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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended Commission file number 33-32744
December 31,1997
CSA Income Fund IV Limited Partnership
(Exact name of registrant as specified in its charter)
Massachusetts No.04-3072449
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
22 Batterymarch St., Boston, MA 02109
(Address of principal executive Zip Code
offices)
Registrant's telephone number, including area code:(617)357-1700
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: 506,776
Units of Limited Partnership Interest
Indicate by check whether 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
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ X ]
Number of shares outstanding of each registrant's classes of
securities:
Number of Units
Title of Each Class at December 31, 1997
Units of Limited Partnership 506,776
Interest: $100 per unit
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Part IV are incorporated by reference
to Amendment No. 1 to Form S-1 and Form S-1,
Registration No. 33-32744
The exhibit index is located on pages 18 and 19.
Part I
Item 1. Business
CSA Income Fund IV Limited Partnership (the "Partnership") is a
limited partnership organized under the provisions of the
Massachusetts Uniform Limited Partnership Act. The Partnership is
composed of CSA Lease Funds, Inc. (an affiliate of CSA Financial
Corp.), the sole General Partner, and as of December 31, 1997, 2,766
Limited Partners owning 506,776 Units of Limited Partnership Interest
of $100 each. The capital contributions of the Partners aggregated
$50,677,600. The Partnership was formed on December 21, 1989 and
commenced operations on April 18, 1990.
The Partnership was organized to engage in the business of acquiring
income-producing equipment for investment. The Partnership's
principal objectives are:
1. To acquire and lease equipment, primarily through Operating Leases,
to generate income during its entire useful life;
2. To provide monthly distributions of cash to the Limited Partners
from leasing revenues and from the proceeds of sale or other
disposition of Partnership equipment;
3. To reinvest in additional equipment a portion of lease revenues and
a substantial portion of Cash From Sales and Refinancing during the
first years of the Partnership's operations.
The Partnership was formed primarily for investment purposes and not
as a "tax shelter".
The Partnership shall terminate on December 31, 2014 unless sooner
terminated.
The Partnership has no direct employees. The General Partner has full
and exclusive discretion in management and control of the Partnership.
Selection of the equipment for purchase and lease is based principally
on the General Partner's evaluation of the usefulness of the equipment
in commercial or industrial applications and its estimate of the
potential demand for the equipment at the end of the initial lease
term.
The Partnership's equipment may include:
1. New and reconditioned computer peripheral equipment, computer
terminal systems and data processing systems primarily manufactured
by International Business Machines, Inc. (IBM) and qualified for
IBM maintenance.
2. New telecommunications and telecomputer equipment consisting
primarily of private automated branch exchanges (PBX's), advanced
high-speed digital telephone switching devices, voice/data
transmission devices and telephone/computer networks as well as
telephone handsets and facsimile transmission products.
3. New office equipment consisting primarily of photocopying and
graphic processing equipment.
4. New highway transportation equipment and new and reconditioned air
transportation equipment consisting primarily of tractors,
trailers, trucks, intermodal equipment, railroad rolling stock,
passenger vehicles and corporate or commercial aircraft.
5. Miscellaneous other types of equipment which meet the investment
objectives of the Partnership.
The equipment leasing industry is highly competitive. In initiating
its leasing transactions, the Partnership competes with leasing
companies, manufacturers that lease their products directly, equipment
brokers, dealers and financial institutions, including commercial
banks and insurance companies. Many competitors are larger than the
Partnership and have access to more favorable financing. Competitive
factors in the equipment leasing business primarily involve pricing
and other financial arrangements. Marketing capability is also a
factor.
As of December 31, 1997, substantially all of the remaining equipment
in the Partnership's portfolio was leased under 165 separate leases to
102 lessees. The lessees providing at least 10% of total revenues
during 1997 are as follows:
Siemens Business Communications Systems, Inc. 15%
America Online Inc. 13%
As of December 31, 1997, approximately 22% of the Partnership's
equipment portfolio (based on cost) is leased outside the United
States. The Partnership's leases and equipment are described more
fully in Notes 3 and 4 to the Financial Statements included in Item 8.
