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, 1999
/ / 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.)
3 North Columbus Boulevard, Philadelphia, Pennsylvania 19106
____________________________________________________________________________
(Address of principal executive offices) (Zip code)
(215) 574-1636
____________________________________________________________________________
(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
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No _____
Page 1 of 12
Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND IV, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30, December 31,
1999 1998
___________ ____________
Cash and cash equivalents $ 843,108 $ 556,543
Accounts receivable 56,904 63,126
Due from related parties 51,057 66,993
Equipment under operating leases
(net of accumulated depreciation
of $2,471,823 and $3,265,367,
respectively) 454,268 560,126
Net investment in direct financing leases 698,470 1,046,488
Equipment held for sale or lease 288,318 31,623
__________ __________
Total assets $2,392,125 $2,324,899
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 30,031 $ 27,867
Accounts payable and
accrued expenses 16,932 12,608
Due to related parties 11,170 17,871
__________ __________
Total liabilities 58,133 58,346
Partners' capital 2,333,992 2,266,553
__________ __________
Total liabilities and
partners' capital $2,392,125 $2,324,899
========== ==========
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
1999 1998 1999 1998
____ ____ ____ ____
Income:
Rentals $192,505 $236,489 $396,617 $505,381
Earned income on direct
financing leases 19,261 4,449 38,372 7,525
Interest 7,125 13,911 13,077 29,576
Gain on sale of equipment,
net - - 88,030 -
Other 17,324 6,604 18,866 12,076
________ ________ ________ ________
236,215 261,453 554,962 554,558
________ ________ ________ ________
Expenses:
Depreciation 106,959 100,674 212,649 242,594
Write-down of equipment
to net realizable value 7,000 29,310 17,000 197,595
General and administrative 15,951 8,986 25,322 21,402
General and administrative
to related party 16,958 18,853 30,582 34,106
Loss on sale of equipment,
net - 5,960 - 2,254
Management fee to related
party 11,081 13,532 26,788 29,515
________ ________ ________ ________
157,949 177,315 312,341 527,466
________ ________ ________ ________
Net income $ 78,266 $ 84,138 $242,621 $ 27,092
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 7.30 $ 8.22 $ 23.04 $ 2.18
======== ======== ======== ========
Weighted average number of
equivalent limited
partnership units outstanding
during the period 10,237 9,921 10,228 10,007
======== ======== ======== ========
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, 1999
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 1999 $ 3,624 41,379 $2,262,929 $2,266,553
Redemptions - (5) (182) (182)
Cash distributions (6,125) - (168,875) (175,000)
Net income 7,000 - 235,621 242,621
_______ ______ __________ __________
Balance, June 30, 1999 $ 4,499 41,374 $2,329,493 $2,333,992
======= ====== ========== ==========
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, 1999 and 1998
(Unaudited)
1999 1998
_________ __________
Cash flows from operating activities:
Net income $ 242,621 $ 27,092
_________ __________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 212,649 242,594
Write-down of equipment to net realizable
value 17,000 197,595
(Gain) loss on sale of equipment, net (88,030) 2,254
(Increase) decrease in accounts receivable 6,222 63,060
(Increase) decrease in due from
related parties 15,936 (198)
Increase (decrease) in lease rents paid
in advance 2,164 (21,315)
Increase (decrease) in accounts payable and
accrued expenses 4,324 (7,561)
Increase (decrease) in other, net (6,701) (7,856)
_________ __________
163,564 468,573
_________ __________
Net cash provided by operating activities 406,185 495,665
_________ __________
Cash flows from investing activities:
Acquisition of equipment (380,486) (250,294)
Investment in direct financing leases - (287,813)
Proceeds from sale of equipment 88,030 57,045
Proceeds from direct financing leases, net
of earned income 348,018 20,604
_________ __________
Net cash provided by (used in)
investing activities 55,562 (460,458)
_________ __________
Cash flows from financing activities:
Distributions (175,000) (175,000)
Redemption (182) -
_________ __________
Net cash used in financing activities (175,182) (175,000)
_________ __________
Increase (decrease) in cash and
cash equivalents 286,565 (139,793)
Cash and cash equivalents, beginning
of period 556,543 1,383,229
_________ __________
Cash and cash equivalents, end of period $ 843,108 $1,243,436
========= ==========
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, 1999
(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 1998 financial statements have been reclass-
ified to conform to the presentation in 1999.
