TEXTAINER FINANCIAL SERVICES CORPORATION
650 California Street, 16th Floor
San Francisco, CA 94108
May 13, 2003
Securities and Exchange Commission
Washington, DC 20549
Ladies and Gentlemen:
Pursuant to the requirements of the Securities Exchange Act of 1934, we are
submitting herewith for filing on behalf of Textainer Equipment Income Fund IV,
L.P. (the "Partnership") the Partnership's Quarterly Report on Form 10-Q for the
First Quarter ended March 31, 2003.
This filing is being effected by direct transmission to the Commission's EDGAR
System.
Sincerely,
Nadine Forsman
Controller
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
Commission file number 0-21228
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
A California Limited Partnership
(Exact name of Registrant as specified in its charter)
California 94-3147432
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
650 California Street, 16th Floor
San Francisco, CA 94108
(Address of Principal Executive Offices) (ZIP Code)
(415) 434-0551
(Registrant's telephone number, including area code)
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 for 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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 2003
Table of Contents
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Page
Item 1. Financial Statements (unaudited)
Balance Sheets - March 31, 2003
and December 31, 2002............................................................................. 3
Statements of Operations for the three months
ended March 31, 2003 and 2002..................................................................... 4
Statements of Partners' Capital for the three months
ended March 31, 2003 and 2002..................................................................... 5
Statements of Cash Flows for the three months
ended March 31, 2003 and 2002..................................................................... 6
Notes to Financial Statements .................................................................... 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................................................... 14
Item 3. Quantitative and Qualitative Disclosures about Market Risk........................................ 21
Item 4. Controls and Procedures........................................................................... 21
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Balance Sheets
March 31, 2003 and December 31, 2002
(Amounts in thousands)
(unaudited)
- ------------------------------------------------------------------------------------------------------------------
2003 2002
---------------- ----------------
Assets
Container rental equipment, net of accumulated
depreciation of $52,800 (2002: $51,768) (note 4) $ 40,491 $ 41,630
Cash 2,623 2,339
Accounts receivable, net of allowance for doubtful
accounts of $135 (2002: $164) 3,144 3,107
Due from affiliates, net (note 2) 293 84
Prepaid expenses 13 40
---------------- ----------------
$ 46,564 $ 47,200
================ ================
Liabilities and Partners' Capital
Liabilities:
Accounts payable $ 340 $ 296
Accrued liabilities 380 430
Accrued damage protection plan costs 248 246
Warranty claims 216 232
Accrued recovery costs 190 184
Deferred quarterly distributions 85 83
Container purchases payable 1,072 -
---------------- ----------------
Total liabilities 2,531 1,471
---------------- ----------------
Partners' capital:
General partners - -
Limited partners 44,033 45,729
---------------- ----------------
Total partners' capital 44,033 45,729
---------------- ----------------
$ 46,564 $ 47,200
================ ================
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Statements of Operations
For the three months ended March 31, 2003 and 2002
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
- ---------------------------------------------------------------------------------------------------------
2003 2002
--------------- ---------------
Rental income $ 3,406 $ 2,642
--------------- ---------------
Costs and expenses:
Direct container expenses 728 1,046
Bad debt expense 11 7
Depreciation (note 4) 1,937 1,550
Write-down of containers (note 4) 135 934
Professional fees 8 12
Management fees to affiliates (note 2) 301 257
General and administrative costs to affiliates (note 2) 164 176
Other general and administrative costs 33 74
(Gain) loss on sale of containers (note 4) (53) 684
--------------- ---------------
3,264 4,740
--------------- ---------------
Income (loss) from operations 142 (2,098)
--------------- ---------------
Interest income 6 9
--------------- ---------------
Net income (loss) $ 148 $ (2,089)
=============== ===============
Allocation of net income (loss) (note 2):
General partners $ 17 $ 18
Limited partners 131 (2,107)
--------------- ---------------
$ 148 $ (2,089)
=============== ===============
Limited partners' per unit share
of net income (loss) $ 0.02 $ (0.31)
=============== ===============
Limited partners' per unit share
of distributions $ 0.25 $ 0.25
=============== ===============
Weighted average number of limited
partnership units outstanding 6,513,955 6,708,666
=============== ===============
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Statements of Partners' Capital
For the three months ended March 31, 2003 and 2002
(Amounts in thousands)
(unaudited)
- -------------------------------------------------------------------------------------------------------------------------
Partners' Capital
--------------------------------------------------------
General Limited Total
-------------- -------------- --------------
Balances at January 1, 2002 $ - $ 57,145 $ 57,145
Distributions (18) (1,678) (1,696)
Redemptions (note 5) - (36) (36)
Net earnings (loss) 18 (2,107) (2,089)
-------------- -------------- --------------
Balances at March 31, 2002 $ - $ 53,324 $ 53,324
============== ============== ==============
Balances at January 1, 2003 $ - $ 45,729 $ 45,729
Distributions (17) (1,631) (1,648)
Redemptions (note 5) - (196) (196)
Net earnings 17 131 148
-------------- -------------- --------------
Balances at March 31, 2003 $ - $ 44,033 $ 44,033
============== ============== ==============
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Statements of Cash Flows
For the three months ended March 31, 2003 and 2002
(Amounts in thousands)
(unaudited)
- -------------------------------------------------------------------------------------------------------------------------
2003 2002
---------------- ----------------
Cash flows from operating activities:
Net earnings (loss) $ 148 $ (2,089)
Adjustments to reconcile net earnings (loss) to
net cash provided by operating activities:
Depreciation (note 4) 1,937 1,550
Write-down of containers (note 4) 135 934
(Decrease) increase in allowance for doubtful accounts (29) 12
(Gain) loss on sale of containers (53) 684
(Increase) decrease in assets:
Accounts receivable (6) 359
Due from affiliates, net (348) 206
Prepaid expenses 27 6
(Decrease) increase in liabilities:
Accounts payable and accrued liabilities (6) (21)
Accrued recovery costs 6 (33)
Accrued damage protection plan costs 2 (6)
Warranty claims (16) (16)
---------------- ----------------
Net cash provided by operating activities 1,797 1,586
---------------- ----------------
Cash flows from investing activities:
Proceeds from sale of containers 467 1,193
Container purchases (139) (27)
---------------- ----------------
Net cash provided by investing activities 328 1,166
---------------- ----------------
Cash flows from financing activities:
Redemptions of limited partnership units (196) (36)
Distributions to partners (1,645) (1,697)
---------------- ----------------
Net cash used in financing activities (1,841) (1,733)
---------------- ----------------
Net increase in cash 284 1,019
Cash at beginning of period 2,339 1,841
---------------- ----------------
Cash at end of period $ 2,623 $ 2,860
================ ================
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Statements Of Cash Flows--Continued
For the three months ended March 31, 2003 and 2002
(Amounts in thousands)
(unaudited)
- --------------------------------------------------------------------------------
Supplemental Disclosures:
Supplemental schedule of non-cash investing and financing activities:
The following table summarizes the amounts of container purchases, distributions
to partners, and proceeds from sale of containers which had not been paid or
received as of March 31, 2003 and 2002, and December 31, 2002 and 2001,
resulting in differences in amounts recorded and amounts of cash disbursed or
received by the Partnership, as shown in the Statements of Cash Flows for the
three-month periods ended March 31, 2003 and 2002.
