SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2002
-----------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
----------------------------
Commission file number 33-80849
----------------------------------------
Capital Preferred Yield Fund-IV, L.P.
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-1331690
- ----------------------- -----------------------------------
(State of organization) (I.R.S. Employer Identification No.)
2750 South Wadsworth Blvd., C-200
Denver, Colorado 80227
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (720) 963-9600
-------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 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 .
----- -----
Exhibit Index Appears on Page 16
Page 1 of 17 Pages
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Quarterly Report on Form 10-Q
For the Quarter Ended
June 30, 2002
Table of Contents
-----------------
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements (Unaudited)
Balance Sheets - June 30, 2002 and December 31, 2001 3
Statements of Income - Three and Six Months Ended
June 30, 2002 and 2001 4
Statements of Cash Flows - Six Months Ended
June 30, 2002 and 2001 5
Notes to Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-14
Item 3. Quantitative and Qualitative Disclosures About Market Risk 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 15
Item 6. Exhibits and Reports on Form 8-K 15
Exhibits 16
Signature 17
2
CAPITAL PREFERRED YIELD FUND-IV, L.P.
BALANCE SHEETS
ASSETS
June 30, December 31,
2002 2001
----------- ------------
(Unaudited)
Cash and cash equivalents $ 3,357,372 $ 3,917,475
Accounts receivable, net 281,565 1,944,681
Equipment held for sale or re-lease 652,298 918,597
Net investment in direct finance leases 6,798,200 6,859,456
Leased equipment, net 36,458,164 33,272,181
----------- -----------
Total assets $47,547,599 $46,912,390
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued liabilities $ 1,195,177 $ 2,511,585
Payables to affiliates 113,179 73,203
Rents received in advance 25,176 40,473
Distributions payable to partners 488,072 488,648
Discounted lease rentals 24,268,045 20,141,516
----------- -----------
Total liabilities 26,089,649 23,255,425
----------- -----------
Partners' capital:
General partner -- --
Limited partners:
Class A 21,166,993 23,343,893
Class B 290,957 313,072
----------- -----------
Total partners' capital 21,457,950 23,656,965
----------- -----------
Total liabilities and partners' capital $47,547,599 $46,912,390
=========== ===========
See accompanying notes to financial statements.
3
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------
Revenue:
Operating lease rentals $3,828,949 $4,539,370 $7,673,232 $8,888,335
Direct finance lease income 128,242 193,179 243,607 404,747
Equipment sales margin 220,013 64,920 320,370 109,442
Interest income 18,280 21,100 66,631 67,173
---------- ---------- ---------- ----------
Total revenue 4,195,484 4,818,569 8,303,840 9,469,697
---------- ---------- ---------- ----------
Expenses:
Depreciation 3,009,827 3,078,146 6,004,595 6,528,037
Management fees to general partner 94,342 106,823 183,676 211,525
Direct services from general partner 78,953 54,609 160,051 103,386
General and administrative 160,993 165,462 293,789 422,482
Interest on discounted lease rentals 412,000 340,228 817,223 685,016
Provision for losses 190,000 475,000 405,000 650,000
---------- ---------- ---------- ----------
Total expenses 3,946,115 4,220,268 7,864,334 8,600,446
---------- ---------- ---------- ----------
Net income $ 249,369 $ 598,301 $ 439,506 $ 869,251
========== ========== ========== ==========
Net income allocated:
To the general partner $ 13,034 $ 13,156 $ 26,075 $ 26,312
To the Class A limited partners 233,972 579,294 409,296 834,509
To the Class B limited partner 2,363 5,851 4,135 8,430
---------- ---------- ---------- ----------
$ 249,369 $ 598,301 $ 439,506 $ 869,251
========== ========== ========== ==========
Net income per weighted average Class A
limited partner unit outstanding $ 0.48 $ .18 $ 0.84 $ 1.70
========== ========== ========== ==========
Weighted average Class A limited
partner units outstanding 486,208 490,744 486,208 490,744
========== ========== ========== ==========
See accompanying notes to financial statements.
