10-Q 1 toprs4_033007.txt TOPRS4 1Q07 3/30/07 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 March 30, 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 if the Registrants are well-known seasoned issuers, as defined in Rule 405 of the Securities Act. Yes |_| No |X| Indicate by check mark if the Registrants are not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes |_| No |X| 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 requirements for the past 90 days. Yes |X| No |_| Indicate by check mark whether the Registrants are large accelerated filers, accelerated filers, or non-accelerated filers. 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 Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes [] No [x] As of the close of business on March 30, 2007, no voting stock of the Registrants was held by non-affiliates of the Registrants. As of May 11, 2007, no voting stock of the Registrants was held by non-affiliates of the Registrants. ================================================================================ PART I - FINANCIAL INFORMATION ------------------------------ ITEM 1. FINANCIAL STATEMENTS (Unaudited) --------------------

MERRILL LYNCH PREFERRED CAPITAL TRUST IV CONDENSED BALANCE SHEETS (unaudited) (dollars in thousands, except per security amounts) -------------------------------------------------------------------------------------------------------------------------- ~~MARCH~~March 30, ~~2001~~2007 ~~DECEMBER~~December 29, ~~2000~~2006 -------------- ----------------- ASSETS Investment in affiliate partnership preferred securities $ 412,372 $ 412,372 ~~Income receivable~~ - ~~7,340~~ ---------- ---------- Total Assets $ 412,372 $ ~~419~~412,~~712~~372 ========== ========== ~~LIABILITY AND~~ STOCKHOLDERS' EQUITY ~~Distributions payable $ - $ 7,340 ---------- ----------~~ 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; $25 liquidation amount per security) 12,372 12,372 ---------- ---------- Total Stockholders' ~~equity~~Equity ~~412,372~~$ 412,372 ~~---------- ---------- Total Liability and Stockholders' Equity~~ $ 412,372 ~~$ 419,712~~ ========== ==========

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 -----------------------------------~~----~~ ~~MARCH~~March 30, ~~2001~~2007 ~~MARCH~~March 31, ~~2000~~2006 -------------- -------------- EARNINGS ~~Income~~Interest on affiliate partnership preferred securities $ 7,340 $ 7,340 ========= =========

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 THREE MONTHS ENDED -----------------------------------~~----~~ ~~MARCH~~March 30, ~~2001~~2007 ~~MARCH~~March 31, ~~2000~~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 7,340 7,340 Distributions (7,340) (7,340) Distributions payable - - ---------- ---------- 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 THREE MONTHS ENDED ------------------------------------~~---~~ ~~MARCH~~March 30, ~~2001~~2007 ~~MARCH~~March 31, ~~2000~~2006 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Earnings $ 7,340 $ 7,340 ~~Decrease in income receivable 7,340~~ - --------- --------- Cash provided by operating activities 147,~~680~~340 7,340 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Distributions (147,~~680~~340) (7,340) --------- --------- Cash used for financing activities (147,~~680~~340) (7,340) --------- --------- NET CHANGE IN CASH - - CASH, BEGINNING OF PERIOD - - --------- --------- CASH, END OF PERIOD $ - $ - ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOWS: ~~Preferred~~No ~~and common~~ distributions ofwere ~~$7,120~~accrued ~~and~~at ~~$220,~~March ~~respectively~~30, ~~were~~2007 ~~accrued~~or at ~~December~~March 2931, ~~2000~~2006.

