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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 31,1998
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, 1998
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, 1998, 2,725
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 their 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 manufactured by companies
such as Compaq Computer Corporation, Dell Computer Corporation, EMC
Corporation and International Business Machines, Inc. (IBM).
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
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, 1998, substantially all of the remaining equipment in the
Partnership's portfolio was leased under 143 separate leases to 75 lessees.
The lessees providing at least 10% of total revenues during 1998 are as follows:
Siemens Business Communications Systems, Inc. 21%
America Online Inc. 20%
As of December 31, 1998, approximately 14% 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 1998.
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. However, partners
have received offers to purchase their Limited Partnership units from
third parties. In such cases the General Partner has recommended the
partner should consult their Financial Advisor. If the partner were still
intent on selling their units, The General Partner, through its
affiliates CSA Financial Corp. ("CSA"), would be willing to make an offer.
In certain cases, CSA has purchased Partnership units.
b. Approximate Number of Equity Security Holders:
Title of Class Number of Limited Partners
Units of Limited Partnership Interests as of 12/31/98
506,776 2,725
Item 6. Selected Financial Data
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)
1998 1997 1996 1995 1994
Total
Revenues $16,987 $13,488 $17,641 $21,917 $21,735
Net Income 2,671 2,716 1,772 858 2,356
Net Income
per Limited
Partnership
Unit 5.22 5.31 3.46 1.68 4.60
Total Assets 30,692 36,736 25,498 33,734 48,111
Notes Payable 15,204 20,923 7,573 13,804 23,329
Limited Recourse
Notes Payable - - 229 581 757
Cash Distribution
per Limited
Partnership Unit
Outstanding $6.00 $ 7.00 $ 8.00 $ 8.00 $ 8.00
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, 1998, 1997 and 1996 was
$16,031,035, $12,413,441, and $17,428,344, respectively. The increase in
rental income during 1998 was primarily due to the additional leases added
in the second half of 1997 and during 1998 with lessees such as America Online
Inc., Siemens Business Communications Systems, Inc. and Unisys Corporation.
Net income for the years ended December 31, 1998, 1997 and 1996 was $2,670,654,
$2,716,253, and $1,772,216, respectively. The increase in 1998 and 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 a
gain on sale of equipment of $863,210, $865,137, and $108,293 for the years
ended 1998, 1997 and 1996, which gains can be sizable since a portion of this
equipment may be fully depreciated. Depreciation expense for 1998, 1997 and
1996 was $10,967,117, $8,072,215, and $13,095,023, respectively.
Interest income for 1998, 1997 and 1996 was $69,999, $124,960, and $90,473,
respectively. Interest expense was $1,626,363, $1,123,693, and $1,065,689 for
the years ended December 31, 1998, 1997, and 1996, respectively.
Liquidity and Capital Resources
During 1998, the Partnership generated $13,021,294 in cash flow from
operations and $2,237,768 from the sale of equipment. The Partnership utilized
these funds proceeds from notes payable of $5,070,515 and cash on hand to
acquire additional equipment of $7,423,505, reduce outstanding notes payable
by $10,790,020 and make cash distributions of $3,071,370.
The General Partner has put in place a year 2000 ("Y2K) compliance plan and
it is currently in the process of implementation. A review of the company's
computer and communication systems was completed. The implementation was
started in 1998 and is anticipated to be completed by mid-1999. The General
Partner has designated a Y2K implementation and contact person to coordinate
all of the third party compliance documentation. The General Partner has
confirmed that a significant portion of the third party relationships have or
are in the process of completing their individual year 2000 compliance.
As of December 31, 1998, the Partnership had approximately $1,122,000 in
equipment off lease and in storage. This off lease equipment consists
primarily of six (6) IBM 3900 high speed laser printers, one of which was sold
in January 1999 for $195,000. The General Partner expects to remarket the
remaining five (5) of these printers for approximately similar amounts.
The Partnership will continue to invest in select short term leases that
will maximize the total return of the Limited Partners. On February 23, 1999,
the Partnership reached its five year Anniversary Date of Closing. As of that
anniversary date, no additional cash receipts from operations or sale of
equipment can be used for purchase of equipment. However, cash on hand and
cash from the financing of existing leases may be used for purchase of
equipment. The Partnership has approximately $2,300,000 available to invest
in equipment during 1999.
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 56% to 78% 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 return on investment.
