<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30,1995 Commission file number
33-8115
Leastec Income Fund IV, A California Limited Partnership
(Exact name of registrant as specified in its charter)
California 68-0100223
(State or other jurisdiction of (IRS Employer Identification
incorporation or organization) number)
2855 Mitchell Drive, Suite 215, Walnut Creek, California 94598
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (510) 938-3443
________________________________________________________________
(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 __
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS: N/A
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Sections 12, 13, or 15
(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes ___ No ___
APPLICABLE ONLY TO CORPORATE ISSUERS: N/A
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.
<PAGE>
<TABLE>
Part 1. Financial Information
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
September 30 December 31
1995 1994
----------- ------------
<S> <C> <C>
ASSETS:
Cash $ 998,579 $ 928,298
Accounts receivable 17,226 45,445
Net investment in direct financing 1,453,233 3,711,391
leases
Equipment on operating leases, net of
accumulated depreciation of $2,622,806
in 1995 and $2,992,283 in 1994 0 0
Equipment held for sale or lease, net of
accumulated depreciation of $-0-in
1995 and $215,677 in 1994 0 0
---------- ----------
Total assets $2,469,038 $4,685,134
=========== ==========
LIABILITIES AND PARTNERS' CAPITAL:
Liabilities:
Payables to affiliates $ 120,648 $ 144,124
Accounts payable 31,085 114,531
Deposits 160,185 360,197
Prepaid rental income 19,422 11,086
Distributions payable 657,900 652,632
Notes payable 0 305,610
---------- ----------
Total liabilities 989,240 1,588,180
Partners' capital:
Partners' capital 1,479,798 3,096,954
---------- ----------
Total partners' capital 1,479,798 3,096,954
---------- ----------
Total liabilities & partners' capital $2,469,038 $4,685,134
========== ==========
<FN>
The accompanying notes are an integral
part of these condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
Nine Months Quarter
Ended Ended
September 30 September 30
1995 1994 1995 1994
--------------------- -------------------
<S> <C> <C> <C> <C>
REVENUE:
Rental income $ 267,341 $ 733,242 $ 110,844 $162,874
Direct financing lease income 336,386 523,498 33,962 139,383
Gain on sale of equipment 54,313 92,071 0 56,069
Interest income 20,332 9,118 6,807 3,229
Other income (loss) 641,486 11,727 45,457 (17,880)
---------- --------- --------- --------
Total revenues 1,319,858 1,369,656 197,070 343,675
---------- --------- --------- --------
EXPENSES:
Depreciation 0 373,063 0 (22)
Management fees 230,408 195,883 37,616 73,491
General & administrative 151,168 174,706 49,740 72,029
Data processing 25,246 45,792 6,487 7,006
lnterest expense 30,192 98,616 1,080 25,006
---------- --------- -------- --------
Total expenses 437,014 888,060 94,923 177,510
Net Income $ 882,844 $481,596 $ 102,147 $166,165
========== ======== ========= ========
Net income per limited
partnership unit $ 8.23 $ 4.49 $ .95 $ 1.55
========== ======== ========= ========
<FN>
The accompanying notes are an integral
part of these condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION >
Nine Months
Ended
September 30
1995 1994
----------- ----------
<C> <C>
Cash flows from operating activities:
Net income $ 882,844 $ 481,596
Adjustments to reconcile net income to
net cash provided by operating activities:
Accumulated depreciation 0 373,063
Gain on disposition of equipment (54,313) (92,071)
Other income 0 (349)
Change in assets and liabilities:
(Increase) decrease in accounts receivable 28,219 (66,665)
Increase (decrease) in payable to affiliates (23,476) 20,969
Decrease in accounts payable (83,446) (69,449)
Decrease in deposits (200,012) (17,209)
Increase (decrease) in prepaid rental income 8,336 (65)
Increase in distributions payable 5,268 231,573
----------- ----------
Net cash provided by operating activities 563,420 861,393
----------- ----------
Cash flows from investing activities:
Proceeds from disposition of equipment 51,445 259,852
Proceeds from sale of direct financing
leases 155,620 0
Decrease in net investment in direct
financing leases 2,105,406 1,606,364
----------- -----------
Net cash provided by investing activities 2,312,471 1,866,216
----------- -----------
Cash flows from financing activities:
Repayment of notes payable (305,610) (1,027,482)
Net distributions to partners (2,500,000) (1,616,376)
----------- -----------
Net cash used in financing activities (2,805,610) (2,643,858)
----------- -----------
Net increase in cash 70,281 83,751
Cash at beginning of period 928,298 576,596
----------- -----------
Cash at end of period $ 998,579 $ 660,347
=========== ===========
<FN>
The accompanying notes are an integral
part of these condensed financial statements.
