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, 2000
/ / 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
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Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND IV, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
June 30, December 31,
2000 1999
___________ ____________
Cash and cash equivalents $ 851,181 $1,070,066
Accounts receivable 99,663 40,594
Due from related parties - 13,683
Equipment under operating leases
(net of accumulated depreciation
of $1,620,478 and $1,490,011,
respectively) 724,355 577,852
Net investment in direct
financing leases 554,817 618,763
Equipment held for sale or lease 31,624 31,624
__________ __________
Total assets $2,261,640 $2,352,582
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 52,079 $ 51,356
Accounts payable and
accrued expenses 10,050 9,464
Due to related parties 6,431 10,163
__________ __________
Total liabilities 68,560 70,983
Partners' capital 2,193,080 2,281,599
__________ __________
Total liabilities and
partners' capital $2,261,640 $2,352,582
========== ==========
The accompanying notes are an integral part of these financial statements.
2
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FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
____ ____ ____ ____
Income:
Rentals $131,092 $192,505 $241,703 $396,617
Earned income on direct
financing leases 9,897 19,261 20,063 38,372
Interest 5,922 7,125 22,991 13,077
Gain on sale of equipment,
net - - - 88,030
Other 5,940 17,324 7,492 18,866
________ ________ ________ ________
152,851 236,215 292,249 554,962
________ ________ ________ ________
Expenses:
Depreciation 71,872 106,959 130,467 212,649
Write-down of equipment
to net realizable value - 7,000 - 17,000
General and administrative 1,701 15,951 13,624 25,322
General and administrative
to related party 9,864 16,958 19,052 30,582
Management fee to related
party 9,457 11,081 17,625 26,788
________ ________ ________ ________
92,894 157,949 180,768 312,341
________ ________ ________ ________
Net income $ 59,957 $ 78,266 $111,481 $242,621
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 5.67 $ 7.30 $ 10.45 $ 23.04
======== ======== ======== ========
Weighted average number of
equivalent limited
partnership units outstanding
during the period 9,956 10,237 9,998 10,228
======== ======== ======== ========
The accompanying notes are an integral part of these financial statements.
3
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FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENT OF PARTNERS' CAPITAL
For the six months ended June 30, 2000
(Unaudited)
General Limited Partners
Partner Units Amount Total
_______ _____ ______ _____
Balance, January 1, 2000 $4,499 41,334 $2,277,100 $2,281,599
Cash distributions (7,000) - (193,000) (200,000)
Net income 7,000 - 104,481 111,481
______ ______ __________ __________
Balance, June 30, 2000 $4,499 41,334 $2,188,581 $2,193,080
====== ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF CASH FLOWS
For the six months ended June 30, 2000 and 1999
(Unaudited)
2000 1999
_________ _________
Cash flows from operating activities:
Net income $ 111,481 $242,621
__________ ________
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 130,467 212,649
Write-down of equipment to net realizable
value - 17,000
Gain on sale of equipment, net - (88,030)
(Increase) decrease in accounts receivable (59,069) 6,222
(Increase) decrease in due from
related parties 13,683 15,936
Increase (decrease) in other, net (2,423) (213)
__________ ________
82,658 163,564
__________ ________
Net cash provided by operating activities 194,139 406,185
__________ ________
Cash flows from investing activities:
Acquisition of equipment (276,971) (380,486)
Investment in direct financing leases (20,077) -
Proceeds from sale of equipment - 88,030
Proceeds from direct financing leases, net
of earned income 84,024 348,018
__________ ________
Net cash provided by (used in)
investing activities (213,024) 55,562
__________ ________
Cash flows from financing activities:
Distributions (200,000) (175,000)
Redemption - (182)
__________ ________
Net cash used in financing activities (200,000) (175,182)
__________ ________
Increase (decrease) in cash and
cash equivalents (218,885) 286,565
Cash and cash equivalents, beginning
of period 1,070,066 556,543
__________ ________
Cash and cash equivalents, end of period $ 851,181 $843,108
========== ========
The accompanying notes are an integral part of these financial statements.
5
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FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(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 1999 financial statements have been reclas-
sified to conform to the presentation in 2000.
1. EQUIPMENT LEASED
Equipment on lease consists in part 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 23 to 60 months. 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, there was no write-down of equipment to net realizable value for
the six months ended June 30, 2000. For the six months ended June 30,
1999, $17,000 was charged to write-down of equipment to net realizable
value. 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. The Fund's direct financing leases are for initial
lease terms ranging from 34 to 60 months.