Mar. 31 Dec. 31 Mar. 31 Dec. 31
2003 2002 2002 2001
----------- ----------- ----------- -----------
Container purchases included in:
Due to affiliates.............................. $ 60 $ - $ - $ 27
Container purchases payable.................... 1,072 - - -
Distributions to partners included in:
Due to affiliates.............................. 6 5 6 7
Deferred quarterly distributions............... 85 83 81 81
Proceeds from sale of containers included in:
Due from affiliates............................ 240 318 733 767
The following table summarizes the amounts of container purchases, distributions
to partners and proceeds from sale of containers recorded by the Partnership and
the amounts paid or received as shown in the Statements of Cash Flows for the
three-month periods ended March 31, 2003 and 2002.
2003 2002
---- ----
Container purchases recorded.................................... $1,271 $ -
Container purchases paid........................................ 139 27
Distributions to partners declared.............................. 1,648 1,696
Distributions to partners paid.................................. 1,645 1,697
Proceeds from sale of containers recorded....................... 389 1,159
Proceeds from sale of containers received....................... 467 1,193
The Partnership has entered into direct finance leases, resulting in the
transfer of containers from container rental equipment to accounts receivable.
The carrying values of containers transferred during the three- month periods
ended March 31, 2003 and 2002 were $2 and $85, respectively.
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
(a California Limited Partnership)
Notes To Financial Statements
For the three months ended March 31, 2003 and 2002
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
- --------------------------------------------------------------------------------
Note 1. General
Textainer Equipment Income Fund IV, L.P. (the Partnership), a California
limited partnership with a maximum life of 20 years, was formed in 1991.
The Partnership owns a fleet of intermodal marine cargo containers, which
are leased to international shipping lines.
The accompanying interim comparative financial statements have not been
audited by an independent public accountant. However, all adjustments
(which were only normal and recurring adjustments) which are, in the
opinion of management, necessary to fairly present the financial position
of the Partnership as of March 31, 2003 and December 31, 2002 and the
results of its operations, changes in partners' capital and cash flows for
the three-month periods ended March 31, 2003 and 2002, have been made.
The financial information presented herein should be read in conjunction
with the audited financial statements and other accompanying notes included
in the Partnership's annual audited financial statements as of and for the
year ended December 31, 2002, in the Annual Report filed on Form 10-K.
Certain estimates and assumptions were made by the Partnership's management
that affect the reported amounts of assets and liabilities and disclosures
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the
reporting period. The Partnership's management evaluates its estimates on
an on-going basis, including those related to the container rental
equipment, accounts receivable and accruals.
These estimates are based on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments regarding the carrying
values of assets and liabilities. Actual results could differ from those
estimates under different assumptions or conditions.
The Partnership's management believes the following critical accounting
policies affect its more significant judgments and estimates used in the
preparation of its financial statements.
The Partnership maintains allowances for doubtful accounts for estimated
losses resulting from the inability of its lessees to make required
payments. These allowances are based on management's current assessment of
the financial condition of the Partnership's lessees and their ability to
make their required payments. If the financial condition of the
Partnership's lessees were to deteriorate, resulting in an impairment of
their ability to make payments, additional allowances may be required.
The Partnership depreciates its container rental equipment based on certain
estimates related to the container's useful life and salvage value. These
estimates are based upon assumptions about future demand for leased
containers and the estimated sales price at the end of the container's
useful life. The Partnership will evaluate the estimated residual values
and remaining estimated useful lives on an on-going basis and will revise
its estimates as needed. As a result, depreciation expense may fluctuate in
future periods based on fluctuations in these estimates.
Additionally, the recoverability of the recorded amounts of containers to
be held for continued use and identified for sale in the ordinary course of
business are evaluated to ensure that containers held for continued use are
not impaired and that containers identified for sale are recorded at
amounts that do not exceed the estimated fair value of the containers.
Containers to be held for continued use are considered impaired and are
written down to estimated fair value when the estimated future undiscounted
cash flows are less than the recorded values. Containers identified for
sale are written down to estimated fair value when the recorded value
exceeds the estimated fair value. In determining the estimated future
undiscounted cash flows and fair value of containers, assumptions are made
regarding future demand and market conditions for leased containers and the
sales prices for used containers. If actual market conditions are less
favorable than those projected or if actual sales prices are lower than
those estimated by the Partnership, additional write-downs may be required
and/or losses may be realized.
In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated
With Exit or Disposal Activities". SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal
activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3
"Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." This Statement requires that a liability for a cost
associated with an exit or disposal activity be recognized when the
liability is incurred. The Partnership adopted SFAS No. 146 on January 1,
2003 and there was no material impact on the Partnership's financial
condition, operating results or cash flow.
