CAPITAL PREFERRED YIELD FUND IV LP
Capital Preferred Yield Fund-IV, L.P., a Delaware limited partnership (the "Partnership"), was organized on December 18, 1995 and is engaged in the business of owning and leasing equipment. CAI Equipment Leasing V Corp. ("CAIEL-V"), a Colorado corporation, is the general partner of the Partnership. CAIEL-V was a wholly owned subsidiary of Capital Associates, Inc. ("CAI") until September 12, 2000, the date it was purchased in its entirety by Mishawaka Leasing Company, Inc. ("MLC"). CAI discontinued its operations on December 15, 2000 and filed Chapter 11 Bankruptcy on October 15, 2001.  Capital Associates International, Inc. ("CAII"), a wholly owned subsidiary of CAI, was the Class B limited partner of the Partnership prior to September 12, 2000. In exchange for its Class B limited partner interest, CAII contributed $500,000 (i.e., $10,000 for each $1,000,000 contribution to the Partnership made by the Class A limited partners) to the Partnership making it the largest single investor in the Partnership. The contributions of CAII were made simultaneously with the purchase of equipment by the Partnership. MLC became the Class B limited partner as of September 12, 2000.  The Partnership's overall investment objectives are to (i) raise the maximum allowable capital from investors for investment in accordance with the Partnership's investment objectives described in the Prospectus; (ii) invest such capital and related indebtedness in a diversified portfolio of equipment subject to leases to creditworthy businesses with terms ranging from two to seven years; (iii) if funds are available for distribution, make monthly cash distributions to the Class A and Class B limited partners during the reinvestment period (a period that ended approximately June 30, 2002); (iv) re-invest all available undistributed cash from operations and cash from sales in additional equipment during the reinvestment period to increase the Partnership's portfolio of revenue-generating equipment, provided that suitable equipment can be identified and acquired; and (v) sell or otherwise dispose of the Partnership's equipment and other assets in an orderly manner during the liquidation period (which began in 2002) and promptly distribute cash from sales thereof to the partners.  Since its formation, the Partnership acquired equipment of various types under lease to third parties on short-term leases (generally five years or less). All of the equipment was either (i) arranged by MLC to be acquired by the Partnership from third parties, or (ii) purchased by CAII directly from manufacturers or from other independent third parties and sold to the Partnership. The equipment is generally comprised of transportation and industrial equipment, office furniture and equipment, and computer and peripheral equipment, among others. The Partnership entered its liquidation period, as defined in the Partnership Agreement, in July 2002. During the liquidation period, purchases of equipment will cease (other than for prior commitments or for equipment upgrades). The Partnership is required to dissolve and distribute all of its assets no later than December 31, 2007. However, the general partner anticipates that all equipment will be sold and the Partnership will be liquidated by December 2006. The Partnership has not yet adopted a formal plan of liquidation and, as such, the financial statements have been prepared on a going-concern basis.  The Partnership may assign the rentals from leases to financial institutions, or acquire leases subject to such assignments, at fixed interest rates on a nonrecourse basis. The proceeds of this nonrecourse debt financing will be utilized to finance the purchase of equipment under lease or to invest in additional equipment under lease. In the event of default by a lessee, the financial institution has a first lien on the underlying leased equipment with no further recourse against the Partnership. Cash proceeds from such financings, or financings assumed in the acquisition of leases, are recorded on the balance sheet as discounted lease rentals. As lessees make payments to financial institutions, leasing revenue and interest expense are recorded.                                         2  The Partnership leases equipment to investment grade lessees in diverse industries including the material handling, telecommunications and manufacturing industries. The majority of the Partnership's total equipment under lease is leased to investment grade lessees. Pursuant to the Partnership Agreement, an investment grade lessee is a company (i) with a net worth in excess of $100,000,000 (and no debt issues that are rated); or (ii) with a credit rating of not less than Baa as determined by Moody's Investor Services, Inc. or comparable credit rating, as determined by another recognized credit rating service; or (iii) a lessee, all of whose lease payments have been unconditionally guaranteed or supported by a letter of credit issued by a company meeting one of the above requirements. The Partnership limits its credit risk through selective use of nonrecourse debt financing of future lease rentals, as described above.  The Partnership only acquires equipment that is on lease at the time of acquisition. After the initial term of its lease, each item of equipment is expected to provide additional investment income from its re-lease or sale. Upon expiration of the initial lease, the Partnership attempts to re-lease or sell the equipment to the existing lessee. If a re-lease or sale to the lessee cannot be negotiated, the Partnership will attempt to lease or sell the equipment to a third party.  The Partnership's business is not subject to seasonal variations.  The ultimate rate of return on leases depends, in part, on the general level of interest rates at the time the leases are originated as well as 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). The amount of future distributions to the partners will depend, in part, on future interest rates.  The Partnership has no employees. Prior to September 12, 2000, the general partner relied upon the services of CAII for origination of leases, administrative and accounting services, and remarketing of leases and equipment, among other services related to the Partnership's assets. Since September 12, 2000, the general partner has contracted with MLC to provide the above services. Many of the management and administrative personnel of MLC formerly worked for CAII and serviced the Partnership's leases. The general partner is entitled to receive certain fees and expense reimbursements in connection with the performance of these services and is responsible for paying MLC. See Item 10 of this Report, "Directors and Executive Officers of the Partnership" and Item 13 of this Report, "Certain Relationships and Related Transactions".  The Partnership competes in the leasing marketplace as a lessor with a significant number of other companies, including equipment manufacturers, leasing companies and financial institutions. The Partnership competes mainly on the basis of the expertise of its general partner in remarketing equipment, terms offered in its transactions, pricing and service. Although the Partnership does not account for a significant percentage of the leasing market, the general partner believes that the Partnership's marketing strategies and financing capabilities and remarketing expertise enable it to compete effectively in the equipment leasing and remarketing markets.  The Partnership leases equipment to seventy-five lessees. One lessee, General Motors Corporation, accounted for approximately 25% of total revenue of the Partnership in 2005. The same lessee accounted for approximately 20% of total revenue of the Partnership during 2004. There have been no new leases with this lessee since the Partnership entered the liquidation period in 2002.                                         3