</TABLE>
<PAGE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995, SEPTEMBER 30, 1994 AND DECEMBER 31, 1994
(UNAUDITED)
1. Basis of Condensed Financial Statement Preparation
--------------------------------------------------
In the opinion of the General Partner, the accompanying unaudited
condensed financial statements contain all adjustments (consisting
principally of normal, recurring accruals) necessary to present
fairly the financial position of Leastec Income Fund IV (the
Partnership) as of September 30, 1995, September 30, 1994 and
December 31, 1994.
As provided for in the Partnership agreement and offering
document, the Partnership engaged in leasing activities which
intended to be completed in approximately eleven years from its
inception at which time all remaining partnership assets will have
been liquidated and cash proceeds distributed to the registrant's
partners. The Partnership has presented its 1995 financial
statements to reflect its leasing activities on a basis consistent
with prior periods.
2. Wind Down Phase
---------------
The Registrant has ceased acquisition of new capital equipment and
is in the process of liquidating its lease portfolio. It is
intended that the Registrant will be fully liquidated at the end
of its eleventh full year of operation, December 1996.
<PAGE>
LEASTEC INCOME FUND IV
A CALIFORNIA LIMITED PARTNERSHIP
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operation
- --------------------
The Registrant has been winding down operations since 1993 by
discontinuing new leasing activities and returning cash available
from operations to the Registrant's Partners. Although the
Registrant has until December 1997 to liquidate operations, the
Registrant intends to be fully liquidated by December 1996. In order
to complete the liquidation of all assets by the end of 1996, it is
the General Partner's policy to allow the early termination of leases
when requested as well as to seek the sale of leased assets in which
the lease may extend beyond December 1996. The General Partner does
not anticipate that the cash proceeds from liquidation will return
100% of the investors original capital contribution.
The majority of the Registrant's operating leases have terminated.
The remaining leases were fully depreciated in the first half of
1995. As operating leases terminate, the equipment is sold. The
remaining balance of the lease portfolio is invested in Direct
Finance leases which terminate with the lessee's contractually
required purchase of equipment. The income and expenses of the
Registrant are steadily declining as the lease portfolio size
declines. The cash balances and related interest income fluctuate
according to the cash flow from rents and equipment and finance lease
sales during each quarter. Cash is distributed to the Partners
according to their respective tax basis capital accounts.
The Registrant reported a net income of $882,844 or $8.23 per
Limited Partnership Unit for the nine months ended September 30,
1995, as compared to net income of $481,596 or $4.49 per Limited
Partnership Unit for the nine months ended September 30, 1994.
Total revenues for the nine months ended September 30, 1995, were
$1,319,858 compared $1,369,656 for the same period in the prior year.
This slight decrease is primarily due to the significant increase in
other income from $11,727 for the nine months ended September 30,
1994, to $641,486 for the same period in 1995. The majority of the
increase, or $591,829, for the nine months ended September 30, 1995,
was caused by early termination fees on a direct finance lease with
Paradigm Technology. Revenue derived from the Fund's equipment
management activities comprised 99% of the total income for the
period, with the remaining 1% being interest income. Direct financing
lease income decreased from September 30, 1994, to September 30,
1995, ($523,498 to $336,386 respectively). The net investment in
direct financing leases decreased from $4,391,489 at September 30,
1994, to $1,453,233 at September 30, 1995.