Note 2. Transactions with Affiliates
Textainer Financial Services Corporation (TFS) is the managing general
partner of the Partnership. TFS is a wholly-owned subsidiary of Textainer
Capital Corporation (TCC). Textainer Equipment Management Limited (TEM) and
Textainer Limited (TL) are associate general partners of the Partnership.
The managing general partner and the associate general partners are
collectively referred to as the General Partners and are commonly owned by
Textainer Group Holdings Limited (TGH). The General Partners also act in
this capacity for other limited partnerships. The General Partners manage
and control the affairs of the Partnership.
In accordance with the Partnership Agreement, sections 3.08 through 3.12,
net earnings or losses and distributions are generally allocated 1% to the
General Partners and 99% to the Limited Partners. If the allocation of
distributions exceeds the allocation of net earnings and creates a deficit
in a General Partner's capital account, the Partnership Agreement provides
for a special allocation of gross income equal to the amount of the deficit
to be made to the General Partners.
As part of the operation of the Partnership, the Partnership is to pay to
the General Partners an acquisition fee, an equipment management fee, an
incentive management fee, and an equipment liquidation fee. These fees are
for various services provided in connection with the administration and
management of the Partnership. During the three-month period ended March
31, 2003, the Partnership capitalized $60 of acquisition fees. There were
no container acquisition fees capitalized during the three-month period
ended March 31, 2002. The Partnership incurred $64 and $71 of incentive
management fees during the three-month periods ended March 31, 2003 and
2002, respectively. There were no equipment liquidation fees incurred
during these periods.
The Partnership's container fleet is managed by TEM. In its role as
manager, TEM has authority to acquire, hold, manage, lease, sell and
dispose of the Partnership's containers. TEM holds, for the payment of
direct operating expenses, a reserve of cash that has been collected from
leasing operations; such cash is included in due from affiliates, net at
March 31, 2003 and December 31, 2002.
Subject to certain reductions, TEM receives a monthly equipment management
fee equal to 7% of gross revenues attributable to operating leases and 2%
of gross revenues attributable to full payout net leases. These fees
totaled $237 and $186 for the three-month periods ended March 31, 2003 and
2002, respectively.
Certain indirect general and administrative costs such as salaries,
employee benefits, taxes and insurance are incurred in performing
administrative services necessary to the operation of the Partnership.
These costs are incurred and paid by TFS and TEM. General and
administrative costs allocated to the Partnership during the three-month
periods ended March 31, 2003 and 2002 were as follows:
2003 2002
---- ----
Salaries $ 88 $ 96
Other 76 80
--- ---
Total general and
administrative costs $164 $176
=== ===
TEM allocates these general and administrative costs based on the ratio of
the Partnership's interest in the managed containers to the total container
fleet managed by TEM during the period. TFS allocates these costs either
based on the ratio of the Partnership's investors to the total number of
investors of all limited partnerships managed by TFS or equally among all
the limited partnerships managed by TFS. The General Partners allocated the
following general and administrative costs to the Partnership during the
three-month periods ended March 31, 2003 and 2002:
2003 2002
---- ----
TEM $143 $149
TFS 21 27
--- ---
Total general and
administrative costs $164 $176
=== ===
The General Partners may acquire containers in their own name and hold
title on a temporary basis for the purpose of facilitating the acquisition
of such containers for the Partnership. The containers may then be resold
to the Partnership on an all-cash basis at a price equal to the actual
cost, as defined in the Partnership Agreement. One or more General Partners
may also arrange for the purchase of containers in its or their names, and
the Partnership may then take title to the containers by paying the seller
directly. In addition, the General Partners are entitled to an acquisition
fee for containers acquired by the Partnership under any of these
arrangements.
At March 31, 2003 and December 31, 2002, due from affiliates, net was
comprised of:
2003 2002
---- ----
Due from affiliates:
Due from TEM...................... $374 $174
--- ---
Due to affiliates:
Due to TFS........................ 62 71
Due to TCC........................ 18 18
Due to TL......................... 1 1
--- ---
81 90
--- ---
Due from affiliates, net $293 $ 84
=== ===
These amounts receivable from and payable to affiliates were incurred in
the ordinary course of business between the Partnership and its affiliates
and represent timing differences in the accrual and remittance of expenses,
fees and distributions described above and in the accrual and remittance of
net rental revenues and container sales proceeds from TEM.
Note 3. Lease Rental Income
Leasing income arises principally from the renting of containers to various
international shipping lines. Revenue is recorded when earned according to
the terms of the container rental contracts. These contracts are typically
for terms of five years or less. The following is the lease mix of the
on-lease containers (in units) at March 31, 2003 and 2002:
2003 2002
---- ----
On-lease under master leases 16,050 11,119
On-lease under long-term leases 6,899 5,078
------ ------
Total on-lease containers 22,949 16,197
====== ======
Under master lease agreements, the lessee is not committed to lease a
minimum number of containers from the Partnership during the lease term and
may generally return any portion or all the containers to the Partnership
at any time, subject to certain restrictions in the lease agreement. Under
long-term lease agreements, containers are usually leased from the
Partnership for periods of between three to five years. Such leases are
generally cancelable with a penalty at the end of each twelve-month period.
Under direct finance leases, the containers are usually leased from the
Partnership for the remainder of the container's useful life with a
purchase option at the end of the lease term.
The remaining containers are off-lease and are being stored primarily at a
large number of storage depots. At March 31, 2003 and 2002, the
Partnership's off lease containers were located in the following locations:
2003 2002
---- ----
Americas 2,604 3,230
Europe 1,195 1,857
Asia 1,457 8,435
Other 150 192
----- ------
Total off-lease containers 5,406 13,714
===== ======
At March 31, 2003 approximately 5% of the Partnership's off-lease
containers had been specifically identified as for sale and are carried at
lower of cost or estimated disposal proceeds.
Note 4. Container Rental Equipment
Effective July 1, 2002, the Partnership revised its estimate for container
salvage value from a percentage of equipment cost to an estimated dollar
residual value. The effect of this change for the three-month period ended
March 31, 2003 was an increase to depreciation expense of $572. The
Partnership will evaluate the estimated residual values and remaining
estimated useful lives on an on-going basis and will revise its estimates
as needed. As a result, depreciation expense may fluctuate in future
periods based on fluctuations in these estimates.
