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, 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, PA 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 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 13
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Part I: Financial Information
Item 1: Financial Statements
FIDELITY LEASING INCOME FUND IV, L.P.
BALANCE SHEETS
ASSETS
(Unaudited) (Audited)
September 30, December 31,
2000 1999
_____________ ____________
Cash and cash equivalents $ 959,171 $1,070,066
Accounts receivable 38,243 40,594
Due from related parties 10,993 13,683
Equipment under operating leases
(net of accumulated depreciation
of $1,700,529 and $1,490,011,
respectively) 644,305 577,852
Net investment in direct financing leases 510,934 618,763
Equipment held for sale or lease 31,622 31,624
__________ __________
Total assets $2,195,268 $2,352,582
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Lease rents paid in advance $ 30,152 $ 51,356
Accounts payable and
accrued expenses 11,673 9,464
Due to related parties 5,459 10,163
__________ __________
Total liabilities 47,284 70,983
Partners' capital 2,147,984 2,281,599
__________ __________
Total liabilities and
partners' capital $2,195,268 $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 Nine Months Ended
September 30 September 30
2000 1999 2000 1999
____ ____ ____ ____
Income:
Rentals $143,744 $136,148 $385,447 $532,765
Earned income on direct
financing leases 9,162 11,511 29,225 49,883
Interest 11,875 11,448 34,866 24,525
Gain on sale of equipment,
net - 4,586 - 92,616
Other 2,300 6,880 9,792 25,746
________ ________ ________ ________
167,081 170,573 459,330 725,535
________ ________ ________ ________
Expenses:
Depreciation 80,052 58,668 210,519 271,317
Write-down of equipment
to net realizable value - - - 17,000
General and administrative 10,881 7,165 24,505 32,487
General and administrative
to related party 11,028 13,000 30,080 43,582
Management fee to related
party 10,216 17,438 27,841 44,226
________ ________ ________ ________
112,177 96,271 292,945 408,612
________ ________ ________ ________
Net income $ 54,904 $ 74,302 $166,385 $316,923
======== ======== ======== ========
Net income per equivalent
limited partnership unit $ 5.21 $ 6.97 $ 15.66 $ 30.03
======== ======== ======== ========
Weighted average number of
equivalent limited partner-
ship units outstanding
during the period 9,870 10,156 9,955 10,204
======== ======== ======== ========
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 nine months ended September 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 (10,500) - (289,500) (300,000)
Net income 10,500 - 155,885 166,385
_______ ______ __________ __________
Balance, September 30, 2000 $ 4,499 41,334 $2,143,485 $2,147,984
======= ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
4
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FIDELITY LEASING INCOME FUND IV, L.P.
STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 2000 and 1999
(Unaudited)
2000 1999
____ ____
Cash flows from operating activities:
Net income $ 166,385 $ 316,923
__________ __________
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 210,519 271,317
Write-down of equipment to net
realizable value - 17,000
(Gain) loss on sale of equipment, net - (92,616)
(Increase) decrease in accounts receivable 2,351 (14,109)
(Increase) decrease in due from related parties 2,690 59,542
Increase (decrease) in lease rents paid
in advance (21,204) 13,536
Increase (decrease) in accounts payable and
accrued expenses 2,209 (5,159)
Increase (decrease) in due to related parties (4,704) 10,968
__________ __________
191,861 260,479
__________ __________
Net cash provided by operating activities 358,246 577,402
__________ __________
Cash flows from investing activities:
Acquisition of equipment (276,970) (380,365)
Investment in direct financing leases (20,077) -
Proceeds from sale of equipment - 108,020
Proceeds from direct financing leases,
net of earned income 127,906 387,549
__________ __________
Net cash provided by (used in)
investing activities (169,141) 115,204
__________ __________
Cash flows from financing activities:
Distributions (300,000) (275,000)
Redemption - (1,572)
__________ __________
Net cash used in financing activities (300,000) (276,572)
__________ __________
Increase (decrease) in cash and
cash equivalents (110,895) 416,034
Cash and cash equivalents, beginning
of period 1,070,066 556,543
__________ __________
Cash and cash equivalents, end of period $ 959,171 $ 972,577
========== ==========
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
September 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.
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. Generally, operating leases will not re-
cover 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. Fund policy is to review quarterly the expected
economic life of its rental equipment in order to determine the recover-
ability of its undepreciated cost. Recent and anticipated technological
developments affecting the equipment and competitive factors in the market-
place are considered among other things, as part of this review. In accor-
dance 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 nine months ended September 30, 2000. For
the nine months ended September 30, 1999, $17,000 was charged to write-
down of equipment to net realizable value. Any future losses are de-
pendent upon unanticipated technological developments affecting the types
of equipment in the portfolio in subsequent 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 ag-
gregate future rentals and estimated additional amounts recoverable 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 estimated
amounts recoverable at lease termination from lease extensions or disposi-
tion 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.
6
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FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
1. EQUIPMENT LEASED (Continued)
The net investment in direct financing leases as of September 30, 2000
is as follows:
Minimum lease payments to be received $560,000
Unearned rental income (49,000)
Expected future residuals -
________
$511,000
========
The future approximate minimum rentals to be received on noncancellable
operating and direct financing leases as of September 30, 2000 are as
follows:
Direct
Years Ending December 31 Operating Financing
________________________ _________ _________
2000 $140,000 $ 53,000
2001 386,000 212,000
2002 233,000 212,000
2003 36,000 83,000
________ ________
$795,000 $560,000
======== ========
Subsequent to September 30, 2000, the Fund invested in approximately
$406,000 of direct financing leases with initial lease terms of 2 to 35
months. The future approximate minimum rentals to be received on these
noncancellable direct financing leases are $62,000 in 2000, $171,000 in
2001, $164,000 in 2002 and $61,000 in 2003.