1. EQUIPMENT LEASED
Equipment on lease consists of equipment under operating leases. 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 12 to 60 months. In accordance with Generally Accepted Account-
ing Principles, the Fund writes down its rental equipment to its esti-
mated net realizable value when the amounts are reasonably estimated and
only recognizes gains upon actual sale of its rental equipment. As a
result, $17,000 and $197,595 was charged to write-down of equipment to
net realizable value for the first six months of 1999 and 1998, respec-
tively. Any future losses are dependent upon unanticipated technological
developments affecting the types of equipment in the portfolio in subse-
quent years.
The Fund also has equipment leased under the direct financing method in
accordance with Statement of Financial Accounting Standards No. 13. This
method provides for recognition of income (the excess of the aggregate
future rentals and estimated unguaranteed residuals upon expiration of the
lease over the related equipment cost) over the life of the lease using
the interest method.
Unguaranteed residuals for direct financing leases represent the
estimated amounts recoverable at lease termination from lease extensions
or disposition of the equipment. The Fund reviews these residual values
quarterly. If the equipment's fair market value is below the estimated
residual value, an adjustment is made.
The net investment in direct financing leases as of June 30, 1999 is as
follows:
Minimum lease payments to be received $796,000
Unearned rental income (98,000)
Expected future residuals -
________
$698,000
========
6
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
The future approximate minimum rentals to be received on noncancellable
operating leases and direct financing leases as of June 30, 1999 are as
follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
1999 $176,000 $102,000
2000 254,000 204,000
2001 248,000 204,000
2002 164,000 204,000
2003 39,000 82,000
________ ________
$881,000 $796,000
======== ========
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, includ-
ing acquisition 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, 1999 and 1998:
Three Months Ended Six Months Ended
June 30 June 30
1999 1998 1999 1998
____ ____ ____ ____
Management fee $11,081 $13,532 $26,788 $29,515
Reimbursable costs 16,958 18,853 30,582 34,106
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
7
FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
Amounts due from related parties at June 30, 1999 and December 31, 1998
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, 1999 and December 31, 1998
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. YEAR 2000 COMPLIANCE
All of the main software systems utilized to generate information for
the Fund are now Year 2000 compliant and in the testing phase. The costs
incurred to complete the Year 2000 Compliance project are not expected
to be material to the net income of the Fund.
All suppliers for the Fund continue to complete their Year 2000
Compliance programs. It is not anticipated that the Fund will incur
any significant losses should any of its outside suppliers fail to
meet their Year 2000 Compliance deadlines.
4. CASH DISTRIBUTION
The General Partner declared and paid a cash distribution of $100,000 in
August 1999 for the three months ended June 30, 1999, to all admitted
partners as of June 30, 1999.
8
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 $236,215 and
$261,453 for the three months ended June 30, 1999 and 1998, respectively
and $554,962 and $554,558 for the six months ended June 30, 1999 and 1998,
respectively. Rental income from the leasing of equipment accounted for 81%
and 90% of total revenues for the second quarter of 1999 and 1998, respec-
tively and 71% and 91% of total revenues for the first six months of 1999
and 1998, respectively. The increase in total revenues for the six months
ended June 30, 1999 was caused by the increase in the net gain on sale of
equipment. The Fund recorded a net gain on sale of equipment of $88,030
during the first six months of 1999. There was no net gain recorded for the
same period in 1998. The Fund also invested in direct financing leases dur-
ing 1998 that generated $38,372 of earned income during the six months ended
June 30, 1999 compared to $7,525 for the same period in 1998. The increase
in this account also contributed to the overall increase in revenues in 1999.