Item 2. Properties
The Partnership neither owns nor leases office space or equipment for
the purpose of managing its day-to-day affairs. The General Partner,
CSA Lease Funds, Inc. ("CLF"), has exclusive control over all aspects
of the business of the Partnership, including provision of any
necessary office space. As such, CLF will be compensated through
Management fees and reimbursement of General and Administrative costs
related to managing the Partnership's business. Excluded from the
allowable reimbursement to the General Partner, however, will be any
of the following: (1) Expenditures for rent or utilities; (2) Capital
equipment and the related depreciation; and (3) Certain other
administrative items.
Item 3. Legal Proceedings
The Partnership is not a party to any pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of
1997.
PART II
Item 5. Market for the Registrant's Equity Securities and Related
Security Holder Matters
a. The Partnership's limited partnership interests are not publicly
traded. There is no active market for the Partnership's limited
partnership interests and it is unlikely that one will develop.
b. Approximate Number of Equity Security Holders:
Title of Class Number of Limited Partners
Units of Limited Partnership Interests as of 12/31/97
506,776 2,766
Item 6. Selected Financial Data - unaudited
The following table sets forth selected financial information
regarding the Partnership's financial position and operating results.
The information should be used in conjunction with the Financial
Statements and Notes thereto, and the General Partner's Discussion and
Analysis of Financial Condition and Results of Operations, which are
included in Items 7 and 8 of this Report.
Years Ended December 31,
(IN THOUSANDS EXCEPT PER UNIT AMOUNTS)
1997 1996 1995 1994 1993
Total
Revenues $13,487 $17,641 $21,917 $21,735 $23,745
Net Income 2,716 1,772 858 2,356 1,148
Net Income
per Limited
Partnership
Unit 5.31 3.46 1.68 4.60 2.24
Total Assets 36,736 25,498 33,734 48,111 44,448
Notes Payable 20,923 7,573 13,804 23,329 17,846
Limited Recourse
Notes Payable - 229 581 757 -
Cash Distribution
per Limited
Partnership Unit
Outstanding $ 7.00 $ 8.00 $ 8.00 $ 8.00 $ 9.68
Item 7. General Partner's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Rental income for the years ended December 31, 1997, 1996 and 1995 was
$12,413,441, $17,428,344 and $20,213,456, respectively. The decrease
in rental income during 1997 was due to expiring leases primarily in
the TIC Leasing Corp. portfolio purchased in 1994. The Partnership
continues to invest in European Agency (Lease Residual) Transactions
which represent lease transactions in the European Community where the
lender receives nominal title to the equipment as a means of securing the
loan, all rents are paid directly by the lessee to the lender and the
Partnership as agent ofr the lender manages the lease and is entitled to
substantially all of the residual value of the equipment. These agreements
provide no current rental revenue or debt service requirements to the
Partnership.
Net income for the years ended December 31, 1997, 1996 and 1995 was
$2,716,253, $1,772,216 and $857,812, respectively. The increase in net
income in 1997 is primarily attributable to 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. Net income was also affected by the gain on the sale of
equipment of $865,137, $108,293 and $1,113,423 for the years ended
1997, 1996 and 1995, respectively, primarily due to the remarketing of
fully depreciated equipment. Depreciation expense for 1997, 1996 and
1995 was $8,072,215, $13,095,023 and $17,736,910, respectively.
Interest income for 1997, 1996 and 1995 was $124,960, $90,473, and
$480,899, respectively. The increase in 1997 was primarily due to
approximately $49,000 of interest being paid by one lessee on late
rental payments. Interest expense was $1,123,693, $1,065,689, and
$1,662,201 for the years ended December 31, 1997, 1996, and 1995,
respectively.
Liquidity and Capital Resources
During 1997, the Partnership generated $10,546,060 in cash flow from
operations and $5,793,771 from the sale of equipment. The Partnership
utilized these funds and proceeds from notes payable of $19,876,925 to
acquire additional equipment of $24,487,895, reduce outstanding notes
payable by $6,755,179 and make cash distributions of $3,583,264.
