<PAGE>
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, 2000
-----------------------------------------------
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.)
7175 West Jefferson Avenue, Suite 4000
Lakewood, Colorado 80235
---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (303) 980-1000
---------------
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
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Quarterly Report on Form 10-Q
For the Quarter Ended
June 30, 2000
Table of Contents
-----------------
PART I. FINANCIAL INFORMATION PAGE
-----
Item 1. Financial Statements (Unaudited)
Balance Sheets - June 30, 2000 and December 31, 1999 3
Statements of Income - Three and Six Months Ended
June 30, 2000 and 1999 4
Statements of Cash Flows - Six months Ended
June 30, 2000 and 1999 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
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
----------- -----------
(Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 1,936,878 $ 1,133,758
Accounts receivable, net 1,451,185 382,407
Receivable from related party 406,144 413,249
Equipment held for sale or re-lease 613,388 355,193
Net investment in direct finance leases 4,155,676 4,405,522
Leased equipment, net 40,820,309 41,440,528
----------- -----------
Total assets $49,383,580 $48,130,657
=========== ===========
</TABLE>
LIABILITIES AND PARTNERS' CAPITAL
<TABLE>
<CAPTION>
Liabilities:
<S> <C> <C>
Accounts payable and accrued liabilities $ 2,314,346 $ 1,047,204
Payables to affiliates 11,420 84,045
Rents received in advance 638,642 450,331
Distributions payable to partners 9,298 494,255
Discounted lease rentals 15,070,194 13,452,270
----------- -----------
Total liabilities 18,043,900 15,528,105
----------- -----------
Partners' capital:
General partner - -
Limited partners:
Class A 30,951,454 32,203,144
Class B 388,226 399,408
----------- -----------
Total partners' capital 31,339,680 32,602,552
----------- -----------
Total liabilities and partners' capital $49,383,580 $48,130,657
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- -----------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenue:
Operating lease rentals $4,295,791 $4,677,802 $8,472,167 $9,378,255
Direct finance lease income 223,412 65,198 588,403 142,166
Equipment sales margin 27,964 39,009 34,137 51,580
Interest income 22,764 21,430 38,265 45,883
---------- ---------- ---------- ----------
Total revenue 4,569,931 4,803,439 9,132,972 9,617,884
---------- ---------- ---------- ----------
Expenses:
Depreciation 3,248,535 3,665,450 6,509,810 7,416,524
Management fees paid to general partner 47,931 106,734 128,665 213,171
Direct services from general partner 35,673 49,359 106,644 97,129
General and administrative 112,884 73,144 191,714 128,161
Interest on discounted lease rentals 326,458 241,649 588,058 497,339
Provision for losses 25,000 25,000 75,000 100,000
---------- ---------- ---------- ----------
Total expenses 3,796,481 4,161,336 7,599,891 8,452,324
---------- ---------- ---------- ----------
Net income $ 773,450 $ 642,103 $1,533,081 $1,165,560
========== ========== ========== ==========
Net income allocated:
To the general partner $ 13,204 $ 13,301 $ 26,408 $ 26,607
To the Class A limited partners 752,644 622,514 1,491,607 1,127,564
To the Class B limited partner 7,602 6,288 15,066 11,389
---------- ---------- ---------- ----------
$ 773,450 $ 642,103 $1,533,081 $1,165,560
========== ========== ========== ==========
Net income per weighted average Class A
limited partner unit outstanding $ 1.53 $ 1.25 $ 3.03 $ 2.27
========== ========== ========== ==========
Weighted average Class A limited partner
units outstanding 491,217 496,773 491,902 496,808
========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
---------------------------
June 30, June 30,
2000 1999
----------- -----------
<S> <C> <C>
Net cash provided by operating activities $ 9,472,685 $10,729,881
----------- -----------
Cash flows from investing activities:
Purchases of equipment on operating leases from affiliate (4,393,861) (4,153,246)
Investment in direct finance leases, acquired from affiliate - (563,525)
----------- -----------
Net cash used in investing activities (4,393,861) (4,716,771)
----------- -----------
Cash flows from financing activities:
Proceeds from discounted lease rentals 2,453,422 -
Principal payments on discounted lease rentals (3,448,216) (4,760,423)
Redemptions of Class A limited partner units (158,949) (54,927)
Distributions to partners (3,121,961) (2,661,294)
----------- -----------
Net cash (used in)/provided by financing activities (4,275,704) (7,476,644)
----------- -----------
Net decrease in cash and cash equivalents 803,120 (1,463,534)
Cash and cash equivalents at beginning of period 1,133,758 2,634,551
----------- -----------
Cash and cash equivalents at end of period $ 1,936,878 $ 1,171,017
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid on discounted lease rentals $ 588,058 $ 490,044
Supplemental disclosure of noncash investing and
financing activities:
Discounted lease rentals assumed in equipment acquisitions 2,612,718 2,181,040
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATMENTS
(Unaudited)
1. Basis of Presentation
---------------------
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles 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 generally accepted accounting principles 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, 1999 was
derived from the audited financial statements included in the Partnership's
1999 Form 10-KA. 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-KA for
the year ended December 31, 1999 (the "1999 Form 10-KA"), previously filed
with the Securities and Exchange Commission.
