##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
 For the Transition period from  to
 Commission file number 333-9371
 CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IV
  Delaware
    
    38-3304096(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)24 Frank Lloyd Wright Drive, Lobby L, 4th Floor, P.O.Box 544, Ann Arbor, Michigan
    
    48106-0544(Address of principal executive offices)
    
    (Zip Code)
 Issuers telephone number, including area code: (734) 994-5505Securities registered under Section 12(b) of the Exchange Act:
 
 
NoneSecurities registered under Section 12(g) of the Exchange Act:
 
    
    None(Title of Class)
 Yes o No þ
 Yes o No þ
 Yes þ No o
 þ
  o Large Accelerated Filer o Accelerated Filer þ Non-accelerated Filer
 Yes o No þ
  DOCUMENTS INCORPORATED BY REFERENCE




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TABLE OF CONTENTS  PART IItem 1. BusinessItem 1A. Risk FactorsItem 1B. Unresolved Staff CommentsItem 2. PropertiesItem 3. Legal ProceedingsItem 4. Submission of Matters to a Vote of Security HoldersPART IIItem 5. Market for Registrants Limited Partnership Interests and Related Security Holder Matters and Issuer Purchases of Equity SecuritiesItem 6. Selected Financial DataItem 7. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 7A. Qualitative and Quantitative Disclosures About Market RiskItem 8. Financial Statements and Supplementary DataItem 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureItem 9A. Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management and Related Securityholder MattersItem 13. Certain Relationships and Related Transactions and Director IndependenceItem 14. Principal Accountant Fees and ServicesItem 15. Exhibits and Financial Statement SchedulesSIGNATURESPART I  FINANCIAL INFORMATIONITEM 1. FINANCIAL STATEMENTSCertification Pursuant to Section 302Certification Pursuant to Section 906    Table of Contents  
 PART I
 
 Item 1. Business.




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Additional Information
 www.sec.gov
 
 Item 1A. Risk Factors.
  
 Item 1B. Unresolved Staff Comments.
  
 Item 2. Properties.




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##### Table of Contents



OriginalAsset Cost
    
    
    Asset
    
    
    
    
    
    
    Date of
    
    
    Annual
    
    
    BuildingConcept
    
    
    Date of
    
    
    Date of
    
    
    Including
    
    
    State
    
    
    Monthly
    
    
    Next Rent
    
    
    Rate of
    
    
    SizeTenant/Lessee Name
    
    Name
    
    
    Commence
    
    
    Expiration
    
    
    Acquisiton Fees
    
    
    Location
    
    
    Rent
    
    
    Increase
    
    
    Increase
    
    
    (SQFT)PROPERTIESVacant (1)
    
    Vacant
    
    na
    
    na
    
    
    1,170,000
    
    
    GA
    
    na
    
    na
    
    na
    
    
    6,500Sterling Jewelers
    
    Jared Jewelers
    
    
    02/01/99
    
    
    
    02/01/19
    
    
    
    1,131,619
    
    
    TX
    
    
    12,833
    
    
    
    02/01/09
    
    
    
    1.92%
    
    
    
    5,2272,301,620
    
    
    
    
    
    
    
    12,833
    
    
    
    
    
    
    
    
    
    
    
    11,727
 
 (1)
    
    Property was previously leased to Blockbuster Entertainment Corp.
Lease was terminated effective 11/30/06 in connection with the sale of the property to OReilly
Automotive, Inc. Leases
 Real Estate Leases:
      Equipment Leases:




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##### Table of Contents



Summary of Investment Objectives and Policies
          
 Item 3. Legal Proceedings.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 PART II
 
 Item 5. Market for Registrants Limited Partnership Interests and Related Security Holder Matters
and Issuer Purchases of Equity Securities.