4
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
--------------------------
June 30, June 30,
2002 2001
----------- ------------
Net cash provided by operating activities $ 5,394,974 $ 5,254,387
----------- -----------
Cash flows from financing activities:
Proceeds from discounted lease rentals 2,348,846 --
Principal payments on discounted lease rentals (5,664,825) (4,892,094)
Redemptions of Class A limited partner units (30,948) --
Distributions to partners (2,608,150) (2,635,395)
----------- -----------
Net cash used in financing activities (5,955,077) (7,527,489)
----------- -----------
Net decrease in cash and cash equivalents (560,103) (2,273,102)
Cash and cash equivalents at beginning of period 3,917,475 3,702,069
----------- -----------
Cash and cash equivalents at end of period $ 3,357,372 $ 1,428,967
=========== ===========
Supplemental disclosure of cash flow information -Interest
paid on discounted lease rentals $ 817,223 $ 685,016
=========== ===========
Supplemental disclosure of noncash investing and
financing activities - Discounted lease rentals assumed in
equipment acquisitions $ 7,442,508 $ 5,162,909
=========== ===========
See accompanying notes to financial statements.
5
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
---------------------
The accompanying unaudited financial statements have been prepared in
accordance with accounting principles generally accepted in the United
States of America for interim financial information and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and disclosures required by accounting
principles generally accepted in the United States of America for annual
financial statements. In the opinion of the general partner, all
adjustments (consisting of normal recurring adjustments) considered
necessary for a fair presentation have been included. The balance sheet at
December 31, 2001 was derived from the audited financial statements
included in the Partnership's 2001 Form 10-K. For further information,
refer to the financial statements of Capital Preferred Yield Fund-IV, L.P.
(the "Partnership"), and the related notes, included in the Partnership's
Annual Report on Form 10-K for the year ended December 31, 2001 (the "2001
Form 10-K"), previously filed with the Securities and Exchange Commission.
Recently Issued Financial Accounting Standards
In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 145 ("SFAS 145"),
"Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
Statement No. 13, and Technical Corrections". SFAS 145 updates, clarifies
and simplifies existing accounting pronouncements. SFAS 145 rescinds
Statement 4, which required all gains and losses from extinguishments of
debt to be aggregated and, if material, classified as an extraordinary
item, net of related income tax effect. As a result, the criteria in APB
Opinion 30 will now be used to classify those gains and losses. Statement
64 amended Statement 4, and is no longer necessary because Statement 4 has
been rescinded. Statement 44 was issued to establish accounting
requirements for the effects of transition to the provisions of the Motor
Carrier Act of 1980. Because the transition has been completed, Statement
44 is no longer necessary. SFAS 145 amends Statement 13 to require that
certain lease modifications that have economic effects similar to
sale-leaseback transactions be accounted for in the same manner as
sale-leaseback transactions. This amendment is consistent with the FASB's
goal of requiring similar accounting treatment for transactions that have
similar economic effects. SFAS 145 also makes technical corrections to
existing pronouncements. The Partnership does not believe the adoption of
SFAS 145 will have a material impact on the Partnership's financial
position, results of operations or cash flows.
6
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. Transactions With the General Partner and Affiliates
----------------------------------------------------
Management Fees Paid to General Partner
In accordance with the Partnership Agreement, the General Partner earns a
management fee in connection with its management of the equipment,
calculated as a percentage of the monthly gross rentals received, and paid
monthly in arrears. As of June 30, 2002, management fees of $23,113 are
included in payables to affiliates.
Direct Services from General Partner
The General Partner and an affiliate provide accounting, investor
relations, billing, collecting, asset management, and other administrative
services to the Partnership. The Partnership reimburses the General Partner
for these services performed on its behalf as permitted under terms of the
Partnership Agreement. As of June 30, 2002, direct services from the
General Partner in the amount of $26,750 are included in payables to
affiliates.
