Silver Screen Management Services, Inc.
Chelsea Piers-Pier 62
Suite 300
New York, NY 10011
(212) 336-6700
Recorded News Update:
(800) 444-SILV


                                SILVER SCREEN IV

                                      Third

                                     Quarter

                                     Report



                               September 30, 1996



C 1996 Silver Screen Management Services, Inc.





                                       8
<PAGE>


D E A R   L I M I T E D    P A R T N E R:

     The 1996 third quarter cash  distribution  totals $27.2  million,  bringing
total distributions since the Partnership's inception in 1988 to $578 million.

     Third quarter  revenue was  generated  principally  from Revenue  Shortfall
Payments from Buena Vista for "The Doctor," "V.I.  Warshawski,"  "True Identity"
and "Deceived." Our three animated films,  "The Little Mermaid," "Beauty and the
Beast" and "The Rescuers Down Under",  also  produced  Partnership  revenue this
quarter from sales of film-related merchandise,  foreign pay television, and the
foreign home video market, respectively.

     Partnership  revenue in the future is expected to be generated  from the 33
films in the portfolio as they  continue to travel  through the U.S. and foreign
television markets, from the only remaining Revenue Shortfall Payment ("Blame It
on the  Bellboy"),  and from the Disney  buyout of the Silver  Screen  IV-Disney
Joint Venture.

     As you may be aware,  a number of private  investment  groups have sent out
correspondence  relating to a tender offer for units in Silver  Screen  Partners
IV. These tender offers are NOT associated  with the Disney  buyout,  and Silver
Screen  IV is NOT  affiliated  in any  way  with  these  firms.  If you  are not
interested in selling your units, no action by you is required.

     The 1996 Annual Report and tax  information  will be mailed to you by March
15. If you need any  assistance  in the  meantime,  please  contact our Investor
Relations  Department at our new telephone number and address listed on the back
of this report.

Sincerely,




/s/ Roland W. Betts                     /s/ Tom A. Bernstein
-------------------                     ------------------------
Roland W. Betts                         Tom A. Bernstein
President                               Executive Vice President






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<PAGE>


B A L A N C E   S H E E T S
(Unaudited)

<TABLE>
<CAPTION>

                                                        Sept. 30, 1996    Dec. 31, 1995
                                                        --------------    -------------
<S>                                                       <C>              <C>
ASSETS

Current assets:
Cash ................................................     $     51,760     $    392,505
Temporary investments (at cost plus accrued interest,
  which approximates market) (Note 2) ...............       54,870,499       42,422,608
                                                          ------------     ------------

Total current assets ................................       54,922,259       42,815,113
Investment in Joint Venture (Note 3) ................       74,450,915       95,691,312
                                                          ------------     ------------

                                                          $129,373,174     $138,506,425
                                                          ============     ============

LIABILITIES AND PARTNERS' EQUITY

Current liabilities:
Due to managing general partner .....................     $     41,793     $     60,728
Overhead fees payable (Note 4) ......................       23,245,371       25,542,750
                                                          ------------     ------------

Total current liabilities ...........................       23,287,164       25,603,478
Other liabilities ...................................             --            100,000
                                                          ------------     ------------

Total liabilities ...................................       23,287,164       25,703,478
                                                          ------------     ------------

Partners' equity:
General partners ....................................             --               --
Limited partners ....................................      106,086,010      112,802,947
                                                          ------------     ------------

Total partners' equity ..............................      106,086,010      112,802,947
                                                          ------------     ------------

                                                          $129,373,174     $138,506,425
                                                          ============     ============
</TABLE>

                       See notes to financial statements.





                                       10
<PAGE>


STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
                                          Three Months      Nine Months    Three Months     Nine Months
                                                 Ended            Ended           Ended           Ended
                                        Sept. 30, 1996   Sept. 30, 1996  Sept. 30, 1995  Sept. 30, 1995
                                        --------------   --------------  --------------  --------------
<S>                                      <C>             <C>              <C>              <C>         
REVENUES:
Income from Joint Venture (Note 3) .     $ 24,445,771    $ 76,425,463     $    330,902     $  7,456,008
Interest income ....................          794,533       2,147,965          633,755        1,958,454
                                         ------------    ------------     ------------     ------------
                                        
