<PAGE> 1
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, 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 .
--- ---
Page 1 of 16 Pages
Exhibit Index Appears on Page 17
<PAGE> 2
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Quarterly Report on Form 10-Q
For the Quarter Ended
September 30, 2000
Table of Contents
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE
----
<S> <C>
Item 1. Financial Statements (Unaudited)
Balance Sheets - September 30, 2000 and December 31, 1999 3
Statements of Income - Three and Nine Months Ended
September 30, 2000 and 1999 4
Statements of Cash Flows - Nine months Ended
September 30, 2000 and 1999 5
Notes to Financial Statements 6-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-13
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
Signature 16
Exhibit Index 17
</TABLE>
2
<PAGE> 3
CAPITAL PREFERRED YIELD FUND-IV, L.P.
BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
September 30, December 31,
2000 1999
-------------- --------------
(Unaudited)
<S> <C> <C>
Cash and cash equivalents $ 4,309,505 $ 1,133,758
Accounts receivable, net 1,367,167 382,407
Receivable from affiliates -- 413,249
Equipment held for sale or re-lease 556,655 355,193
Net investment in direct finance leases 3,809,269 4,405,522
Leased equipment, net 37,996,835 41,440,528
-------------- --------------
Total assets $ 48,039,431 $ 48,130,657
============== ==============
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable and accrued liabilities $ 2,659,091 $ 1,047,204
Payables to affiliates 313,132 84,045
Rents received in advance 374,202 450,331
Distributions payable to partners 485,716 494,255
Discounted lease rentals 13,176,071 13,452,270
-------------- --------------
Total liabilities 17,008,212 15,528,105
-------------- --------------
Partners' capital:
General partner -- --
Limited partners:
Class A 30,646,179 32,203,144
Class B 385,040 399,408
-------------- --------------
Total partners' capital 31,031,219 32,602,552
-------------- --------------
Total liabilities and partners' capital $ 48,039,431 $ 48,130,657
============== ==============
</TABLE>
The accompanying notes are an integral part of these
financial statements.
3
<PAGE> 4
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- --------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE:
Operating lease rentals $ 4,049,929 $ 4,867,417 $12,522,097 $14,245,673
Direct finance lease income 201,645 68,197 790,047 210,362
Equipment sales margin 111,822 24,538 145,960 76,118
Interest income 56,422 13,148 94,686 59,031
----------- ----------- ----------- -----------
Total revenue 4,419,818 4,973,300 13,552,790 14,591,184
----------- ----------- ----------- -----------
EXPENSES:
Depreciation 2,952,600 3,963,694 9,462,410 11,380,217
Management fees paid to general partner 99,815 99,745 228,480 312,917
Direct services from general partner 14,137 55,414 120,781 152,543
General and administrative 11,570 44,841 203,284 173,002
Interest on discounted lease rentals 284,516 185,321 872,574 682,660
Provision for losses 50,000 25,000 125,000 125,000
----------- ----------- ----------- -----------
Total expenses 3,412,638 4,374,015 11,012,529 12,826,339
----------- ----------- ----------- -----------
NET INCOME $ 1,007,180 $ 599,285 $ 2,540,261 $ 1,764,845
=========== =========== =========== ===========
NET INCOME ALLOCATED:
To the general partner $ 13,156 $ 13,284 $ 39,564 $ 39,891
To the Class A limited partners 984,084 580,141 2,475,691 1,707,705
To the Class B limited partner 9,940 5,860 25,006 17,249
----------- ----------- ----------- -----------
$ 1,007,180 $ 599,285 $ 2,540,261 $ 1,764,845
=========== =========== =========== ===========
Net income per weighted average Class A
limited partner unit outstanding $ 2.01 $ 1.17 $ 5.04 $ 3.44
=========== =========== =========== ===========
Weighted average Class A limited partner
units outstanding 490,744 496,194 491,513 496,601
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
<PAGE> 5
CAPITAL PREFERRED YIELD FUND-IV, L.P.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------------
September 30, September 30,
2000 1999
-------------- --------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 15,888,239 $ 14,686,560
-------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment on operating leases from affiliate (5,703,442) (4,602,466)
Investment in direct finance leases, acquired from affiliate -- (634,629)
-------------- --------------
Net cash used in investing activities (5,703,442) (5,237,095)
-------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from discounted lease rentals 2,453,422 --
Principal payments on discounted lease rentals (5,342,339) (6,724,833)
Redemptions of Class A limited partner units (158,950) (54,927)
Distributions to partners (3,961,183) (3,990,217)
-------------- --------------
Net cash used in financing activities (7,009,050) (10,769,977)
-------------- --------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,175,747 (1,320,512)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,133,758 2,634,551
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,309,505 $ 1,314,039
============== ==============
Supplemental disclosure of cash flow information:
Interest paid on discounted lease rentals $ 872,574 $ 682,660
Supplemental disclosure of noncash investing and
financing activities:
Discounted lease rentals assumed in equipment acquisitions 2,612,718 3,639,490
</TABLE>
The accompanying notes are an integral part of these
financial statements.
