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 September 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.
-------------------------------------
(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
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 268-6550
--------------
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
September 30, 2004
Table of Contents
-----------------
PART I. FINANCIAL INFORMATION PAGE
----
Item 1. Financial Statements
Balance Sheets - September 30, 2004 (Unaudited) and
December 31, 2003 3
Statements of Income (Unaudited) - Three and Nine Months
Ended September 30, 2004 and 2003 4
Statements of Cash Flows (Unaudited) -Nine Months Ended
September 30, 2004 and 2003 5
Notes to Financial Statements (Unaudited) 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
September 30, December 31,
2004 2003
---- ----
(Unaudited)
Cash and cash equivalents $ 1,408,130 $ 820,121
Accounts receivable, net 180,356 205,574
Prepaid Insurance 20,162 --
Equipment held for sale or re-lease 87,572 262,029
Net investment in direct finance leases 3,154,975 5,228,035
Leased equipment, net 16,505,504 23,893,894
----------- -----------
Total assets $21,356,699 $30,409,653
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued liabilities $ 346,612 $ 830,414
Payables to affiliates 200,147 166,243
Rents received in advance 19,657 37,596
Distributions payable to partners 1,059,266 261,635
Discounted lease rentals 11,276,767 17,582,086
----------- -----------
Total liabilities 12,902,449 18,877,974
----------- -----------
Partners' capital:
General partner -- --
Limited partners:
Class A 8,208,979 11,298,258
Class B 245,271 233,421
----------- -----------
Total partners' capital 8,454,250 11,531,679
----------- -----------
Total liabilities and partners' capital $21,356,699 $30,409,653
=========== ===========
See accompanying notes to financial statements.
3
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Nine months Ended
September 30, September 30,
-------------------------- ------------------------
2004 2003 2004 2003
---- ---- ---- ----
Revenue:
Operating lease rentals $ 2,957,778 $ 3,228,554 $ 8,804,404 $11,175,829
Direct finance lease income 54,947 106,157 205,114 357,713
Equipment sales margin 324,380 217,211 480,546 425,949
Interest income 2,588 1,565 4,850 5,769
----------- ----------- ----------- -----------
Total revenue 3,339,693 3,553,487 9,494,914 11,965,260
----------- ----------- ----------- -----------
Expenses:
Depreciation 1,946,993 2,540,788 6,529,276 8,908,938
Management fees to general partner 62,890 81,125 207,922 275,868
Direct services from general partner 86,240 71,673 230,470 214,472
General and administrative 104,131 103,408 342,789 457,868
Interest on discounted lease rentals 213,506 389,649 764,630 1,292,773
Provision for losses, net (30,039) 249,000 192,461 257,000
----------- ----------- ----------- -----------
Total expenses 2,383,721 3,435,643 8,267,548 11,406,919
----------- ----------- ----------- -----------
Net income $ 955,972 $ 117,844 $ 1,227,366 $ 558,341
=========== =========== =========== ===========
Net income allocated:
To the general partner $ 23,600 $ 17,950 $ 42,536 $ 51,620
To the Class A limited partners 923,048 98,895 1,172,980 501,654
To the Class B limited partner 9,324 999 11,850 5,067
----------- ----------- ----------- -----------
$ 955,972 $ 117,844 $ 1,227,366 $ 558,341
=========== =========== =========== ===========
Net income per weighted average Class A
limited partner unit outstanding $ 1.91 $ 0.20 $ 2.43 $ 1.04
=========== =========== =========== ===========
Weighted average Class A limited
partner units outstanding 482,250 484,461 482,974 484,526
=========== =========== =========== ===========
See accompanying notes to financial statements.
4
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months Ended
-----------------
September 30, September 30,
2004 2003
---- ----
Net cash provided by operating activities $ 10,400,492 $ 13,088,255
------------ ------------
Cash flows from financing activities:
Principal payments on discounted lease rentals (6,305,319) (8,327,092)
Redemptions of Class A limited partner units (51,195) (5,855)
Distributions to partners (3,455,969) (6,050,835)
------------ ------------
Net cash used in financing activities (9,812,483) (14,383,782)
------------ ------------
Net increase (decrease) in cash and cash equivalents 588,009 (1,295,527)
Cash and cash equivalents at beginning of period 820,121 2,100,551
------------ ------------
Cash and cash equivalents at end of period $ 1,408,130 $ 805,024
============ ============
Supplemental disclosure of cash flow information -Interest
paid on discounted lease rentals $ 764,630 $ 1,292,773
============ ============
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 nine months
ended September 30, 2004 and 2003 were $192,461 and $257,000 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
September 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 September 30, 2004.