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Item 6. Selected Financial Data.
    Selected
Financial Data
 Statement ofChanges in NetAssets(Liquidation
    
    
    Summary Statement of Discontinued Operations DataBasis)
    
    
    (Going Concern Basis)Period from
    
    
    Period fromDecember 19
    
    
    January 1,through
    
    
    through
    
    
    Year Ended
    
    
    Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 18,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2006
    
    
    2006
    
    
    2005
    
    
    2004
    
    

    2003
    
    
    2002Net assets in liquidation  December 18, 2006
    
    $
    3,172,192Adjustments relating to adoption of liquidation basis of accountingAdjustment of real estate investments and other assets to
net realizable value, net of liabilities
    
    
    (110,958
    )Accrual of estimated costs of liquidation
    
    
    (336,499
    )Operating loss
    
    
    5,742Net assets in liquidation  December 31, 2006
    
    $
    2,730,477Operating revenue:Rental income
    
    
    
    
    
    $
    376,019
    
    
    $
    1,644,276
    
    
    $
    2,874,064
    
    
    $
    3,666,636
    
    
    $
    3,363,815Finance income
    
    
    
    
    
    
    110,074
    
    
    
    125,092
    
    
    
    146,330
    
    
    
    199,059
    
    
    
    310,428Total operating revenue
    
    
    
    
    
    
    486,093
    
    
    
    1,769,368
    
    
    
    3,020,394
    
    
    
    3,865,695
    
    
    
    3,674,243Operating costs and expenses:Interest expense
    
    
    
    
    
    
    
    
    
    
    555,865
    
    
    
    1,182,993
    
    
    
    1,271,165
    
    
    
    1,266,420Depreciation
    
    
    
    
    
    
    54,218
    
    
    
    80,407
    
    
    
    473,108
    
    
    
    506,298
    
    
    
    489,976Provision for losses
    
    
    
    
    
    
    781,876
    
    
    
    
    
    
    
    15,000
    
    
    
    
    
    
    
    195,542Debt retirement costs
    
    
    
    
    
    
    
    
    
    
    1,690,354
    
    
    
    209,010
    
    
    
    
    
    
    
    General and administrative
    
    
    
    
    
    
    385,507
    
    
    
    360,461
    
    
    
    617,557
    
    
    
    218,997
    
    
    
    166,788Total operating costs and expenses
    
    
    
    
    
    
    1,221,601
    
    
    
    2,687,087
    
    
    
    2,497,668
    
    
    
    1,996,460
    
    
    
    2,118,726(Loss) income from discontinued operations before other income
    
    
    
    
    
    
    (735,508
    )
    
    
    (917,719
    )
    
    
    522,726
    
    
    
    1,869,235
    
    
    
    1,555,517Other income (expense):Interest and other income
    
    
    
    
    
    
    84,237
    
    
    
    128,754
    
    
    
    5,340
    
    
    
    4,857
    
    
    
    1,478Gain on sale of equipment
    
    
    
    
    
    
    
    
    
    
    1,997
    
    
    
    8,040
    
    
    
    45,741
    
    
    
    Gain on sale of real estate
    
    
    
    
    
    
    446,059
    
    
    
    4,754,452
    
    
    
    262,045
    
    
    
    
    
    
    
    Total other income from discontinued operations
    
    
    
    
    
    
    530,296
    
    
    
    4,885,203
    
    
    
    275,425
    
    
    
    50,598
    
    
    
    1,478Net (loss) income from discontinued operations
    
    
    
    
    
    
    (205,212
    )
    
    
    3,967,484
    
    
    
    798,151
    
    
    
    1,919,833
    
    
    
    1,556,995Net  income from discontinued operations allocable to general partners
    
    
    
    
    
    
    2,878
    
    
    
    9,034
    
    
    
    7,982
    
    
    
    19,198
    
    
    
    15,570Net (loss) income from discontinued operations allocable to limited partners
    
    
    
    
    
    $
    (208,090
    )
    