New container prices steadily declined from 1995 through 1999 and have
remained low through the beginning of 2003. As a result, the cost of new
containers purchased in recent years is significantly less than the average
cost of containers purchased in prior years. The Partnership evaluated the
recoverability of the recorded amount of container rental equipment at
March 31, 2003 and 2002 for containers to be held for continued use and
determined that a reduction to the carrying value of these containers was
not required. The Partnership also evaluated the recoverability of the
recorded amount of containers identified for sale in the ordinary course of
business and determined that a reduction to the carrying value of some of
these containers was required. The Partnership wrote down the value of
these containers to their estimated net realizable value, which was based
on recent sales prices less cost to sell. During the three-month periods
ended March 31, 2003 and 2002, the Partnership recorded write-down expenses
of $135 and $934, respectively, on 182 and 1,069 containers identified as
for sale and requiring a reserve. At March 31, 2003 and 2002, the net book
value of the 281 and 1,295 containers identified as for sale was $256 and
$1,053, respectively.
The Partnership sold 139 previously written down containers for a loss of
$9 during the three-month period ended March 31, 2003 and sold 630
previously written down containers for a loss of $57 during the same period
in 2002. The Partnership incurred losses on the sale of some containers
previously written down as the actual sales prices received on these
containers were lower than the estimates used for the write-downs.
The Partnership also sold containers that had not been written down and
recorded a gain of $62 and a loss of $627 during the three-month periods
ended March 31, 2003 and 2002, respectively.
As more containers are subsequently identified as for sale or if container
sales prices continue to decline, the Partnership may incur additional
write-downs on containers and/or may incur losses on the sale of
containers. The Partnership will continue to evaluate the recoverability of
the recorded amounts of container rental equipment.
Note 5. Redemptions
The following redemptions were consummated by the Partnership during the
three-month periods ended March 31, 2003 and 2002:
Units Average
Redeemed Redemption Price Amount Paid
-------- ---------------- ------------
Total Partnership redemptions as of
December 31, 2001................. 131,937 $9.89 $1,305
Three-month period ended:
March 31, 2002.................... 5,300 $6.79 36
------- -----
Total Partnership redemptions as of
March 31, 2002.................... 137,237 $9.77 $1,341
======= =====
Total Partnership redemptions as of
December 31, 2002................. 295,555 $7.33 $2,165
Three-month period ended:
March 31, 2003.................... 36,393 $5.39 196
------- -----
Total Partnership redemptions as of
March 31, 2003.................... 331,948 $7.11 $2,361
======= =====
The redemption price is fixed by formula in accordance with the Partnership
Agreement.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Amounts in thousands except for unit and per unit amounts)
- --------------------------------------------------------------------------------
The Financial Statements contain information which will assist in evaluating the
financial condition of the Partnership for the three-month periods ended March
31, 2003 and 2002. Please refer to the Financial Statements and Notes thereto in
connection with the following discussion.
Textainer Financial Services Corporation (TFS) is the Managing General Partner
of the Partnership and is a wholly-owned subsidiary of Textainer Capital
Corporation (TCC). Textainer Equipment Management Limited (TEM) and Textainer
Limited (TL) are Associate General Partners of the Partnership. The General
Partners manage and control the affairs of the Partnership.
Liquidity and Capital Resources
From May 1, 1992 until April 30, 1994, the Partnership offered limited
partnership interests to the public. The Partnership received its minimum
subscription amount of $5,000 on June 11, 1992 and on April 30, 1994 the
Partnership had received a total subscription amount of $136,918.
The Partnership invests working capital, cash flow from operations prior to its
distribution to the partners and proceeds from container sales that have not
been used to purchase containers in short-term, liquid investments. Rental
income is the Partnership's principal source of liquidity and provides a major
source of funds for distributions. Rental income is affected by market
conditions for leased containers. Market conditions are discussed more fully in
"Results of Operations." The Partnership's cash is affected by cash provided by
or used in operating, investing and financing activities. These activities are
discussed in detail below.
Limited partners are currently receiving monthly distributions in an annualized
amount equal to 5% of their original investment. During the three-month period
ended March 31, 2003, the Partnership declared cash distributions to limited
partners pertaining to the period from December 2002 through February 2003 in
the amount of $1,631. On a cash basis, as reflected on the Statements of Cash
Flows, after paying redemptions and general partner distributions, $1,584 of
these distributions was from current year operating activities and $47 was a
return of capital. On an accrual basis, as reflected on the Statements of
Partners' Capital, all of these distributions were a return of capital.
From time to time, the Partnership redeems units from limited partners for a
specified redemption value, which is set by formula. Up to 2% of the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded at the Managing General Partner's discretion. All redemptions
are subject to the Managing General Partner's good faith determination that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a corporation, (ii) impair the capital or operations of the Partnership, or
(iii) impair the ability of the Partnership to pay distributions in accordance
with its distribution policy. During the three-month period ended March 31,
2003, the Partnership redeemed 36,393 units for a total dollar amount of $196.
The Partnership used cash flow from operations to pay for the redeemed units.
Net cash provided by operating activities for the three-month periods ended
March 31, 2003 and 2002 was $1,797 and $1,586, respectively. The increase of
$211, or 13%, was primarily attributable to the fluctuations in net earnings
(loss), adjusted for non-cash transactions, offset by the fluctuations in due
from affiliates, net and accounts receivable. Net earnings (loss), adjusted for
non-cash transactions, fluctuated primarily due to the increase in rental income
and the decrease in direct container expenses. These fluctuations are discussed
more fully in "Results of Operations." The fluctuations in due from affiliates,
net, resulted from timing differences in the payment of expenses, fees and
distributions and the remittance of net rental revenues and container sales
proceeds, as well as fluctuations in these amounts. Gross accounts receivable
increased $6 during the three-month period ended March 31, 2003. The decrease in
gross accounts receivable of $359 during the three-month period ended March 31,
2002 was primarily due to the decrease in rental income, offset by the increase
in the average collection period of accounts receivable.