Risks Related to Our Business  Distributions to partners will be impacted by interest rates and on-going lessee creditworthiness  The ultimate rate of return on leases depends, in part, on the general level of interest rates at the time the leases are originated as well as on on-going lessee creditworthiness. Because leasing is an alternative to financing equipment purchases with debt, lease rates, and in the case of re-leases after the initial lease, tend to rise and fall with interest rates (although lease rate movements generally lag interest rate changes in the capital markets). The amount of future distributions to the partners will depend, in part, on on-going lessee creditworthiness and future interest rates.  Distributions to partners will be impacted by future equipment values  The ultimate rate of return on leases depends, in part, on future equipment values. These values are typically realized after the initial lease term is completed and are realized through the re-lease or sale of equipment. As such, distributions to partners will be impacted by future equipment values.  Distributions  to partners  will be impacted by the value  realized in the final liquidation of the partnership  The Partnership will continue until December 31, 2007 unless terminated earlier in accordance with the terms of the Partnership Agreement. All equipment owned by the Partnership is expected to be sold and the Partnership liquidated in 2006. As such, distributions to partners will be impacted by the amount realized from the sale of equipment and leases upon liquidation.   Actual results could differ from the estimates and assumptions used to prepare our financial statements .  In order to prepare financial statements in conformity with accounting principles generally accepted in the United States of America, we are required to make estimates and assumptions as of the date of the financial statements which affect the reported values of our assets, liabilities, revenues and expenses, and disclosures of contingent assets and liabilities. Areas requiring significant estimates by us include:       o    Allowances for losses of accounts receivable       o    Residual value impairments       o    Future rental streams from leases   Risks Related to Market For Partnership Units  Absence of a public market may prevent you from selling your partnership units.  There is no public market for partnership units and none is expected to develop. Due to certain redemption limitations described in the partnership agreement, the partnership may not have the ability to redeem partnership units upon request.                                         4  Risks Related to Regulatory Compliance  Our costs may increase as a result of complying with regulatory requirements  Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty. Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 ("SOX") and related SEC regulations, are creating uncertainty for public companies. We continually evaluate and monitor developments with respect to new and proposed rules and cannot predict or estimate the amount of the additional costs we may incur or the timing of such costs.
We do not currently have any unresolved written comments from the Staff of the SEC regarding our periodic or current reports under the Securities Exchange Act of 1934.
Per the Partnership Agreement, the Partnership does not own or lease any physical properties other than the equipment discussed in Item 1 "Business," of this Report, which is incorporated herein by reference.
Neither the Partnership nor any of the Partnership's equipment is the subject of any material pending legal proceedings.
No matters were submitted to a vote of the limited partners of the Partnership, through the solicitation of proxies or otherwise, during the fourth quarter ended December 31, 2005.
(c)  Distributions, continued       During 2004, the Partnership  made twelve (12)  distributions (a portion of      which  constituted  a return of  capital)  to Class A limited  partners  as      follows:                                             Distributions Per                                             $100 Investment      For the               Payment           (computed on               Total   Period Ended           Made During       weighted average)       Distributions - ------------------      ------------       ----------------       -------------  December 31, 2003       January 2004            $ 0.543            $   262,248 January 31, 2004        February 2004             0.877                423,547 February 28, 2004       March 2004                0.029                 13,917 March 31, 2004          April 2004                0.635                306,323 April 30, 2004          May 2004                  0.827                399,393 May 31, 2004            June 2004                 0.582                281,026 June 30, 2004           July 2004                 0.933                450,260 July 31, 2004           August 2004               1.633                788,097 August 31, 2004         September 2004            1.028                496,014 September 30, 2004      October 2004              2.180              1,052,289 October 31, 2004        November 2004             0.960                463,545 November 30, 2004       December 2004             0.864                417,231                                                 -------            -----------                                                 $ 11.09            $ 5,353,890                                                 =======            ===========       The following represents annual and cumulative distributions per Class A      limited partner unit, as described in note 1 to Notes to Financial      Statements.                         Distribution Amount                Distribution %                         per $100 Class A                 per $100 Class A                        Limited Partner Unit            Limited Partner Unit  Payment                 (computed on                     (computed on Made During             weighted average)              weighted average)(1) - -----------           ---------------------            ---------------------    1996                   $   7.72                            11.0%   1997                      10.50                            10.5%   1998                      10.50                            10.5%   1999                      10.50                            10.5%   2000                      10.50                            10.5%   2001                      10.50                            10.5%   2002                      12.29                            12.3%   2003                      14.33                            14.3%   2004                      11.09                            11.1%   2005                       9.17                             9.2%                          --------                          $ 107.10                                         7       (1)  Cumulative distributions, as described in note 1 to Notes to Financial           Statements, began May 1996.
The following selected financial data relates to the years ended December 31, 2005 through 2001. The data should be read in conjunction with Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and notes thereto appearing with Item 8 herein.                                                             2005           2004            2003           2002            2001                                                          ----           ----            ----           ----            ----        Total revenue                                       $ 8,430,336    $ 12,153,605   $ 15,236,917    $ 18,312,824   $ 19,133,203 Net income (loss)                                     1,335,471       1,521,275        789,369         124,816       (112,651) Net income (loss) per weighted average  Class A   limited partner unit outstanding                         2.66            3.00           1.49            0.11          (0.33) Total assets                                          9,882,543      17,938,287     30,409,653      48,015,520     46,912,390 Discounted lease rentals                              4,472,322       9,545,679     17,582,086      28,582,334     20,141,516 Distributions declared to partners                    4,265,900       5,623,600      5,889,529       7,056,442      5,250,559 Distributions declared per weighted average   Class A limited partner unit outstanding                 8.74           11.53          11.96           14.27          10.50
III.   New Accounting Pronouncements        -----------------------------  No new accounting pronouncements are expected that will have a significant impact on the Partnership.  IV.   "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 acquisitions; realization of residual values; customer credit risk; competition from other lessors, specialty finance lenders or banks; and the availability and cost of financing sources. Certain specific risks associated with particular aspects of the Partnership's business are discussed in detail throughout Parts I and II when and where applicable.