                                           25,240,304      78,573,428          964,657        9,414,462
                                        
COSTS AND EXPENSES:                     
General and administrative expenses           780,405       2,477,084          974,408        3,071,088
                                         ------------    ------------     ------------     ------------
                                        
Income (loss) before tax ...........       24,459,899      76,096,344           (9,751)       6,343,374
Unincorporated business tax ........          995,100         995,100             --               --
                                         ------------    ------------     ------------     ------------
                                        
Net income (loss) ..................     $ 23,464,799    $ 75,101,244     $     (9,751)    $  6,343,374
                                         ============    ============     ============     ============
                                        
NET INCOME (LOSS) ALLOCATED TO:         
General partners ...................     $  2,346,480    $  2,862,844     $        (98)    $     63,434
Limited partners ...................       21,118,319      72,238,400           (9,653)       6,279,940
                                         ------------    ------------     ------------     ------------
                                        
                                         $ 23,464,799    $ 75,101,244     $     (9,751)    $  6,343,374
                                         ============    ============     ============     ============
                                        
Net income (loss) per a $500 limited    
  partnership unit (based on 800,000    
  units outstanding) ...............     $      26.40    $      90.30     $      (0.01)    $       7.85
                                         ============    ============     ============     ============
                                        
</TABLE>                               

                       See notes to financial statements.



S T A T E M E N T S   OF   P A R T N E R S '   E Q U I T Y
(Unaudited)  
<TABLE>
<CAPTION>
                                                                                                 Year Ended December 31, 1995
                                                                                         and Nine Months Ended Sept. 30, 1996
                                                                     ========================================================
                                                                     General Partners    Limited Partners               Total
                                                                     ----------------    ----------------               -----
                                                                                                                 
<S>                                                                  <C>                  <C>                    <C>          
Balance, January 1, 1995 ..........................................  $        --          $ 165,350,987          $ 165,350,987
Net income, 1995 ..................................................         80,580            7,977,440              8,058,020
Distributions, 1995 ...............................................       (606,060)         (60,000,000)           (60,606,060)
Allocation under Treasury Regulation Section 1.704-1(b) ...........        525,480             (525,480)                  --
                                                                     -------------        -------------          -------------
                                                                                                             
Balance, December 31, 1995 ........................................           --            112,802,947            112,802,947
NET INCOME, NINE MONTHS 1996 ......................................      2,862,844           72,238,400             75,101,244
DISTRIBUTIONS DURING NINE MONTHS 1996 .............................     (3,818,181)         (78,000,000)           (81,818,181)
ALLOCATION UNDER TREASURY REGULATION SECTION 1.704-1(b) ...........        955,337             (955,337)                  --
                                                                     -------------        -------------          -------------
                                                                                                          
                                                                     $        --          $ 106,086,010          $ 106,086,010
                                                                     =============        =============          =============
</TABLE>

                       See notes to financial statements.


                                       11
<PAGE>


S T A T E M E N T S   O F   C A S H   F L O W S
(Unaudited)
<TABLE>
<CAPTION>
                                                       Nine Months Ended   Nine Months Ended
                                                          Sept. 30, 1996      Sept. 30, 1995
                                                       ----------------   ----------------
<S>                                                        <C>                 <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income .............................................   $ 75,101,244        $  6,343,374
Adjustments to reconcile net income to                                      
  net cash provided by operating activities:                                
  (Increase) decrease in accrued interest receivable ...       (118,295)            266,966
  Charge on overhead fees payable ......................      1,702,621           1,980,574
Net change in operating assets and liabilities:                             
  (Decrease) increase in due to managing general partner        (18,935)             50,464
  Decrease in other liabilities ........................       (100,000)               --
                                                           ------------        ------------
                                                                            
Net cash provided by operating activities ..............     76,566,635           8,641,378
                                                           ------------        ------------
                                                                            
CASH FLOWS FROM INVESTING ACTIVITIES:                                       
Investments in Joint Venture ...........................           --               (78,566)
Distributions received from Joint Venture                                   
  in excess of equity in income ........................           --            24,012,564
Decrease in investment in Joint Venture ................     21,240,397                --
(Purchase) sale of temporary investments, net ..........    (12,329,596)         16,458,664
                                                           ------------        ------------
                                                                            
Net cash provided by investing activities ..............      8,910,801          40,392,662
                                                           ------------        ------------
                                                                            
CASH FLOWS FROM FINANCING ACTIVITIES:                                       
Distributions to partners ..............................    (81,818,181)        (48,484,848)
Decrease in overhead fee payable .......................     (4,000,000)         (3,540,691)
                                                           ------------        ------------
                                                                            
Net cash used in financing activities ..................    (85,818,181)        (52,025,539)
                                                           ------------        ------------
                                                                            
Net decrease in cash ...................................       (340,745)         (2,991,499)
Cash, beginning of year ................................        392,505           3,279,252
                                                           ------------        ------------
                                                                            
Cash at end of nine months .............................   $     51,760        $    287,753
                                                           ============        ============
</TABLE>

                                                                         
                       See notes to financial statements.






