UNITED STATES
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 28, 2007
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
COMMISSION FILE NO.: 1-7182-08
MERRILL LYNCH PREFERRED CAPITAL TRUST IV
(Exact name of Registrant as specified in its certificate of trust)
Delaware 13-7139562
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4 World Financial Center
New York, New York 10080
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
COMMISSION FILE NO.: 1-7182-07
MERRILL LYNCH PREFERRED FUNDING IV, L.P.
(Exact name of Registrant as specified in its
certificate of limited partnership)
Delaware 13-3982446
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4 World Financial Center
New York, New York 10080
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 449-1000
The Registrants meet the conditions set forth in General Instruction H (1)(a)
and (b) of Form 10-Q and are therefore filing this form with the reduced
disclosure format.
Indicate by check mark whether the Registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes |X| No |_|
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
(Check one):
Large Accelerated Filer___ Accelerated Filer ___ Non-Accelerated Filer _X__
Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
YES ___ NO _X__
As of November 9, 2007 no common stock was held by non-affiliates of the
Registrants.
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PART I - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS (Unaudited)
--------------------
MERRILL LYNCH PREFERRED CAPITAL TRUST IV
CONDENSED BALANCE SHEETS (unaudited)
(dollars in thousands, except per security amounts)
- --------------------------------------------------------------------------------------------------------------------------------
September 28, 2007 December 29, 2006
------------------ -----------------
ASSETS
Investment in affiliate partnership preferred securities $ 412,372 $ 412,372
Interest receivable from affiliate 7,340 -
---------- ----------
Total Assets $ 419,712 $ 412,372
========== ==========
LIABILITY AND STOCKHOLDER'S EQUITY
Distributions payable $ 7,340 $ -
---------- ----------
STOCKHOLDERS' EQUITY
Stockholders' equity:
Preferred securities (7.12% Trust Originated Preferred Securities;
16,000,000 authorized, issued, and outstanding; $25 liquidation
amount per security) $ 400,000 $ 400,000
Common securities (7.12% Trust Common Securities;
494,880 authorized, issued, and outstanding;
$25 liquidation amount per security) 12,372 12,372
---------- ----------
Total Stockholders' Equity $ 412,372 $ 412,372
---------- ----------
Total Liability and Stockholder's Equity $ 419,712 $ 412,372
========== ==========
See Note to Condensed Financial Statements
2
MERRILL LYNCH PREFERRED CAPITAL TRUST IV
CONDENSED STATEMENTS OF EARNINGS (unaudited)
(dollars in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED
----------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
EARNINGS
Interest on affiliate partnership preferred securities $ 7,340 $ 7,341
========== ==========
FOR THE NINE MONTHS ENDED
----------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
EARNINGS
Interest on affiliate partnership preferred securities $ 22,020 $ 22,021
========== ==========
See Note to Condensed Financial Statements
3
MERRILL LYNCH PREFERRED CAPITAL TRUST IV
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
(dollars in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED
--------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
PREFERRED SECURITIES
Balance, beginning and end of period $ 400,000 $ 400,000
---------- ----------
COMMON SECURITIES
Balance, beginning and end of period 12,372 12,372
---------- ----------
UNDISTRIBUTED EARNINGS
Balance, beginning of period - -
Earnings 22,020 22,021
Distributions (14,680) (14,680)
Distributions payable (7,340) (7,341)
---------- ----------
Balance, end of period - -
---------- ----------
Total Stockholders' Equity $ 412,372 $ 412,372
========== ==========
See Note to Condensed Financial Statements
4
MERRILL LYNCH PREFERRED CAPITAL TRUST IV
CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
(dollars in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED
--------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings $ 22,020 $ 22,021
Interest receivable from affliate (7,340) (7,341)
---------- ----------
Cash provided by operating activities 14,680 14,680
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions (14,680) (14,680)
---------- ----------
Cash used for financing activities (14,680) (14,680)
---------- ----------
NET CHANGE IN CASH - -
CASH, BEGINNING OF PERIOD - -
--------- --------
CASH, END OF PERIOD $ - $ -
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Preferred and common distributions of $7,120 and $220, respectively, were
accrued at September 28, 2007. Preferred and common distributions of $7,120
and $221, respectively, were accrued at September 29, 2006.