5
<PAGE> 6
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 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 all fiscal quarters of all 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 all fiscal quarters of all fiscal years beginning after
June 15, 2000, with earlier application permitted. The Partnership adopted
Statement 133 in the first quarter of 1999.
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 September 30, 2000, management fees of $20,035
are included in payables to affiliates.
6
<PAGE> 7
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATEMENTS
(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 September 30, 2000, direct services from
the General Partner in the amount of $6,627 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 AFFILIATES
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 nine months ended September 30, 2000, the Partnership acquired
the equipment described below from Capital Associates International, Inc.:
<TABLE>
<CAPTION>
Acquisition Fees
Cost of and Total Equipment
Lessee Equipment Description Equipment Reimbursements Purchase Price
-------------------- ------------------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
American Honda Editing Equipment $ 9,998 $ 346 $ 10,344
Chrysler Forklift 94,120 3,261 97,381
E-Trade Office Furniture 283,627 9,828 293,454
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
New York Hospital Ultra Sound Equipment 1,171,604 40,596 1,212,200
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 3,022,170
Unilever Forklift 65,281 2,262 67,543
Xerox Computers 53,505 1,854 55,359
--------------- --------------- -----------------
$ 8,037,656 $ 278,504 $ 8,316,160
=============== =============== =================
</TABLE>
7
<PAGE> 8
CAPITAL PREFERRED YIELD FUND-IV, L.P.
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
2. Transactions With the General Partner and Affiliates, continued
EQUIPMENT PURCHASES, continued
As of September 30, 2000, the general partner had identified approximately
$750,000 of equipment that satisfied the Partnership's investment criteria
and is expected to be acquired during the remainder of 2000.
8
<PAGE> 9
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
3. General Partner Matters
Until September 2000, the Partnership relied upon the services of Capital
Associates International, Inc. ("CAII"), its affiliate, for origination of
leases, administrative and accounting services and remarketing of leases
and equipment, among other services. The General Partner has terminated
its relationship with CAII and has contracted with Stellar Financial, Inc.
to provide billing, accounting and property tax repayment services and
Mishawaka Leasing Company, Inc. ("Mishawaka") to provide all other lease
accounting, administrative and remarketing services. Many of the
management and administrative personnel of Mishawaka Leasing Company, Inc.
formerly worked for CAII and serviced the Partnership leases.
CAII owed the Partnership $406,144 for rents, remarketing proceeds and
other amounts (the "Prior Rents") collected by CAII on behalf of the
Partnership during the periods prior to February 1, 2000. On September 8,
2000, as part of the Sale of the General Partnership interest owned by
CAII to Mishawaka, Mishawaka repaid the Prior Rents owed by CAII to the
Partnership. Included in payables to affiliates is $286,469 of
administrative expenses that are reimbursable to the General Partner.
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 Nine Months
Ended September 30, Ended September 30,
-------------------------- ---------------------------
2000 1999 Change 2000 1999 Change
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Leasing margin $ 1,014,458 $ 786,599 $ 227,859 $ 2,977,160 $ 2,393,158 $ 584,002
Equipment sales margin 111,822 24,538 87,284 145,960 76,118 69,842
Interest income 56,422 13,148 43,274 94,686 59,031 35,655
Management fees paid to general partner (99,815) (99,745) (70) (228,480) (312,917) 84,437
Direct services from general partner (14,137) (55,414) 41,277 (120,781) (152,543) 31,762
General and administrative expenses (11,570) (44,841) 33,271 (203,284) (173,002) (30,282)
Provision for losses (50,000) (25,000) (25,000) (125,000) (125,000) --
----------- ----------- ----------- ----------- ----------- -----------
Net income $ 1,007,180 $ 599,285 $ 407,895 $ 2,540,261 $ 1,764,845 $ 775,416
=========== =========== =========== =========== =========== ===========
</TABLE>
9
<PAGE> 10
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
LEASING MARGIN
Leasing margin consists of the following:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ -----------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Operating lease rentals $ 4,049,929 $ 4,867,417 $ 12,522,097 $ 14,245,673
Direct finance lease income 201,645 68,197 790,047 210,362
Depreciation (2,952,600) (3,963,694) (9,462,410) (11,380,217)
Interest on discounted lease rentals (284,516) (185,321) (872,574) (682,660)
------------ ------------ ------------ ------------
Leasing margin $ 1,014,458 $ 786,599 $ 2,977,160 $ 2,393,158
============ ============ ============ ============
Leasing margin ratio 24% 16% 22% 17%
== == == ==
</TABLE>
Operating lease rentals and depreciation decreased for the nine months ended
September 30, 2000 compared to the nine months ended September 30, 1999 due to a
decrease in the operating lease portfolio. Interest on discounted lease rentals
increased for the three and nine months ended September 30, 2000 compared to the
three and nine months ended September 30, 1999 primarily due to an increase in
remarketing leases. Direct finance lease income increased for the three and nine
months ended compared to the same period of 1999 due to the addition of a large
lease at the end of 1999.
