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, 2004
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 33-80849
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Capital Preferred Yield Fund-IV, L.P.
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(Exact name of registrant as specified in its charter)
Delaware 84-1331690
(State of organization) (I.R.S. Employer Identification No.)
7901 Southpark Plaza, Ste. 107
Littleton, Colorado 80120
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 268-6550
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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 14
Page 1 of 19 Pages
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Quarterly Report on Form 10-Q
For the Quarter Ended
June 30, 2004
Table of Contents
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PART I. FINANCIAL INFORMATION PAGE
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Item 1. Financial Statements (Unaudited)
Balance Sheets - June 30, 2004 and December 31, 2003 3
Statements of Income - Three and Six Months Ended
June 30, 2004 and 2003 4
Statements of Cash Flows -Six Months Ended
June 30, 2004 and 2003 5
Notes to Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 8 - 12
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Item 4. Controls and Procedures 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 6. Exhibits and Reports on Form 8-K 13
Exhibits 14
Signatures 15
Certifications 16-19
2
CAPITAL PREFERRED YIELD FUND-IV, L.P.
BALANCE SHEETS
ASSETS
June 30, December 31,
2004 2003
---- ----
(Unaudited)
Cash and cash equivalents $ 1,446,309 $ 820,121
Accounts receivable, net 70,381 205,574
Prepaid Insurance 35,283 --
Equipment held for sale or re-lease 81,627 262,029
Net investment in direct finance leases 3,831,455 5,228,035
Leased equipment, net 18,808,787 23,893,894
----------- -----------
Total assets $24,273,842 $30,409,653
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued liabilities $ 752,472 $ 830,414
Payables to affiliates 93,076 166,243
Rents received in advance 22,577 37,596
Distributions payable to partners 451,573 261,635
Discounted lease rentals 13,086,985 17,582,086
----------- -----------
Total liabilities 14,406,683 18,877,974
----------- -----------
Partners' capital:
General partner -- --
Limited partners:
Class A 9,631,213 11,298,258
Class B 235,946 233,421
----------- -----------
Total partners' capital 9,867,159 11,531,679
----------- -----------
Total liabilities and partners' capital $24,273,842 $30,409,653
=========== ===========
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,
-------------------------------------------------------
2004 2003 2004 2003
---- ---- ---- ----
Revenue:
Operating lease rentals $ 2,859,656 $ 3,892,945 $ 5,846,626 $ 7,947,275
Direct finance lease income 68,914 123,435 150,167 251,556
Equipment sales margin 101,058 172,603 156,166 208,738
Interest income 1,266 2,285 2,262 4,204
----------- ----------- ----------- -----------
Total revenue 3,030,894 4,191,268 6,155,221 8,411,773
----------- ----------- ----------- -----------
Expenses:
Depreciation 2,166,321 3,146,279 4,582,284 6,368,150
Management fees to general partner 69,941 94,729 145,033 194,743
Direct services from general partner 72,566 70,204 144,230 142,799
General and administrative 107,641 107,223 238,658 354,461
Interest on discounted lease rentals 249,175 429,250 551,124 903,123
Provision for losses, net 112,500 (92,500) 222,500 8,000
----------- ----------- ----------- -----------
Total expenses 2,778,144 3,755,185 5,883,829 7,971,276
----------- ----------- ----------- -----------
Net income $ 252,750 $ 436,083 $ 271,392 $ 440,497
=========== =========== =========== ===========
Net income allocated:
To the general partner $ 11,421 $ 19,470 $ 18,936 $ 33,670
To the Class A limited partners 238,916 412,447 249,931 402,759
To the Class B limited partner 2,413 4,166 2,525 4,068
----------- ----------- ----------- -----------
$ 252,750 $ 436,083 $ 271,392 $ 440,497
=========== =========== =========== ===========
Net income per weighted average Class A
limited partner unit outstanding $ 0.50 $ 0.85 $ 0.52 $ 0.83
=========== =========== =========== ===========
Weighted average Class A limited
partner units outstanding 482,530 484,461 483,340 484,526
=========== =========== =========== ===========
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,
2004 2003
---- ----
Net cash provided by operating activities $ 6,867,264 $ 9,099,236
----------- -----------
Cash flows from financing activities:
Principal payments on discounted lease rentals (4,495,101) (5,604,533)
Redemptions of Class A limited partner units (42,312) (5,855)
Distributions to partners (1,703,663) (3,669,330)
----------- -----------
Net cash used in financing activities (6,241,076) (9,279,718)
----------- -----------
Net increase (decrease) in cash and cash equivalents 626,188 (180,482)
Cash and cash equivalents at beginning of period 820,121 2,100,551
----------- -----------
Cash and cash equivalents at end of period $ 1,446,309 $ 1,920,069
=========== ===========
Supplemental disclosure of cash flow information -Interest
paid on discounted lease rentals $ 551,124 $ 903,123
=========== ===========
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, 2003 was derived from the audited financial statements
included in the Partnership's 2003 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, 2003, previously
filed with the Securities and Exchange Commission.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. For leasing
entities, this includes the estimate of residual values and impairment as
discussed below. Actual results could differ from those estimates. Included
in the results of operations for the six months ended June 30, 2004 and
2003 were $222,500 and $8,000 for provision for losses.