At March 31, 2003, the Partnership had no commitments to purchase containers.
For the three-month period ended March 31, 2003 and 2002, net cash provided by
investing activities (the purchase and sale of containers) was $328 and $1,166,
respectively. The decrease of $838 was due to the decrease in proceeds from
container sales and the increase in cash used for container purchases. Cash used
for container purchases increased primarily as the Partnership purchased
containers during the three-month period ended March 31, 2003, whereas there
were no such purchases during the same period in 2002. Proceeds from container
sales decreased primarily due to the Partnership selling fewer containers during
the three-month period ended March 31, 2003 than in the same period in 2002.
This decrease was partially offset by the increase in the average sales price
received on container sales. Although average container sales prices increased
between the periods for the Partnership, in general, average sales prices
received on container sales for other Partnerships managed by TCC continued to
decrease as a result of current market conditions, which have adversely affected
the value of used containers. Until market conditions improve in certain low
demand locations, the Partnership plans to continue selling some of its
containers that are off-lease in these locations rather than incurring the
expense of repositioning them. The number of containers sold, both in low demand
locations and elsewhere, as well as the average sales price, will affect how
much the Partnership can reinvest in new containers.
Consistent with its investment objectives and subject to its distribution
policy, the Partnership intends to continue to reinvest both cash from
operations available for reinvestment and all, or a significant amount of, the
proceeds from container sales in additional containers. Reinvestment is expected
to continue until the Partnership begins its liquidation phase, which is
estimated to begin in 2004. Cash from operations available for reinvestment is
generally equal to cash provided by operating activities, less distributions and
redemptions paid, which are subject to the General Partners' authority to set
these amounts (and modify reserves and working capital), as provided in the
Partnership Agreement. During the years ended December 31, 2002 and 2001 there
was no cash from operations available to reinvest in additional containers. The
amount of sales proceeds will fluctuate based on the number of containers sold
and the sales price received. The Partnership sells containers when (i) a
container reaches the end of its useful life or (ii) an analysis indicates that
the sale is warranted based on existing market conditions and the container's
age, location and condition.
Both cash from operations available for reinvestment and sales proceeds have
been adversely affected by market conditions. These market conditions have
resulted in a slower than anticipated rate of reinvestment. Market conditions
are discussed more fully under "Results of Operations." A slower rate of
reinvestment will, over time, affect the size of the Partnership's container
fleet. Furthermore, even with reinvestment, the Partnership is not likely to be
able to replace all the containers it sells, since new container prices are
usually higher than the average sales price for a used container, and the
majority of cash available for reinvestment is from sales proceeds.
Results of Operations
The Partnership's income from operations, which consists primarily of rental
income less costs and expenses (including container depreciation, direct
container expenses, management fees, and reimbursement of administrative
expenses) was directly related to the size of the container fleet during the
three-month periods ended March 31, 2003 and 2002, as well as certain other
factors as discussed below. The following is a summary of the container fleet
(in units) available for lease during those periods:
2003 2002
---- ----
Beginning container fleet............... 28,024 31,411
Ending container fleet.................. 28,355 29,911
Average container fleet................. 28,190 30,661
The average container fleet decreased 8% from the three-month period ended March
31, 2002 to the comparable period in 2003, primarily due to sales of containers.
Although sales proceeds were used to purchase additional containers, fewer
containers were bought than sold as used container sales prices were lower than
new container prices. The Partnership's primary source of funds for container
purchases is these sales proceeds. The rate of decline in average fleet size may
fluctuate due to timing differences in the purchase and sale of containers and
fluctuations in container sale and purchase prices during each period.
As noted above, when containers are sold, sales proceeds are not likely to be
sufficient to replace all of the containers sold, resulting in the continuing
decline in the average container fleet. This trend is expected to continue.
Other factors related to this trend are discussed above in "Liquidity and
Capital Resources".
Rental income and direct container expenses are also affected by the utilization
of the container fleet, which was 81% and 51% on average during the three-month
periods ended March 31, 2003 and 2002, respectively. The remaining container
fleet is off-lease and is being stored primarily at a large number of storage
depots. At March 31, 2003 and 2002, utilization was 81% and 54%, respectively,
and the Partnership's off-lease containers (in units) were located in the
following locations:
2003 2002
---- ----
Americas 2,604 3,230
Europe 1,195 1,857
Asia 1,457 8,435
Other 150 192
----- ------
Total off-lease containers 5,406 13,714
===== ======
At March 31, 2003 approximately 5% of the Partnership's off-lease containers had
been specifically identified as for sale.
In addition to utilization, rental income is affected by daily rental rates. The
average daily rental rate decreased 11% between the periods. The decrease in the
average rental rate was due to declines in both master and long term lease
rates, which are the two principal types of leases for the Partnership's
containers. The majority of the Partnership's rental income was generated from
leasing of the Partnership's containers under master operating leases, but in
the past several years an increasing percentage of the Partnership's containers
have been on lease under long term leases. At March 31, 2003 and 2002, 30% and
31%, respectively, of the Partnership's on-lease containers were on lease under
long term leases. Long term leases generally have lower rental rates than master
leases because the lessees have contracted to lease the containers for several
years and cannot return the containers prior to the termination date without a
penalty. Fluctuations in rental rates under either type of lease generally will
affect the Partnership's operating results.
The following is a comparative analysis of the results of operations for the
three-month periods ended March 31, 2003 and 2002.
The Partnership's income (loss) from operations for the three-month periods
ended March 31, 2003 and 2002 was $142 and $(2,098), respectively, on rental
income of $3,406 and $2,642, respectively. The increase in rental income of
$764, or 29%, from the three-month period ended March 31, 2002 to the comparable
period in 2003 was attributable to increases in container rental income and
other rental income, which is discussed below. Income from container rentals,
the major component of total revenue, increased $652, or 30%, primarily due to
an increase in the average on-hire utilization of 59%, offset by a decrease in
average rental rates of 11% and average container fleet of 8% between the
periods.