    $
    3,958,450
    
    
    $
    790,169
    
    
    $
    1,900,635
    
    
    $
    1,541,425Net (loss) income from discontinued operations per limited partnership unit
    
    
    
    
    
    $
    (7.18
    )
    
    $
    136.62
    
    
    $
    27.23
    
    
    $
    65.00
    
    
    $
    52.49weighted average units outstanding
    
    
    
    
    
    
    28,975
    
    
    
    28,975
    
    
    
    29,020
    
    
    
    29,239
    
    
    
    29,369Other Data:Cash flows from operating activities
    
    $
    2,062
    
    
    $
    138,754
    
    
    $
    (560,434
    )
    
    $
    1,173,309
    
    
    $
    1,951,899
    
    
    $
    1,934,582Cash flows from investing activities
    
    
    (3,809
    )
    
    
    3,399,790
    
    
    
    27,936,743
    
    
    
    4,110,489
    
    
    
    (97,459
    )
    
    
    1,402,096Cash flows from financing activities
    
    
    
    
    
    
    (3,004,067
    )
    
    
    (26,623,608
    )
    
    
    (5,835,077
    )
    
    
    (2,292,589
    )
    
    
    (3,461,189
    )Balance Sheet Data:Cash and cash equivalents
    
    $
    1,428,894
    
    
    $
    1,430,641
    
    
    $
    896,164
    
    
    $
    476,469
    
    
    $
    928,132
    
    
    $
    1,367,069Investment in property under leases
    
    
    1,662,760
    
    
    
    1,769,909
    
    
    
    5,513,042
    
    
    
    27,231,464
    
    
    
    31,262,517
    
    
    
    31,516,729Total assets
    
    
    3,098,617
    
    
    
    3,208,385
    
    
    
    6,466,143
    
    
    
    29,220,279
    
    
    
    34,246,143
    
    
    
    34,612,180Total liabilities
    
    
    368,140
    
    
    
    36,193
    
    
    
    84,672
    
    
    
    13,780,645
    
    
    
    15,120,012
    
    
    
    14,552,078Total partners capital
    
    
    
    
    
    
    3,172,192
    
    
    
    6,381,471
    
    
    
    15,439,634
    
    
    
    19,126,131
    
    
    
    20,060,102Net assets in liquidation
    
    
    2,730,477
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.




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Changes in Net Assets and Results of Operations  2006 compared to 2005
 Liquidation Basis  Changes in net assets in liquidation from December 19 to December 31, 2006
  Going Concern Basis  Comparison of results of operations from January 1, 2006 through December 18,
2006 to the year ended
 December
      Results of Operations  2005 compared to 2004




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Liquidity and Capital Resources




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Contractual Obligations
  Critical Accounting Policies
 Going Concern Basis of Accounting
       Liquidation Basis of Accounting




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Item 7A. Qualitative and Quantitative Disclosures About Market Risk
  
 Item 8. Financial Statements and Supplementary Data.
  
 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
  
 Item 9A. Controls and Procedures
   
 Item 9B. Other Information.
 None.




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PART III
 
 Item 10. Directors, Executive Officers and Corporate Governance.
     
 Item 11. Executive Compensation.
  
 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Securityholder
Matters.
  
 Item 13. Certain Relationships and Related Transactions and Director Independence.




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Item 14. Principal Accountant Fees and Services.
 Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees




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Item 15. Exhibits and Financial Statement Schedules.
  Statement of Net Assets in Liquidation (liquidation basis) at December 31, 2006
    
    F - 2Statement of Changes in Net Assets in Liquidation (liquidation basis) for the
period December 19, 2006 through December 31, 2006
    
    F - 3Balance Sheet (going concern basis) at December 31, 2005
    
    F - 4Statements of Discontinued Operations (going concern basis) for the period
January 1, 2006 through December 18, 2006 and the years ended December 31, 2005 and 2004
    