The Partnership is in its liquidation period, as defined in the Partnership
Agreement. Even so, because the liquidation period extends over an undefined
number of accounting periods, the accompanying financial statements have been
prepared on a going concern basis that contemplates the realization of assets
and payments of liabilities in the ordinary course of business, which is in
accordance with accounting principles generally accepted in the United States of
America. The General Partner believes that the Partnership will generate
sufficient cash flows from operations during the remainder of 2004, to (1) meet
current operating requirements, and (2) fund cash distributions to Class A
limited partners in accordance with the Partnership Agreement. All distributions
are expected to be a return of capital for economic and accounting purposes.
Additionally, the General Partner anticipates that all equipment owned by the
Partnership will be sold and the Partnership liquidated between 2004 and 2006.
However, the Partnership has not entered into a formal liquidation plan as of
June 30, 2004 and accordingly has not adopted the liquidation basis of
accounting. There is no assurance that the limited partners will receive future
distributions equal to their capital account balance at June 30, 2004.
6
CAPITAL PREFERRED YEILD 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. Managemenet fees to the general partner for the six
months ended June 30, 2004 and 2003 were $145,033 and $194,743,
respectively. As of June 30, 2004 and December 31, 2003 management fees of
$17,137 and $18,542 respectively, 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. Direct services from the general partner for the six
months ended June 30,2004 and 2003 were $144,230 and $142,799,
respectively. As of June 30, 2004 and December 31, 2003 direct services
from the General Partner in the amount of $30,044 and $22,802,
respectively, 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. General and administrative expenses for the
six months ended June 30,2004 and 2003 were $238,658 and $354,461,
respectively. As of June 30, 2004 and December 31, 2003 administrative
expenses of $45,895 and $124,899, respectively, are included in payables to
affiliates.
7
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
- ---------------------
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,
----------------------------------- ------------------------------------
2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
Leasing margin $ 513,074 $ 440,851 $ 72,223 $ 863,385 $ 927,558 $ (64,173)
Equipment sales margin 101,058 172,603 (71,545) 156,166 208,738 (52,572)
Interest income 1,266 2,285 (1,019) 2,262 4,204 (1,942)
Management fees to general partner (69,941) (94,729) 24,788 (145,033) (194,743) 49,710
Direct services from general partner (72,566) (70,204) (2,362) (144,230) (142,799) (1,431)
General and administrative (107,641) (107,223) (418) (238,658) (354,461) 115,803
Provision for losses, net (112,500) 92,500 (205,000) (222,500) (8,000) (214,500)
-------- ------ -------- -------- ------ --------
Net income $ 252,750 $ 436,083 $(183,333) $ 271,392 $ 440,497 $(169,105)
========= ========= ========= ========= ========= =========
The Partnership entered its liquidation period in 2002, as defined in the
Partnership Agreement, and will not purchase significant amounts of equipment in
future periods. Furthermore, during future periods, initial leases will expire
and the equipment will be remarketed (i.e., re-leased or sold). As a result,
both the size of the Partnership's leasing portfolio and the amount of total
revenue will decline ("portfolio runoff"). Even so, because the liquidation
period extends over an undefined number of accounting periods, the accompanying
financial statements have been prepared on a going concern basis that
contemplates the realization of assets and payments of liabilities in the
ordinary course of business, which is in accordance with accounting principles
generally accepted in the United States of America.