Beginning in March 2002, utilization began to improve and improved steadily
through the end of 2002 due to:
o An increase in export cargo out of Asia
o Prior repositioning of containers to Asia which placed large quantities of
containers in areas of high demand
o Disposal of older containers and fewer purchases of new containers by both
container lessors and shipping lines in 2001 and 2002, resulting in an
overall better-balanced supply of containers
o The labor disagreement that affected U.S. West Coast ports in the third and
part of the fourth quarter had short-term positive effects on demand for
containers as shipping lines were not able to reposition enough containers
to Asia and had to lease more containers to meet their customers' demands
Utilization declined slightly in the first quarter of 2003, which is
traditionally a slow period for container demand. Rental rates also declined
slightly primarily due to low new container prices, low interest rates and low
rates offered by competitors. The General Partners are cautiously optimistic
that current utilization levels can be maintained or improved during the next
several months. However, the General Partners caution that market conditions
could deteriorate again due to global economic and political conditions. Demand
for leased containers could therefore weaken again and result in a decrease in
utilization and further declines in lease rates and container sale prices,
adversely affecting the Partnership's operating results.
Despite the improvement in utilization since early 2002, the Partnership
continues to sell (rather than reposition) some older containers located in low
demand locations. For the number of off-lease containers located in the lower
demand locations in the Americas and Europe, see chart above. The decision to
sell containers is based on the current expectation that the economic benefit of
selling these containers is greater than the estimated economic benefit of
continuing to own these containers. The majority of the containers sold are
older containers. The expected economic benefit of continuing to own these older
containers is significantly less than that of newer containers. This is due to
their shorter remaining marine life, the cost to reposition them, and the
shipping lines' preference for leasing newer containers when they have a choice.
Once the decision was made to sell containers, the Partnership wrote down the
value of these specifically identified containers when the carrying value was
greater than the container's estimated net realizable value, which was based on
recent sales prices less cost of sales. The sale of these containers is
discussed in more detail below.
Other rental income consists of other lease-related items, primarily income from
charges to lessees for dropping off containers in surplus locations less credits
granted to lessees for leasing containers from surplus locations (location
income), income from charges to lessees for handling related to leasing and
returning containers (handling income) and income from charges to lessees for a
Damage Protection Plan (DPP). For the three-month period ended March 31, 2003,
other rental income was $557, an increase of $112 from the equivalent period in
2002. The increase was primarily due to increases in location and DPP income of
$44 and $41. Location income increased primarily due to the increase in charges
to one lessee who required containers to be delivered to specific locations,
offset by the decrease in charges to lessees for dropping off containers in
certain locations. DPP income increased primarily due to an increase in the
number of containers covered under DPP.
Direct container expenses decreased $318, or 30%, from the three-month period
ended March 31, 2002, to the same period in 2003. The decrease was primarily due
to a decrease in storage expense of $516, offset by an increase in repositioning
expense of $183. Storage expense decreased due to the increase in utilization
noted above and the decrease in the average storage cost per container.
Repositioning expense increased due to an increase in the average repositioning
costs due to (i) expensive repositioning moves related to one lessee who
required containers to be delivered to certain locations as discussed above and
(ii) longer, more expensive average repositioning moves.
Bad debt expense was $11 and $7 for the three-month periods ended March 31, 2003
and 2002, respectively. Fluctuations in bad debt expense reflect the required
adjustment to the bad debt reserve and are based on management's then current
estimates of the portion of accounts receivable that may not be collected, and
which will not be covered by insurance. These estimates are based primarily on
management's current assessment of the financial condition of the Partnership's
lessees and their ability to make their required payments. The expenses recorded
during the three-month periods ended March 31, 2002 and 2003 reflect the
additions to bad debt allowance, after deductions had been taken against the
reserve.
Depreciation expense increased $387, or 25%, from the three-month period ended
March 31, 2002 to the comparable period in 2003, primarily due to an increase in
the depreciation rate as a result of changes in estimated salvage values as
discussed below, offset by the decrease in average fleet size noted above.
Effective July 1, 2002, the Partnership revised its estimate for container
salvage value from a percentage of equipment cost to an estimated dollar
residual value. The effect of this change for the three-month period ended March
31, 2003 was an increase to depreciation expense of $572. The Partnership will
evaluate the estimated residual values and remaining estimated useful lives on
an on-going basis and will revise its estimates as needed. As a result,
depreciation expense may fluctuate in future periods based on fluctuations in
these estimates.
New container prices steadily declined from 1995 through 1999 and have remained
low through the beginning of 2003. As a result, the cost of new containers
purchased in recent years is significantly less than the average cost of
containers purchased in prior years. The Partnership evaluated the
recoverability of the recorded amount of container rental equipment at March 31,
2003 and 2002 for containers to be held for continued use and determined that a
reduction to the carrying value of these containers was not required. The
Partnership also evaluated the recoverability of the recorded amount of
containers identified for sale in the ordinary course of business and determined
that a reduction to the carrying value of some of these containers was required.
The Partnership wrote down the value of these containers to their estimated net
realizable value, which was based on recent sales prices less cost to sell. The
containers written down included those located in low demand locations and
identified for sale as discussed above. During the three-month periods ended
March 31, 2003 and 2002, the Partnership recorded write-down expenses of $135
and $934, respectively, on 182 and 1,069 containers identified as for sale and
requiring a reserve. At March 31, 2003 and 2002, the net book value of the 281
and 1,295 containers identified as for sale was $256 and $1,053, respectively.
The Partnership sold 139 previously written down containers for a loss of $9
during the three-month period ended March 31, 2003 and sold 630 previously
written down containers for a loss of $57 during the same period in 2002. The
Partnership incurred losses on the sale of some containers previously written
down as the actual sales prices received on these containers were lower than the
estimates used for the write-downs.
The Partnership also sold containers that had not been written down and recorded
a gain of $62 and a loss of $627 during the three-month periods ended March 31,
2003 and 2002, respectively.
As more containers are subsequently identified as for sale or if container sales
prices continue to decline, the Partnership may incur additional write-downs on
containers and/or may incur losses on the sale of containers. The Partnership
will continue to evaluate the recoverability of the recorded amounts of
container rental equipment.