Recently Issued Financial Accounting Standards
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("Statement
133"). Statement 133 establishes accounting and reporting standards for
derivative instruments and for hedging activities. It requires that an
entity recognize all derivatives as either assets or liabilities in the
statement of financial position and measure those instruments at fair value.
Statement 133 is effective for fiscal years beginning after June 15, 1999,
with earlier application permitted. In June 1999, the Financial Accounting
Standards Board issued SFAS No. 137, Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date of FASB Statement
133, an Amendment of FASB Statement 133. Statement 137 effectively extends
the required application of Statement 133 to fiscal years beginning after
June 15, 2000, with earlier application permitted. The Partnership adopted
Statement 133 in the first quarter of 1999. The General Partner does not
expect the adoption of Statement 133 or Statement 137 to have an impact on
its financial reporting.
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, 2000, management fees of $4,708 are
included in payables to affiliates.
6
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATMENTS
(Unaudited)
2. Transactions With the General Partner and Affiliates, continued
----------------------------------------------------
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 the terms of the
Partnership Agreement. As of June 30, 2000, direct services from the General
Partner in the amount of $6,712 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 Partnership per the terms of
the Partnership Agreement.
Receivable From Related Party
The General Partner collects and applies rental payments to the lessee's
account with the Partnership for those lessees who remit directly to the
General Partner. The rental payments are then transferred to the
Partnership, eliminating the receivable from related party balance.
Equipment Purchases
During the three months ended June 30, 2000, the Partnership acquired the
equipment described below from Capital Associates International, Inc.:
<TABLE>
<CAPTION>
Acquisition
Fees Total
Cost of and Equipment
Lessee Equipment Description Equipment Reimbursements Purchase Price
-------------------- --------------------- ----------- ---------------- ---------------
<S> <C> <C> <C> <C>
American Honda Editing Equipment $ 9,998 $ 346 $ 10,344
E-Trade Office Furniture 283,627 9,828 293,455
General Motors Corp Crane 264,355 9,160 273,515
General Motors Corp Lift Truck 106,671 3,696 110,367
General Motors Corp Railcar Mover 150,547 5,216 155,763
General Motors Corp Scrubber 126,873 4,396 131,269
H.J. Heinz Lift Trucks 1,119,223 38,781 1,158,004
NBC Media Composer 317,937 11,017 328,954
Parke-Davis Spectrometer 135,980 4,712 140,692
Pillsbury Forklifts 112,943 3,913 116,856
Thomson Ind Hobbing Machine 67,850 2,351 70,201
Thomson Ind Machine Center 358,650 12,427 371,077
Thomson Ind Machine Tools 200,000 6,930 206,930
Thomson Ind Mazak Machine 477,534 16,547 494,081
TRW Semiconductor 2,920,958 101,211 3,022,169
Unilever Forklift 65,281 2,262 67,543
Xerox Computers 53,505 1,854 55,359
----------- ---------------- ---------------
$6,771,932 $234,647 $7,006,579
=========== ================ ===============
</TABLE>
As of June 30, 2000, the general partner had identified approximately $3
million of equipment that
7
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATMENTS
(Unaudited)
satisfied the Partnership's investment criteria and is expected to be
acquired during the remainder of 2000.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
3. General Partner Matters
-----------------------
According to the records of CAII, an affiliate of the general partner, as of
June 30, 2000, CAII owes the Partnership approximately $400,000, for rents,
remarketing proceeds and other amounts (collectively, the "Prior Rents")
collected by CAII on behalf of the Partnership during periods prior to
February 1, 2000 (the "Prior Periods"). According to its own records, CAII
owes approximately $3.0 million to other investors and creditors as of July
31, 2000 (who, along with the Partnership, are referred to herein as the
"Payees"), for Prior Rents collected by CAII on their behalf during the Prior
Periods. CAII, which presently does not have the funds to repay all of the
Prior Rents, is in negotiations with the Payees to develop a plan for
repayment of the Prior Rents owed to all Payees over time. The Partnership
is withholding acquisition fees and managements fees otherwise payable to the
general partner and crediting such withheld fees (the "Fees") against the
Prior Rents owing from CAII. The Partnership intends to continue to withhold
future Fees until such time as it recovers all Prior Rents.