As of December 31, 1997, the Partnership did not have any material
amount of equipment off lease and in storage.
The Partnership's liquidity is determined by cash from operations
provided by the leases currently in place. It is expected that this
cash flow will be sufficient to service outstanding debt, pay monthly
distributions to the partners and meet any other commitments and
obligations which may arise in the ordinary course of business. The
Partnership's future liquidity will be dependent upon the addition of
leased equipment, the sale and/or re-lease of equipment as it comes
off lease and the level of debt service.
To date, the Partnership has made cash distributions to the Limited
Partners ranging from 50% to 72% of their initial investment,
depending on when the Limited Partner entered the Partnership. The
objective of the Partnership is to return the Limited Partners'
investment through current distributions and provide a return on this
investment by continued distributions as long as the equipment
continues to be leased.
Management reviews the Partnership's projected performance on a
periodic basis. Based on an analysis of the remaining assets in the
Partnership's portfolio completed as part of the annual audit process,
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.
Quarterly Financial Data - unaudited
Summarized unaudited quarterly financial data for the years ended
December 31, 1997 and 1996 are as follows:
1997 Quarter Ended: 12/31 9/30 6/30 3/31
Total Revenues $3,899,845 $3,528,182 $2,711,295 $3,348,215
Net Income * 353,667 671,191 900,727 790,668
Net Income *
Per Limited
Partnership Unit
Outstanding .69 1.32 1.76 1.54
Cash Distributions
Per Limited
Partnership Unit
Outstanding 1.50 1.50 2.00 2.00
1996 Quarter Ended: 12/31 9/30 6/30 3/31
Total Revenues $3,303,325 $3,883,946 $5,693,274 $4,760,449
Net Income * 529,689 142,315 514,978 585,234
Net Income *
Per Limited
Partnership Unit
Outstanding 1.03 .28 1.01 1.14
Cash Distributions
Per Limited
Partnership Unit
Outstanding 2.00 2.00 2.00 2.00
* The fourth quarter of 1997 includes a charge to expense of $74,500
for adjustments to anticipated residual values. The corresponding
amount for the fourth quarter of 1996 was $300,000.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
There is no Market Risk related to the Notes Payable of the Partnership
since all Notes are Nonrecourse and have fixed interest rates. There are
no other financial instruments that require Market Risk disclosure.
Item 8. Financial Statements
CSA Income Fund IV Limited Partnership
Index to Financial Statements
Page
Number
Independent Auditors' Report 8
Statements of Financial Position
as of December 31, 1997 and 1996 9
Statements for the Years Ended
December 31, 1997, 1996 and 1995
Operations 10
Cash Flows 11
Changes in Partners' Capital (Deficit) 12
Notes to Financial Statements 13
INDEPENDENT AUDITORS' REPORT
To the Partners of CSA Income Fund IV Limited Partnership
We have audited the accompanying statements of financial position of
CSA Income Fund IV Limited Partnership as of December 31, 1997 and
1996, and the related statements of operations, cash flow, and changes
in partners' capital (deficit) for the three years then ended. These
financial statements are the responsibility of the Partnership's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of CSA Income
Fund IV Limited Partnership as of December 31, 1997 and 1996, and the
results of its operations and its cash flows for the three years then
ended in conformity with generally accepted accounting principles.
\s\ Sullivan Bille, P.C.