Management fees to affiliates increased $44, or 17%, from the three-month period
ended March 31, 2002 to the comparable period in 2003 due to an increase in
equipment management fees, offset by a decrease in incentive management fees.
Equipment management fees increased due to the increase in rental income, upon
which these fees are primarily based. These fees were approximately 7% of rental
income for these periods. Incentive management fees, decreased primarily due to
(i) the decrease in the amount of distributions paid from cash from operations
and (ii) decreases in partners' capital due to redemptions of limited partners
units.
General and administrative costs to affiliates decreased $12, or 7%, from the
three-month period ended March 31, 2002 to the same period in 2003 due to
decreases in the allocation of overhead costs from TEM and TCC. The allocation
of overhead costs from TEM decreased as the Partnership represented a smaller
portion of the total fleet managed by TEM. The allocation of overhead from TCC
decreased primarily due to the decrease in total overhead costs incurred and
allocated by TCC.
The Partnership Agreement provides for the ongoing payment to the General
Partners of the management fees and the reimbursement of the expenses discussed
above. Since these fees and expenses are established by the Agreement, they
cannot be considered the result of arms' length negotiations with third parties.
The Partnership Agreement was formulated at the Partnership's inception and was
part of the terms upon which the Partnership solicited investments from its
limited partners. The business purpose of paying the General Partners these fees
is to compensate the General Partners for the services they render to the
Partnership. Reimbursement for expenses is made to offset some of the costs
incurred by the General Partners in managing the Partnership and its container
fleet. More details about these fees and expenses are included in footnote 2 to
the Financial Statements.
Other general and administrative costs decreased $41 from the three-month period
ended March 31, 2002 to the same period in 2003. The decrease was primarily due
to decreases in other service fees between the periods.
Gain/loss on sale of containers fluctuated from a loss of $684 to a gain of $53
from the three-month period ended March 31, 2002 to the same period in 2003. The
fluctuation was primarily due to the Partnership selling containers with lower
average net book values at higher average sales prices during the three-month
period ended March 31, 2003, than the same period in 2002.
Net earnings (loss) per limited partnership unit fluctuated from $(0.31) to
$0.02 from the three-month period ended March 31, 2002 to the equivalent period
in 2003, respectively, reflecting the fluctuation in net earnings (loss)
allocated to limited partners from ($2,107) to $131, respectively. The
allocation of net earnings (loss) for the three-month periods ended March 31,
2003 and 2002, included special allocations of gross income to the General
Partners of $16 and $39, respectively, in accordance with the Partnership
Agreement.
Critical Accounting Policies and Estimates
The Partnership's discussion and analysis of its financial condition and results
of operations are based upon the Partnership's financial statements, which have
been prepared in accordance with accounting principles generally accepted in the
United States of America. Certain estimates and assumptions were made by the
Partnership's management that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. The Partnership's management evaluates its estimates on an
on-going basis, including those related to the container rental equipment,
accounts receivable and accruals.
These estimates are based on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments regarding the carrying
values of assets and liabilities. Actual results could differ from those
estimates under different assumptions or conditions.
The Partnership's management believes the following critical accounting policies
affect its more significant judgments and estimates used in the preparation of
its financial statements.
The Partnership maintains allowances for doubtful accounts for estimated losses
resulting from the inability of its lessees to make required payments. These
allowances are based on management's current assessment of the financial
condition of the Partnership's lessees and their ability to make their required
payments. If the financial condition of the Partnership's lessees were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required, which would adversely affect the
Partnership's operating results.
The Partnership depreciates its container rental equipment based on certain
estimates related to the container's useful life and salvage value. These
estimates are based upon assumptions about future demand for leased containers
and the estimated sales price at the end of the container's useful life.
Effective July 1, 2002, the Partnership revised its estimate for container
salvage value from a percentage of equipment cost to an estimated dollar
residual value. The Partnership will evaluate the estimated residual values and
remaining estimated useful lives on an on-going basis and will revise its
estimates as needed. As a result, depreciation expense may fluctuate in future
periods based on fluctuations in these estimates. If the estimates regarding
residual value and remaining useful life of the containers were to decline,
depreciation expense would increase, adversely affecting the Partnership's
operating results.
Additionally, the recoverability of the recorded amounts of containers to be
held for continued use and identified for sale in the ordinary course of
business are evaluated to ensure that containers held for continued use are not
impaired and that containers identified for sale are recorded at amounts that do
not exceed the estimated fair value of the containers. Containers to be held for
continued use are considered impaired and are written down to estimated fair
value when the estimated future undiscounted cash flows are less than the
recorded values. Containers identified for sale are written down to estimated
fair value when the recorded value exceeds the estimated fair value. In
determining the estimated future undiscounted cash flows and fair value of
containers, assumptions are made regarding future demand and market conditions
for leased containers and the sales prices for used containers. If actual market
conditions are less favorable than those projected or if actual sales prices are
lower than those estimated by the Partnership, additional write-downs may be
required and/or losses may be realized. Any additional write-downs or losses
would adversely affect the Partnership's operating results.
Risk Factors and Forward Looking Statements
Although substantially all of the Partnership's income from operations is
derived from assets employed in foreign operations, virtually all of this income
is denominated in United States dollars. The Partnership's customers are
international shipping lines, which transport goods on international trade
routes. The domicile of the lessee is not indicative of where the lessee is
transporting the containers. The Partnership's business risk in its foreign
operations lies with the creditworthiness of the lessees, and the Partnership's
ability to keep its containers under lease, rather than the geographic location
of the containers or the domicile of the lessees. The containers are generally
operated on the international high seas rather than on domestic waterways. The
containers are subject to the risk of war or other political, economic or social
occurrence where the containers are used, which may result in the loss of
containers, which, in turn, may have a material impact on the Partnership's
results of operations and financial condition.