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 at a fixed rate debt. Consequently, the Partnership has limited interest rate risk or other market risk exposure.                                            13
Index to Financial Statements and Financial Statement Schedule                                                                             Page                                                                           Number                                                                           ------          Financial Statements          --------------------               Report of Independent Registered Public Accounting Firm          15               Balance Sheets at December 31, 2005 and 2004                     16               Statements of Operations for the years ended December 31,              2005, 2004 and 2003                                              17               Statements of Partners' Capital for the years ended December              31, 2005, 2004 and 2003                                          18               Statements of Cash Flows for the years ended December 31,              2005, 2004 and 2003                                              19               Notes to Financial Statements                                 20-27            Financial Statement Schedule          ----------------------------               Report of Independent Registered Public Accounting Firm on                          Schedule                                             28               Schedule II - Valuation and Qualifying Accounts                  29                                           14               Report of Independent Registered Public Accounting Firm              -------------------------------------------------------   The Partners Capital Preferred Yield Fund-IV, L.P.:  We have audited the accompanying balance sheets of Capital Preferred Yield Fund-IV, L.P. as of December 31, 2005 and 2004, and the related statements of operations, partners' capital, and cash flows for each of the years in the three-year period ended December 31, 2005. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.  In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Capital Preferred Yield Fund-IV, L.P. as of December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2005, in conformity with United States generally accepted accounting principles.                                                    /s/KPMG LLP                                                -----------                                                KPMG LLP  Denver, Colorado March 10, 2006                                         15                        Capital Preferred Yield Fund-IV, L.P.                                   BALANCE SHEETS                            December 31, 2005 and 2004                                       ASSETS                                                                               2005        2004                                                                         ----------   -----------    Cash and cash equivalents                                              $ 1,000,558   $ 1,208,737 Accounts receivable, net of allowance for losses      of $19,237 in 2005 and $22,019 in 2004                                 90,784        77,014 Prepaid insurance                                                           25,177         5,040 Equipment held for sale                                                    148,566       123,223 Net investment in direct finance leases                                  1,198,399     2,630,701 Leased equipment, net                                                    7,419,059    13,893,572                                                                        -----------   -----------       Total assets                                                      $ 9,882,543   $17,938,287                                                                        ===========   ===========                         LIABILITIES AND PARTNERS' CAPITAL  Liabilities:      Accounts payable and accrued liabilities                          $   449,101   $   420,549      Payables to affiliates                                                250,429       116,570      Rents received in advance                                                   -         7,129      Distributions payable to partners                                     270,450       476,952      Discounted lease rentals                                            4,472,322     9,545,679                                                                        -----------   -----------       Total liabilities                                                   5,442,302    10,566,879                                                                        -----------   -----------  Partners' capital:      General partner                                                             -             -      Limited partners:          Class A 500,000 units authorized; 481,590 and 481,790 units            issued and outstanding in 2005 and 2004, respectively         4,192,369     7,123,337          Class B                                                           247,872       248,071                                                                        -----------   -----------                Total partners' capital                                    4,440,241     7,371,408                                                                        -----------   -----------                Total liabilities and partners' capital                  $ 9,882,543   $17,938,287                                                                        ===========   ===========                   See accompanying notes to financial statements.                                         16                        Capital Preferred Yield Fund-IV, L.P.                              STATEMENTS OF OPERATIONS               For the Years Ended December 31, 2005, 2004 and 2003                                                    2005         2004          2003                                              ----------   -----------   -----------      Revenue:      Operating lease rentals                $ 7,741,018   $11,311,474   $14,215,088      Direct finance lease income                116,290       248,579       451,364      Equipment sales margin                     561,582       586,719       563,679      Interest income                             11,446         6,833         6,786                                             -----------   -----------   -----------           Total revenue                        8,430,336    12,153,605    15,236,917                                             -----------   -----------   -----------  Expenses:      Depreciation                             5,155,423     8,264,058    11,354,415      Management fees to general partner         179,974       266,858       354,944      Direct services from general partner       142,490       327,146       279,544      General and administrative                 469,211       456,658       506,365      Provision for losses                       192,275       348,461       333,000      Remarketing sharing                        465,447          --            --      Interest on discounted lease rentals       490,045       969,149     1,619,280                                             -----------   -----------   -----------           Total expenses                       7,094,865    10,632,330    14,447,548                                             -----------   -----------   -----------  Net income                                  $ 1,335,471     1,521,275   $   789,369                                             ===========   ===========   ===========  Net income allocated:      To the general partner                 $    42,659   $    56,236   $    58,629      To the Class A limited partners          1,279,886     1,450,389       723,433      To the Class B limited partner              12,926        14,650         7,307                                             -----------   -----------   -----------                                             $ 1,335,471   $ 1,521,275   $   789,369                                             ===========   ===========   ===========  Net income per weighted average Class A      limited partner unit outstanding       $      2.66   $      3.00   $      1.49                                             ===========   ===========   ===========  Weighted average Class A limited partner      units outstanding                          481,666       482,680       484,493                                             ===========   ===========   ===========                    See accompanying notes to financial statements.                                         17                        Capital Preferred Yield Fund-IV, L.P.                           