Boston, Massachusetts
March 20, 1998
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statements of Financial Position as of
December 31, 1997 and 1996
1997 1996
Assets
Cash and cash equivalents $ 1,746,766 $ 1,187,208
Rentals receivable 559,640 872,371
Value added tax receivable 3,028 80,511
Accounts receivable-affiliates 292,804 416,589
Other receivable 9,290 153,817
Rental equipment, at cost 59,318,040 59,434,351
Less accumulated depreciation (25,193,487) (36,646,360)
Net rental equipment 34,124,553 22,787,991
Total assets $36,736,081 $25,498,487
Liabilities and Partners' Capital
Accrued management fees $ 103,996 $ 54,316
Accrued interest expense 52,260 69,655
Accounts payable 43,058 28,701
Accounts payable - affiliates - 1,032,127
Deferred income 42,889 74,545
Notes payable 20,923,341 7,573,033
Limited recourse notes payable - 228,562
Total liabilities 21,165,544 9,060,939
Partners' capital:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income (loss) 11,955 (15,208)
Cumulative cash distributions (323,420) (287,587)
(310,465) (301,795)
Limited Partners (506,776 units):
Capital contributions net of
offering costs 46,201,039 46,201,039
Cumulative net income (loss) 1,183,419 (1,505,671)
Cumulative cash distributions (31,503,456) (27,956,025)
15,881,002 16,739,343
Total partners' capital 15,570,537 16,437,548
Total liabilities and
partners' capital $36,736,081 $25,498,487
See accompanying notes to financial statements.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statements of Operations
for the years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Revenue:
Rental income $12,413,441 $17,428,344 $20,213,456
Interest income 124,960 90,473 480,899
Gain on sale of
equipment 865,137 108,293 1,113,423
Net gain on foreign
currency transactions 83,999 13,884 109,441
Total revenue 13,487,537 17,640,994 21,917,219
Expenses:
Depreciation and
amortization 8,072,215 13,095,023 17,736,910
Interest 1,123,693 1,065,689 1,662,201
Management fees 1,288,394 1,399,993 1,340,804
General and
administrative 286,982 308,073 319,492
Total expenses 10,771,284 15,868,778 21,059,407
Net income $ 2,716,253 $ 1,772,216 $ 857,812
Income allocation:
General Partner $ 27,163 $ 17,722 $ 8,578
Limited Partners 2,689,090 1,754,494 849,234
$ 2,716,253 $ 1,772,216 $ 857,812
Net income per
Limited Partnership Unit $ 5.31 $ 3.46 $ 1.68
Number of
Limited Partnership
units outstanding 506,776 506,776 506,776
See accompanying notes to financial statements.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statements of Cash Flows for the
years ended December 31, 1997, 1996 and 1995
1997 1996 1995
Cash flows from operations:
Cash received from rental
of equipment $13,073,527 $16,783,224 $21,895,109
Cash paid for operating and
management expenses ( 1,511,339) (1,703,797) (1,831,571)
Interest paid ( 1,141,088) (1,109,596) (1,742,436)
Interest received 124,960 90,473 480,899
Net cash from operations 10,546,060 14,060,304 18,802,001
Cash flows from investments:
Value added tax deposits 77,483 9,402 (20,001)
Purchase of equipment (24,487,895) (13,050,318) (6,158,563)
Sale of equipment 5,793,771 2,994,079 6,434,150
Net cash (used for) provided
by investments (18,616,641) (10,046,837) 255,586
Cash flows from financing:
A/P equipment purchases - (84,691) (967,631)
Advances (to) from
affiliates (908,343) 1,142,250 533,817
Proceeds from notes payable 19,876,925 4,014,939 5,985,266
Repayment of notes payable (6,755,179) (10,598,644) (15,686,102)
Payment of cash
distributions (3,583,264) (4,095,160) (4,095,160)
Net cash (used for)
provided by financing 8,630,139 (9,621,306) (14,229,810)
Net change in cash and
cash equivalents 559,558 (5,607,839) 4,827,777
Cash and cash equivalents
at beginning of year 1,187,208 6,795,047 1,967,270
Cash and cash equivalents
at end of year $ 1,746,766 $ 1,187,208 $ 6,795,047
See accompanying notes to financial statements.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statement of Changes in Partners' Capital (Deficit)
For years ended December 31, 1997, 1996, and 1995
Limited General
Partners Partner Total
Balance at December 31, 1994 $22,244,031 $ (246,191) $21,997,840
Net income 849,234 8,578 857,812
Cash distributions (4,054,208) ( 40,952) (4,095,160)
Balance at December 31, 1995 19,039,057 (278,565) 18,760,492
Net income 1,754,494 17,722 1,772,216
Cash distributions (4,054,208) ( 40,952) (4,095,160)
Balance at December 31, 1996 16,739,343 (301,795) 16,437,548
Net income 2,689,090 27,163 2,716,253
Cash distributions (3,547,431) ( 35,833) (3,583,264)
Balance at December 31, 1997 $15,881,002 $ (310,465) $15,570,537
See accompanying notes to financial statements.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1997
(1) Organization
CSA Income Fund IV Limited Partnership ("the Partnership") was formed
under the Massachusetts Uniform Limited Partnership Act on December
21, 1989 with an initial investment of $1,000, from its sole General
Partner, CSA Lease Funds, Inc. and the purchase of 10 Limited
Partnership Units at $100 each by an initial Limited Partner. The
Partnership's primary activity is to invest in equipment to be leased
to third parties. On February 22, 1990, the Partnership began its
offering of Limited Partnership Units. The Partnership commenced
operations on April 18, 1990. As of December 31, 1997, the Partnership
has 506,776 units of Limited Partnership interest outstanding
representing aggregate capital contributions of $50,677,600.