Interest income increased because the Registrant held slightly
higher cash balances due to equipment and lease sales during the
first nine months of 1995 as compared to the same period in the prior
year. All available cash is being paid out in distributions to the
Fund's partners on a quarterly basis.
<PAGE>
Total expenses for the nine months ended September 30, 1995, were
$437,014 compared to $888,060 for the same period in the prior year.
Depreciation, management fees, interest, and general and
administrative costs comprised 94% of the total expenses. Interest
expense decreased from September 30, 1994 to September 30, 1995,
($98,616 to $30,192 respectively). The note payable balance was
$548,591 as of September 30, 1994, compared to a note payable balance
of $0 as of September 30, 1995.
The equipment on operating leases was fully depreciated at the
end of 1994 giving a balance net of accumulated depreciation of $-0-
for both December 31, 1994, and September 30, 1995.
The gain on sale of equipment for the nine months ended
September 30, 1995, was $54,313 as compared to $92,071 for the same
period in 1994. As the Registrant draws nearer to complete
liquidation more leases and underlying equipment will be sold causing
fluctuations between periods in the gain on sale of equipment.
General and administrative costs remained relatively unchanged
decreasing slightly from $174,706 for the first nine months of 1994
to $151,168 for the same period in 1995.
Liquidity and Capital Resources
- -------------------------------
Cash provided by operating activities for the nine months ended
September 30, 1995, was $563,420 compared to $861,393 for the same
period in the prior year.
Cash provided by investing activities increased from $1,866,216
for the nine months ended September 30, 1994, to $2,312,471 for the
same period in 1995, reflecting primarily the inter-period
fluctuations in equipment sales and the aging of rental receipts from
the direct finance lease portfolio.
As rental payments on finance leases are received, the cash is
broken up into income and return of principal. As a finance lease
ages the income portion of the rental receipts decrease and the
return of principal portion increases.
Sales proceeds of equipment for the nine months ended September
30, 1994, totaled approximately $259,852 resulting in a $92,071 gain
after depreciation expense was taken compared to $51,445 resulting in
a gain of $54,313 for the same period this year.
Cash provided by investing activities was used to repay $305,610
of debt during the nine months ended September 30,1995 as compared to
$1,027,482 for the same period in the prior year.
As of September 30, 1995, the Fund's partners were allocated cash
distributions of $657,900 payable on October 13, 1995. The size of
investor distributions depend on the timing of equipment sales and
collections of rents. As a result of the decreasing portfolio of
leases, this amount can be expected to gradually decrease during 1995
and 1996 and to be variable in amount from quarter to quarter
depending on the timing of equipment sales.
<PAGE>
The cash balance increased from $576,596 at December 31, 1993, to
$660,347 at September 30, 1994, to $928,298 at December 31, 1994 to
$998,579 at September 30, 1995.
The cash position as of September 30, 1995, was $998,579. The
General Partner anticipates that funds from operations will be
adequate to cover all operating expenses and future needs of the
Partnership during 1995.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None.
Item 2. Changes in Securities
---------------------
None.
Item 3. Defaults Upon Senior Securities
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
None.
Item 5. Other Information
-----------------
None.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
<PAGE>
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.
LEASTEC INCOME FUND IV
(Registrant)
LEASTEC CORPORATION
(General Partner)
Date: November 1, 1995 By: Ernest V. Lavagetto
Ernest V. Lavagetto,
President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 998,579
<SECURITIES> 0
<RECEIVABLES> 1,470,459
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,469,038
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 2,469,038
<CURRENT-LIABILITIES> 989,240
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 1,479,798
<TOTAL-LIABILITY-AND-EQUITY> 2,469,038
<SALES> 1,319,858
<TOTAL-REVENUES> 1,319,858
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 406,822
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,192
<INCOME-PRETAX> 882,844
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 882,844
<EPS-PRIMARY> 8.23
<EPS-DILUTED> 8.23
</TABLE>