See Note to Condensed Financial Statements
5
MERRILL LYNCH PREFERRED CAPITAL TRUST IV
NOTE TO CONDENSED FINANCIAL STATEMENTS (unaudited)
September 28, 2007
- -------------------------------------------------------------------------------
BASIS OF PRESENTATION
These unaudited condensed financial statements should be read in conjunction
with the audited financial statements included in the Annual Report on Form 10-K
of Merrill Lynch Preferred Capital Trust IV (the "Trust") for the year ended
December 29, 2006. The December 29, 2006 balance sheet information was derived
from the audited financial statements. The interim condensed financial
statements for the three- and nine- month periods are unaudited; however, in the
opinion of the Regular Trustee of the Trust, all adjustments, consisting only of
normal recurring accruals necessary for a fair statement of the results of
operations, have been included.
INVESTMENTS
The Trust's investment in Merrill Lynch Preferred Funding IV, L.P. (the
"Partnership") Preferred Securities represents a limited partnership interest in
the Partnership and is recorded at cost. At quarter end, the fair value of the
investment approximates its carrying value. Income on the Partnership Preferred
Securities is accrued when earned.
6
MERRILL LYNCH PREFERRED FUNDING IV, L.P.
CONDENSED BALANCE SHEETS (unaudited)
(dollars in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
September 28, 2007 December 29, 2006
------------------- -----------------
ASSETS
Investments:
Affiliate debentures $ 480,292 $ 480,292
U.S. Government and agencies 4,936 4,875
---------- ----------
Total investments 485,228 485,167
Interest receivable from affliate 8,549 8,550
---------- ----------
Total Assets $ 493,777 $ 485,167
========== ==========
LIABILITY AND PARTNERS' CAPITAL
Distribution payable $ 8,549 $ -
---------- ----------
PARTNERS' CAPITAL
Partners' capital:
Limited partnership interest $ 412,372 $ 412,372
General partnership interest 72,856 72,795
---------- ----------
Total Partners' Capital $ 485,228 $ 485,167
---------- ----------
Total Liability and Partners' Capital $ 493,777 $ 485,167
========== ==========
See Note to Condensed Financial Statements
7
MERRILL LYNCH PREFERRED FUNDING IV, L.P.
CONDENSED STATEMENTS OF EARNINGS (unaudited)
(dollars in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED
--------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
EARNINGS
Interest income:
Affiliate debentures $ 8,549 $ 8,550
U.S. Government and agencies 61 61
---------- ----------
Earnings $ 8,610 8,611
========== ==========
FOR THE NINE MONTHS ENDED
--------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
EARNINGS
Interest income:
Affiliate debentures $ 25,647 $ 25,648
U.S. Government and agencies 184 166
---------- ---------
Earnings $ 25,831 $ 25,814
========== ==========
See Note to Condensed Financial Statements
8
MERRILL LYNCH PREFERRED FUNDING IV, L.P.
CONDENSED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (unaudited)
(dollars in thousands)
- --------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED
-----------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
LIMITED PARTNER'S CAPITAL
Balance, beginning of period $ 412,372 $ 412,372
Net income allocated to limited partner 22,020 22,021
Distributions (14,680) (14,680)
Distributions payable (7,340) (7,341)
---------- ----------
Balance, end of period 412,372 412,372
---------- ----------
GENERAL PARTNER'S CAPITAL
Balance, beginning of period 72,795 72,791
Net income allocated to general partner 3,811 3,793
Distributions (2,541) (2,519)
Distributions payable (1,209) (1,209)
---------- ----------
Balance, end of period 72,856 72,856
---------- ----------
TOTAL PARTNERS' CAPITAL $ 485,228 $ 485,228
========== ==========
See Note to Condensed Financial Statements
9
MERRILL LYNCH PREFERRED FUNDING IV, L.P.