Leasing Margin
Leasing margin consists of the following:
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ----------------------------
2004 2003 2004 2003
---- ---- ---- ----
Operating lease rentals $ 2,859,656 $ 3,892,945 $ 5,846,626 $ 7,947,275
Direct finance lease income 68,914 123,435 150,167 251,556
Depreciation (2,166,321) (3,146,279) (4,582,284) (6,368,150)
Interest expense on discounted lease rentals (249,175) (429,250) (551,124) (903,123)
----------- ----------- ----------- -----------
Leasing margin $ 513,074 $ 440,851 $ 863,385 $ 927,558
=========== =========== =========== ===========
Leasing margin ratio 18% 11% 14% 11%
== == == ==
8
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 and all of the components of leasing margin including operating
lease rentals, direct finance lease income, depreciation on leased equipment and
interest expense on discounted lease rentals decreased due to portfolio runoff.
Because the Partnership is in its liquidation stage, no additional equipment is
being purchased. As a result, leasing margin and its components will decline
over the remaining life of the related leases in the Partnership's portfolio.
Leasing margin ratio increased for the three and six months ended June 30, 2004
compared to the three and six months ended June 30, 2003 primarily due to
increases in a) the percentage of leases in the portfolio that have entered
their remarketing stage, and b) the average maturity of operating leases in the
portfolio. Leasing margin is generally lower and leasing margin ratio is
generally higher as leases enter their remarketing stage because typically the
rate of return on remarketed leases is higher. Leasing margin and leasing margin
ratio for an operating lease financed with discounted lease rentals increase as
the lease matures since rents and depreciation are typically fixed while
interest expense declines as the related discounted lease rentals principal is
repaid.
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,
-------------------------- --------------------------
2004 2003 2004 2003
---- ---- ---- ----
Equipment sales revenue $ 669,096 $ 1,057,887 $ 785,030 $ 1,387,072
Cost of equipment sales (568,038) (885,284) (628,864) (1,178,334)
-------- -------- -------- ----------
Equipment sales margin $ 101,058 $ 172,603 $ 156,166 $ 208,738
=========== =========== =========== ===========
Equipment sales margin fluctuates based on the composition of equipment
available for sale. Currently, the Partnership is in its liquidation period (as
defined in the Partnership Agreement). Initial leases are expiring and the
equipment is either being re-leased or sold to the lessee or a third party.
Equipment sales margin varies with the number and dollar amount of equipment
leases that mature in a particular period and the current market for specific
equipment and residual value estimates.
9
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
- ---------------------
Interest Income
Interest income varies due to (1) the amount of cash available for investment
pending distribution to partners and (2) the interest rate on such invested
cash.
Expenses
Management fees paid to the general partner are earned on gross rents received
and will fluctuate due to variances in cash flow and the size of the
Partnership's portfolio. Management fees paid to the general partner decreased
for the three and six months ended June 30, 2004 compared to the three and six
months ended June 30, 2003 due to the decrease in average portfolio size
discussed above, which resulted in a corresponding decrease in gross rents
received.
General and administrative expenses decreased for the six months ended June 30,
2004 compared to the six months ended June 30, 2003 primarily due to a) upgrades
to computer equipment and the associated consulting expenses that were incurred
in 2003 and b) change in recognition of prepaid insurance and state income tax
expenses. General and administrative expenses were virtually unchanged for the
three months ended June 30, 2004 compared to the three months ended June 30,
2003.
Provision for Losses
The realization of greater than the carrying value of equipment (which occurs
when the equipment is remarketed subsequent to initial lease termination) 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 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 or purchase
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 impairments in value that, if any, are also recorded as provision for
losses.
The provision for losses of $112,500 and $222,500 recorded during the three and
six months ended June 30, 2004 related primarily to losses on equipment returned
to the Partnership at lease maturity occurring because the residual realized is
expected to be less than the residual value originally estimated.
10
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 is in its liquidation period, as defined in the Partnership
Agreement. The Partnership is not purchasing additional equipment, initial
leases are expiring, and the amount of equipment being remarketed (i.e.,
re-leased, renewed, or sold) is generally decreasing. As a result, both the size
of the Partnership's lease portfolio and the amount of leasing revenue are
declining. Even so, because the liquidation period extends over an undefined
number of accounting periods, the accompanying financial statements have been
prepared on a going concern basis that contemplates the realization of assets
and payments of liabilities in the ordinary course of business, which is in
accordance with accounting principles generally accepted in the United States of
America.