Distributable cash from operations, sales or refinancing and profits
or losses for federal income tax purposes are allocated 99% to the
Limited Partners and 1% to the General Partner until Payout has
occurred, and thereafter, 85% and 15% respectively. Payout is
achieved when the aggregate amount of all distributions to the Limited
Partners equals the amount of the Limited Partners' original invested
capital plus a cumulative 9% annual return (compounded daily) on
unreturned invested capital.
In accordance with the Partnership Agreement, the Partnership is
liable to the General Partner (or its affiliates) for management fees
calculated at 5% of gross rental revenues and to certain reimbursable
operating expenses subject to limitations stated in the Partnership
Agreement.
(2) Significant Accounting Policies
The Partnership records are maintained on the accrual basis of
accounting.
The Partnership accounts for equipment leases as operating leases;
therefore, rental income is reported when earned. Equipment purchases
are depreciated on a straight-line basis over the initial term of the
lease to estimated realizable value. On a periodic basis, the
Partnership conducts a review of the residual value of its equipment
as compared to the estimated net realizable values for such equipment
upon expiration of the related lease. The Partnership records
additional charges to depreciation expense when net book values exceed
estimated realizable values. In connection with this review for the
years ended December 31, 1997, 1996 and 1995 the Partnership recorded
additional charges of $74,500, $300,000 and $445,686, respectively, to
depreciation expense.
Deferred income represents prepaid rentals received for active leases
that are recognized when earned.
No provision for income taxes has been made as the liability for such
taxes is that of the Partners rather than the Partnership. The
Partnership's federal tax return is prepared solely to arrive at the
Partners' individual taxable income or loss as reported on form K-1.
Partnership taxable income (loss) in 1997, 1996 and 1995 was
($7,349,952), $1,628,070 and $816,250, respectively. The differences
between Partnership taxable income and book income are primarily due
to the difference between tax and book depreciation methods and the
related differences in the gain or loss on sales of equipment.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
The Partnership considers short-term investments with original
maturities of three months or less to be cash equivalents.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the General Partner to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as
of the date of the financial statements and the reported amounts of
revenue and expenses during the reporting year. Actual results could
differ from those estimates.
(3) Rental Equipment
The Partnership purchases equipment subject to existing leases either
directly from CSA Financial Corp. or the manufacturer. The purchase
price to the Partnership is equal to the lesser of fair market value
or cost as adjusted, if necessary, for rents received and carrying
costs, plus an acquisition fee of 4% of cost. In accordance with
Section 6.4 (b) of the Partnership Agreement, the total of all
acquisition fees paid to the General Partner shall not exceed 15% of
the total Capital Contributions received by the Partnership. This
lifetime acquisition fee limit was met during 1996 and the General
Partner is no longer paid acquisition fees on any new Partnership
equipment acquisitions. However, the General Partner continued to
actively seek out additional lease investment opportunities during
1997.