General and Administrative Expenses
The General Partner and an affiliate are reimbursed for the actual cost of
administrative expenses incurred on behalf of the Partnership per the terms
of the Partnership Agreement. As of June 30, 2002, administrative expenses
of $63,316 are included in payables to affiliates.
Equipment Purchases
During the six months ended June 30, 2002, the Partnership acquired the
equipment described below from independent third parties as arranged by
Mishawaka Leasing Company, Inc. (the General Partner):
Total
Acquisition Equipment
Cost of Fees and Purchase
Lessee Equipment Description Equipment Reimbursements Price
- ---------------------- --------------------- --------- -------------- -----
Avery Dennison Forklifts $ 317,876 $ 11,014 $ 328,890
Eye Centers of Florida Medical 45,129 1,564 46,693
Robert Tobin Medical 328,494 11,382 339,876
Hartford Hospital Medical 241,578 8,371 249,949
Vision Care Medical 337,648 11,700 349,348
Suffolk Eye Medical 32,760 1,135 33,895
Saint Raphael Medical 67,441 2,337 69,778
Lapeer Regional Medical 29,764 1,031 30,795
Eye Centers of Florida Medical 327,951 11,364 339,315
Healthsouth Medical 99,745 3,456 103,201
Grant/Riverside Medical 198,702 6,885 205,587
New Milford Hospital Medical 29,328 1,016 30,344
Eye Surgery Consult. Medical 12,998 450 13,448
Sisters of Charity Medical 141,424 4,900 146,324
Johnson Controls Forklifts 38,572 1,200 39,772
7
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. Transactions With the General Partner and Affiliates, continued
---------------------------------------------------------------
Equipment Purchases, continued
Johnson Controls Forklifts 193,296 6,012 199,308
Johnson Controls Pallet Trucks 151,991 4,728 156,719
Johnson Controls Forklifts 64,368 2,002 66,370
Johnson Controls Forklifts 26,454 946 27,400
Johnson Controls Forklifts 28,036 1,002 29,038
Johnson Controls Sweeper/Scrubber 30,024 1,073 31,097
Johnson Controls Forklifts 38,990 1,394 40,384
NBC Broadcasting 217,979 8,068 226,047
Michelin Forklifts 72,398 2,660 75,058
Michelin Forklifts 31,497 1,157 32,654
Johnson Controls Forklifts 163,724 5,857 169,581
Johnson Controls Forklifts 57,041 2,041 59,082
General Motors Forklifts 1,389,210 49,846 1,439,056
General Motors Construction 643,360 22,730 666,090
General Motors Forklifts 329,914 11,634 341,548
General Motors Crane 369,441 13,025 382,466
TRW Workstations 296,671 0 296,671
TRW Telecommunications 45,355 0 45,355
Communications Test Design Material Handling 116,793 0 116,793
Communications Test Design Forklifts 22,111 0 22,111
Communications Test Design Forklifts 85,717 0 85,717
Johnson Controls Forklifts 48,417 0 48,417
Johnson Controls Forklifts 28,987 0 28,987
Johnson Controls Forklifts 22,695 0 22,695
Johnson Controls Forklifts 25,521 0 25,521
Johnson Controls Forklifts 57,975 0 57,975
Michelin Forklifts 75,152 0 75,152
Michelin Forklifts 4,722 0 4,722
Michelin Forklifts 4,722 0 4,722
Michelin Forklifts 50,860 0 50,860
Michelin Forklifts 25,430 0 25,430
Michelin Forklifts 79,375 0 79,375
Michelin Forklifts 60,504 0 60,504
Mississippi Power Co. Tractors 1,370,398 0 1,370,398
NBC Broadcasting 1,035,312 0 1,035,312
Texas Utilities Networking 218,069 0 218,069
Texas Utilities Networking 42,551 0 42,551
Texas Utilities Networking 43,355 0 43,355
Texas Utilities Telecom - PBX 78,328 0 78,328
Texas Utilities Telecom - PBX 48,395 0 48,395
Texas Utilities Printers 89,395 0 89,395
Texas Utilities Printers 36,754 0 36,754
Texas Utilities Printers 37,920 0 37,920
Texas Utilities Printers 38,625 0 38,625
Texas Utilities Telecommunications 111,287 0 111,287
8
2. Transactions With the General Partner and Affiliates, continued
Equipment Purchases, continued
TRW Semiconductor 540,698 0 540,698
TRW Office Furniture 265,336 0 265,336
TRW Office Furniture 15,064 0 15,064
TRW Telecommunications 529,153 0 529,153
------------ --------- ------------
$ 11,608,780 $ 211,980 $ 11,820,760
============ ========= ============
In addition, during the six months ended June 30, 2002, the Partnership
reached its Front End Fee Cap, as defined in the Partnership Agreement. As
such, the Partnership ceased paying acquisition fees during the three
months ended March 31, 2002 and anticipates that no such fees will be paid
in future periods.