The Partnership funds its operating activities principally with cash from rents
and sales of off-lease equipment. The decline of net cash provided by operating
activities of approximately $2,250,000 from the six months ended June 30, 2003
to June 30, 2004 is primarily due to a reduction in equipment under lease.
Available cash and cash reserves of the Partnership are invested in short-term
government securities pending distribution to the partners.
During the six months ended June 30, 2004, the Partnership declared
distributions to the Class A limited partners of $1,874,664 ($450,260 of which
was paid in July 2004). All such distributions are expected to constitute a
return of capital for economic purposes. 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 2004, to (1) meet current
operating requirements, and (2) fund cash distributions to Class A limited
partners in accordance with the Partnership Agreement. All distributions are
expected to be a return of capital for economic and accounting purposes.
Additionally, the General Partner anticipates that all equipment owned by the
Partnership will be sold and the Partnership liquidated between 2004 and 2006.
However, the Partnership has not entered into a formal liquidation plan as of
June 30, 2004 and accordingly has not adopted the liquidation basis of
accounting. There is no assurance that the limited partners will receive future
distributions equal to their capital account balance at June 30, 2004.
11
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
"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 2003 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 minimal interest rate risk or other market
risk exposure.
Item 4. Controls and Procedures
An evaluation was performed under the supervision and with the participation of
the General Partner's management, including the President and Director, and the
Principal Financial Officer, of the effectiveness of the design and operation of
the Partnership's disclosure controls and procedures as of the end of the period
covered by this report. Based on that evaluation, the General Partner's
management, including the President and Director, and the Principal Financial
Officer, concluded that the Partnership's disclosure controls and procedures are
effective in timely alerting them to material information relating to the
Partnership required to be included in the Partnership's periodic SEC reports.
12
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, 2004.
13
Index to Exhibits
Exhibit
Number Description
- ------ -----------
* 99.1 Certification by John F. Olmstead pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
* 99.2 Certification by Mary M. Ebele pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.
* Filed herewith
14
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Signatures
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 13, 2004 By: /s/John F. Olmstead
-------------------
John F. Olmstead
President and Director
(Principal Executive Officer)
CAPITAL PREFERRED YIELD FUND-IV, L.P.
By: CAI Equipment Leasing V Corp.
Dated: August 13, 2004 By: /s/Mary M. Ebele
----------------
Mary M. Ebele
Principal Financial Officer
15
CERTIFICATION
I, John F. Olmstead, President and Director of CAI Equipment Leasing V Corp.,
the General Partner of Capital Preferred Yield Fund-IV, L.P. (the
"Partnership"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the Partnership;
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 Partnership as of, and for the periods presented in this
quarterly report;
4. The Partnership's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Partnership and
have:
a. designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our
supervision to ensure that material information relating to the
Partnership, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report in being prepared;
b. evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report and based on such evaluation; and
c. disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the
Partnership's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership's
internal control over financial reporting; and
5. The Partnership's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Partnership's auditors:
a. all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the Partnership's internal
control over financial reporting.
/s/ John F. Olmstead
--------------------
John F. Olmstead
President and Director
(Principal Executive Officer)
August 13, 2004
16
CERTIFICATION
I, Mary M. Ebele, Principal Financial Officer of CAI Equipment Leasing V Corp.,
the General Partner of Capital Preferred Yield Fund-IV, L.P. (the
"Partnership"), certify that:
1. I have reviewed this quarterly report on Form 10-Q of the Partnership;
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 Partnership as of, and for the periods presented in this
quarterly report;
4. The Partnership's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Partnership and
have:
a. designed such disclosure controls and procedures or caused such
disclosure controls and procedures to be designed under our
supervision to ensure that material information relating to the
Partnership, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in
which this report in being prepared;
b. evaluated the effectiveness of the Partnership's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end
of the period covered by this report and based on such evaluation; and
c. disclosed in this report any change in the Partnership's internal
control over financial reporting that occurred during the
Partnership's most recent fiscal quarter that has materially affected,
or is reasonably likely to materially affect, the Partnership's
internal control over financial reporting; and
5. The Partnership's other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
the Partnership's auditors:
a. all significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Partnership's ability to
record, process, summarize and report financial information; and
b. any fraud, whether or not material, that involves management or other
employees who have a significant role in the Partnership's internal
control over financial reporting.
/s/ Mary M. Ebele
-----------------
Mary M. Ebele
Principal Financial Officer
August 13, 2004
17