    F - 5Statements of Changes in Partners Capital (going concern basis) for the
period January 1, 2006 through December 18, 2006 and the years ended December
31, 2005 and 2004
    
    F - 6Statements of Cash Flows for the period December 19, 2006 through December 31,
2006 (liquidation basis) and for the period January 1, 2006 through December
18, 2006 and the years ended December 31, 2005 and 2004 (going concern basis)
    
    F - 7Notes to Financial Statements
    
    F - 8
  
  Number
    
    Exhibit2
    
    Plan of Liquidation and Dissolution (Incorporated by reference to the
Registrants Definitive Proxy Statement on Schedule 14A, filed on
September 21, 2004)4
    
    Amended Agreement of Limited Partnership of Registrant. (Incorporated
by reference to the Registrants Definitive Proxy Statement on
Schedule 14A, filed on September 21, 2004 and the corresponding
exhibit in the Registrants Form 10-K for the fiscal year ended
December 31, 1998)10.1
    
    Promissory Note dated December 17, 1998 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-K for the fiscal
year ended December 31, 1998)10.2
    
    Promissory Note dated March 30, 1999 between Registrant and
National Realty Funding L.C. (Incorporated by reference to the
corresponding exhibit in the Registrants Form 10-Q for the quarter
ended March 31, 1999)31
    
    Certification Pursuant to section 302 of the Sarbanes-Oxley Act of 200232
    
    Certification Pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to section 906 of the Sarbanes-Oxley Act of 2002




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SIGNATURES
  CAPTEC FRANCHISE CAPITAL PARTNERS L.P. IVBy:
    
    GP4 Asset Acquisition, LLC
Its ManagerBy:
    
    /s/ Patrick L. Beach
Patrick L. Beach
PresidentDate:
    
    March 29, 2007
  By:
    
    /s/ Patrick L. Beach
Patrick L. Beach
PresidentDate:
    
    March 29, 2007




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Captec Franchise Capital Partners L.P. IV
 Contents
 Page(s)Report of Independent Registered Public Accounting Firm
    
    F - 1Financial StatementsStatement of Net Assets in Liquidation (liquidation basis) at December 31, 2006
    
    F - 2Statement of Changes in Net Assets in Liquidation (liquidation basis) for the
period December 19, 2006 through December 31, 2006
    
    F - 3Balance Sheet (going concern basis) at December 31, 2005
    
    F - 4Statements of Discontinued Operations (going concern basis) for the period
January 1, 2006 through December 18, 2006 and the years ended December 31,
2005 and 2004
    
    F - 5Statements of Changes in Partners Capital (going concern basis) for the
period January 1, 2006 through December 18, 2006 and the years ended December
31, 2005 and 2004
    
    F - 6Statements of Cash Flows for the period December 19, 2006 through December 31,
2006 (liquidation basis) and for the period January 1, 2006 through December
18, 2006 and the years ended December 31, 2005 and 2004 (going concern basis)
    
    F - 7Notes to Financial Statements
    
    F - 8
 F-I




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Report of Independent Registered Public Accounting Firm




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Captec Franchise Capital Partners L.P. IV
Statement of Net Assets in Liquidation
(Liquidation Basis)
 AssetsCash and cash equivalents
    
    $
    1,428,894Investment in leases:Operating leases, net
    
    
    892,200Financing leases, net
    
    
    770,560Unbilled rent, net
    
    
    3,503Accounts receivable
    
    
    3,460Total assets
    
    $
    3,098,617Liabilities and Net Assets in LiquidationLiabilities:Reserve for estimated costs during liquidation period
    
    
    368,140Net assets in liquidation
    
    $
    2,730,477
 The accompanying notes are an integral part of the financial statements.
 F-2




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Captec Franchise Capital Partners L.P. IV
Statement of Changes in Net Assets in Liquidation
(Liquidation Basis)
 Shareholders equity  December 18, 2006
    
