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, 1997
/ / 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.)
7004 West Butler 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,
1997 1996
___________ ____________
Cash and cash equivalents $1,296,949 $ 915,772
Accounts receivable 49,462 45,765
Due from related parties 3,729 30,068
Equipment under operating leases
(net of accumulated depreciation
of $5,082,569 and $5,034,585,
respectively) 1,057,334 1,397,793
Equipment held for sale or lease 5,910 -
__________ __________
Total assets $2,413,384 $2,389,398
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 113,332 $ 90,732
Accounts payable and
accrued expenses 8,670 9,891
Due to related parties 3,996 8,950
__________ __________
Total liabilities 125,998 109,573
Partners' capital 2,287,386 2,279,825
__________ __________
Total liabilities and
partners' capital $2,413,384 $2,389,398
========== ==========
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
1997 1996 1997 1996
____ ____ ____ ____
Income:
Rentals $332,640 $379,383 $1,030,306 $1,154,933
Interest 15,449 6,639 40,992 31,030
Gain on sale of equipment,
net - 16,905 - 132,201
Other 298 896 1,970 8,379
________ ________ __________ __________
348,387 403,823 1,073,268 1,326,543
________ ________ __________ __________
Expenses:
Depreciation 193,877 203,952 595,214 573,808
Write-down of equipment
to net realizable value 26,000 39,501 26,000 117,718
General and administrative 6,801 20,411 24,382 71,591
General and administrative
to related party 10,793 19,367 39,924 57,028
Management fee to related
party 19,455 22,260 60,307 67,785
Loss on sale of equipment, net 23,275 - 19,880 -
________ ________ __________ __________
280,201 305,491 765,707 887,930
________ ________ __________ __________
Net income $ 68,186 $ 98,332 $ 307,561 $ 438,613
======== ======== ========== ==========
Net income per equivalent
limited partnership unit $ 6.37 $ 9.25 $ 29.29 $ 13.72
======== ======== ========== ==========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 10,147 10,255 10,142 10,533
======== ======== ========== ==========
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, 1997
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1997 $ 4,499 41,379 $2,275,326 $2,279,825
Cash distributions (10,500) - (289,500) (300,000)
Net income 10,500 - 297,061 307,561
________ ______ __________ __________
Balance, September 30, 1997 $ 4,499 41,379 $2,282,887 $2,287,386
======== ====== ========== ==========
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, 1997 and 1996
(Unaudited)
1997 1996
____ ____
Cash flows from operating activities:
Net income $ 307,561 $438,613
__________ ________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 595,214 573,808
Write-down of equipment to net
realizable value 26,000 117,718
(Gain) loss on sale of equipment, net 19,880 (132,201)
(Increase) decrease in due from related parties 26,339 -
Increase (decrease) in lease rents paid
in advance 22,600 49,900
Increase (decrease) in accounts payable and
accrued expenses (1,221) (64,500)
Increase (decrease) in other, net (8,651) (19,831)
__________ ________
680,161 524,894
__________ ________
Net cash provided by operating activities 987,722 963,507
__________ ________
Cash flows from investing activities:
Acquisition of equipment (318,575) (450,749)
Proceeds from sale of equipment 12,030 142,483
__________ ________
Net cash used in investing activities (306,545) (308,266)
__________ ________
Cash flows from financing activities:
Redemptions of capital - (33,954)
Distributions (300,000) (780,707)
__________ ________
Net cash used in financing activities (300,000) (814,661)
__________ ________
Increase (decrease) in cash and
cash equivalents 381,177 (159,420)
Cash and cash equivalents, beginning
of period 915,772 789,629
__________ ________
Cash and cash equivalents, end of period $1,296,949 $630,209
========== ========
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, 1997
(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 1996 financial statements have been
reclassified to conform to the presentation in 1997.
1. EQUIPMENT LEASED
Equipment on lease consists primarily of computer equipment under operating
leases. A majority of the equipment was manufactured by IBM. The lessees
have agreements with the manufacturer to provide maintenance 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, $26,000 and $117,718 was charged to write-
down of equipment to net realizable value for the nine months ended
September 30, 1997 and 1996, 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, 1997 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1997 $ 278,000
1998 578,000
1999 249,000
__________
$1,105,000
==========
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 parent company 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 parent company during the three and nine months
ended September 30, 1997 and 1996:
Three Months Ended Nine Months Ended
September 30 September 30
1997 1996 1997 1996
____ ____ ____ ____
Management fee $19,455 $22,260 $60,307 $67,785
Reimbursable costs 10,793 19,367 39,924 57,028
The Fund maintains its checking and investment accounts in Jefferson
Bank, a subsidiary of JeffBanks, Inc., in which the Chairman of Resource
America, Inc. serves as a director.
Amounts due from related parties at September 30, 1997 and December 31,
1996 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.