STATEMENTS OF PARTNERS' CAPITAL                      For the Years Ended December 31, 2005,                                   2004 and 2003                                                               Class A                                                           Limited          Class A         Class B                                            General        Partners         Limited         Limited                                            Partner         Units           Partners        Partner         Total                                            -------         -----           --------        -------         -----       Partners' capital, December 31, 2002   $       --           484,601    $ 16,376,581    $    261,114    $ 16,637,695  Redemptions                                    --              (140)         (5,856)           --            (5,856) Net income                                   58,629            --           723,433           7,307         789,369 Distributions declared to partners           58,629)           --        (5,795,900)        (35,000)     (5,889,529)                                        ------------    ------------    ------------    ------------    ------------  Partners' capital, December 31, 2003           --           484,461      11,298,258         233,421      11,531,679  Redemptions                                    --            (2,671)        (57,946)           --           (57,946) Net income                                   56,236            --         1,450,389          14,650       1,521,275 Distributions declared to partners          (56,236)           --        (5,567,364)           --        (5,623,600)                                        ------------    ------------    ------------    ------------    ------------ Partners' capital, December 31, 2004           --           481,790       7,123,337         248,071       7,371,408  Redemptions                                    --              (200)           (738)           --              (738) Net income                                   42,659            --         1,279,886          12,926       1,335,471 Distributions declared to partners          (42,659)           --        (4,210,116)        (13,125)     (4,265,900)                                        ------------    ------------    ------------    ------------    ------------  Partners' capital, December 31, 2005   $       --           481,590    $  4,192,369    $    247,872    $  4,440,241                                        ============    ============    ============    ============    ============                    See accompanying notes to financial statements.                                         18                        Capital Preferred Yield Fund-IV, L.P.                             STATEMENTS OF CASH FLOWS               For the Years Ended December 31, 2005, 2004 and 2003                                                                     2005            2004            2003                                                              -------------------------------------------     Cash flows from operating activities: Net income                                                  $  1,335,471    $  1,521,275    $    789,369    Adjustments to reconcile net income to net cash    provided by operating activities:        Depreciation                                            5,155,423       8,264,058      11,354,415        Provision for losses, excluding recoveries                192,275         481,550         333,000        Proceeds, net of gains on equipment sales               1,386,533       1,809,286       1,759,515        Recovery of investment in direct finance leases         1,132,464       2,148,602       2,991,903        Other                                                        --            (8,747)        (70,312)    Changes in assets and liabilities:        (Increase) decrease  in accounts receivable, net          (13,770)        120,992         241,513        Increase in prepaid insurance                             (20,137)           --              --        Increase (decrease) in accounts payable            and accrued liabilities                                28,552        (409,865)       (233,778)        Increase (decrease) in payables to affiliates             133,859         (49,673)        (42,555)        Decrease in rents received in advance                      (7,129)        (30,467)        (59,822)                                                              ------------    ------------    ------------ Net cash provided by operating activities                      9,323,541      13,847,011      17,063,248                                                              -----------    ------------    ------------  Cash flows from financing activities:    Principal payments on discounted lease rentals             (5,058,580)     (7,992,166)    (11,284,845)    Redemptions of Class A limited partner units                     (738)        (57,946)         (5,856)    Distributions to partners                                  (4,472,402)     (5,408,283)     (7,052,977)                                                             ------------    ------------    ------------ Net cash used in financing activities                         (9,531,720)    (13,458,395)    (18,343,678)                                                             ------------    ------------    ------------  Net increase (decrease) in cash and cash equivalents            (208,179)        388,616      (1,280,430) Cash and cash equivalents at beginning of year                 1,208,737         820,121       2,100,551                                                             -----------    ------------     ------------  Cash and cash equivalents at end of year                    $  1,000,558    $  1,208,737    $    820,121                                                             ============    ============    ============   Supplemental disclosure of cash flow information:    Interest paid on discounted lease rentals                $    490,045    $    969,149    $  1,619,280 Supplemental disclosure of noncash investing and    financing activities:    Discounted lease rental obligation relieved related to        Early termination of leases                          $     14,777               -    $     48,459                    See accompanying notes to financial statements.                                         19                        Capital Preferred Yield Fund-IV, L.P.                           NOTES TO FINANCIAL STATEMENTS  1.     Organization and Summary of Significant Accounting Policies        -----------------------------------------------------------         a)  Organization         Capital Preferred Yield Fund-IV, L.P. (the "Partnership") was organized        on December 18, 1995 as a limited partnership under the laws of the State        of Delaware pursuant to an Agreement of Limited Partnership (the        "Partnership Agreement"). The Partnership was formed for the purpose of        acquiring and leasing a diversified portfolio of equipment to        unaffiliated third parties. The Partnership will continue until December        31, 2007 unless terminated earlier in accordance with the terms of the        Partnership Agreement. All equipment owned by the Partnership is expected        to be sold and the Partnership liquidated in 2006. The Partnership has        not yet adopted a formal plan of liquidation and, as such, the financial        statements have been prepared on a going-concern basis. The general        partner of the Partnership is CAI Equipment Leasing V Corp., a wholly        owned subsidiary of Mishawaka Leasing Company, Inc. ("MLC").         The general partner manages the Partnership, including investment of        funds, purchase and sale of equipment, lease negotiation and other        administrative duties. The Partnership initially sold 500,000 Class A        limited partner units to 2,345 investors at a price of $100 per Class A        limited partner unit.         MLC is the Class B limited partner. The Class B limited partner        contributed cash, upon acquisition of equipment, in an amount equal to 1%        of gross offering proceeds received from the sale of Class A limited        partner units.         b)   Use of Estimates         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.         c)  Partnership Allocations         Cash Distributions         During the Reinvestment Period (as defined in the Partnership Agreement),        available cash was distributed to the partners as follows:         First, 1.0% to the general partner and 99.0% to the Class A limited        partners (on a pari passu basis) until the Class A limited partners        receive annual, non-compounded cumulative distributions equal to 10.5% of        their contributed capital.         Second, 1.0% to the general partner and 99.0% to the Class B limited        partner (on a pari passu basis) until the Class B limited partner        receives annual non-compounded distributions equal to 10.5% of its        contributed capital.                                         20                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued  1.     Organization and Summary of Significant Accounting Policies, continued        -----------------------------------------------------------         Partnership Allocations, continued         Cash Distributions, continued        ------------------         Third, any remaining available cash will be reinvested or distributed to        the partners as specified in the Partnership Agreement.         After the Reinvestment Period (i.e. the liquidation period as defined in        the Partnership Agreement), available cash will be distributed to the        partners as follows:         First, in accordance with the first and second allocations during the        Reinvestment Period as described above.         Second, 99.0% to the Class A limited partners and 1.0% to the general        partner (on a pari passu basis), until the Class A limited partners        achieve Payout (as defined in the Partnership Agreement).         