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 June 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 W. 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)
June 30, December 31,
1997 1996
___________ ____________
Cash and cash equivalents $1,196,485 $ 915,772
Accounts receivable 26,581 45,765
Due from related parties - 30,068
Equipment under operating leases
(net of accumulated depreciation
of $5,040,771 and $5,034,585,
respectively) 1,158,071 1,397,793
Equipment held for sale or lease 63,820 -
__________ __________
Total assets $2,444,957 $2,389,398
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 113,253 $ 90,732
Accounts payable and
accrued expenses 9,299 9,891
Due to related parties 3,205 8,950
__________ __________
Total liabilities 125,757 109,573
Partners' capital 2,319,200 2,279,825
__________ __________
Total liabilities and
partners' capital $2,444,957 $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 Six Months Ended
June 30 June 30
1997 1996 1997 1996
____ ____ ____ ____
Income:
Rentals $339,491 $374,285 $697,666 $775,550
Interest 13,386 16,094 25,543 24,391
Gain on sale of equipment,
net 2,785 86,860 3,395 115,296
Other 942 7,114 1,672 7,483
________ ________ ________ ________
356,604 484,353 728,276 922,720
________ ________ ________ ________
Expenses:
Depreciation 187,452 175,466 401,337 369,856
Write-down of equipment
to net realizable value - 39,109 - 78,217
General and administrative 7,780 19,868 17,581 51,180
General and administrative
to related party 15,165 18,863 29,131 37,661
Management fee to related
party 19,865 21,953 40,852 45,525
________ ________ ________ ________
230,262 275,259 488,901 582,439
________ ________ ________ ________
Net income $126,342 $209,094 $239,375 $340,281
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 12.09 $ 11.84 $ 22.92 $ 4.65
======== ======== ======== ========
Weighted average number of
equivalent limited
partnership units outstanding
during the period 10,161 10,532 10,139 10,672
======== ======== ======== ========
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 six months ended June 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 (7,000) - (193,000) (200,000)
Net income 7,000 - 232,375 239,375
______ ______ __________ __________
Balance, June 30, 1997 $4,499 41,379 $2,314,701 $2,319,200
====== ====== ========== ==========
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 six months ended June 30, 1997 and 1996
(Unaudited)
1997 1996
__________ __________
Cash flows from operating activities:
Net income $ 239,375 $340,281
__________ ________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 401,337 369,856
Write-down of equipment to net realizable
value - 78,217
Gain on sale of equipment, net (3,395) (115,296)
(Increase) decrease in accounts receivable 19,184 (13,348)
(Increase) decrease in due from
related parties 30,068 (32,356)
Increase (decrease) in lease rents paid
in advance 22,521 42,867
Increase (decrease) in accounts payable and
accrued expenses (592) (54,104)
Increase (decrease) in other, net (5,745) (6,996)
__________ ________
463,378 268,840
__________ ________
Net cash provided by operating activities 702,753 609,121
__________ ________
Cash flows from investing activities:
Acquisition of equipment (225,436) -
Proceeds from sale of equipment 3,396 125,577
__________ ________
Net cash provided by (used in)
investing activities (222,040) 125,577
__________ ________
Cash flows from financing activities:
Distributions (200,000) (504,249)
Redemptions of capital - (33,954)
__________ ________
Net cash used in financing activities (200,000) (538,203)
__________ ________
Increase in cash and cash equivalents 280,713 196,495
Cash and cash equivalents, beginning
of period 915,772 789,629
__________ ________
Cash and cash equivalents, end of period $1,196,485 $986,124
========== ========
The accompanying notes are an integral part of these financial statements.
5
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
June 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. There was no charge to write-down of equipment to net
realizable value for the first six months of 1997. For the six months
ended June 30, 1996, $78,217 was charged to write-down of equipment to net
realizable value. 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 June 30, 1997 are as follows:
Years Ending December 31 Minimum Rentals
________________________ _______________
1997 $ 493,000
1998 450,000
1999 178,000
__________
$1,121,000
==========
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 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 six months ended
June 30, 1997 and 1996:
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
____ ____ ____ ____
Management fee $19,865 $21,953 $40,852 $45,525
Reimbursable costs 15,165 18,863 29,131 37,661
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 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 to the Fund.
