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
/X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended September 30, 1996
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _____ to _____
Commission file number: 0-16845
Fidelity Leasing Income Fund IV, L.P.
_______________________________________________________________________________
(Exact name of registrant as specified in its charter)
Delaware 23-2441780
_______________________________________________________________________________
(State of organization) (I.R.S. Employer Identification No.)
Seven East Skippack Pike, Ambler, Pennsylvania 19002
_______________________________________________________________________________
(Address of principal executive offices) (Zip code)
(215) 619-2800
_______________________________________________________________________________
(Registrant's telephone number, including area code)
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 regis-
trant was required to file such reports), and (2) has been subject to such fil-
ing requirements for the past 90 days.
Yes __X__ No _____
Page 1 of 11
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND IV, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
September 30, December 31,
1996 1995
___________ ____________
Cash and cash equivalents $ 630,209 $ 789,629
Accounts receivable 86,154 77,274
Interest receivable 10,005 3,651
Due from related parties 25,046 24,545
Equipment under operating leases
(net of accumulated depreciation
of $5,228,940 and $6,994,681,
respectively) 1,640,757 1,888,844
Equipment held for sale or lease - 2,972
__________ __________
Total assets $2,392,171 $2,786,195
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 106,361 $ 56,461
Accounts payable and
accrued expenses 8,751 73,251
Due to related parties - 4,096
__________ __________
Total liabilities 115,112 133,808
Partners' capital 2,277,059 2,653,107
__________ __________
Total liabilities and
partners' capital $2,392,171 $2,786,915
========== ==========
The accompanying notes are an integral part of these financial statements.
2
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
____ ____ ____ ____
Income:
Rentals $379,383 $515,005 $1,154,933 $1,646,778
Interest 6,639 13,226 31,030 60,505
Gain on sale of equipment,
net 16,905 45,075 132,201 145,618
Other 896 401 8,379 13,074
________ ________ __________ __________
403,823 573,707 1,326,543 1,865,975
________ ________ __________ __________
Expenses:
Depreciation 203,952 279,179 573,808 970,061
Write-down of equipment
to net realizable value 39,501 - 117,718 87,796
General and administrative 22,014 18,885 76,400 83,383
General and administrative
to related party 17,764 13,435 52,219 56,940
Management fee to related
party 22,260 30,396 67,785 97,295
________ ________ __________ __________
305,491 341,895 887,930 1,295,475
________ ________ __________ __________
Net income $ 98,332 $231,812 $ 438,613 $ 570,500
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 9.25 $ 17.80 $ 13.72 $ 42.45
======== ======== ========== ==========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 10,255 11,889 10,533 12,700
======== ======== ========== ==========
The accompanying notes are an integral part of these financial statements.
3
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the nine months ended September 30, 1996
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1996 $ 6,879 40,786 $2,646,228 $2,653,107
Redemptions - (604) (33,954) (33,954)
Cash distributions (296,552) - (484,155) (780,707)
Net income 294,102 - 144,511 438,613
________ ______ __________ __________
Balance, September 30, 1996 $ 4,429 40,182 $2,272,630 $2,277,059
======== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1996 and 1995
(Unaudited)
1996 1995
____ ____
Cash flows from operating activities:
Net income $438,613 $ 570,500
________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 573,808 970,061
Write-down of equipment to net
realizable value 117,718 87,796
Gain on sale of equipment, net (132,201) (145,618)
(Increase) decrease in accounts receivable (8,880) 22,502
Increase (decrease) in lease rents paid
in advance 49,900 (31,683)
Increase (decrease) in accounts payable and
accrued expenses (64,500) (37,160)
(Increase) decrease in other, net (10,951) 13,714
________ __________
524,894 879,612
________ __________
Net cash provided by operating activities 963,507 1,450,112
________ __________
Cash flows from investing activities:
Acquisition of equipment (450,749) (1,533,346)
Proceeds from sale of equipment 142,483 269,449
________ __________
Net cash used in investing activities (308,266) (1,263,897)
________ __________
Cash flows from financing activities:
Redemptions of capital (33,954) (17,453)
Distributions (780,707) (1,685,726)
________ __________
Net cash used in financing activities (814,661) (1,703,179)
________ __________
Decrease in cash and cash equivalents (159,420) (1,516,964)
Cash and cash equivalents, beginning
of period 789,629 2,456,685
________ __________
Cash and cash equivalents, end of period $630,209 $ 939,721
======== ==========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
(Unaudited)
The accompanying unaudited condensed financial statements have been prepared
by the Fund in accordance with Generally Accepted Accounting Principles,
pursuant to the rules and regulations of the Securities and Exchange Commis-
sion. In the opinion of Management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Certain amounts on the 1995 financial statements have been
reclassified to conform to the presntation in 1996.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer peripheral equipment
under operating leases. A majority of the equipment was manufactured by
IBM. The lessees have agreements with the manufacturer to provide main-
tenance for the leased equipment. The Fund's operating leases are for
initial lease terms of 15 to 60 months. Generally, operating leases will
not recover all of the undepreciated cost and related expenses of its
rental equipment during the initial lease terms and the Fund is prepared to
remarket the equipment in future years. Fund policy is to review quarterly
the expected economic life of its rental equipment in order to determine
the recoverability of its undepreciated cost. Recent and anticipated
technological developments affecting computer equipment and competitive
factors in the marketplace are considered among other things, as part of
this review. In accordance with Generally Accepted Accounting
Principles,the Fund writes down its rental equipment to its estimated net
realizable value when the amounts are reasonably estimated and only
recognizes gains upon actual sale of its rental equipment. As a result,
$117,718 and $87,796 was charged to write-down of equipment to net
realizable value for the nine months ended September 30, 1996 and 1995,
respectively. Any future losses are dependent upon unanticipated
technological developments affecting the computer equipment industry in
subsequent years.