CONDENSED STATEMENTS OF CASH FLOWS (unaudited)
(dollars in thousands)
- ---------------------------------------------------------------------------------------------------------------------------------
FOR THE NINE MONTHS ENDED
--------------------------------
September 28, 2007 September 29, 2006
------------------ ------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings $ 25,831 $ 25,814
Accretion of interest on securities issued by U.S. Government and agencies (184) (166)
Interest receivable from affliates (8,549) (8,550)
---------- ----------
Cash provided by operating activities 17,098 17,098
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Investment Securities (4,852) (4,852)
Maturities of Investment Securities 4,975 4,953
---------- ----------
Cash provided by investing activities 123 101
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to limited partner (14,680) (14,680)
Distributions to general partner (2,541) (2,519)
--------- ----------
Cash used for financing activities (17,221) (17,199)
---------- ----------
NET CHANGE IN CASH - -
CASH, BEGINNING OF PERIOD - -
---------- ----------
CASH, END OF PERIOD $ - $ -
========== ==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS:
Distributions of $8,549 and $8,550 were accrued at September 28, 2007 and
September 29, 2006, respectively.
See Note to Condensed Financial Statements
10
MERRILL LYNCH PREFERRED FUNDING IV, L.P.
NOTE TO CONDENSED FINANCIAL STATEMENTS (unaudited)
September 28, 2007
- --------------------------------------------------------------------------------
BASIS OF PRESENTATION
These unaudited condensed financial statements should be read in conjunction
with the audited financial statements included in the Annual Report on Form 10-K
of Merrill Lynch Preferred Funding IV, L.P. (the "Partnership") for the year
ended December 29, 2006. The December 29, 2006 balance sheet information was
derived from the audited financial statements. The interim condensed financial
statements for the three- and nine- month periods are unaudited; however, in the
opinion of the General Partner of the Partnership, all adjustments, consisting
only of normal recurring accruals necessary for a fair statement of the results
of operations, have been included.
INVESTMENTS
The Partnership's investment in affiliate debentures, which is recorded at cost,
and its investment securities issued by U.S. Government and agencies, which
is recorded at accreted cost and which matures within one year, are classified
as available-for-sale, which both approximate fair value.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
No disclosure is required for this Item pursuant to General Instruction H of
Form 10-Q. There are no material changes in the amount of revenue and expense
items between the most recent fiscal year-to-date period presented and the
corresponding year-to-date period in the preceding fiscal year.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
No disclosure is required for this Item pursuant to General Instruction H of
Form 10-Q.
ITEM 4. CONTROLS AND PROCEDURES
The persons who function as the equivalent of the chief executive officer and
chief financial officer of the Trust and the Partnership have evaluated the
effectiveness of the Trust's and the Partnership's disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of
1934) as of the end of the period covered by this Report. Based on that
evaluation, the persons who function as the equivalent of the chief executive
officer and chief financial officer of the Trust and the Partnership have
concluded that the Trust's and the Partnership's disclosure controls and
procedures were effective as of the end of the period covered by this Report.
In addition, no change in the Trust's and the Partnership's internal control
over financial reporting (as defined in Rule 13a-15(f) under the Securities
Exchange Act of 1934) occurred during the third fiscal quarter of 2007 that
has materially affected, or is reasonably likely to materially affect, the
Trust's or the Partnership's internal control over financial reporting.
12
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS
12 Computation of Ratios of Earnings to Combined Fixed Charges and
Preferred Securities Distributions.
31.1 Rule 13a - 14(a) Certification.
31.2 Rule 13a - 14(a) Certification.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
MERRILL LYNCH PREFERRED CAPITAL TRUST IV*
By: /s/ MARLENE DEBEL
---------------------------------------------
Name: Marlene Debel
Title: Regular Trustee
MERRILL LYNCH PREFERRED FUNDING IV, L.P.*
By: MERRILL LYNCH & CO., INC., as General Partner
By: /s/ GARY CARLIN
---------------------------------------------
Name: Gary Carlin
Title: Controller, Merrill Lynch & Co., Inc.
November 9, 2007
- ----------------
* There is no principal executive officer(s), principal financial officer,
controller, principal accounting officer or board of directors of the
Registrants. The Trustees of the Trust (which include the Regular Trustees, the
Property Trustee and the Delaware Trustee) together exercise all powers and
perform all functions with respect to the Trust.
14
INDEX TO EXHIBITS
EXHIBITS
12 Computation of Ratios of Earnings to Combined Fixed Charges
and Preferred Securities Distributions.
31.1 Rule 13a - 14(a) Certification.
31.2 Rule 13a - 14(a) Certification.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
15