However, rental income decreased during the first six months of 1999 relative
to 1998. Rental income decreased by approximately $188,000 because of equip-
ment that came off lease and was released at lower rental rates or sold.
This decrease was reduced by rental income of approximately $79,000 generated
from equipment on operating leases purchased since June 1998. The decrease
in this account reduced the amount of the overall increase in total revenues
in 1999.
Expenses were $157,949 and $177,315 for the second quarter of 1999 and
1998, respectively and $312,341 and $527,466 for the six months ended June 30,
1999 and 1998, respectively. Depreciation expense comprised 68% and 57% of
total expenses for the second quarter of 1999 and 1998, respectively and 68%
and 46% of total expenses for the six months ended June 30, 1999 and 1998,
respectively. The decrease in expenses was primarily due to 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,
approximately $17,000 was charged to write-down of equipment to net realizable
value during the six months ended June 30, 1999 compared to $197,595 for the
six months ended June 30, 1998. Any future losses are dependent upon unantic-
ipated technological developments affecting the types of equipment in the
portfolio in subsequent years. The decrease in depreciation expense result-
ing from equipment which came off lease, terminated or sold since June 1998
also contributed to the overall decrease in expenses for the six months
ended June 30, 1999.
The Fund's net income was $78,266 and $84,138 for the second quarter of
1999 and 1998, respectively and $242,621 and $27,092 for the six months ended
June 30, 1999 and 1998, respectively. The earnings per equivalent limited
9
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)
partnership unit, after earnings allocated to the General Partner, were $7.30
and $8.22 based on a weighted average number of equivalent limited partnership
units outstanding of 10,237 and 9,921 for the quarter ended June 30, 1999 and
1998, respectively. The earnings per equivalent limited partnership unit,
after earnings allocated to the General Partner, were $23.04 and $2.18 based
on a weighted average number of equivalent limited partnership units out-
standing of 10,228 and 10,007 for the first six months of 1999 and 1998,
respectively.
The Fund generated cash from operations of $192,225 and $220,082 for the
purpose of determining cash available for distribution, during the second
quarter of 1999 and 1998, respectively and distributed $100,000 and $75,000 to
partners in August 1999 and 1998, respectively. For the six months ended
June 30, 1999 and 1998, the Fund generated cash from operations of $384,240
and $469,535. The Fund distributed $100,000 and $75,000 to partners during
the first six months of 1999 and 1998, repectively and $100,000 and $75,000
to partners in August 1999 and 1998, 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 is currently in the process of dissolution. As provided in the
Restated Limited Partnership Agreement, the assets of the Fund shall be liqui-
dated as promptly as is consistent with obtaining their fair value. During
this time, the Fund will continue to purchase equipment with cash available
from operations that was not distributed to partners in previous periods.
During the first six months of 1999 and 1998, the Fund purchased $380,486 and
$250,294, respectively, of equipment subject to operating leases. The Fund
also invested $287,813 in a direct financing lease during the six months
ended June 30, 1998.
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.
10
Part II: Other Information
FIDELITY LEASING INCOME FUND IV, L.P.
June 30, 1999
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
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.
8-12-99 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-12-99 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 843,108
<SECURITIES> 0
<RECEIVABLES> 107,961
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 951,069
<PP&E> 3,214,409
<DEPRECIATION> 2,471,823
<TOTAL-ASSETS> 2,392,125
<CURRENT-LIABILITIES> 58,133
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 2,333,992
<TOTAL-LIABILITY-AND-EQUITY> 2,392,125
<SALES> 396,617
<TOTAL-REVENUES> 554,962
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 312,341
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 242,621
<INCOME-TAX> 0
<INCOME-CONTINUING> 242,621
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 242,621
<EPS-BASIC> 23.04
<EPS-DILUTED> 23.04
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