A summary of changes in rental equipment owned and its related
accumulated depreciation is as follows:
Beginning Ending
Balance Additions Sales Balance
Costs for years ended:
December 31, 1995 $92,684,951 $ 6,158,563 $21,373,531 $77,469,983
December 31, 1996 $77,469,983 $13,050,318 $31,085,950 $59,434,351
December 31, 1997 $59,434,351 $24,487,895 $24,604,206 $59,318,040
Accumulated depreciation for
the years ended:
December 31, 1995 $49,934,611 $17,501,209 $15,802,000 $51,633,820
December 31, 1996 $51,633,820 $13,095,023 $28,082,483 $36,646,360
December 31, 1997 $36,646,360 $ 8,072,215 $19,525,088 $25,193,487
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
(4) Leases
As of December 31, 1997, substantially all of the Partnership's
equipment was leased under 165 separate leases to 102 lessees.
Approximately 22% of the Partnership's equipment portfolio (based on
cost) has been leased outside the United States. Two lessees provided
approximately 28% (15% and 13%, respectively) of the Partnership's
revenues in 1997 as compared to two leases providing 35% (20%, and
15%, respectively) in 1996 and three lessees providing 48% (25%, 13%,
and 10%, respectively) in 1995.
Minimum annual lease rentals scheduled to be received under existing
noncancellable operating leases are as follows:
Year Amount
1998 $12,973,248
1999 9,088,664
2000 5,927,311
2001 1,522,346
2002 22,829
$29,534,398
(5) Notes Payable
Notes payable consist of nonrecourse notes due in monthly, quarterly
and annual installments, with interest rates that range from 6.25% to
10.50% per annum. Such notes are collateralized by equipment with a
cost of $37,606,442. Annual maturities of notes payable at December
31, 1997, are as follows:
Year Amount
1998 $ 8,963,730
1999 6,509,819
2000 4,105,553
2001 1,344,239
$20,923,341
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
(6) Fair Values of Financial Instruments
The following methods and assumptions were used to estimate the fair
value of financial instruments:
Cash and Cash Equivalents
The carrying amount of cash and cash equivalents approximates its fair
value due to their short maturity.
Notes Payable
The fair value of the Partnership's notes payable is based on the
market price for the same or similar debt issues or on the current
rates offered to the Partnership for debt with the same remaining
maturity. The carrying amount of notes payable approximates fair
value.
Limited Recourse Notes Payable
The carrying amount of the limited recourse notes payable approximates
its fair value due to their short maturities.
(7) Related Party Transactions
Fees and other expenses paid or accrued by the Partnership to the
General Partner or affiliates of the General Partner for 1997, 1996
and 1995 are as follows:
1997 1996 1995
Equipment acquisition fees $ - $1,028,920 578,149
Management fees 1,288,394 1,399,993 1,340,804
Reimbursable operating
expenses 182,862 169,016 180,530
$1,471,256 $2,597,929 $2,099,483
(8) Net Cash Provided from Operations
The reconciliation of net income to net cash from operations for 1997,
1996 and 1995 are as follows:
1997 1996 1995
Net Income $ 2,716,253 $ 1,772,216 $ 857,812
Gain on sale of equipment (865,137) (108,293) (1,113,423)
Depreciation and
amortization 8,072,215 13,095,023 17,736,910
(Increase) decrease
in receivables 457,258 (507,459) 1,746,093
Other 133,090 - -
Decrease in payables
and deferred income 32,381 (191,183) (425,391)
Net cash from operations $10,546,060 $14,060,304 $18,802,001
(9) Net Gain from Foreign Currency Transactions
Net gain from foreign currency transactions resulted from exchange
gains and losses on certain leases which call for the payment of
rentals in British Pound Sterling.
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
None
PART III
Item 10. Directors and Executive Officers of the Registrant
The Partnership has no directors or officers. All management
functions are performed by CSA Lease Funds, Inc., the corporate
General Partner. The current directors and officers of the corporate
General Partner are:
Name Age Title(s) Elected
J. Frank Keohane 61 Director & President 04/01/88
Richard P. Timmons 43 Controller 03/01/95
Trevor A. Keohane 31 Director 05/28/93
Term of Office: Until a successor is elected.
