FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 	OR ( ) 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 33-32744 CSA Income Fund IV Limited Partnership (Exact name of registrant as specified in its charter) Massachusetts 04-3072449 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 22 Batterymarch St., Boston Massachusetts 02109 (Address of principal executive offices) (Zip Code) (617) 357-1700 (Registrant's telephone number, including area code) Former name, former address and former fiscal year, if changed since last report 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 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: PART I - FINANCIAL INFORMATION CSA INCOME FUND IV LIMITED PARTNERSHIP CSA INCOME FUND IV LIMITED PARTNERSHIP STATEMENTS OF FINANCIAL POSITION AS OF SEPTEMBER 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995 ______________________________________________________________________ (Unaudited) SEPTEMBER 30, December 31, 1996 1995 Assets Cash and cash equivalents $ 1,699,242 $ 6,795,047 Rentals receivable 809,367 369,887 Value added tax deposits 149,397 89,913 Accounts receivable-affiliates 152,651 611,953 Remarketing receivable 102,647 31,160 Rental equipment, at cost 74,191,126 77,469,983 Less accumulated depreciation (50,017,084) (51,633,820) Net rental equipment 24,174,042 25,836,163 Total assets $ 27,087,346 $ 33,734,123 Liabilities and partners' capital Liabilities: Accrued management fee $ 54,277 $ 40,781 Accrued interest expense 81,568 113,562 Accounts payable 44,343 37,968 Accounts payable - equipment - 84,691 Accounts payable - affiliates 527,985 85,240 Deferred income 20,603 226,089 Notes payable 8,856,448 13,804,399 Limited recourse notes payable 570,471 580,901 Total liabilities 10,155,695 14,973,631 Partners' capital: General Partner: Capital contribution 1,000 1,000 Cumulative net loss (20,505) (32,930) Cumulative cash distributions (277,348) (246,635) (296,853) (278,565) Limited Partners (506,776 units): Capital contributions, net of offering costs 46,201,039 46,201,039 Cumulative net loss (2,030,062) (3,260,165) Cumulative cash distributions (26,942,473) (23,901,817) 17,228,504 19,039,057 Total partners' capital 16,931,651 18,760,492 Total liabilities and partners' capital $ 27,087,346 $ 33,734,123 STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995 ______________________________________________________________________ THREE MONTHS NINE MONTHS 1996 1995 1996 1995 Revenues: Rental income $ 4,273,790 $ 4,895,085 $14,334,291 $15,535,759 Interest income 19,803 157,472 76,761 331,057 Gain (loss) on sale of equipment (395,052) 139,834 (53,150) 280,786 Net gain (loss) on foreign currency (14,594) 28,356 (20,233) 123,368 Total revenues 3,883,946 5,220,747 14,337,669 16,270,970 Costs and expenses: Depreciation and amortization 3,061,845 4,095,392 10,966,644 13,248,566 Interest 239,327 303,709 811,325 1,333,668 Management fees 358,528 330,790 1,094,454 1,017,075 General and administrative 81,931 90,609 222,718 311,268 Total expenses 3,741,631 4,820,500 13,095,141 15,910,577 Net income $ 142,315 $ 400,247 $ 1,242,528 $ 360,393 Net income allocation: General Partner $ 1,423 $ 4,002 $ 12,425 $ 3,604 Limited Partners 140,892 396,245 1,230,103 356,789 $ 142,315 $ 400,247 $ 1,242,528 $ 360,393 Net income per Limited Partnership Unit $ .28 $ 0.78 $ 2.43 $ 0.70 Number of Limited Partnership Units 506,776 506,776 506,776 506,776 CSA INCOME FUND IV LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995 ______________________________________________________________________ THREE MONTHS NINE MONTHS 1996 1995 1996 1995 Cash flows from operations: Cash received from rental of equipment $ 4,864,625 $ 4,968,651 $13,667,471 $16,159,315 Cash paid for operating and management expenses (509,962) (427,194) (1,297,300) (1,419,408) Interest paid (239,327) (467,722) (843,319) (1,438,454) Interest received 19,803 157,472 76,761 331,057 Net cash from operations 4,135,139 4,231,207 11,603,613 13,632,510 Cash flow from investments: Value added tax (68,502) 142,649 (59,483) 12,069 Purchase of equipment (708,686) (995,198) (11,391,650) (2,438,705) Sale of equipment 1,122,812 1,655,081 1,964,110 4,540,762 Net cash used from investments 345,624 802,532 (9,487,023) 2,114,126 Cash flows from financing: Change in amounts due to/from affiliates (668,977) 773,037 902,046 1,350,306 Accounts payable equipment purchase (426,483) (614,513) (84,691) (1,052,322) Proceeds from notes payable 587,234 449,382 3,861,710 4,246,154 Repayment of notes payable (3,030,153) (4,438,998) (8,820,091)(12,023,447) Payment of cash distributions (1,023,789) (1,023,791) (3,071,369) (3,071,370) Net cash used for financing (4,562,168) (4,850,883) (7,212,395)(10,550,679) Net change in cash and cash equivalents (81,405) 182,856 (5,095,805) 5,195,957 Cash and cash equivalents at beginning of period 1,780,647 6,980,371 6,795,047 1,967,270 Cash and cash equivalents at end of period $1,699,242 $ 7,163,227 $1,699,242 $ 7,163,227 CSA INCOME FUND IV