    $
    3,172,192Adjustments relating to adoption of liquidation basis of accountingAdjustment of real estate investments and other assets to
net realizable value
    
    
    (110,958
    )Accrual of estimated costs of liquidation
    
    
    (336,499
    )Net assets in liquidation  December 19, 2006
    
    
    2,724,735Operating income
    
    
    5,742Net assets in liquidation  December 31, 2006
    
    $
    2,730,477
 The accompanying notes are an integral part of the financial statements.
 F-3




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CAPTEC
FRANCHISE CAPITAL PARTNERS L.P. IV
 PART I  FINANCIAL INFORMATION
 ITEM 1. FINANCIAL STATEMENTS
 Captec Franchise Capital Partners L.P. IV
Balance Sheets (Going Concern Basis)
 AssetsCash and cash equivalents
    
    $
    896,164Investment in leases:Operating leases, net
    
    
    4,295,457Financing leases, net
    
    
    1,217,585Unbilled rent, net
    
    
    53,437Accounts receivable
    
    
    3,500Total assets
    
    $
    6,466,143Liabilities and Partners CapitalLiabilities:Accounts payable and accrued expenses
    
    $
    63,800Due to related parties
    
    
    20,872Total liabilities
    
    
    84,672Partners capital:Limited partners capital accounts
    
    
    6,377,000General partners capital account
    
    
    4,471Total partners capital
    
    
    6,381,471Total liabilities and partners capital
    
    $
    6,466,143
 The accompanying notes are an integral part of the financial statements.
 F-4




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Captec Franchise Capital Partners L.P. IV
Statements of Discontinued Operations (Going Concern Basis)
 For the periodJanuary 1 toDecember 18, 2006
    
    
    2005
    
    
    2004Operating revenue:Rental income
    
    $
    376,019
    
    
    $
    1,644,276
    
    
    $
    2,874,064Lease termination fee
    
    
    
    
    
    
    
    
    
    
    Finance income
    
    
    110,074
    
    
    
    125,092
    
    
    
    146,330Total operating revenue
    
    
    486,093
    
    
    
    1,769,368
    
    
    
    3,020,394Operating costs and expenses:Interest expense
    
    
 
    
    
    
    555,865
    
    
    
    1,182,993Depreciation
    
    
    54,218
    
    
    
    80,407
    
    
    
    473,108Debt retirement costs
    
    
 

    
    
    
    1,690,354
    
    
    
    209,010Provision for losses
    
    
    781,876
    
    
    
    
    
    
    
    General and administrative
    
    
    385,507
    
    
    
    360,461
    
    
    
    632,557Total operating costs and expenses
    
    
    1,221,601
    
    
    
    2,687,087
    
    
    
    2,497,668(Loss) income from discontinued operations before other income
    
    
    (735,508
    )
    
    
    (917,719
    )
    
    
    522,726Other income :Gain on sale of equipment
    
    
 

    
    
    
    1,997
    
    
    
    8,040Gain on sale of real estate
    
    
    446,059
    
    
    
    4,754,452
    
    
    
    262,045Interest and other income
    
    
    84,237
    
    
    
    128,754
    
    
    
    5,340Total other income
    
    
    530,296
    
    
    
    4,885,203
    
    
    
    275,425Net (loss) income from discontinued operations
    
    $
    (205,212
    )
    
    
    3,967,484
    
    
    
    798,151Net (loss) income from discontinued operations allocable to general partner
    
    $
    2,878
    
    
    $
    9,034
    
    
    $
    7,982Net (loss) income from discontinued operations allocable to limited partners
    
    $
    (208,090
    )
    
    $
    3,958,450
    
    
    $
    790,169Net (loss) income from discontinued operations per limited partnership unit
    
    $
    (7.18
    )
    
    $
    136.62
    
    
    $
    27.23Weighted average number of limited partnership
units outstanding
    
    
    28,975
    
    
    
    28,975
    
    
    