Third, 99.0% to the Class B limited partner, 1.0% to the general partner        (on a pari passu basis), until the Class B limited partner achieves        Payout (as defined in the Partnership Agreement).         Fourth, 99.0% to the Class A and Class B limited partners (as a class)        (on a pari passi basis) and 1.0% to the general partner, until the Class        A and Class B limited partners receive cash distributions equal to 170%        of their capital contributions.         Thereafter, 90% to the Class A and Class B limited partners (as a class)        (on a pari passu basis) and 10% to the general partner.         Federal Income Tax Basis Profits and Losses        -------------------------------------------         There are several special allocations that precede the general        allocations of profits and losses to the partners for federal income tax        purposes. The most significant special allocations are as follows:         First, commissions and expenses paid in connection with the sale of Class        A limited partner units are allocated 1.0% to the general partner and        99.0% to the Class A limited partners.         Second, depreciation relating to Partnership equipment and any losses        resulting from the sale of equipment are generally allocated 1.0% to the        general partner and 99.0% to the limited partners (shared 99.0%/1.0% by        the Class A and Class B limited partners, respectively) until the        cumulative amount of such depreciation and such losses allocated to each        limited partner equals such limited partner's contributed capital reduced        by commissions and other expenses paid in connection with the sale of        Class A limited partner units allocated to such partner. Thereafter, gain        on sale of equipment, if any, will be allocated to the general partner in        an amount equal to the sum of depreciation and loss on sale of equipment        previously allocated to the general partner.                                         21                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued  1.     Organization and Summary of Significant Accounting Policies, continued        -----------------------------------------------------------         Partnership Allocations, continued         Federal Income Tax Basis Profits and Losses, continued        -------------------------------------------         Third, notwithstanding anything in the Partnership Agreement to the        contrary, and before any other allocation is made, items of income and        gain for the current year (or period) shall be allocated to the general        partner to the extent of any deficit balance existing in the general        partner's capital account as of the close of the immediately preceding        year, in order to restore the balance in the general partner's capital        account to zero.         After giving effect to special allocations, profits (as defined in the        Partnership Agreement) are first allocated in proportion to, and to the        extent of, any previous losses, in reverse chronological order and        priority. Any remaining profits are allocated in the same order and        priority as cash distributions.         After giving effect to special allocations, losses (as defined in the        Partnership Agreement) are allocated in proportion to, and to the extent        of, any previous profits, in reverse chronological order and priority.        Any remaining losses are allocated 1.0% to the general partner and 99.0%        to the limited partners (shared 99.0%/1.0% by the Class A and Class B        limited partners, respectively).         Financial Reporting - Profits and Losses        ----------------------------------------         For financial reporting purposes, net income (loss) is generally        allocated to the partners in a manner consistent with the allocation of        cash distributions. Differences between the allocation of net income        (loss) and cash distributions are considered in the final allocation        under the Partnership Agreement.         d)  Impairment of Long-Lived Assets         In accordance with Statement of Financial Accounting Standards No. 144,        "Accounting for the Impairment or Disposal of Long-Lived Assets",        long-lived assets, such as property, plant, and equipment, and purchased        intangibles subject to amortization, are reviewed for impairment whenever        events or changes in circumstances indicate that the carrying amount of        an asset may not be recoverable. Recoverability of assets to be held and        used is measured by a comparison of the carrying amount of an asset to        estimated undiscounted future cash flows expected to be generated by the        asset. If the carrying amount of an asset exceeds its estimated        undiscounted future cash flows, an impairment charge is recognized for        the amount by which the carrying amount of the asset exceeds the fair        value of the asset. Assets to be disposed of are separately presented in        the balance sheet and reported at the lower of the carrying amount or        fair value less costs to sell, and are no longer depreciated. The assets        and liabilities of a disposal group classified as held for sale are        presented separately in the appropriate asset and liability sections of        the balance sheet.                                         22                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued        1.  Organization and Summary of Significant Accounting Policies, continued           -----------------------------------------------------------         e)  Lease Accounting         Statement of Financial Accounting Standards No. 13, "Accounting for        Leases", requires that a lessor account for each lease by the direct        finance, sales-type or operating lease method. The Partnership currently        utilizes the direct finance and operating lease methods for all the        Partnership's equipment under lease. Direct finance leases are defined as        those leases that transfer substantially all of the benefits and risks of        ownership of the equipment to the lessee. Operating leases are defined as        any lease that is not a capital lease. These are generally used for        short-term leases of equipment in which the lessee can acquire the use of        equipment for a fraction of the useful life of the asset. For all types        of leases, the determination of profit considers the estimated value of        the equipment at lease termination, referred to as the residual value.        After the inception of a lease, the Partnership may engage in financing        of lease receivables on a nonrecourse basis (i.e., "nonrecourse debt" or        "discounted lease rentals") and/or equipment sale transactions to reduce        or recover its investment in the equipment.         The Partnership's accounting methods and their financial reporting        effects are described below.         f)  Net Investment in Direct Finance Leases ("DFLs")         The cost of the equipment, including acquisition fees paid to the general        partner, is recorded as net investment in DFLs on the accompanying        balance sheets. Leasing revenue, which is recognized over the term of the        lease, consists of the excess of lease payments plus the estimated        residual value over the equipment's cost. Earned income is recognized        monthly to provide a constant yield and is recorded as direct finance        lease income on the accompanying statements of operations. Residual        values are established at lease inception equal to the estimated value to        be received from the equipment following termination of the initial lease        as determined by the general partner. In estimating such values, the        general partner considers all relevant information regarding the        equipment and the lessee.                                          23                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued         1. Organization and Summary of Significant Accounting Policies, continued           -----------------------------------------------------------         g)  Equipment on Operating Leases ("OLs")         The cost of equipment, including acquisition fees paid to the general        partner, is recorded as leased equipment in the accompanying balance        sheets and is depreciated on a straight-line basis over the lease term to        an amount equal to the estimated residual value at the lease termination        date. Leasing revenue consists principally of monthly rents and is        recognized as operating lease rentals in the accompanying statements of        operations. Residual values are established at lease inception equal to        the estimated value to be received from the equipment following        termination of the initial lease as determined by the general partner. In        estimating such values, the general partner considers all relevant        information and circumstances regarding the equipment and the lessee.        Because revenue, depreciation expense and the resultant profit margin        before interest expense are recorded on a straight-line basis, and        interest expense on discounted lease rentals (discussed below) is        recorded on the interest method, lower returns are realized in the early        years of the term of an OL and higher returns in later years.         