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).
10
<PAGE> 11
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
EQUIPMENT SALES MARGIN
Equipment sales margin consists of the following:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
2000 1999 2000 1999
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Equipment sales revenue $ 1,340,530 $ 98,748 $ 1,580,269 $ 790,014
Cost of equipment sales (1,228,708) (74,210) (1,434,309) (713,896)
----------- ----------- ----------- -----------
Equipment sales margin $ 111,822 $ 24,538 $ 145,960 $ 76,118
=========== =========== =========== ===========
</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 increased for the three and nine months
ended September 30, 2000 compared to the same period in 1999 primarily due to an
increase in the expiration of leases within the portfolio.
INTEREST INCOME
Interest income increased for the nine months ended September 30, 2000 compared
to the nine months ended September 30, 1999 due to an increase 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.
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 nine
months ended September 30, 2000 were lower than the nine months ended September
30, 1999 primarily due to an decrease in rents collected.
Direct services from general partner decreased for the nine months ended
September 30, 2000 compared to the nine months ended September 30, 1999
primarily due to a change in the method in which the general partner charges for
its asset management services that was implemented during the fourth quarter of
1999. 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 nine months
ended September 30, 2000 generated refurbishing charges in the amount of
$75,845.
General and administrative charges increased for the nine months ended September
30, 2000 compared to the nine months ended September 30, 1999 primarily due to a
one time remarketing fee on the renewal of a lease for approximately $25,000, an
increase in data processing costs of $13,236 and an increase in income tax
expense of approximately $13,000. The increase in sales 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.
11
<PAGE> 12
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations, continued
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 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 $125,000 for the nine months ended September 30, 2000 related primarily
to equipment returned to the Partnership and the associated decrease in the
estimated value to be received from the equipment.
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 nine months ended September 30, 2000, the Partnership acquired
equipment subject to leases with a total purchase price of $8,316,160. As of
September 30, 2000, the general partner had identified approximately $750,000 of
additional equipment that satisfied the Partnership's acquisition criteria and
is expected to be acquired during the remainder of 2000.
During the nine months ended September 30, 2000, the Partnership declared
distributions to the partners of $3,952,644 ($485,716 of which was paid in
October 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 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.
12
<PAGE> 13
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, continued
Until September 2000, the Partnership relied upon the services of Capital
Associates International, Inc. ("CAII"), its affiliate, for origination of
leases, administrative and accounting services and remarketing of leases and
equipment, among other services. The General Partner has terminated its
relationship with CAII and has contracted with Stellar Financial, Inc. to
provide billing, accounting and property tax repayment services and Mishawaka
Leasing Company, Inc. ("Mishawaka") to provide all other lease accounting,
administrative and remarketing services. Many of the management and
administrative personnel of Mishawaka Leasing Company, Inc. formerly worked for
CAII and serviced the Partnership leases.
CAII owed the Partnership $406,144 for rents, remarketing proceeds and other
amounts (the "Prior Rents") collected by CAII on behalf of the Partnership
during the periods prior to February 1, 2000. On September 8, 2000, as part of
the Sale of the General Partnership interest owned by CAII to Mishawaka,
Mishawaka repaid the Prior Rents owed by CAII to the Partnership. Included in
payables to affiliates is $286,469 of administrative expenses that are
reimbursable to the General Partner.
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
all fiscal quarters of all fiscal years beginning after June 15, 2000, with
earlier application permitted. The Partnership adopted Statement 133 in the
first quarter of 1999.
"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> 14
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> 15
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
27 Financial Data Schedule
(b) The Partnership did not file any reports on Form 8-K during
the quarter ended September 30, 2000.
15
<PAGE> 16
CAPITAL PREFERRED YIELD FUND-IV, L.P.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Partnership has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAPITAL PREFERRED YIELD FUND-IV, L.P.
By: CAI Equipment Leasing V Corp.
Dated: November 14, 2000 By: /s/ Susan M. Landi
------------------------
Susan M. Landi
Chief Accounting Officer
16
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
17