Unguaranteed residuals for direct financing leases represent the esti-
mated 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, 2000 is as
follows:
Minimum lease payments to be received $613,000
Unearned rental income (58,000)
________
$555,000
========
6
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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 and direct financing leases as of June 30, 2000 are as follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
2000 $238,000 $106,000
2001 386,000 212,000
2002 233,000 212,000
2003 36,000 83,000
________ ________
$893,000 $613,000
======== ========
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. Follow-
ing 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, 2000 and 1999:
Three Months Ended Six Months Ended
June 30 June 30
2000 1999 2000 1999
____ ____ ____ ____
Management fee $9,457 $11,081 $17,625 $26,788
Reimbursable costs 9,864 16,958 19,052 30,582
Amounts due from related parties at December 31, 1999 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.
7
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FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
Amounts due to related parties at June 30, 2000 and December 31, 1999
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 2000 for the three months ended June 30, 2000, to all admitted
partners as of June 30, 2000.
8
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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 $152,851 and
$236,215 for the three months ended June 30, 2000 and 1999, respectively
and $292,249 and $554,962 for the six months ended June 30, 2000 and 1999,
respectively. Rental income from the leasing of equipment accounted for 86%
and 81% of total revenues for the second quarter of 2000 and 1999, respec-
tively and 83% and 71% of total revenues for the first six months of 2000
and 1999, respectively. The decrease in total revenues for the six months
ended June 30, 2000 was caused in part by the decrease in rental income.
Rental income decreased approximately $265,000 in 2000 because of equipment
that terminated and was sold since the second quarter of 1999. This decrease
was mitigated by an increase of approximately $110,000 resulting from equip-
ment purchases made since June 1999. Additionally, the earned income on direct
financing leases decreased during the first six months of 2000 compared to
the first six months of 1999 because of an early termination of a direct fi-
nancing lease in the second quarter of 1999. The decrease in this account
also contributed to the overall decrease in revenues in 2000. Furthermore,
the decrease in net gain on sale of equipment accounted for the decrease in
total revenues in the first six months of 2000. There was no net gain on sale
of equipment recognized during the six months ended June 30, 2000 compared to
$88,030 of net gain on sale of equipment recognized during the six months
ended June 30, 1999.
Expenses were $92,894 and $157,949 for the second quarter of 2000 and
1999, respectively and $180,768 and $312,341 for the six months ended June 30,
2000 and 1999, respectively. Depreciation expense comprised 77% and 68% of
total expenses for the second quarter of 2000 and 1999, respectively and 72%
and 68% of total expenses for the six months ended June 30, 2000 and 1999,
respectively. The decrease in expenses was primarily due to the decrease in
depreciation expense resulting from equipment that terminated and was sold
since June 1999. Additionally, the decrease in write-down of equipment to
net realizable value also contributed to the decrease in total expenses.
Based upon the quarterly review of the recoverability of the undepreciated
cost of rental equipment, there was no write-down of equipment to net real-
izable value during the six months ended June 30, 2000 compared to $17,000
for the six months ended June 30, 1999. Any future losses are dependent upon
unanticipated technological developments affecting the types of equipment in
the portfolio in subsequent years.
The Fund's net income was $59,957 and $78,266 for the second quarter of
2000 and 1999, respectively and $111,481 and $242,621 for the six months
ended June 30, 2000 and 1999, respectively. The earnings per equivalent
limited partnership unit, after earnings allocated to the General Partner,
were $5.67 and $7.30 based on a weighted average number of equivalent limited
partnership units outstanding of 9,956 and 10,237 for the quarter ended
9
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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)
June 30, 2000 and 1999, respectively. The earnings per equivalent limited
partnership unit, after earnings allocated to the General Partner, were
$10.45 and $23.04 based on a weighted average number of equivalent limited
partnership units outstanding of 9,998 and 10,228 for the first six months
of 2000 and 1999, respectively.
The Fund generated cash from operations of $131,829 and $192,225 for the
purpose of determining cash available for distribution, during the second
quarter of 2000 and 1999, respectively and distributed $100,000 to partners
in both August 2000 and 1999. For the six months ended June 30, 2000 and
1999, the Fund generated cash from operations of $241,948 and $384,240. The
Fund distributed $100,000 to partners during the first six months of both
2000 and 1999 and $100,000 to partners in both August 2000 and 1999. 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 look for opportunities to purchase equip-
ment under operating leases or invest in direct financing leases with cash
available from operations that was not distributed to partners in previous
periods. During the first six months of 2000 and 1999, the Fund purchased
$276,971 and $380,486, respectively, of equipment subject to operating leases.
The Fund also invested $20,077 in a direct financing lease during the six
months ended June 30, 2000.
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
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Part II: Other Information
FIDELITY LEASING INCOME FUND IV, L.P.
June 30, 2000
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
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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.
8-11-00 By: Freddie M. Kotek
_______ ___________________________
Date Freddie M. Kotek
President of
F.L. Partnership Management, Inc.
(Principal Operating Officer)
8-11-00 By: Marianne T. Schuster
_______ ___________________________
Date Marianne T. Schuster
Vice President of
F.L. Partnership Management, Inc.
(Principal Financial Officer)
12
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