h)  Nonrecourse Discounting of Future Lease Rentals         The Partnership may assign the future lease rentals to financial        institutions, or acquire leases subject to such assignments, at fixed        interest rates on a nonrecourse basis. In return for such assigned future        rentals, the Partnership receives the discounted value of the rentals in        cash. In the event of default by a lessee, the financial institution has        a first lien on the underlying leased equipment, with no further recourse        against the Partnership. Cash proceeds from such financings, or the        assumption of such financings, are recorded as discounted lease rentals        on the accompanying balance sheets. As lessees make payments to financial        institutions, leasing revenue and interest expense are recorded.         i)  Transactions Subsequent to Initial Lease Termination         After the initial term of equipment under lease expires, the equipment is        either sold or re-leased to the existing lessee or another third party.        The remaining net book value of equipment sold is removed and gain or        loss recorded when equipment is sold. The accounting for re-leased        equipment is consistent with the accounting described under "Net        Investment in Direct Financing Leases" and "Equipment on Operating        Leases" discussed above.         j)  Income Taxes         No provision for income taxes has been made in the financial statements        because taxable income or loss is recorded in the tax return of the        individual partners.         k)    Cash Equivalents         The Partnership considers short-term, highly liquid investments that are        readily convertible to known amounts of cash to be cash equivalents. Cash        equivalents of approximately $629,000 and $1,152,000 at December 31, 2005        and 2004 respectively, are comprised of investments in a mutual fund        which invests solely in U.S. Government treasury bills having maturities        of 90 days or less.                                         24                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued  1.     Organization and Summary of Significant Accounting Policies, continued         -----------------------------------------------------------          l)    Equipment Held for Sale         Equipment held for sale, recorded at the lower of cost or market value        expected to be realized, consists of equipment previously leased to end        users which has been returned to the Partnership following lease        expiration.         m)    Net Income (Loss) Per Class A Limited Partner Unit         Net income (loss) per Class A limited partner unit is computed by        dividing the net income (loss) allocated to the Class A limited partners        by the weighted average number of Class A limited partner units        outstanding during the period.   2.     Net Investment in Direct Finance Leases        ---------------------------------------         The components of the net investment in direct finance leases as of        December 31, were:                                                           2005          2004                                                          ----          ----        Minimum lease payments receivable            $   938,897    $ 2,215,506        Estimated residual values                        295,362        646,098        Unearned income                                  (35,860)      (230,903)                                                     -----------    -----------               Total                                 $ 1,198,399    $ 2,630,701                                                     ============   ===========  3.     Leased Equipment, net        ---------------------         The Partnership's investment in equipment on operating leases by major        classes as of December 31, were:                                                          2005           2004                                                    ------------   ------------        Transportation and industrial equipment     $ 20,814,904   $ 29,505,079        Computers and peripherals                        884,504      1,145,854        Office furniture and equipment                   649,818        649,818        Other                                          3,842,251      6,784,743                                                     -----------   -------------                                                      26,191,477     38,085,494        Accumulated depreciation                     (18,772,418)   (24,191,922)                                                     -----------   ------------                                                    $  7,419,059   $ 13,893,572                                                    ============   ============         Depreciation expense for 2005, 2004 and 2003 was $5,155,423, $8,264,058        and $11,354,415, respectively.                                         25                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued  4.     Future Minimum Lease Payments        -----------------------------         Future minimum lease payments receivable from non-cancelable leases as of        December 31, 2005 are as follows:         Years Ending December 31,      Direct Finance Leases     Operating Leases        -------------------------      ---------------------     ----------------                 2006                      $   859,474              $  2,760,421                2007                           79,423                 1,083,845                                          -----------              ------------                         Total            $   938,897              $  3,844,266                                          ===========              ============  5.     Discounted Lease Rentals        ------------------------         Discounted lease rentals outstanding at December 31, 2005 bear interest        at rates primarily ranging between 6% and 10%. Aggregate maturities of        such nonrecourse obligations are:         Years Ending December 31,        -------------------------                    2006                                $ 3,363,880                   2007                                  1,108,442                                                       -----------                                                       $ 4,472,322  6.     Transactions With the General Partner and Affiliates        ----------------------------------------------------         Origination Fee and Evaluation Fee        ----------------------------------         The general partner earns a fee equal to 3.5% of the purchase price of        equipment acquired by the Partnership (up to a maximum cumulative amount        as specified in the Partnership Agreement), 1.5% of which represents        compensation for selecting, negotiating and consummating the acquisition        of the equipment and 2% of which represents reimbursement for services        rendered in connection with evaluating the suitability of the equipment        and the creditworthiness of the lessees. No origination and evaluation        fees were paid during 2005 or 2004.         Management Fees to General Partner        ----------------------------------         The general partner earns management fees for services performed in        connection with managing the Partnership's equipment equal to 2% of gross        rentals received as permitted under terms of the Partnership Agreement.        The general partner earned approximately $180,000, $267,000 and $355,000        of management fees during 2005, 2004, and 2003, respectively.                                         26                        Capital Preferred Yield Fund-IV, L.P.                     NOTES TO FINANCIAL STATEMENTS, continued  6.     Transactions With the General Partner and Affiliates (continued)        ----------------------------------------------------         Direct Services from General Partner        ------------------------------------         The general partner and its affiliates 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. The Partnership        recorded approximately $142,500, $327,000 and $280,000 of direct services        from the general partner during 2005, 2004 and 2003, respectively.         Payables to Affiliates        ----------------------         Payables to affiliates of approximately $250,500 and $116,500 at December        31, 2005 and 2004, respectively, consist of $11,000 for direct services        from general partner, $13,000 for management fees to general partner, and        $226,500 for reimbursable general and administrative expenses in 2005        which includes accruals for payments due for profit sharing proceeds and        property taxes which will be paid in the first quarter of 2006; and        $26,000 for direct services from general partner, $12,000 for management        fees to general partner, and $78,500 for reimbursable general and        administrative expenses in 2004.  7.     Remarketing Agreement        ---------------------         The Partnership has entered into remarketing agreements with an        unaffiliated third party, whereby that party provides remarketing        services to the Partnership in exchange for profit sharing once the        Partnership has reached certain thresholds, usually relating to rents        received on re-marketed or sold equipment after the expiration of the        initial lease term. During the year ended December 31, 2005, the        Partnership reached its first threshold and was required to begin paying        profit sharing payments on the remarketing agreements. The profit sharing        payments incurred during the year ended December 31, 2005 were $465,447        and are recorded in the accompanying statements of opeartions as        remarketing sharing.  