Amounts due to related parties at September 30, 1997 and December 31,
1996 represent 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. CASH DISTRIBUTION
The General Partner declared and paid a cash distribution of $100,000 in
November 1997 for the three months ended September 30, 1997, to all
admitted partners as of September 30, 1997.
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 $348,387 and
$403,823 for the three months ended September 30, 1997 and 1996,
respectively, and $1,073,268 and $1,326,543 for the nine months ended
September 30, 1997 and 1996, respectively. Rental income from the leasing
of computer equipment accounted for 95% and 94% of total revenues
for the third quarter of 1997 and 1996, respectively, and 96% and 87% of
total revenues for the first nine months of 1997 and 1996, respectively.
The decrease in revenues is partly attributable to a decrease in rental
income. In 1997, rental income decreased by approximately $321,000 because
of equipment which came off lease and was re-leased at lower rental rates or
sold. This decrease, however, was reduced by approximately $196,000 of rents
generated from equipment purchases made since the third quarter of 1996 as
well as rents generated on 1996 equipment purchases for which a full nine
months of rent was earned in 1997 and only a portion of the nine months of
rent was earned in 1996. Additionally, the Fund recognized $-0- net gain on
sale of equipment for the nine months ended September 30, 1997 compared to
$132,201 for the nine months ended September 30, 1996, which also contributed
to the decrease in revenues in 1997.
Expenses were $280,201 and $305,491 during the three months ended
September 30, 1997 and 1996, respectively and $765,707 and $887,930 for the
nine months ended September 30, 1997 and 1996, respectively. Depreciation
expense comprised 69% and 67% of total expenses during the third quarter of
1997 and 1996, respectively and 78% and 65% of total expenses for the first
nine months of 1997 and 1996, respectively. The decrease in expenses in
1997 is primarily caused by the decrease in write-down of equipment to net
realizable value. Based upon the quarterly review of the recoverability of
the undepreciated cost of rental equipment, $26,000 was charged to
operations to write down equipment to its estimated net realizable value
during the nine months ended September 30, 1997 as compared to $117,718 for
the nine months ended September 30, 1996. Any future losses are dependent upon
unanticipated technological developments affecting the computer equipment
industry in subsequent years. Additionally, the decrease in general
administrative costs incurred by the Fund contributed to the decrease in the
overall expenses during the nine months ended September 30, 1997. However, in
1997, the increase in depreciation expense resulting from the acquisition of
equipment since September 1996 served to mitigate the overall decrease in
expenses in 1997. The Fund also recorded a net loss on sale of equipment of
$19,880 for the nine months ended September 30, 1997 compared to $-0- for the
same period in 1996 which further reduced the overall decrease in expenses in
1997.
For the three months ended September 30, 1997 and 1996, the Fund had net
income of $68,186 and $98,332, respectively. For the nine months ended
September 30, 1997 and 1996, the Fund had net income of $307,561 and
$438,613, respectively. The earnings per equivalent limited partnership
unit, after earnings allocated to the General Partner were $6.37 and $9.25
based on a weighted average number of equivalent limited partnership units
outstanding of 10,147 and 10,255 for the quarter ended September 30, 1997
and 1996, respectively. The earnings per equivalent limited partnership
unit, after earnings allocated to the General Partner were $29.29 and $13.72
based on a weighted average number of equivalent limited partnership units
outstanding of 10,142 and 10,533 for the nine months ended September 30,
1997 and 1996, respectively.
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)
The Fund generated cash from operations of $311,338 and $324,880, for
the purpose of determining cash available for distribution, during the third
quarter of 1997 and 1996, respectively and distributed $100,000 and $98,000
to partners in November 1997 and 1996, respectively. For the nine months
ended September 30, 1997 and 1996, the Fund generated funds from operations of
$948,655 and $997,938 and distributed $200,000 and $612,707 to partners
during the nine months ended September 30, 1997 and 1996, respectively and
$100,000 and $98,000 to partners in November 1997 and 1996, 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 equipment with cash available from
operations which was not distributed to partners in previous periods. The Fund
purchased $318,575 and $450,749 of equipment during the nine months ended
September 30, 1997 and 1996, 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, 1997
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
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIDELITY LEASING INCOME FUND IV, L.P.
11/11/97 By: Freddie M. Kotek
________ _____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11/11/97 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
registrant has duly caused this report to be signed on its behalf by the
undersigned, 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-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,296,949
<SECURITIES> 0
<RECEIVABLES> 53,191
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,350,140
<PP&E> 6,145,813
<DEPRECIATION> 5,082,569
<TOTAL-ASSETS> 2,413,384
<CURRENT-LIABILITIES> 125,998
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,287,386
<TOTAL-LIABILITY-AND-EQUITY> 2,413,384
<SALES> 1,030,306
<TOTAL-REVENUES> 1,073,268
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 765,707
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 307,561
<INCOME-TAX> 0
<INCOME-CONTINUING> 307,561
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 307,561
<EPS-PRIMARY> 29.29
<EPS-DILUTED> 29.29
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