Quarterly Financial Data - unaudited
Summarized unaudited quarterly financial data for the years ended
December 31, 1998 and 1997 are as follows:
1998 Quarter Ended: 12/31 9/30 6/30 3/31
Total Revenues $4,423,594 $4,170,840 $4,592,471 $3,800,197
Net Income * 558,218 592,558 1,074,794 445,084
Net Income *
Per Limited
Partnership Unit
Outstanding 1.09 1.16 2.10 .87
Cash Distributions
Per Limited
Partnership Unit
Outstanding 1.50 1.50 1.50 1.50
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
* The fourth quarter of 1998 includes no adjustments to residual values.
In 1997, the Partnership recorded a $74,500 charge to expense for adjustments
to residual values anticipated at that time.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
N/A
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, 1998 and 1997 9
Statements for the Years Ended
December 31, 1998, 1997 and 1996
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, 1998 and
1997, 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, 1998 and 1997, 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 16, 1999
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statements of Financial Position as of
December 31, 1998 and 1997
1998 1997
Assets
Cash and cash equivalents $ 560,193 $ 1,746,766
Rentals receivable 391,628 559,640
Value added tax receivable - 3,028
Accounts receivable-affiliates 524,059 292,804
Other receivable 218,343 9,290
Rental equipment, at cost 59,956,146 59,318,040
Less accumulated depreciation (30,958,816) (25,193,487)
Net rental equipment 28,997,330 34,124,553
Total assets $30,691,553 $36,736,081
Liabilities and Partners' Capital
Accrued management fees $ 127,500 $ 103,996
Accrued interest expense 32,965 52,260
Accounts payable 24,745 43,058
Deferred income 132,686 42,889
Notes payable 15,203,836 20,923,341
Total liabilities 15,521,732 21,165,544
Partners' capital:
General Partner:
Capital contribution 1,000 1,000
Cumulative net income 38,662 11,955
Cumulative cash distributions (354,134) (323,420)
(314,472) (310,465)
Limited Partners (506,776 units):
Capital contributions net of
offering costs 46,201,039 46,201,039
Cumulative net income 3,827,366 1,183,419
Cumulative cash distributions (34,544,112) (31,503,456)
15,484,293 15,881,002
Total partners' capital 15,169,821 15,570,537
Total liabilities and
partners' capital 30,691,553 $36,736,081
See accompanying notes to financial statements.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statements of Operations
for the years ended December 31, 1998, 1997 and 1996
1998 1997 1996
Revenue:
Rental income $16,031,035 $12,413,441 $17,428,344
Interest income 69,999 124,960 90,473
Gain on sale of
equipment 863,210 865,137 108,293
Net gain on foreign
currency transactions 22,858 83,999 13,884
Total revenue 16,987,102 13,487,537 17,640,994
Expenses:
Depreciation and
amortization 10,967,117 8,072,215 13,095,023
Interest 1,626,363 1,123,693 1,065,689
Management fee 1,456,914 1,288,394 1,399,993
General and
administrative 266,054 286,982 308,073
Total expenses 14,316,448 10,771,284 15,868,778
Net income $ 2,670,654 $ 2,716,253 $ 1,772,216
Income allocation:
General Partner $ 26,707 $ 27,163 $ 17,722
Limited Partners 2,643,947 2,689,090 1,754,494
$2,670,654 $ 2,716,253 $ 1,772,216
Net income per
Limited Partnership Unit $ 5.22 $ 5.31 $ 3.46
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, 1998, 1997 and 1996
1998 1997 1996
Cash flows from operations:
Cash received from rental
of equipment $16,314,730 $13,073,527 $16,783,224
Cash paid for operating and
management expenses (1,717,777) ( 1,511,339) (1,703,797)
Interest paid (1,645,658) ( 1,141,088) (1,109,596)
Interest received 69,999 124,960 90,473
Net cash from operations 13,021,294 10,546,060 14,060,304
Cash flows from investments:
Value added tax deposits - 77,483 9,402
Purchase of equipment (7,423,505) (24,487,895) (13,050,318)
Sale of equipment 2,237,768 5,793,771 2,994,079
Net cash used for
investments (5,185,737) (18,616,641) (10,046,837)
Cash flows from financing:
A/P equipment purchases - - (84,691)
Advances (to) from
affiliates (231,255) (908,343) 1,142,250
Proceeds from notes payable 5,070,515 19,876,925 4,014,939
Repayment of notes payable (10,790,020) (6,755,179) (10,598,644)
Payment of cash
distributions (3,071,370) (3,583,264) (4,095,160)
Net cash (used for)
provided by financing (9,022,130) 8,630,139 (9,621,306)
Net change in cash and
cash equivalents (1,186,573) 559,558 (5,607,839)
Cash and cash equivalents
at beginning of year 1,746,766 1,187,208 6,795,047
Cash and cash equivalents
at end of year $ 560,193 $ 1,746,766 $ 1,187,208