See Note to Condensed Financial Statements 5 MERRILL LYNCH PREFERRED CAPITAL TRUST IV NOTE TO CONDENSED FINANCIAL STATEMENTS (unaudited) March 30, 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-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 condensed financial statements 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) ---------------------------------------------------------------------------------------------------------------- ~~MARCH~~March 30, ~~2001~~2007 ~~DECEMBER~~December 29, ~~2000~~2006 -------------- ----------------- ASSETS ~~Cash $ 1 $ 1 ----------- -----------~~ Investments: Affiliate debentures $ 480,292 $ 480,292 U.S. ~~Treasury~~Government ~~bills~~and agencies 4,~~986~~937 4,~~911~~875 ---------- ---------- Total investments 485,~~278~~229 485,~~203~~167 ~~Interest receivable~~ - ~~8,549~~ ---------- ---------- Total Assets $ 485,~~279~~229 $ ~~493~~485,~~753~~167 ========== ========== ~~LIABILITY AND~~ PARTNERS' CAPITAL ~~Distributions payable $ - $ 8,549 ---------- ----------~~ Partners' capital: Limited partnership interest $ 412,372 $ 412,372 General partnership interest 72,~~907~~857 72,~~832~~795 ---------- ---------- Total ~~partners' capital 485,279 485,204 ---------- ---------- Total Liability and~~ Partners' Capital $ 485,~~279~~229 $ ~~493~~485,~~753~~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 -----------------------------------~~----~~ ~~MARCH~~March 30, ~~2001~~2007 ~~MARCH~~March 31, ~~2000~~2006 -------------- -------------- EARNINGS Interest income: Affiliate debentures $ 8,549 $ 8,549 U.S. ~~Treasury~~Government ~~bills~~and 75agencies 6462 51 ---------- ---------- Earnings $ 8,~~624~~611 $ 8,~~613~~600 ========== ==========

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 THREE MONTHS ENDED -----------------------------------~~----~~ ~~MARCH~~March 30, ~~2001~~2007 ~~MARCH~~March 31, ~~2000~~2006 -------------- --------------- LIMITED PARTNER'S CAPITAL Balance, beginning of period $ 412,372 $ 412,372 Net income allocated to limited partner 7,340 7,340 Distributions (7,340) (7,340) Distributions payable - - ---------- ---------- Balance, end of period 412,372 412,372 ---------- ---------- GENERAL PARTNER'S CAPITAL Balance, beginning of period 72,~~832~~795 72,~~817~~791 Net income allocated to general partner 1,~~284~~271 1,~~273~~260 Distributions (1,209) (1,209) Distributions payable - - ---------- ---------- Balance, end of period 72,~~907~~857 72,~~881~~842 ---------- ---------- TOTAL PARTNERS' CAPITAL $ 485,~~279~~229 $ 485,~~253~~214 ========== ==========

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 THREE MONTHS ENDED -----------------------------------~~----~~ ~~MARCH~~March 30, ~~2001~~2007 ~~MARCH~~March 31, ~~2000~~2006 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Earnings $ 8,~~624~~611 $ 8,~~613~~600 Accretion of U.S. ~~Treasury~~Government ~~bills~~and agencies (7562) (6451) ~~Decrease in income receivable 8,549~~ - --------- --------- Cash provided by operating activities 178,~~098~~549 8,549 --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Distributions to limited partner (147,~~680~~340) (7,340) Distributions to general partner (21,~~418~~209) (1,209) --------- --------- Cash used for financing activities (178,~~098~~549) (8,549) --------- --------- NET CHANGE IN CASH - - CASH, BEGINNING OF PERIOD 1- - --------- --------- CASH, END OF PERIOD $ 1- $ - ========= ========= SUPPLEMENTAL DISCLOSURE OF CASH FLOWS: ~~Distributions~~No ofdistributions ~~$8,549~~ were accrued at ~~December~~March 2930, ~~2000~~2007 or at March 31, 2006.

See Note to Condensed Financial Statements 10 MERRILL LYNCH PREFERRED FUNDING IV, L.P. NOTE TO CONDENSED FINANCIAL STATEMENTS (unaudited) March 30, 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-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 condensed financial statements have been included. INVESTMENTS The Partnership's investment in affiliate debentures, which is recorded at cost, and its investment in U.S. Government and agencies, which are recorded at accreted cost and which mature 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 first 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/ KATHLEEN SKERO --------------------------------------------- Name: Kathleen Skero Title: Controller, Merrill Lynch & Co., Inc. May 11, 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

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