2. RELATED PARTY TRANSACTIONS
The General Partner receives 6% or 3% of rental payments from equipment
under operating leases and full pay-out leases, respectively, for adminis-
trative 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 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
7
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FIDELITY LEASING INCOME FUND IV, L.P.
NOTES TO FINANCIAL STATEMENTS (Continued)
2. RELATED PARTY TRANSACTIONS (Continued)
General Partner or its parent company during the three and nine months
ended September 30, 2000 and 1999:
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
____ ____ ____ ____
Management fee $10,216 $17,438 $27,841 $44,226
Reimbursable costs 11,028 13,000 30,080 43,582
Amounts due from related parties at September 30, 2000 and 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.
Amounts due to related parties at September 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
November 2000 for the three months ended September 30, 2000, to all
admitted partners as of September 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 $167,081 and
$170,573 for the three months ended September 30, 2000 and 1999, respec-
tively, and $459,330 and $725,535 for the nine months ended September 30,
2000 and 1999, respectively. Rental income from the leasing of equipment
accounted for 86% and 80% of total revenues for the third quarter of 2000
and 1999, respectively, and 84% and 73% of total revenues for the first nine
months of 2000 and 1999, respectively. The decrease in revenues was primarily
attributable to a decrease in rental income. In 2000, rental income decreased
by approximately $332,000 because of equipment that came off lease and was re-
leased at lower rental rates or sold. This decrease, however, was reduced by
approximately $185,000 of rents generated from equipment purchases made since
the third quarter of 1999 as well as rents generated on 1999 equipment pur-
chases for which a full nine months of rent was earned in 2000 and only a
portion of the nine months of rent was earned in 1999. Additionally, the
decrease in earned income on direct financing leases also contributed to the
overall decrease in revenues during the nine months ended September 30, 2000.
The decrease in this account was caused by the sale of a direct financing
lease in the second quarter of 1999. Furthermore, the decrease in net gain
on sale of equipment accounted for a portion of the decrease in total revenues
in the first nine months of 2000. There was no net gain on sale of equipment
recognized during the first nine months of 2000 compared to $92,616 of net
gain on sale of equipment recognized during the first nine months of 1999.
Other income also decreased during 2000 because the Fund collected approxi-
mately $10,000 in late charges during the nine months ended September 30, 1999
compared to no late charges collected during the same period in 2000.
Expenses were $112,177 and $96,271 during the three months ended
September 30, 2000 and 1999, respectively and $292,945 and $408,612 for the
nine months ended September 30, 2000 and 1999, respectively. Depreciation
expense comprised 71% and 61% of total expenses during the third quarter of
2000 and 1999, respectively and 72% and 66% of total expenses for the first
nine months of 2000 and 1999, respectively. The decrease in expenses in
2000 was primarily caused by the decrease in depreciation expense resulting
from equipment that terminated and was sold since September 1999. Addition-
ally, the decrease in write-down of equipment to net realizable value also
lowered the overall expenses for the nine months ended September 30, 2000.
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 nine months ended
September 30, 2000 compared to $17,000 for the nine months ended September 30,
1999. Any future losses are dependent upon unanticipated technological
developments affecting the types of equipment in the portfolio in subsequent
years. Furthermore, management fee to related party also decreased during the
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)
first nine months of 2000 as a direct result of the decrease in rental income
during this period. The decrease in this account also contributed to the
overall decrease in expenses in 2000.
For the three months ended September 30, 2000 and 1999, the Fund had net
income of $54,904 and $74,302, respectively. For the nine months ended
September 30, 2000 and 1999, the Fund had net income of $166,385 and
$316,923, respectively. The earnings per equivalent limited partnership
unit, after earnings allocated to the General Partner were $5.21 and $6.97
based on a weighted average number of equivalent limited partnership units
outstanding of 9,870 and 10,156 for the quarter ended September 30, 2000 and
1999, respectively. The earnings per equivalent limited partnership unit,
after earnings allocated to the General Partner were $15.66 and $30.03 based
on a weighted average number of equivalent limited partnership units out-
standing of 9,955 and 10,204 for the nine months ended September 30, 2000
and 1999, respectively.
The Fund generated cash from operations of $134,956 and $128,384, for
the purpose of determining cash available for distribution, during the third
quarter of 2000 and 1999, respectively and distributed $100,000 to partners
in both November 2000 and 1999. For the nine months ended September 30, 2000
and 1999, the Fund generated cash from operations of $376,904 and $512,624 and
distributed $200,000 of these amounts to partners during both the nine months
ended September 30, 2000 and 1999 and $100,000 to partners in both November
2000 and 1999. For financial statement purposes, the Fund records cash distri-
butions 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
liquidated 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 nine months of 2000 and 1999, the Fund purchased
$276,970 and $380,365, respectively, of equipment subject to operating leases.
The Fund also invested $20,077 in direct financing leases during the nine
months ended September 30, 2000.
Subsequent to September 30, 2000, the Fund invested in approximately
$406,000 of direct financing leases with initial lease terms of 2 to 35 months.
10
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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)
ANALYSIS OF FINANCIAL CONDITION (Continued)
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.
11
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Part II: Other Information
FIDELITY LEASING INCOME FUND IV, L.P.
September 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
12
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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.
11-13-00 By: Freddie M. Kotek
________ ____________________________
Date Freddie M. Kotek
President of F.L. Partnership Management, Inc.
(Principal Operating Officer)
11-13-00 By: Marianne T. Schuster
________ ____________________________
Date Marianne T. Schuster
Vice President of F.L. Partnership Management, Inc.
(Principal Financial Officer)
13
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