LIMITED PARTNERSHIP NOTE TO FINANCIAL STATEMENTS ______________________________________________________________________ The quarterly financial statements have been prepared by the Partnership without audit. Certain information and footnote disclosures normally included in the annual financial statements have been condensed or omitted from the accompanying statements. For such information, reference should be made to the financial statements and notes thereto included in the Partnership's annual report on Form 10-K for the year ended December 31, 1995. In the General Partner's opinion, the unaudited financial statements reflect all adjustments necessary to present fairly the financial position of CSA Income Fund IV Limited Partnership as of September 30, 1996 and December 31, 1995 and the results of operations and cash flows for the periods presented therein. CSA INCOME FUND IV LIMITED PARTNERSHIP GENERAL PARTNER'S DISCUSSION OF OPERATIONS ______________________________________________________________________ Gross rental income was $4,273,790 and $4,895,085 and net income was $142,315 and $400,247 for the quarters ended September 30, 1996 and 1995, respectively. For the nine months ended September 30, 1996 and 1995, gross rental income was $14,334,291 and $15,535,759 and net income was $1,242,528 and $360,393, respectively. The decrease in gross rental income during 1996 is due to expiring leases and the sale of equipment from the Partnership's portfolio as well as additional investment in sales agency agreements which provide for equity in residual values of equipment but provide no current rental revenue or debt service requirements to the Partnership. Both the three and nine month periods ended September 30, 1996 benefited from lower levels of depreciation which were the result of the use of accelerated methods of depreciation for a portion of the Partnership's portfolio in prior years and the remarketing of fully depreciated equipment. However, this benefit was substantially offset in the third quarter of 1996 by realized losses on the sales of certain equipment whose value was negatively affected by the manufacturer's introduction of more technologically advanced equipment. Additionally, interest income was lower during 1996 as a result of lower cash balances available for investment. The Partnership generated $13,567,723 from operations and sales of equipment during the nine months ended September 30, 1996. The Partnership used these funds, proceeds from notes payable and cash on hand to acquire additional equipment of $11,391,650, make scheduled payments on notes payable of $8,820,091 and make distributions to partners of $3,071,369. The Partnership paid distributions of $.67 per Limited Partner unit on the 15th of July, August and September 1996. To date, the Partnership has made cash distributions to the Limited Partners ranging from 41% to 63% of their initial investment, depending on when the Limited Partners entered the Partnership. The objective of the Partnership is to return the Limited Partner's investment through current distributions and provide a return on this investment by continued distributions for as long as the equipment continues to be leased. Management, on a periodic basis, reviews the Partnership's projected performance. The most recent review indicates that revenues generated by the Partnership from certain lease renewals and remarketings after the initial lease terms have been lower than anticipated, as a result of more rapid obsolescence in high technology equipment. Based on an analysis of the remaining assets in the Partnership's portfolio, the General Partner presently estimates that the continued cash distributions will return the entire initial investment of the Limited Partners and a return thereon, however, the magnitude of the return may be lower than originally anticipated at the inception of the Partnership. The General Partner will continue to report on the Limited Partners' return of investment with each cash distribution and the General Partner intends to pursue additional lease investment opportunities to increase the Partnership's distributions. CSA INCOME FUND IV LIMITED PARTNERSHIP PART II ______________________________________________________________________ Item 1 - Legal Proceedings None Item 2 - Changes in Securities None Item 3 - Defaults Upon Senior Securities None Item 4 - Submission of Matters to a Vote of Security Holders None Item 5 - Other Information None Item 6 - Exhibits and Reports on Form 8-K (a) Exhibits - Exhibit 27. Financial Data Schedule. (b) Reports on Form 8-K - No reports have been filed on Form 8-K during this quarter. 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. CSA Income Fund IV Limited Partnership Partnership (Registrant) By its General Partner, CSA Lease Funds, Inc. Date: November 14, 1996 /s/ J. Frank Keohane President and Principal Executive Officer Date: November 14, 1996 /s/ Richard F. Sullivan Vice President Principal Accounting and Finance Officer