The future approximate minimum rentals to be received on noncancellable
operating leases as of September 30, 1996 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1996 $ 344,000
1997 917,000
1998 252,000
__________
$1,513,000
==========
6
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS
The General Partner receives 6% or 3% of gross rental payments from equip-
ment under operating leases and full pay-out leases, respectively, for
administrative and management services performed on behalf of the Fund.
Full pay-out leases are noncancellable leases with terms in excess of 42
months and for which rental payments during the initial term are at least
sufficient to recover the purchase price of the equipment, including acqui-
sition fees.
Additionally, the General Partner and its affiliates are reimbursed by the
Fund for certain costs of services and materials used by or for the Fund
except those items covered by the above-mentioned fees. Following is a
summary of fees and costs of services and materials charged by the General
Partner or its affiliates during the three and nine months ended
September 30, 1996 and 1995:
Three Months Ended Nine Months Ended
September 30 September 30
1996 1995 1996 1995
____ ____ ____ ____
Management fee $22,260 $30,396 $67,785 $97,295
Reimbursable costs 17,764 13,435 52,219 56,940
Amounts due from related parties at September 30, 1996 and December 31,
1995 represent monies due the Fund from the General Partner and/or other
affiliated funds for rentals and sales proceeds collected and not yet
remitted the Fund.
The amount due to related parties at December 31, 1995 represents monies
due to the General Partner for the fees and costs mentioned above, as well
as, rentals and sales proceeds collected by the Fund on behalf of other
affiliated funds.
3. SUBSEQUENT EVENT
Cash Distribution:
The General Partner declared and paid a cash distribution of $98,000 in
November 1996 for the three months ended September 30, 1996, to all
admitted partners as of September 30, 1996.
7
FIDELITY LEASING INCOME FUND IV, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Fidelity Leasing Income Fund IV, L.P. had revenues of $403,823 and
$573,707 for the three months ended September 30, 1996 and 1995, respectively,
and $1,326,543 and $1,865,975 for the nine months ended September 30, 1996 and
1995, respectively. Rental income from the leasing of computer peripheral
equipment accounted for 94% and 90% of total revenues for the third quarter of
1996 and 1995, respectively, and 87% and 88% of total revenues for the first
nine months of 1996 and 1995, respectively. The decrease in revenues is
primarily attributable to a decrease in rental income. In 1996, rental
income decreased by approximately $578,000 because of equipment which came off
lease and was re-leased at lower rental rates or sold. This decrease, however,
was offset by approximately $86,000 of rents generated from equipment pur-
chases made since the third quarter of 1995 as well as rents generated on 1995
equipment purchases for which a full nine months of rent was earned in 1996 and
only a portion of the nine months of rent was earned in 1995. Additionally,
interest income earned by the Fund was lower in 1996 compared to 1995 because
of lower cash balances available for investment by the Fund which also accounts
for the decrease in total revenues in 1996. Furthermore, the Fund recognized a
net gain on sale of equipment of $132,201 and $145,618 for the nine months
ended September 30, 1996 and 1995, respectively, which also contributed to the
decrease in revenues in 1996.