Item 11. Executive Compensation
(a), (b), (c), (d) and (e): The Officers and Directors of the General
Partner receive no current or proposed direct remuneration in such
capacities, pursuant to any standard arrangements or otherwise, from
the Partnership. In addition, the Partnership has not paid and does
not propose to pay any options, warrants or rights to the Officers and
Directors of the General Partner. There exists no remuneration plan
or arrangement with any Officer or Director of the General Partner
resulting from resignation, retirement or any other termination. See
Note 7 of the Notes to Financial Statements included in Item 8 of this
report for a description of the remuneration paid by the Partnership
to the General Partner and its affiliates.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
By virtue of its organization as a limited partnership, the
Partnership has outstanding no securities possessing traditional
voting rights. However, as provided for in Section 13.2 of the
Agreement of Limited Partnership (subject to Section 13.3), a majority
in interest of the Limited Partners have voting rights with respect
to:
1. Amendment of the Limited Partnership Agreement.
2. Termination of the Partnership.
3. Removal of the General Partner.
4. Approval or disapproval of the sale of substantially all the
assets of the Partnership if such sale occurs prior to February 22,
1997.
No person or group is known by the General Partner to own beneficially
more than 5% of the Partnership's outstanding Limited Partnership
Units as of December 31, 1997.
Item 13. Certain Relationships and Related Transactions
An affiliate of the General Partner also acts as General Partner for
CSA Income Fund Limited Partnership III. The General Partner or
affiliates may act in that capacity for other income fund limited
partnerships in the future.
PART IV
Item 14. Exhibits, Financial Statements, Schedules and Reports
on Form 8-K
(a) (1) Financial Statements - See accompanying Index to Financial
Statements - Item 8.
(2) Financial Statement Schedules - All schedules have been
omitted as not required, not applicable or the information
required to be shown therein is included in the Financial
Statements and related notes.
(3) Exhibits Index
Except as set forth below, all exhibits to Form 10-K, as set forth in
item 601 of Regulation S-K are not applicable.
Page Number or
Exhibit Incorporated by
Number Description Reference
4.1 Agreement of Limited Partnership *
4.2 Subscription Agreement **
4.3 Certificate of Limited Partnership and ***
Agreement of Limited Partnership dated
April 8, 1988
4.4 First Amended and Restated Certificate ****
of Limited Partnership and Agreement
of Limited Partnership dated June 22,
1988
10.1 Escrow Agreement ***
12.0 First Amendment to Agreement of Limited
Partnership *****
27.1 Financial Data Schedule
* Included as Exhibit A to Amendment No. 1 to Form S-1,
Registration Statement No. 0-19939 filed with the Securities
and Exchange Commission on June 23, 1988.
** Included as Exhibit C to Amendment No. 1 to Form S-1 to
Registration Statement No. 0-19939 filed with the Securities and
Exchange Commission on June 23, 1988.
*** Included with the Exhibit Volume to Form S-1, Registration
Statement No. 0-19939 filed with the Securities and Exchange
Commission on April 15, 1988.
**** Included with the Exhibit Volume to Amendment No. 1 to Form S-1,
Registration Statement No. 0-19939 filed with the Securities and
Exchange Commission on June 23, 1988.
***** Included in Consent Statement filed on August 3, 1994.
(b) Reports on Form 8-K: There were no reports filed during the
fourth quarter of 1997.
Signatures
Pursuant to the requirements of Section 13 or 15(d) 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:
\s\ J. Frank Keohane, President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the dates indicated.
By its General Partner,
CSA Lease Funds, Inc.
Date:
\s\ J. Frank Keohane
President & Director
Principal Executive Officer
Date:
\s\ Christopher R. Guiod
Senior Vice President
Finance and Administration
Date:
\s\ Richard P. Timmons
Controller
Principal Accounting and
Finance Officer