The amount stated on the Balance Sheet as Receivable from affiliates is net
of a $300,000 allowance recorded at December 31, 1999.
The Partnership relies upon the services of CAII for origination of leases,
administrative and accounting services and remarketing of leases and
equipment, among other services. Should CAII be unable to develop a plan for
repayment with it's Payees, the Partnership may be required to contract with
another party for these services. In such event, there is no assurance that
another provider of these services can be identified.
8
<PAGE>
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:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------------- ---------------------------------------------------
2000 1999 Change 2000 1999 Change
--------- --------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Leasing margin $ 944,210 $ 835,901 $ 108,309 $ 1,962,702 $ 1,606,558 $ 356,144
Equipment sales margin 27,964 39,009 (11,045) 34,137 51,580 (17,443)
Interest income 22,764 21,430 1,334 38,265 45,883 (7,618)
Management fees paid to general partner (47,931) (106,734) 58,803 (128,665) (213,171) 84,506
Direct services from general partner (35,673) (49,359) 13,686 (106,644) (97,129) (9,515)
General and administrative expenses (112,884) (73,144) (39,740) (191,714) (128,161) (63,553)
Provision for losses (25,000) (25,000) - (75,000) (100,000) 25,000
--------- --------- ---------- ----------- ----------- -----------
Net income $ 773,450 $ 642,103 $ 131,347 $ 1,533,081 $ 1,165,560 $ 367,521
========= ========= ========== =========== =========== ===========
</TABLE>
Leasing Margin
Leasing margin consists of the following:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------ -------------------------
2000 1999 2000 1999
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Operating lease rentals $4,295,791 $4,677,802 $ 8,472,167 $ 9,378,255
Direct finance lease income 223,412 65,198 588,403 142,166
Depreciation (3,248,535) (3,665,450) (6,509,810) (7,416,524)
Interest on discounted lease rentals (326,458) (241,649) (588,058) (497,339)
---------- ---------- ----------- -----------
Leasing margin $ 944,210 $ 835,901 $ 1,962,702 $ 1,606,558
========== ========== =========== ===========
Leasing margin ratio 21% 18% 22% 17%
========== ========== =========== ===========
</TABLE>
Operating lease rentals and depreciation decreased for the six months ended June
30, 2000 compared to the six months ended June 30, 1999 due to a decrease in the
operating lease portfolio. Interest on discounted lease rentals increased for
the six months ended June 30, 2000 compared to the six months ended June 30,
1999 primarily due to an increase in discounted lease rentals. Direct finance
lease income increased for the three and six months ended due to an increase in
the net investment in direct finance leases compared to the same period of 1999.
9
<PAGE>
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 fluctuates based upon (i) the mix of direct finance leases
and operating leases, (ii) remarketing activities, (iii) the method used to
finance leases added to the Partnership's lease portfolio, and (iv) the relative
age of lease types in the portfolio. Leasing margin and the related 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 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:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ----------------------
<S> <C> <C> <C> <C>
2000 1999 2000 1999
--------- --------- --------- ---------
Equipment sales revenue $ 144,847 $ 313,035 $ 239,739 $ 691,266
Cost of equipment sales (116,883) (274,026) (205,602) (639,686)
--------- --------- --------- ---------
Equipment sales margin $ 27,964 $ 39,009 $ 34,137 $ 51,580
========= ========= ========= =========
</TABLE>
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. Equipment sales margin decreased for the three and six months
ended June 30, 2000 compared to the same period in 1999 primarily due to a
variance in equipment available for sale.
Interest Income
Interest income decreased for the six months ended June 30, 2000 compared to the
six months ended June 30, 1999 due to a decrease in invested cash. 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.
10
<PAGE>
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 are earned on gross rents received and will fluctuate due to
variances in cash flow. Management fees paid to general partner for the six
months ended June 30, 2000 were lower than the six months ended June 30, 1999
primarily due to an decrease in rents collected.