                                       12
<PAGE>


N O T E S    T O    F I N A N C I A L    S T A T E M E N T S



1.   PARTNERSHIP  PROCEEDS

The Partnership  Agreement  provides that all profits,  losses and distributable
cash  ("Proceeds"),  are  allocated  99% to the limited  partners  and 1% to the
general partners until the Partnership has satisfied certain tests.  Thereafter,
all  Proceeds  will be  allocated  90% to the  limited  partners  and 10% to the
general  partners.  These tests were  satisfied  in the second  quarter of 1996.
Therefore, all proceeds beginning with the third quarter have been allocated 90%
to the limited partners and 10% to the general partners.  After additional tests
have been satisfied,  Proceeds will be allocated 80% to the limited partners and
20% to the general  partners.  Cash generated by net gain from sale, as defined,
will be allocated 85% to the limited partners and 15% to the general partners.


2.   TEMPORARY INVESTMENTS

Temporary investments represent investments in commercial paper.


3.   INVESTMENT IN JOINT VENTURE

The investment in the Joint Venture was accounted for using the equity method of
accounting.  Under the equity method,  the investment was initially  recorded at
cost, and was thereafter  increased by additional  investments,  adjusted by the
Partnership's  share of the Joint Venture's results of operations and reduced by
distributions  received from the Joint Venture.  The Joint Venture's fiscal year
ends  September  30, while the  Partnership's  fiscal year ends December 31. The
investment in the Joint Venture on January 1, 1996 totaled $95,691,312.

The Partnership  entered into a Letter  Agreement (the "Buyout  Agreement") with
Disney dated  September 11, 1995  providing for the sale to Disney of all of the
Partnership's  interest in the Joint Venture.  The Buyout Agreement provides for
the payment of the purchase price of  $330,000,000,  in cash (subject to certain
adjustments with respect to revenues  received from the exploitation of animated
films).  Closing  is  scheduled  to  occur  on  November  30,  1998  subject  to
satisfaction of certain customary conditions. In addition to the purchase price,
the Buyout  Agreement  provides  that Buena Vista  Pictures  Distribution,  Inc.
("BV") will continue to account for and make payments to the Joint  Venture,  as
required by the Distribution  Agreement for all revenues  received by BV through
April 30, 1998.

As a result of the Buyout Agreement, the Partnership is using the cost method of
accounting  starting  January  1,  1996.  Under the cost  method,  distributions
received are recognized as income and investments  will be reduced in proportion
that actual cash received bears to ultimate revenues expected.


4.   OVERHEAD FEES PAYABLE

The  Partnership   Agreement   provides  that  overhead  fees  received  by  the
Partnership for the benefit of the Managing  General Partner ("MGP") will remain
on account with the  Partnership  with the  understanding  that the MGP may draw
from such  account  from time to time,  in order to cover its  actual  operating
expenses not  reimbursed  from other  sources.  Such amounts are included in the
temporary  investments and earn interest which accrues to the  Partnership.  The
fees remaining on account will earn 10% per annum (compounded quarterly) for the
MGP.  The amount  included in general and  administrative  expenses for the nine
months is  $1,702,621.  Any amount  remaining in such account on January 2, 1997
will be paid to the MGP on such date. As of September  30, 1996,  the balance of
such overhead fee account was $23,245,371.


5.   UNINCORPORATED BUSINESS TAX

On September 30, 1996 the Partnership  received an assessment from New York City
regarding  unincorporated  business  tax  covering  all periods  from  inception
through December 31, 1995 of $1,095,100 (including interest). This liability was
paid on that date. The  Unincorporated  Business Tax Expense reflects the excess
of this payment over an amount previously established as a contingency reserve.



                                       13
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