8.     Concentration of Credit Risk        ----------------------------         The majority of the Partnership's equipment under lease was leased to        investment grade companies. Pursuant to the Partnership Agreement, an        investment grade lessee is a company (i) with a net worth in excess of        $100,000,000 (and no debt issues that are rated), or (ii) with a credit        rating of not less than Baa as determined by Moody's Investor Services,        Inc. or comparable credit rating as determined by another recognized        credit rating service; or (iii) a lessee, all of whose lease payments        have been unconditionally guaranteed or supported by a letter of credit        issued by a company meeting one of the above requirements. The        Partnership limits its credit risk through selective use of nonrecourse        discounting of future lease rentals as discussed above.         The Partnership leases equipment to a significant number of lessees. One        lessee accounted for approximately 25% of total revenue during 2005 and        20% in 2004.         The Partnership's cash balance is maintained with a high credit quality        financial institution. At times, such balances may be in excess of the        Federal Deposit Insurance Company (FDIC) insurance limit due to the        receipt of lockbox amounts that have not cleared the presentment bank        (generally for less than two days). As the funds become available, they        are invested in a money market mutual fund.                                         27                 Report of Independent Registered Public Accounting Firm    The Partners Capital Preferred Yield Fund-IV, L.P.:  Under date of March 10, 2006, we reported on the balance sheets of Capital Preferred Yield Fund-IV, L.P. as of December 31, 2005 and 2004, and the related statements of operations, partners' capital, and cash flows for each of the years in the three-year period ended December 31, 2005, which are included in the Partnership's annual report on Form 10-K for the year ended December 31, 2005. In connection with our audits of the aforementioned financial statements, we also audited the related financial statement Schedule II - Valuation and Qualifying Accounts. This financial statement schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.  In our opinion, such financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.                                        /s/KPMG LLP                                     -----------                                        KPMG LLP  Denver, Colorado March 10, 2006                                          28                        CAPITAL PREFERRED YIELD FUND-IV, L.P.                   SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS               For the Years Ended December 31, 2005, 2004 and 2003           COLUMN A             COLUMN B           COLUMN C              COLUMN D      COLUMN E - ---------------------      ----------      ----------------      --------------    --------                            Balance at         Additions                             Balance                            Beginning      Charged(Reversed)                         at End Classification             of Year          to Expenses          Deductions (1)     of Year - --------------             ----------     -----------------      --------------    ---------           2005     ---- Allowance for losses:    Accounts receivable     $  22,019        $     300              $  3,082         $ 19,237      2004     ---- Allowance for losses:   Accounts receivable      $  16,607        $   0,353              $  4,941         $ 22,019      2003    ---- Allowance for losses:   Accounts receivable      $ 267,443        $(180,000)             $ 70,836         $ 16,607        (1) Principally charge-offs against the established allowances.        See accompanying report of independent registered public accounting firm.                                         29
None.
Within 90 days prior to the date of this annual report, 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. 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. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.
No form 8-Ks were filed during the year ended December 31, 2005.
The Partnership has no officers and directors. The general partner manages and controls the affairs of the Partnership and has general responsibility and authority in all matters affecting its business. Information concerning the directors and executive officers of the general partner is as follows:                            CAI Equipment Leasing V Corp.           Name                       Positions Held          ----                       --------------      John F. Olmstead               President and Director      Mary M. Ebele                  Principal Financial Officer  John F. Olmstead, age 61, has been President of Mishawaka Leasing Company, Inc. since its formation in September 2000. He was Senior Vice President of CAII from December 1988, until June 2000. He has served as Chairman of the Board for Neo-kam Industries, Inc., Matchless Metal Polish Company, Inc. and ACL, Inc. since 1983. He has over 30 years of experience holding various positions of responsibility in the leasing industry. Mr. Olmstead holds a Bachelor of Science degree from Indiana University and a Juris Doctorate degree from Indiana Law School.  Mary M. Ebele, age 43, has been with Mishawaka Leasing Co. as a Lease Accountant since its formation in September 2000. She worked in a similar capacity at CAI from August 1999 until November 2000. She assumed the position of Principal Financial Officer in December 2004. She holds a Bachelor of Arts degree from the State University of New York at Potsdam and is currently pursuing a second degree from Metro State College in Denver, Colorado.                                         30
No compensation was paid by the Partnership to any officers or directors of the general partner. See Item 13 of this Report, "Certain Relationships and Related Transactions" for a description of the compensation and fees paid to the general partner and its affiliates by the Partnership during 2005.
(a) As of the date hereof, no person is known by the Partnership to be the          beneficial owner of more than 5% of the Class A limited partner units          of the Partnership. The Partnership has no directors or officers, and          neither the general partner nor the Class B limited partner of the          Partnership own any Class A limited partner units.           MLC is the Class B limited partner.           CAI Equipment Leasing V Corp. is the general partner.           The names and addresses of the general partner and the Class B limited          partner are as follows:           General Partner           CAI Equipment Leasing V Corp.          7901 Southpark Plaza          Suite 107          Littleton, Colorado 80120           Class B Limited Partner          -----------------------           Mishawaka Leasing Company, Inc.          7901 Southpark Plaza          Suite 107          Littleton, Colorado 80120       (b) No directors or officers of the general partner or the Class B limited          partner owned any Class A limited partner units as of December 31,          2005.       (c) The Partnership knows of no arrangements, the operation of which may at          a subsequent date result in a change in control of the Partnership.
The general partner and its affiliates receive certain types of compensation, fees or other distributions in connection with the operations of the Partnership.  Following is a summary of the amounts paid or payable to the general partner and its affiliates during 2005:                                         31                          Acquisition and Operating Stages   Acquisition Fee and Acquisition Cost Reimbursement - --------------------------------------------------  The general partner receives a fee equal to 3.5% of the purchase price of equipment sold to the Partnership, 1.5% of which represents compensation for selecting, negotiating and consummating the acquisition of the equipment and 2% of which represents reimbursement for services rendered in connection with evaluating the suitability of the equipment and the creditworthiness of lessees. There were no origination and evaluation fees in 2005.   Management Fees - ---------------  The general partner receives management fees as compensation for services rendered in connection with managing the Partnership's equipment equal to 2% of gross rentals received. Such fees totaled $179,974 for 2005 and $266,858 for 2004.   Accountable General and Administrative Expenses - -----------------------------------------------  The general partner is entitled to reimbursement of certain expenses paid on behalf of the Partnership that are incurred in connection with the Partnership's operations. Such reimbursable expenses totaled $142,490 during 2005 and $327,146 during 2004.  Additionally, the general partner is allocated 1% of Partnership cash distributions and net income relating to its general partner interest in the Partnership. Distributions and net income allocated to the general partner totaled $42,659 for 2005 and $56,236 for 2004. Net income allocated to the Class B limited partner totaled $12,926 during 2005 and $14,650 during 2004.