Direct services from general partner increased for the six months ended June 30,
2000 compared to the six months ended June 30, 1999 primarily due to a change in
the method in which the general partner charges for its asset management
services. The Partnership pays a refurbishing charge to the general partner at
the time computer equipment is returned by the lessee to the Partnership. The
refurbishing charge includes all services necessary to prepare the equipment for
re-sale. Computer equipment returned to the Partnership for the six months
ended June 30, 2000 generated refurbishing charges in the amount of $52,030.
General and administrative charges increased for the six months ended June 30,
2000 compared to the six months ended June 30, 1999 primarily due to a one time
remarketing fee on the renewal of a lease for approximately $25,000, an increase
in audit fees of $22,000 and an increase in income tax expense of approximately
$13,000. The increase in income tax expense is due to a change by the State of
Michigan, in the method of apportions of multi-state companies and an increase
in appraised fees to determine fair market value.
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
assessments of the estimated residual value of its assets to identify any other-
than-temporary losses in value. The Partnership recorded a provision for loss
of $75,000 for the six months ended June 30, 2000 related primarily to equipment
returned to the Partnership and the associated decrease in the estimated value
to be received from the equipment.
11
<PAGE>
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, 2000, the Partnership acquired equipment
subject to leases with a total purchase price of $7,006,579. As of June 30,
2000, the general partner had identified approximately $3 million of additional
equipment that satisfied the Partnership's acquisition criteria and is expected
to be acquired during the remainder of 2000.
During the six months ended June 30, 2000, the Partnership declared
distributions to the partners of $2,637,004 ($9,298 of which was paid in July
2000). 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 which 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 2000, 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.
According to the records of CAII, an affiliate of the general partner, as of
June 30, 2000, CAII owes the Partnership approximately $400,000, for rents,
remarketing proceeds and other amounts (collectively, the "Prior Rents")
collected by CAII on behalf of the Partnership during periods prior to February
1, 2000 (the "Prior Periods"). According to its own records, CAII owes
approximately $3.0 million to other investors and creditors as of July 31, 2000
(who, along with the Partnership, are referred to herein as the "Payees"), for
Prior Rents collected by CAII on their behalf during the Prior Periods. CAII,
which presently does not have the funds to repay all of the Prior Rents, is in
negotiations with the Payees to develop a plan for repayment of the Prior Rents
owed to all Payees over time. The Partnership is withholding acquisition fees
and managements fees otherwise payable to the general partner and crediting such
withheld fees (the "Fees") against the Prior Rents owing from CAII. The
Partnership intends to continue to withhold future Fees until such time as it
recovers all Prior Rents.
The amount stated on the Balance Sheet as Receivable from affiliates is net of a
$300,000 allowance recorded at December 31, 1999.
12
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity & Capital Resources, continued
-----------------------------
The Partnership relies upon the services of CAII for origination of leases,
administrative and accounting services and remarketing of leases and equipment,
among other services. Should CAII be unable to develop a plan for repayment with
it's Payees, the Partnership may be required to contract with another party for
these services. In such event, there is no assurance that another provider of
these services can be identified.
New Accounting Pronouncements
-----------------------------
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities ("Statement 133").
Statement 133 establishes accounting and reporting standards for derivative
instruments and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. Statement 133 is
effective for fiscal years beginning after June 15, 1999, with earlier
application permitted. In June 1999, the Financial Accounting Standards Board
issued SFAS No. 137, Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement 133, an Amendment
of FASB Statement 133. Statement 137 effectively extends the required
application of Statement 133 to fiscal years beginning after June 15, 2000, with
earlier application permitted. The Partnership adopted Statement 133 in the
first quarter of 1999. The General Partner does not expect the adoption of
Statement 133 or Statement 137 to have an impact on its financial reporting.
"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 1999 Form 10-KA when and where applicable.
13
<PAGE>
Item 3. Quantitative and Qualitative Disclosures About Market Risk
----------------------------------------------------------
The partnership's leases with equipment users are non-cancelable and have lease
rates which 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 partnerships other assets and liabilities are also at fixed
rates. Consequently the partnership has no significant interest rate risk or
other market risk exposure.
14
<PAGE>
CAPITAL PREFERRED YIELD FUND-IV, L.P.
PART II.
OTHER INFORMATION
Item 1. Legal Proceedings
The Partnership is not a party to any material legal proceedings
outside the ordinary course of its business.
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, 2000.
15
<PAGE>
Item No. Exhibit Index
27 Financial Data Schedule
16
<PAGE>
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, 2000 By: /s/Susan M. Landi
------------------------
Susan M. Landi
Chief Accounting Officer
17