Amounts due to related parties at June 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
August 1997 for the three months ended June 30, 1997, to all admitted
partners as of June 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 $356,604 and
$484,353 for the three months ended June 30, 1997 and 1996, respectively
and $728,276 and $922,720 for the six months ended June 30, 1997 and 1996,
respectively. Rental income from the leasing of computer equipment
accounted for 95% and 77% of total revenues for the second quarter of 1997 and
1996, respectively and 96% and 84% of total revenues for the first six months
of 1997 and 1996, respectively. The decrease in revenues is partially attri-
butable to a decrease in rental income. In 1997, rental income decreased by
approximately $218,000 because of equipment which came off lease and was re-
leased at lower rental rates or sold. This decrease, however, was reduced by
approximately $140,000 of rents generated from equipment purchases made since
the second quarter of 1996. Additionally, the Fund recognized a net gain on
sale of equipment of $3,395 and $115,296 for the six months ended June 30, 1997
and 1996, respectively, which also accounted for the overall decrease in
revenues in 1997.
Expenses were $230,262 and $275,259 during the three months ended June 30,
1997 and 1996, respectively and $488,901 and $582,439 for the six months ended
June 30, 1997 and 1996, respectively. Depreciation expense comprised 81% and
64% of total expenses during the second quarter of 1997 and 1996, respectively
and 82% and 64% of total expenses during the six months ended June 30, 1997
and 1996, respectively. The decrease in expenses 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, there was no charge to operations to write down equipment to its
estimated net realizable value during the six months ended June 30, 1997.
However, $78,217 was charged to write-down of equipment to net realizable value
during the six months ended June 30, 1996. Any future losses are dependent
upon unanticipated technological developments affecting the computer
equipment industry in subsequent years. Additionally, the decrease in general
and administrative expenses incurred by the Fund in 1997 as compared to 1996
also contributed to the decrease in overall expenses in 1997. The increase in
depreciation expense resulting from new equipment purchases made since June
1996 mitigated the amount of the overall decrease in expenses in 1997.
For the three months ended June 30, 1997 and 1996, the Fund had net income
of $126,342 and $209,094, respectively. For the six months ended June 30, 1997
and 1996, the Fund had net income of $239,375 and $340,281, respectively. The
earnings per equivalent limited partnership unit, after earnings allocated to
the General Partner were $12.09 and $11.84 based on a weighted average number
of equivalent limited partnership units outstanding of 10,161 and 10,532 for
the quarter ended June 30, 1997 and 1996, respectively. The earnings per
equivalent limited partnership unit, after earnings allocated to the General
Partner, were $22.92 and $4.65 based on a weighted average number of
equivalent limited partnership units outstanding of 10,139 and 10,672 for the
six months ended June 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 $311,009 and $336,809, for the
purpose of determining cash available for distribution, during the second
quarter of 1997 and 1996, respectively and distributed $100,000 and $276,458
to partners in August 1997 and 1996, respectively. For the six months ended
June 30, 1997 and 1996, the Fund generated cash from operations of $637,317
and $673,058 and distributed $100,000 and $336,249 to partners during the six
months ended June 30, 1997 and 1996, respectively, and $100,000 and $276,458 to
partners in August 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. During
the six months ended June 30, 1997, the Fund purchased $225,436 of equipment
subject to an operating lease.
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.
June 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 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.
8/11/97 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8/11/97 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 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.
By:
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
By:
_______ ___________________________
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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,196,485
<SECURITIES> 0
<RECEIVABLES> 26,581
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,223,066
<PP&E> 6,262,662
<DEPRECIATION> 5,040,771
<TOTAL-ASSETS> 2,444,957
<CURRENT-LIABILITIES> 125,757
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,319,200
<TOTAL-LIABILITY-AND-EQUITY> 2,444,957
<SALES> 697,666
<TOTAL-REVENUES> 728,276
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 488,901
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 239,375
<INCOME-TAX> 0
<INCOME-CONTINUING> 239,375
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 239,375
<EPS-PRIMARY> 22.92
<EPS-DILUTED> 22.92
</TABLE>