Audit Fees - ----------  Fees paid to the principal accountant for the audit of the annual financial statements and review of financial statements included in Form 10-Q totaled $81,000 in 2005 and $63,750 in 2004.  Fees paid to the principal accountant for tax compliance, tax advice, and tax planning totaled $47,548 for 2005 and $54,750 for 2004.                                         32
(a)          and          (d) The following documents are filed as part of this Report:                 1.   Financial Statements: (Incorporated by reference to Item 8                     of this Report, "Financial Statements and Supplementary                     Data").            (b)  The Partnership did not file any reports on Form 8-K during the                quarter ended December 31, 2005.            (c)  Exhibits required to be filed.                 Exhibit                Number                             Exhibit Name                 4.1* Capital Preferred Yield Fund-IV Limited Partnership                     Agreement                 4.2* First Amendment to Limited Partnership Agreement dated                     November 23, 1996                 4.3* Amended and Restated Agreement of Limited Partnership of                     Capital Preferred Yield Fund-IV, L.P.                 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.                   *    Not filed herewith. In accordance with Rule 12b-32 of the                     General Rules and Regulations under the Securities Exchange                     Act of 1934, reference is made to the document previously                     filed with the Commission.                                          33                                     SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) 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.  Dated:  March 30, 2006             Capital Preferred Yield Fund-IV, L.P.                                     By: CAI Equipment Leasing V Corporation                                     By: /s/John F. Olmstead                                        -------------------------------------                                        John F. Olmstead                                        President and Director  Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the general partner of the Partnership and in the capacities indicated on March 30, 2006.  Signature                                            Title - ---------                                            -----  /s/John F. Olmstead - ------------------- John F. Olmstead                             President and Director                                            34                                      SIGNATURES  Pursuant to the requirements of Section 13 or 15(d) 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.  Dated:  March 30, 2006             Capital Preferred Yield Fund-IV, L.P.                                     By: CAI Equipment Leasing V Corporation                                     By: /s/Mary M. Ebele                                        -------------------------------------                                        Mary M. Ebele                                        Principal Financial Officer  Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the general partner of the Partnership and in the capacities indicated on March 30, 2006.  Signature                                            Title - ---------                                            -----  /s/Mary M. Ebele - ----------------- Mary M. Ebele                              Principal Financial Officer                                           35  CERTIFICATION  I, John F. Olmstead, President and Director of CAI Equipment Leasing IV Corp., the General Partner of Capital Preferred Yield Fund-III, L.P. (the "Partnership"), certify that:       1. I have reviewed this report on Form 10-K of the Partnership;       2. Based on my knowledge, this report does not contain any untrue statement of 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 report;       3. Based on my knowledge, the financial statements, and other financial information included in this 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 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 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 (the Partnership's fourth           fiscal quarter in the case of an annual report) that has materially           affected, or is reasonably likely to materially affect, the           Partnership's internal control over financial reporting; and       5. The Partnership's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Partnership's auditors and the audit committee of the Partnership's board of directors (or persons performing the equivalent functions):                 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 controls over financial reporting.                                        /s/John F. Olmstead                                       -------------------                                       President and Director                                   (Principal Executive Officer)                                           March 30, 2006                                         36   CERTIFICATION  I, Mary M. Ebele, Principal Financial Officer of CAI Equipment Leasing IV Corp., the General Partner of Capital Preferred Yield Fund-III, L.P. (the "Partnership"), certify that:       1. I have reviewed this report on Form 10-K of the Partnership;       2. Based on my knowledge, this report does not contain any untrue statement of 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 report;       3. Based on my knowledge, the financial statements, and other financial information included in this 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 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 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 (the Partnership's fourth fiscal quarter in the      case of an annual report) that has materially affected, or is reasonably      likely to materially affect, the Partnership's internal control over      financial reporting; and       5. The Partnership's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Partnership's auditors and the audit committee of the Partnership's board of directors (or persons performing the equivalent functions):            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      controls over financial reporting.                                              /s/ Mary M. Ebele                                             -----------------                                                 Mary M. Ebele                                          Principal Financial Officer                                                 March 30, 2006                                         37    EX-99 3 cap4-10kexh991_123105.txt EXHIBIT 99.1 CERTIFICATION PRESIDENT/DIRECTOR                                    Exhibit 99.1            CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED             PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the annual report of Capital Preferred Yield Fund-IV, L.P. (the "Partnership") on Form 10-K for the annual period ended December 31, 2005, as filed with the Security and Exchange Commission on the date hereof (the "Report"), I, John F. Olmstead, President and Director of CAI Equipment Leasing V Corp., the General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:  1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and  2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.   By:      /s/ John F. Olmstead                              Dated: March 30, 2006          ----------------------          John F. Olmstead Title:   President and Director     EX-99 4 cap4-10kexh992_123105.txt EXHIBIT 99.2 CERTIFICATION FINANCIAL OFFICER                                    Exhibit 99.2            CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED             PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002  In connection with the annual report of Capital Preferred Yield Fund-IV, L.P. (the "Partnership") on Form 10-K for the annual period ended December 31, 2005 as filed with the Security and Exchange Commission on the date hereof (the "Report"), I, Mary M. Ebele, Principal Financial Officer of CAI Equipment Leasing V Corp., the General Partner of the Partnership, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:       1.   The Report fully complies with the requirements of section 13(a) or           15(d) of the Securities Exchange Act of 1934; and       2.   The information contained in the Report fairly presents, in all           material respects, the financial condition and results of operations           of the Partnership.   By:    /s/Mary M. Ebele                               Dated: March 30, 2006        ----------------------------        Mary M. Ebele Title: Principal Financial Officer      -----END PRIVACY-ENHANCED MESSAGE-----