Other risks of the Partnership's leasing operations include competition, the
cost of repositioning containers after they come off-lease, the risk of an
uninsured loss, including bad debts, increases in maintenance expenses or other
costs of operating the containers, and the effect of world trade, industry
trends and/or general business and economic cycles on the Partnership's
operations. See "Risk Factors" in the Partnership's Prospectus, as supplemented,
for additional information on risks of the Partnership's business. See "Critical
Accounting Policies and Estimates" above for information on the Partnership's
critical accounting policies and how changes in those estimates could adversely
affect the Partnership's results of operations.
The foregoing includes forward-looking statements and predictions about possible
or future events, results of operations and financial condition. These
statements and predictions may prove to be inaccurate, because of the
assumptions made by the Partnership or the General Partners or the actual
development of future events. No assurance can be given that any of these
forward-looking statements or predictions will ultimately prove to be correct or
even substantially correct. The risks and uncertainties in these forward-looking
statements include, but are not limited to, changes in demand for leased
containers, changes in global business conditions and their effect on world
trade, future modifications in the way in which the Partnership's lessees
conduct their business or of the profitability of their business, increases or
decreases in new container prices or the availability of financing therefor,
alterations in the costs of maintaining and repairing used containers, increases
in competition, changes in the Partnership's ability to maintain insurance for
its containers and its operations, the effects of political conditions on
worldwide shipping and demand for global trade or of other general business and
economic cycles on the Partnership, as well as other risks detailed herein and
from time to time in the Partnership's filings with the Securities and Exchange
Commission. The Partnership does not undertake any obligation to update
forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk.
Inapplicable.
Item 4. Controls and Procedures
Based on an evaluation of the Partnership's disclosure controls and procedures
(as defined in Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934)
conducted within ninety days of the filing date of this report, the managing
general partner's principal executive officer and principal financial officer
have found those controls and procedures to be effective. There have been no
significant changes in the Partnership's internal controls or in other factors
that could significantly affect these controls subsequent to the date of their
evaluation including any corrective actions with regard to significant
deficiencies and material weaknesses.
Part II
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits 99.1 and 99.2 Certifications pursuant to 18 U.S.C. Section
1350, as adopted, and regarding Section 906 of the Sarbanes-Oxley Act
of 2002
(b) Not applicable.
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.
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
A California Limited Partnership
By Textainer Financial Services Corporation
The Managing General Partner
By _______________________________
Ernest J. Furtado
Chief Financial Officer
Date: May 13, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer Financial
Services Corporation, the Managing General Partner of the Registrant, in the
capacities and on the dates indicated:
Signature Title Date
________________________ Chief Financial Officer, Senior May 13, 2003
Ernest J. Furtado Vice President and Secretary
________________________ President May 13, 2003
John A. Maccarone
Part II
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits 99.1 and 99.2 Certifications pursuant to 18 U.S.C. Section
1350, as adopted, and regarding Section 906 of the Sarbanes-Oxley Act
of 2002
(b) Not applicable.
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.
TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
A California Limited Partnership
By Textainer Financial Services Corporation
The Managing General Partner
By /s/Ernest J. Furtado
___________________________________________
Ernest J. Furtado
Chief Financial Officer
Date: May 13, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer Financial
Services Corporation, the Managing General Partner of the Registrant, in the
capacities and on the dates indicated:
Signature Title Date
/s/Ernest J. Furtado
_____________________________________ Chief Financial Officer, Senior May 13, 2003
Ernest J. Furtado Vice President and Secretary
/s/John A. Maccarone
_____________________________________ President May 13, 2003
John A. Maccarone
CERTIFICATIONS
I, John A. Maccarone, certify that:
1. I have reviewed this quarterly report on form 10-Q of Textainer Equipment
Income Fund IV, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a.) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b.) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c.) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a.) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b.) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
May 13, 2003
/s/ John A. Maccarone
______________________________________________
John A. Maccarone
President and Director of TFS
CERTIFICATIONS
I, Ernest J. Furtado, certify that:
1. I have reviewed this quarterly report on form 10-Q of Textainer Equipment
Income Fund IV, L.P.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a.) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b.) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report ( the "Evaluation Date"); and
c.) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a.) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b.) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
May 13, 2003
/s/ Ernest J. Furtado
____________________________________________________
Ernest J. Furtado
Chief Financial Officer, Senior Vice President,
Secretary and Director of TFS
EXHIBIT 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ADOPTED, REGARDING SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Textainer Equipment Income Fund IV,
L.P., (the "Registrant") on Form 10-Q for the quarterly period ended March 31,
2003, as filed on May 13, 2003 with the Securities and Exchange Commission (the
"Report"), I, John A. Maccarone, the President and Director of Textainer
Financial Services Corporation ("TFS") and Principal Executive Officer of TFS,
the Managing General Partner of the Registrant, certify, pursuant to 18 U.S.C.
ss. 1350, as adopted, regarding Section 906 of the Sarbanes-Oxley Act of 2002,
that:
(i) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(ii) The information contained in the Report fairly presents, in all material
respects, the financial condition, and results of operations of the
Registrant.
May 13, 2003
By /s/ John A. Maccarone
_______________________________
John A. Maccarone
President and Director of TFS
A signed original of this written statement required by Section 906 has been
provided to the Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. ss. 1350,
AS ADOPTED, REGARDING SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Textainer Equipment Income Fund IV,
L.P., (the "Registrant") on Form 10-Q for the quarterly period ended March 31,
2003, as filed on May 13, 2003 with the Securities and Exchange Commission (the
"Report"), I, Ernest J. Furtado, Chief Financial Officer, Senior Vice President,
Secretary and Director of Textainer Financial Services Corporation ("TFS") and
Principal Financial and Accounting Officer of TFS, the Managing General Partner
of the Registrant, certify, pursuant to 18 U.S.C. ss. 1350, as adopted,
regarding Section 906 of the Sarbanes-Oxley Act of 2002, that:
(i) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(ii) The information contained in the Report fairly presents, in all material
respects, the financial condition, and results of operations of the
Registrant.
May 13, 2003
By /s/ Ernest J. Furtado
_______________________________________________
Ernest J. Furtado
Chief Financial Officer, Senior Vice President,
Secretary and Director of TFS
A signed original of this written statement required by Section 906 has been
provided to the Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission or its staff upon request.