    29,020
 The accompanying notes are an integral part of the financial statements.
 F-5




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Captec Franchise Capital Partners L.P. IV
Statement of Changes in Partners Capital (Going Concern Basis)
 Limited
    
    
    Limited
    
    
    General
    
    
    TotalPartners
    
    
    Partners
    
    
    Partners
    
    
    PartnersUnits
    
    
    Accounts
    
    
    Account
    
    
    CapitalBalance, January 1, 2004
    
    
    29,155
    
    
    $
    19,138,676
    
    
    $
    (12,545
    )
    
    $
    19,126,131Distributions  ($150.24 per limited
partnership unit)
    
    
    
    
    
    
    (4,359,932
    )
    
    
    
    
    
    
    (4,359,932
    )Repurchase of limited partnership units
    
    
    (180
    )
    
    
    (124,716
    )
    
    
    
    
    
    
    (124,716
    )Net income
    
    
    
    
    
    
    790,169
    
    
    
    7,982
    
    
    
    798,151Balance, December 31, 2004
    
    
    28,975
    
    
    
    15,444,197
    
    
    
    (4,563
    )
    
    
    15,439,634Distributions  ($449.55 per limited
partnership unit)
    
    
    
    
    
    
    (13,025,647
    )
    
    
    
    
    
    
    (13,025,647
    )Net income
    
    
    
    
    
    
    3,958,450
    
    
    
    9,034
    
    
    
    3,967,484Balance, December 31, 2005
    
    
    28,975
    
    
    
    6,377,000
    
    
    
    4,471
    
    
    
    6,381,471Distributions  ($103.68 per limited
partnership unit)
    
    
    
    
    
    
    (3,004,067
    )
    
    
    
    
    
    
    (3,004,067
    )Net loss
    
    
    
    
    
    
    (208,090
    )
    
    
    2,878
    
    
    
    (205,212
    )Balance, December 18, 2006
    
    
    28,975
    
    
    
    3,164,843
    
    
    
    7,349
    
    
    
    3,172,192
 The accompanying notes are an integral part of the financial statements.
 F-6




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Captec Franchise Capital Partners L.P. IV
Statements of Cash Flows
 2006LiquidationBasis
    
    
    Going Concern BasisDecember 19 to
    
    
    January 1 to
    
    
    For the years ended December 31,December 31,
    
    
    December 18,
    
    
    2005
    
    
    2004Cash flows from operating activities:Change in net assets in liquidation from operating activity
    
    $
    5,742
    
    
    $
    
    
    
    $
    
    
    
    $
    Net income (loss) from discontinued operation (period
prior to liquidation accounting)
    
    
    
    
    
    
    (205,212
    )
    
    
    3,967,484
    
    
    
    798,151Adjustments to net income:Depreciation
    
    
    
    
    
    
    54,218
    
    
    
    80,407
    
    
    
    473,108Amortization of debt issuance costs
    
    
    
    
    
    
    
    
    
    
    25,749
    
    
    
    50,920Gain on sale of equipment
    
    
    
    
    
    
    
    
    
    
    (1,997
    )
    
    
    (8,040
    )Gain on sale of real estate
    
    
    
    
    
    
    (446,059
    )
    
    
    (4,754,452
    )
    
    
    (262,045
    )Provision for losses
    
    
    
    
    
    
    781,876
    
    
    
    9,961
    
    
    
    15,000(Increase) decrease in unbilled rent
    
    
    
    
    
    
    3,282
    
    
    
    (66,804
    )
    
    
    72,591(Increase) decrease in accounts receivable
    
    
    872
    
    
    
    (872
    )
    
    
    (85,678
    )
    
    
    122,178(Decrease) increase in accounts payable and accrued expenses
    
    
    (2,025
    )
    
    
    (28,274
    )
    
    
    (78,013
    )
    
    
    11,202Increase (decrease) in due to related parties
    
    
    (667
    )
    