9
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
- ---------------------
Presented below are schedules (prepared solely to facilitate the discussion of
results of operations that follows) showing items of income and expense and
changes in those items derived from the Statements of Income:
Three Months Six Months
Ended June 30, Ended June 30,
----------------------------------------- -----------------------------------------
2002 2001 Change 2002 2001 Change
----------- ----------- ----------- ----------- ----------- -----------
Leasing margin $ 535,364 $ 1,314,175 $ (778,811) $ 1,095,021 $ 2,080,029 $ (985,008)
Equipment sales margin 220,013 64,920 155,093 320,370 109,442 210,928
Interest income 18,280 21,100 (2,820) 66,631 67,173 (542)
Management fees to general partner (94,342) (106,823) 12,481 (183,676) (211,525) 27,849
Direct services from general partner (78,953) (54,609) (24,344) (160,051) (103,386) (56,665)
General and administrative (160,993) (165,462) 4,469 (293,789) (422,482) 128,693
Provision for losses (190,000) (475,000) 285,000 (405,000) (650,000) 245,000
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 249,369 $ 598,301 $ (348,932) $ 439,506 $ 869,251 $ (429,745)
=========== =========== =========== =========== =========== ===========
Leasing Margin
Leasing margin consists of the following:
Three Months Six Months
Ended June 30, Ended June 30,
-----------------------------------------------------------
2002 2001 2002 Change
----------- ----------- ----------- -----------
Operating lease rentals $ 3,828,949 $ 4,539,370 $ 7,673,232 $ 8,888,335
Direct finance lease income 128,242 193,179 243,607 404,747
Depreciation (3,009,827) (3,078,146) (6,004,595) (6,528,037)
Interest expense on discounted lease rentals (412,000) (340,228) (817,223) (685,016)
----------- ----------- ----------- -----------
Leasing margin $ 535,364 $ 1,314,175 $ 1,095,021 $ 2,080,029
=========== =========== =========== ===========
Leasing margin ratio 14% 28% 14% 22%
== == == ==
Operating lease rentals and depreciation decreased for the three and six months
ended June 30, 2002 compared to the three and six months ended June 30, 2001 due
to a decrease in the average net book value of the operating lease portfolio.
Direct finance lease income decreased for the three and six months ended June
30, 2002 compared to the same period of 2001 primarily because the direct
finance lease portfolio for the three and six months ended June 30, 2001
included a large, high-yielding remarketed lease. Interest expense on discounted
lease rentals increased for the three and six months ended June 30, 2002
compared to the three and six months ended March 31, 2001 due to an increase in
non-recourse debt outstanding.
