplementary Quarterly Data (Unaudited)
1999
-----------------------------------------------------
February 28 May 31 August 31 November 30
----------- ------ --------- -----------
Total revenues $ 814,662 845,093 802,586 787,732
Adjustment to liquidation basis ---- 585,461 ---- ----
Net income (loss) 103,744 566,801 (486,947) (101,609)
Net income (loss) per limited
partnership unit 7.54 41.17 (35.37) (7.38)
======= ======= ======= =======
1998
-----------------------------------------------------
February 28 May 31 August 31 November 30
----------- ------ --------- -----------
Total revenues $ 848,737 829,782 842,513 766,538
Adjustment to liquidation basis ---- ---- ---- (1,038,889)
Net income (loss) 2,371 (73,607) (63,815) (1,305,537)
Net income (loss) per limited
partnership unit 0.17 (5.35) (4.64) (94.81)
======= ======= ======= =========
15
Schedule 1
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Reconciliation of Partners' Equity (Deficit)
Years ended November 30, 1999, 1998 and 1997
Limited General
partners partners Total
------------ --------- -----------
1999:
Balance per statement of partners' deficit $(2,727,129) (319,415) (3,046,544)
Add:
Selling commissions and other offering costs not deductible for
income tax purposes 1,732,908 --- 1,732,908
Bad debt expense not deductible for income tax purposes 30,837 545 31,382
Prepaid rents included in income for income tax purposes 69,214 1,222 70,436
Writedown of investment property not recognized for income tax purposes 1,491,100 26,328 1,517,428
--------- ------ ---------
596,930 (291,320) 305,610
Less
Excess depreciation deducted for income tax purposes 6,779,531 190,491 6,970,022
Rent concessions not recognized for income tax purposes 12,688 224 12,912
--------- -------- ---------
Partners' deficit per tax return $(6,195,289) (482,035) (6,677,324)
=========== ======== =========
1998:
Balance per statement of partners" deficit $(2,807,695) (320,838) (3,128,533)
Add:
Selling commissions and other offering costs not deductible for
income tax purposes 1,732,907 --- 1,732,907
Adjustment to liquidation basis not deducted for income tax purposes 280,487 4,974 285,461
Prepaid rents included in income for income tax purposes 9,898 175 10,073
Writedown of investment property not recognized for income tax purposes 1,785,931 31,497 1,817,428
--------- -------- ---------
1,001,528 (284,192) 717,336
Less
Excess depreciation deducted for income tax purposes 7,103,298 196,010 7,299,308
Rent concessions not recognized for income tax purposes 4,406 77 4,483
Insurance premiums deducted for income tax purposes 40,738 718 41,456
--------- -------- ---------
Partners' deficit per tax return $(6,146,914) (480,997) (6,627,911)
=========== ======== =========
1997:
Balance per statement of partners' deficit $(1,392,102) (295,843) (1,687,945)
Add:
Selling commissions and other offering costs not deductible for
income tax purposes 1,732,907 --- 1,732,907
Prepaid rents included in income for income tax purposes 3,985 70 4,055
Writedown of investment property not recognized for income tax purposes 1,045,565 18,435 1,064,000
--------- -------- ---------
1,390,355 (277,338) 1,113,017
Less
Excess depreciation deducted for income tax purposes 7,395,960 201,166 7,597,126
Rent concessions not recognized for income tax purposes 190 2 192
Insurance premiums deducted for income tax purposes 18,558 327 18,885
--------- -------- ---------
Partners' deficit per tax return $(6,024,353) (478,833) (6,503,186)
=========== ======== =========
See accompanying independent auditors' reports.
16
Schedule 2
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Real Estate and Accumulated Depreciation
November 30, 1999
Column C
----------------------------------------------------- Column D
Initial cost to Partnership ---------------
----------------------------------------------------- Costs
Column B Buildings and capitalized
-------------- subsequent to
Column A Encumbrances Land Improvements Total acquisition
- --------------------------------- -------------- --------- ------------ ---------- -------------
Cobblestone Court Shopping Center
Burnsvile, Minnesota $ 4,555,328 1,205,378 4,676,940 5,882,318 199,828(1)
Woodhollow Apartments,
Maryland Heights, Missouri 9,270,668 1,013,858 11,651,289 12,665,147 4,149,020
--------- --------- --------- ---------- ---------
Total $ 13,825,996 2,219,236 16,328,229 18,547,465 4,348,848
============= ========= ========== ========== =========
Column I
Column E ---------------
---------------------------------- Life on which
Gross amount at which Column F Column G Column H depreciation in
carried at close of period ------------ ------------ -------- latest income
Buildings and Accumulated Date of Date statement is
Land Improvements Total depreciation construction acquired computed
---- ------------ ----- ------------ ------------ -------- --------
Cobblestone Court Shopping Center
Burnsvile, Minnesota 1,205,378 4,876,768 6,082,146(2) 2,682,146(2) 1980 02/16/82 30 years
Woodhollow Apartments,
Maryland Heights, Missouri 1,013,858 15,225,310 16,239,168 8,655,278 1971-1972 07/28/82 30 years
--------- ---------- ---------- ---------
Total 2,219,236 20,102,078 22,321,314 11,337,424
========= ========== ========== ==========
(1) Amount is net of $942,428 in writedowns to reflect the minimum recoverable
value to the Partnership.
(2) Amount is shown net in the financial statements as investment property held
for sale.
17 (Continued)
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Real Estate and Accumulated Depreciation, Continued
Years ended November 30, 1999, 1998, and 1997
1999 1998 1997
------------ ---------- ----------
Reconciliation of amounts in Column E:
Balance at beginning of period $ 28,361,748 21,395,024 20,556,298
Add cost of improvements 859,594 524,657 898,139
Less adjustment of net realizable value (6,900,028) 6,446,601 ---
Less cost of disposals --- (4,534) (59,413)
---------- ---------- ----------
Balance at end of year $ 22,321,314 28,361,748 21,395,024
============ ========== ==========
Reconciliation of amounts in Column F:
Balance at beginning of period $ 10,776,748 10,284,783 9,878,090
Add depreciation expense 560,676 496,499 466,106
Less accumulated depreciation on disposals --- (4,534) (59,413)
---------- ---------- ----------
Balance at end of year $ 11,337,424 10,776,748 10,284,783
============ ========== ==========
The aggregate cost of real estate owned for federal
income tax purposes $ 23,838,742 22,979,147 22,459,024
============ ========== ==========
See accompanying independent auditors' reports.
18