Expenses were $305,491 and $341,895 during the three months ended September
30, 1996 and 1995, respectively and $887,930 and $1,295,475 for the nine
months ended September 30, 1996 and 1995, respectively. Depreciation expense
comprised 67% and 82% of total expenses during the third quarter of 1996 and
1995, respectively and 65% and 75% of total expenses for the first nine months
of 1996 and 1995, respectively. The decrease in expenses in 1996 is primarily
caused by the decrease in depreciation expense because of equipment which came
off lease or was sold. Additionally, management fee to related party decreased
in 1996 proportionately to the decrease in rental income during this year. The
overall decrease in expenses, however, was reduced by the increase in the
write- down of equipment to net realizable value. Based upon the quarterly
review of the recoverability of the undepreciated cost of rental equipment,
$117,718 was charged to operations to write down equipment to its estimated net
realizable value during the nine months ended September 30, 1996 as compared to
$87,796 for the nine months ended September 30, 1995. Any future losses are
dependent upon unanticipated technological developments affecting the computer
equipment industry in subsequent years.
For the three months ended September 30, 1996 and 1995, the Fund had net
income of $98,332 and $231,812, respectively. For the nine months ended
September 30, 1996 and 1995, the Fund had net income of $438,613 and $570,500,
respectively. The earnings per equivalent limited partnership unit, after
earnings allocated to the General Partner were $9.25 and $17.80 based on a
weighted average number of equivalent limited partnership units outstanding of
10,255 and 11,889 for the quarter ended September 30, 1996 and 1995, respec-
tively. The earnings per equivalent limited partnership unit, after earnings
allocated to the General Partner were $13.72 and $42.45 based on a weighted
average number of equivalent limited partnership units outstanding of 10,533
and 12,700 for the nine months ended September 30, 1996 and 1995, respectively.
The Fund generated funds from operations of $324,880 and $465,916, for the
purpose of determining cash available for distribution, during the third
quarter of 1996 and 1995, respectively and distributed $98,000 and $575,434 to
partners in November 1996 and 1995, respectively. For the nine months ended
8
FIDELITY LEASING INCOME FUND IV, L.P.
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (Continued)
RESULTS OF OPERATIONS (Continued)
September 30, 1996 and 1995, the Fund generated funds from operations of
$997,938 and $1,482,739 and distributed $276,458 and $1,122,148 to partners
during the nine months ended September 30, 1996 and 1995, respectively and
$98,000 and $575,434 to partners in November 1996 and 1995, respectively. For
financial statement purposes, the Fund records cash distributions to partners
on a cash basis in the period in which they are paid.
ANALYSIS OF FINANCIAL CONDITION
The Fund continues to purchase computer peripheral equipment, with sales
proceeds and cash available from operations which was not distributed to
partners in previous periods. The Fund purchased $450,749 and $1,533,346 of
equipment during the nine months ended September 30, 1996 and 1995,
respectively.
The cash position of the Fund is reviewed daily and cash is invested on a
short-term basis.
The Fund's cash from operations is expected to continue to be adequate to
cover all operating expenses and contingencies during the next twelve month
period.
9
Part II: Other Information
FIDELITY LEASING INCOME FUND IV, L.P.
September 30, 1996
Item 1. Legal Proceedings: Inapplicable.
Item 2. Changes in Securities: Inapplicable.
Item 3. Defaults Upon Senior Securities: Inapplicable.
Item 4. Submission of Matters to a Vote of Securities Holders: Inapplicable.
Item 5. Other Information: Inapplicable.
Item 6. Exhibits and Reports on Form 8-K:
a) Exhibits: EX-27
b) Reports on Form 8-K: None
10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
FIDELITY LEASING INCOME FUND IV, L.P.
11-13-96 By: Freddie M. Kotek
________ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-13-96 By: Marianne T. Schuster
________ _____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the regis-
trant has duly caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
FIDELITY LEASING INCOME FUND IV, L.P.
_______ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
_______ _____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
11
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 630,209
<SECURITIES> 0
<RECEIVABLES> 121,205
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 751,414
<PP&E> 6,869,697
<DEPRECIATION> 5,228,940
<TOTAL-ASSETS> 2,392,171
<CURRENT-LIABILITIES> 115,112
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,277,059
<TOTAL-LIABILITY-AND-EQUITY> 2,392,171
<SALES> 1,154,933
<TOTAL-REVENUES> 1,326,543
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 887,930
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 438,613
<INCOME-TAX> 0
<INCOME-CONTINUING> 438,613
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 438,613
<EPS-PRIMARY> 13.72
<EPS-DILUTED> 13.72
</TABLE>