10
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Results of Operations, continued
- ---------------------
Leasing Margin, continued
Leasing margin ratio will vary due to changes in the portfolio, including, among
other things, the mix of operating leases versus direct finance leases, the
average maturity of leases comprising the portfolio, the average residual value
of leased assets in the portfolio, and the amount of discounted lease rentals
financing the portfolio. Leasing margin ratio for a direct finance lease is
fixed over the term of the lease. Leasing margin ratio for an operating lease
financed with non-recourse debt increases during the term of the lease since
rents and depreciation are typically fixed while interest expense declines as
the related non-recourse debt principle is repaid. Leasing margin ratio
decreased for the three months ended March 31, 2002 compared to the three and
six months ended June 30, 2001 primarily as a result of the remarketed direct
finance lease in 2001 discussed above.
The ultimate profitability of the Partnership's leasing transactions is
dependent in part on interest rates at the time the leases are originated,
future equipment values, and on-going lessee creditworthiness. Because leasing
is an alternative to financing equipment purchases with debt, lease rates tend
to rise and fall with interest rates (although lease rate movements generally
lag interest rate changes in the capital markets).
Equipment Sales Margin
Equipment sales margin consists of the following:
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
2002 2001 2002 2001
----------- ------------ ----------- -----------
Equipment sales revenue $ 414,988 $ 796,938 $ 1,917,465 $ 1,306,496
Cost of equipment sales (194,975) (732,018) (1,597,095) (1,197,054)
----------- ----------- ----------- -----------
Equipment sales margin $ 220,013 $ 64,920 $ 320,370 $ 109,442
=========== =========== =========== ===========
Equipment sales margin is affected by the volume and composition of equipment
that becomes available for sale. Some of the Partnership's initial leases have
expired, and the equipment is either being re-leased or sold to the lessee or to
third parties.
Interest Income
Interest income varies due to (1) the amount of cash available for investment
(pending distribution to partners or investment in equipment purchases) and (2)
the interest rate on such invested cash.
11
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Results of Operations, continued
- ---------------------
Expenses
Management fees decreased for the three and six months ended June 30, 2002
compared to the three and six months ended June 30, 2001 primarily due to
decrease in rents collected.
Direct services from general partner increased for the three and six months
ended June 30, 2002 compared to the three and six months ended June 30, 2001
primarily due to increased costs related to management's efforts to collect
receivables owed to the Partnership and increased remarketing activities related
to the increased amounts of lease terminations.
General and administrative expenses decreased for the six months ended June 30,
2002 compared to the six months ended June 30, 2001 primarily because the period
during 2001 included a one-time charge for software and computer equipment
related to a change in the ownership of the general partner.
Provision for Losses
The remarketing of equipment for an amount greater than its book value is
reported as equipment sales margin (if the equipment is sold) or leasing margin
(if the equipment is re-leased). The realization of less than the carrying value
of equipment (which occurs when the equipment is remarketed subsequent to
initial lease termination) is recorded as provision for losses.
Residual values are established equal to the estimated value to be received from
the equipment following termination of the lease. In estimating such values, the
Partnership considers all relevant facts regarding the equipment and the lessee,
including, for example, the likelihood that the lessee will re-lease the
equipment. The nature of the Partnership's leasing activities is such that it
has credit exposure and residual value exposure and will incur losses from those
exposures in the ordinary course of business. The Partnership performs quarterly
assessments of the estimated residual value of its assets to identify any
other-than-temporary losses in value.
The provision for losses of $190,000 and $405,000 recorded during the three and
six months ended June 30, 2002 related primarily to lower of cost or market
write downs of equipment in inventory in addition to residual value write downs
of leased equipment.
12
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
Liquidity & Capital Resources
- -----------------------------
The Partnership funds its operating activities principally with cash from rents,
discounted lease rentals (non-recourse debt), interest income and sales of
off-lease equipment. Available cash and cash reserves of the Partnership are
invested in short-term government securities pending the acquisition of
equipment or distribution to partners.
During the six months ended June 30, 2002, the Partnership acquired equipment
subject to leases with a total purchase price of $11,820,760.