See accompanying notes to financial statements.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Statement of Changes in Partners' Capital (Deficit)
For years ended December 31, 1998, 1997, and 1996
Limited General
Partners Partner Total
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
Net income 2,643,947 26,707 2,670,654
Cash distributions (3,040,656) ( 30,714) (3,071,370)
Balance at December 31, 1998 $15,484,293 $ (314,472) $15,169,821
See accompanying notes to financial statements
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
December 31, 1998
(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, 1998, 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. In connection
with this review, there was no residual values adjustments in 1998. In the
years ended December 31, 1997 and 1996, the Partnership recorded additional
charges of $74,500 and $300,000, 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 1998,
1997 and 1996 was $1,271,389, ($7,349,952), and $1,628,070, respectively. The
differences between Partnership taxable income and book income are primarily
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
due to the difference between tax and book depreciation methods and the related
differences in the gain or loss on sales of equipment.
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. On February 23, 1998, the Partnership reached its five year
Anniversary Date of Closing. As of that anniversary date, no additional cash
receipts from operations or sale of equipment can be used for the purchase of
equipment. However, cash on hand and cash from the financing of existing
leases may be used for purchase of equipment. The Partnership has
approximately $2,300,000 available to invest in equipment during 1999.
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, 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
December 31, 1998 $59,318,040 $ 7,423,505 $ 6,785,399 $59,956,146
Accumulated depreciation for
the years ended:
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
December 31, 1998 $25,193,487 $10,967,117 $ 5,201,788 $30,958,816
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
(4) Leases
As of December 31, 1998, substantially all of the Partnership's equipment was
leased under 143 separate leases to 75 lessees. Approximately 14% of the
Partnership's equipment portfolio (based on cost) has been leased outside the
United States. Two lessees represented approximately 41% (21% and 20%,
respectively) of the Partnership's revenues in 1998 as compared to two lessees
representing 28% (15% and 13%, respectively) in 1997 and two lessees
representing 35% (20% and 15%, respectively) in 1996.
Minimum annual lease rentals scheduled to be received under existing
noncancellable operating leases are as follows:
Year Amount
1999 $11,990,653
2000 6,908,804
2001 1,693,163
$20,592,620
(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 $38,349,453.
Annual maturities of notes payable at December 31, 1998, are as follows:
Year Amount
1999 $ 8,931,367
2000 4,853,173
2001 1,419,296
$15,203,836
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.
(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 1998, 1997
and 1996 are as follows:
1998 1997 1996
Equipment acquisition fees $ - $ - $1,028,920
Management fee 1,456,914 1,288,394 1,399,993
Reimbursable operating
expenses 172,879 182,862 169,016
$1,629,793 $1,471,256 $2,597,929
(8) Net Cash Provided from Operations
The reconciliation of net income to net cash from operations for 1998,
1997 and 1996 is as follows:
1998 1997 1996
Net Income $ 2,670,654 $ 2,716,253 $ 1,772,216
Gain on sale of equipment (863,210) (865,137) (108,293)
Depreciation and
amortization 10,967,117 8,072,215 13,095,023
(Increase) decrease
in receivables 171,040 457,258 (507,459)
Other - 133,090 -
(Decrease) Increase in payables
and deferred income 75,693 32,381 (191,183)
Net cash from operations $13,021,294 $10,546,060 $14,060,304
(9) Net Gain on 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.
CSA INCOME FUND IV LIMITED PARTNERSHIP
Notes to Financial Statements
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 62 Director & President 04/01/88
Richard P. Timmons 44 Controller 03/01/95
Trevor A. Keohane 32 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, 1998.
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 1998.
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:
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:
J. Frank Keohane
President & Director
Principal Executive Officer
Date:
Richard P. Timmons
Controller
Principal Accounting and
Finance Officer