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 March 31, 1997 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 MARCH 31, 1997 (UNAUDITED) AND DECEMBER 31, 1996 1997 1996 Assets Cash and cash equivalents $ 583,324 $ 1,187,208 Rents receivable 1,161,292 872,371 Value added tax receivable 82,494 80,511 Accounts receivable - affiliates 783,464 416,589 Remarketing receivable 5,646 153,817 Rental equipment, at cost 52,433,152 59,434,351 Less accumulated depreciation (32,056,930) (36,646,360) Net rental equipment 20,376,222 22,787,991 Total assets $ 22,992,442 $ 25,498,487 Liabilities and partners' capital Accrued management fees $ 94,013 $ 54,316 Accrued interest expense 69,655 69,655 Accounts payable and accrued expenses 22,241 28,701 Accounts payable - affiliates 1,032,127 Deferred income 72,304 74,545 Notes payable 6,302,809 7,573,033 Limited recourse notes payable 226,994 228,562 Total liabilities 6,788,016 9,060,939 Partners' capital: General Partner: Capital contribution 1,000 1,000 Cumulative net loss (7,301) (15,208) Cumulative cash distributions (297,825) (287,587) (304,126) (301,795) Limited Partners (506,776 units): Capital contributions, net of offering costs 46,201,039 46,201,039 Cumulative net loss (722,910) (1,505,671) Cumulative cash distributions (28,969,577) (27,956,025) 16,508,552 16,739,343 Total partners' capital 16,204,426 16,437,548 Total liabilities and partners' capital $ 22,992,442 $ 25,498,487 CSA INCOME FUND IV LIMITED PARTNERSHIP STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996 1997 1996 Revenues: Rental income $ 2,915,302 $ 4,410,873 Interest income 60,391 48,865 Gain on sale of equipment 364,148 298,674 Net gain on foreign currency transactions 8,374 2,037 Total revenues 3,348,215 4,760,449 Costs and expenses: Depreciation and amortization 2,064,766 3,456,794 Interest 120,172 319,035 Management fees 300,697 312,035 General and administrative 71,912 87,351 Total expenses 2,557,547 4,175,215 Net income $ 790,668 $ 585,234 Net income allocation: General Partner 7,907 $ 5,852 Limited Partners 782,761 579,382 $ 790,668 $ 585,234 Net income per weighted average Limited Partnership Unit $ 1.54 $ 1.14 Number of weighted average Limited Partnership Units 506,776 506,776 CSA INCOME FUND IV LIMITED PARTNERSHIP STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31,1997 AND 1996 1997 1996 Cash flows from operations: Cash received from rental of equipment $ 2,644,117 $ 4,300,229 Cash paid for operating and management expenses (339,372) (410,154) Interest paid (120,172) (285,140) Interest received 60,391 48,865 Net cash from operations 2,244,964 3,653,800 Cash flow from investments: Value added tax (1,983) 8,776 Purchase of equipment (1,004,726) (5,112,874) Sale of equipment 1,852,445 607,335 Net cash provided by (used for) investments 845,736 (4,496,763) Cash flows from financing: Equipment purchases payable (47,363) Advances to/from affiliates (1,399,002) (312,266) Proceeds from notes payable 566 858 Repayment of notes payable (1,838,650) (2,845,815) Payment of cash distributions (1,023,790) (1,023,789) Net cash used for financing (3,694,584) (4,310,816) Net change in cash and cash equivalents (603,884) (5,153,779) Cash and cash equivalents at beginning of period 1,187,208 6,795,047 Cash and cash equivalents at end of period $ 583,324 $ 1,641,268 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, 1996. In the General Partner's opinion, the unaudited financial statements reflect all adjustments which are of a normal recurring nature, necessary to present fairly the financial position of CSA Income Fund IV Limited Partnership as of March 31, 1997 and March 31, 1996 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 $2,915,302 and $4,410,873 and net income was $790,668 and $585,234 for the quarters ended March 31, 1997 and 1996, respectively. The decrease in rental income was due primarily to the expiration of a major portion of the TIC Leasing Corp. portfolio acquired from Turner Broadcasting System Inc. during 1994. Rental income was also reduced due to 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. The decrease in revenue was more than offset by lower levels of depreciation which was the result of the use of accelerated methods of depreciation for certain equipment in prior years and the remarketing of fully depreciated equipment. The Partnership generated $4,097,409 in cash flow from operations and from the sale of equipment during the three months ended March 31, 1997. This cash along with cash on hand was used to purchase equipment, repay debt and pay cash distributions to the partners. The Partnership acquired $1,004,726 in additional equipment, repaid $1,852,445 of notes payable and made cash distributions to partners of $1,023,790. The Partnership paid distributions of $.67 per limited partnership unit on the 15th of January, February and March 1997. To date, the Partnership has made cash distributions to the Limited Partners ranging from 45% to 67% 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 as long as the equipment continues to be leased. Management, on a periodic basis, reviews the Partnership's projected performance. 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 ART 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 - There were no reports filed during the first quarter of 1997. 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 (Registrant) By its General Partner, CSA Lease Funds, Inc. Date: 05/15/97 /S/ J. Frank Keohane President and Principal Executive Officer Date: 05/15/97 /S/ Richard P. Timmons Controller Principal Accounting and Finance Officer