During the six months ended June 30, 2002, the Partnership declared
distributions to the Class A limited partners of $2,555,248 ($478,816 of which
was paid in July 2002). A substantial portion of such distributions is expected
to constitute a return of capital. Distributions may be characterized for tax,
accounting and economic purposes as a return of capital, a return on capital, or
a portion of both. The portion of each cash distribution that exceeds its net
income for the fiscal period may be deemed a return of capital for accounting
purposes. However, the total percentage of the partnership's return on capital
over its life will only be determined after all residual cash flows (which
include proceeds from the re-leasing and sale of equipment) have been realized
at the termination of the Partnership.
The general partner believes that the Partnership will generate sufficient cash
flows from operations during the remainder of 2002, to (1) meet current
operating requirements, (2) fund cash distributions to both the Class A and
Class B limited partners at annualized rates of 10.5% (portions of which are
expected to constitute returns of capital), and (3) reinvest in additional
equipment under leases, provided that suitable equipment can be identified and
acquired.
13
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
New Accounting Pronouncements
- -----------------------------
In April 2002, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 145 ("SFAS 145"), "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and
Technical Corrections". SFAS 145 updates, clarifies and simplifies existing
accounting pronouncements. SFAS 145 rescinds Statement 4, which required all
gains and losses from extinguishments of debt to be aggregated and, if material,
classified as an extraordinary item, net of related income tax effect. As a
result, the criteria in APB Opinion 30 will now be used to classify those gains
and losses. Statement 64 amended Statement 4, and is no longer necessary because
Statement 4 has been rescinded. Statement 44 was issued to establish accounting
requirements for the effects of transition to the provisions of the Motor
Carrier Act of 1980. Because the transition has been completed, Statement 44 is
no longer necessary. SFAS 145 amends Statement 13 to require that certain lease
modifications that have economic effects similar to sale-leaseback transactions
be accounted for in the same manner as sale-leaseback transactions. This
amendment is consistent with the FASB's goal of requiring similar accounting
treatment for transactions that have similar economic effects. SFAS 145 also
makes technical corrections to existing pronouncements. The Partnership does not
believe the adoption of SFAS 145 will have a material impact on the
Partnership's financial position, results of operations or cash flows.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act of
- --------------------------------------------------------------------------------
1995
- -----
The statements contained in this report which are not historical facts may be
deemed to contain forward-looking statements with respect to events, the
occurrence of which involve risks and uncertainties, and are subject to factors
that could cause actual future results to differ both adversely and materially
from currently anticipated results, including, without limitation, the level of
lease originations, realization of residual values, the availability and cost of
financing sources and the ultimate outcome of any contract disputes. Certain
specific risks associated with particular aspects of the Partnership's business
are discussed under Results of Operations in this report and under Results of
Operations in the 2001 Form 10-K when and where applicable.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The Partnership's leases with equipment users are non-cancelable and have lease
rates that are fixed at lease inception. The Partnership finances its leases, in
part, with discounted lease rentals. Discounted lease rentals are a fixed rate
debt. The Partnership's other assets and liabilities are also at fixed rates.
Consequently, the Partnership has no interest rate risk or other market risk
exposure.
14
CAPITAL PREFERRED YIELD FUND-IV, L.P.
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is involved in routine legal proceedings
incidental to the conduct of its business. The General Partner
believes none of these legal proceedings will have a material
adverse effect on the financial condition or operations of the
Partnership.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(b) The Partnership did not file any reports on Form 8-K
during the quarter ended June 30, 2002.
15
Item No. Exhibit Index
No exhibits were filed with this Form 10-Q.
16
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAPITAL PREFERRED YIELD FUND-IV, L.P.
By: CAI Equipment Leasing V Corp.
Dated: August 14, 2002 By: /s/Joseph F. Bukofski
-------------------------
Joseph F. Bukofski
Chief Accounting Officer
17
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAPITAL PREFERRED YIELD FUND-IV, L.P.
By: CAI Equipment Leasing V Corp.
Dated: August 14, 2002 By:
------------------------
Joseph F. Bukofski
Chief Accounting Officer
17