    
    (20,205
    )
    
    
    9,903
    
    
    
    (140
    )Decrease (increase) in restricted cash
    
    
    
    
    
    
    
    
    
    
    333,006
    
    
    
    (99,616
    )Reserve for estimaestimated costs during liquidation period
    
    
    (1,860
    )
    
    
    
    
    
    
    
    
    
    
    Net cash (used in) provided by operating activities
    
    
    2,062
    
    
    
    138,754
    
    
    
    (560,434
    )
    
    
    1,173,309Cash flows from investing activities:Proceeds from sale of equipment
    
    
    
    
    
    
    
    
    
    
    15,000
    
    
    
    40,200Proceeds from sale of real estate
    
    
    
    
    
    
    3,355,864
    
    
    
    27,895,673
    
    
    
    3,849,338Payment of lease commissions
    
    
    
    
    
    
    
    
    
    
    (59,805
    )
    
    
    Principal collections on financing leases
    
    
    (3,809
    )
    
    
    43,926
    
    
    
    85,875
    
    
    
    220,951Net cash provided by (used in) investing activities
    
    
    (3,809
    )
    
    
    3,399,790
    
    
    
    27,936,743
    
    
    
    4,110,489Cash flows from financing activities:Repayments of notes payable
    
    
    
    
    
    
    
    
    
    
    (13,597,961
    )
    
    
    (1,350,429
    )Repurchase of limited partnership units
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (124,716
    )Distributions to limited partners
    
    
    
    
    
    
    (3,004,067
    )
    
    
    (13,025,647
    )
    
    
    (4,359,932
    )Net cash used in financing activities
    
    
    
    
    
    
    (3,004,067
    )
    
    
    (26,623,608
    )
    
    
    (5,835,077
    )Net increase (decrease) in cash and cash equivalents
    
    
    (1,747
    )
    
    
    534,477
    
    
    
    752,701
    
    
    
    (551,279
    )Cash and cash equivalents, beginning of period
    
    
    1,430,641
    
    
    
    896,164
    
    
    
    143,463
    
    
    
    694,742Cash and cash equivalents, end of period
    
    
    1,428,894
    
    
    
    1,430,641
    
    
    $
    896,164
    
    
    $
    143,463Cash paid for interest
    
    $
    
    
    
    $
    
    
    
    $
    597,661
    
    
    $
    1,129,074
 The accompanying notes are an integral part of the financial statements.
 F-7




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##### Table of Contents



Captec Franchise Capital Partners, L.P. IV
Notes to Financial Statements
 1.
    
    The Partnership and Its Significant Accounting Principles
       Basis of presentation
  F-8




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##### Table of Contents



Cash and cash equivalents
  Rental income from operating leases
  Land and buildings subject to operating leases
   F-9




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##### Table of Contents



Net investment in financing leases
  F-10




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##### Table of Contents



Net income per limited partnership interest
  Distributions per limited partnership Unit
  Income taxes
  Estimates
  2.
    
    Distributions
   F-11




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##### Table of Contents



3.
    
    Related Party Transactions and Agreements
      4.
    
    Land and Building Subject to Operating Leases
  December 31,2005Land
    
    $
    1,705,200Building and improvements
    
    
    3,214,9804,920,180Less accumulated depreciation
    
    
    (624,723
    )$
    4,295,457
  F-12




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##### Table of Contents



5.
    
    Net Investment in Financing Leases
  December 31,2005Minimum lease payments to be received
    
    $
    1,880,854Gross investment in financing leases
    
    
    1,880,854Less unearned income
    
    
    (663,268
    )Less reserve for loss
    
    
    0Net investment in financing leases
    
    $
    1,217,585
  6.
    
    Notes Payable
        F-13




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##### Table of Contents



7.
    
    Change in Estimate
  8.
    
    Subsequent Events
   9.
    