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. Management fees to the general partner for the nine
months ended September 30, 2004 and 2003 were $207,922 and $275,868,
respectively. As of September 30, 2004 and December 31, 2003 management
fees of $14,608 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
nine months ended September 30,2004 and 2003 were $230,470 and $214,472,
respectively. As of September 30, 2004 and December 31, 2003 direct
services from the General Partner in the amount of $31,419 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
nine months ended September 30, 2004 and 2003 were $342,789 and $457,868,
respectively. As of September 30, 2004 and December 31, 2003 administrative
expenses of $154,120 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
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 Nine Months
Ended September 30, Ended September 30,
------------------------------------------ -----------------------------------------
2004 2003 Change 2004 2003 Change
---- ---- ------ ---- ---- ------
Leasing margin $ 852,226 $ 404,274 $ 447,952 $ 1,715,612 $ 1,331,831 $ 383,781
Equipment sales margin 324,380 217,211 107,169 480,546 425,949 54,597
Interest income 2,588 1,565 1,023 4,850 5,769 (919)
Management fees to general partner (62,890) (81,125) 18,235 (207,922) (275,868) 67,946
Direct services from general partner (86,240) (71,673) (14,567) (230,470) (214,472) (15,998)
General and administrative (104,131) (103,408) (723) (342,789) (457,868) 115,079
Provision for losses, net 30,039 (249,000) 279,039 (192,461) (257,000) 64,539
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 955,972 $ 117,844 $ 838,128 $ 1,227,366 $ 558,341 $ 669,025
=========== =========== =========== =========== =========== ===========
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 Nine months Ended
September 30, September 30,
----------------------------- ------------------------------
2004 2003 2004 2003
---- ---- ---- ----
Operating lease rentals $ 2,957,778 $ 3,228,554 $ 8,804,404 $ 11,175,829
Direct finance lease income 54,947 106,157 205,114 357,713
Depreciation (1,946,993) (2,540,788) (6,529,276) (8,908,938)
Interest expense on discounted lease rentals (213,506) (389,649) (764,630) (1,292,773)
Leasing margin $ 852,226 $ 404,274 $ 1,715,612 $ 1,331,831
Leasing margin ratio 28% 12% 19% 12%
== == == ==
8
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
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 nine months ended September 30,
2004 compared to the three and nine months ended September 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 and leasing margin ratio are generally higher
as leases enter their remarketing stage because typically depreciation expense
is reduced since the related equipment is at or near the end of its useful life.
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 Nine months Ended
September 30, September 30,
-------------------------- --------------------------
2004 2003 2004 2003
---- ---- ---- ----
Equipment sales revenue $ 844,176 $ 820,709 $ 1,629,206 $ 2,207,781
Cost of equipment sales (519,796) (603,498) (1,148,660) (1,781,832)
----------- ----------- ----------- -----------
Equipment sales margin $ 324,380 $ 217,211 $ 480,546 $ 425,949
=========== =========== =========== ===========
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
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 nine months ended September 30, 2004 compared to the three and
nine months ended September 30, 2003 due to the decrease in average portfolio
size discussed above, which resulted in a corresponding decrease in gross rents
received.
Direct Services from the general partner increased for the three and nine months
ended September 30, 2004 due to Management's efforts to prepare to implement
Section 404 of the Sarbanes-Oxley Act of 2002.
General and administrative expenses decreased for the nine months ended
September 30, 2004 compared to the nine months ended September 30, 2003
primarily due to a) fees related to 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.
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 $(30,039) recorded during the three months ended
September 30, 2004 related primarily to $103,050 for 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
offset by a reversal of $133,089 of provision for losses recorded for cash
received as part of a lessee's bankruptcy settlement. The provision for losses
of $192,461 recorded during the nine months ended September 30, 2004 related
primarily to $325,550 for losses on equipment returned to the Partnership offset
by the reversal of $133,089 previously discussed.
10
CAPITAL PREFERRED YIELD FUND-IV, L.P.
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
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 $2,680,000 from the nine months ended September 30,
2003 to September 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 nine months ended September 30, 2004, the Partnership declared
distributions to the Class A limited partners of $4,211,064 ($1,052,289 of which
was paid in October 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
September 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 September 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 September 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: November 12, 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: November 12, 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 General Partner and 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)
November 12, 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 General Partner and 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
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Mary M. Ebele
Principal Financial Officer
November 12, 2004
17