    Quarterly Results of Operations (Unaudited)
  PeriodThree Months Ended
    
    
    October 1, toMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 18,2006
    
    
    2006
    
    
    2006
    
    
    2006Total revenues from discontinued operations
    
    
    162,833
    
    
    
    150,866
    
    
    
    120,897
    
    
    
    51,497Income from discontinued operations
    
    
    65,916
    
    
    
    (269,029
    )
    
    
    (469,836
    )
    
    
    (62,559
    )Other income from discontinued operations
    
    
    9,297
    
    
    
    233,330
    
    
    
    283,742
    
    
    
    3,927Net income
    
    
    75,213
    
    
    
    (35,699
    )
    
    
    (186,094
    )
    
    
    (58,632
    )Net income allocable to limited partner
    
    
    74,461
    
    
    
    (33,213
    )
    
    
    (181,756
    )
    
    
    (67,582
    )Net income per limited partnership unit
    
    
    2.57
    
    
    $
    (1.15
    )
    
    
    (6.27
    )
    
    
    (2.33
    )
 Year Ended December 31, 20051st
    
    
    2nd
    
    
    3rd
    
    
    4thQuarter
    
    
    Quarter
    
    
    Quarter
    
    
    QuarterTotal revenues from discontinued operations
    
    
    736,405
    
    
    
    604,656
    
    
    
    264,808
    
    
    
    163,499Income from discontinued operations
    
    
    341,742
    
    
    
    (1,063,024
    )
    
    
    (201,353
    )
    
    
    4,916Other income from discontinued operations
    
    
    2,347
    
    
    
    3,247,260
    
    
    
    1,600,265
    
    
    
    35,331Net income
    
    
    344,089
    
    
    
    2,184,236
    
    
    
    1,398,912
    
    
    
    40,247Net income allocable to limited partner
    
    
    340,648
    
    
    
    2,162,236
    
    
    
    1,396,850
    
    
    
    58,716Net income per limited partnership unit
    
    
    11.76
    
    
    
    74.63
    
    
    
    48.21
    
    
    
    2.02
  F-14




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##### Table of Contents



SCHEDULE
III
PROPERTIES AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006
 Gross AmountDecrease
    
    
    At Whichdue to
    
    
    Carried At
    
    
    
    
    
    
    Date ofType of
    
    
    State
    
    
    
    
    
    
    Initial Cost
    
    
    Impairment
    
    
    Close
    
    
    Accumulated
    
    
    Acquisition/
    
    
    Acquisition/Concept
    
    Property
    
    
    Location
    
    
    Encumbrances
    
    

To Company
    
    
    Charges
    
    

Of Period
    
    
    Depreciation
    
    
    Construction
    
    
    Construction
    
    
    DepreciationVacant
    
    Retail
    
    GA
    
    
    
    
    
    
    1,170,000
    
    
    
    (95,450
    )
    
    
    1,074,550
    
    
    
    182,350
    
    
    
    1997
    
    
    Acquisition
    
    40 YearsTotal Properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,170,000
    
    
    $
    (95,450
    )
    
    $
    1,074,550
    
    
    $
    182,350
   2006
    
    
    2005Balance,
beginning of year
    
    $
    4,920,180
    
    
    $
    28,240,688Acquisitions
    
    
    
    
    
    
    Dispositions
    
    
    (3,362,620
    )
    
    
    (23,320,508
    )Decrease due
to impairment charges
    
    
    (483,010
    )
    
    
    Balance, end
of year
    
    $
    1,074,550
    
    
    $
    4,920,180
  2006
    
    
    2005Balance,
beginning of year
    
    $
    624,723
    
    
    $
    2,335,649Depreciation expense
    
    
    54,218
    
    
    
    80,407Dispositions
    
    
    (496,591
    )
    
    
    (1,791,333
    )Balance, end
of year
    
    $
    182,350
    
    
    $
    624,723
 F-15