TEXTAINER FINANCIAL SERVICES CORPORATION
                        650 California Street, 16th Floor
                             San Francisco, CA 94108


March 26, 1998


Securities and Exchange Commission
Washington, DC  20549

Gentlemen:

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  we are
submitting  herewith for filing on behalf of Textainer Equipment Income Fund IV,
L.P. (the  "Partnership")  the Partnership's  Annual Report on Form 10-K for the
fiscal year ended December 31, 1997.

The financial  statements  included in the enclosed Annual Report on Form 10K do
not reflect a change from the  preceding  year in any  accounting  principles or
practices, or in the method of applying any such principles or practices.

This filing is being effected by direct  transmission to the Commission's  EDGAR
System.

Sincerely,

Nadine Forsman
Controller
<PAGE>



                       SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

                                    FORM 10K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1997

                         Commission file number 0-21228

                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
             (Exact name of Registrant as specified in its charter)

          California                                              94-3147432
 (State or other jurisdiction                                   (IRS Employer
of incorporation or organization)                            Identification No.)

   650 California Street, 16th Floor
         San Francisco, CA                                            94108
(Address of Principal Executive Offices)                            (ZIP Code)

               Registrant's telephone number, including area code:
                                 (415) 434-0551

Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

Securities registered pursuant to Section 12(g) of the Act:

                     LIMITED PARTNER INTERESTS (THE "UNITS")
                                (Title of Class)

Indicate by check mark whether the registrant (1) has 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  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. [ X ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[  ]

State the aggregate  market value of the voting stock held by  nonaffiliates  of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the  average  bid and ask  prices of such
stock, as of a specified date within 60 days prior to the date of the filing.

Not Applicable.

Documents Incorporated by Reference

The Registrant's Prospectus as contained in Pre-Effective Amendment No. 2 to the
Registrant's  Registration  Statement, as filed with the Commission on April 10,
1992,  as  supplemented  by  Post-Effective  Amendment  No.  3  filed  with  The
Securities Act of 1933 on May 25, 1993 and as  supplemented  by Supplement No. 8
as filed under Rule 424(b) of the Securities Act of 1933 on March 1, 1994.


<PAGE>

                                     PART I

ITEM 1   DESCRIPTION OF BUSINESS

For more detailed information about the Registrant's  business, see "Business of
the Partnership" in the Registrant's Prospectus as supplemented.

(a)      General Development of Business

         The Registrant is a California  Limited  Partnership  formed on October
         30, 1991 to purchase,  own,  operate,  lease,  and sell  equipment (the
         Equipment)  used in the  containerized  cargo  shipping  industry.  The
         Registrant  commenced offering units representing  limited  partnership
         interests  (Units) to the public on April 30, 1992 in  accordance  with
         its  Registration  Statement and ceased to offer such Units as of April
         30,  1994.  The  Registrant  raised  a total of  $136,918,060  from the
         offering.

         See  Item 10  herein  for a  description  of the  Registrant's  General
         Partners.  See  item 7  herein  for a  description  of  current  market
         conditions affecting the Registrant's business.

(b)      Financial Information About Industry Segments

         Inapplicable.

(c)      Narrative Description of Business

(c)(1)(i)         A  container leasing company  generally,  and  the  Registrant
                  specifically, is an operating  business comparable to a rental
                  car business.  A customer can lease a car from a bank  leasing
                  department for a monthly charge which  represents  the cost of
                  the car, plus interest, amortized  over the term of the lease;
                  or the  customer  can rent the same  car  from  a  rental  car
                  company at a much  higher  daily  lease rate.  The customer is
                  willing to pay the higher  daily rate for the convenience  and
                  value-added features  provided by the rental car company,  the
                  most  important  of  which  is  the ability to pick up the car
                  where it is most  convenient,  use it for the  desired  period
                  of time, and then drop it off at a location convenient  to the
                  customer. Rental car  companies  compete  with one  another on
                  the  basis  of  lease  rates,  availability  of cars,  and the
                  provision of  additional  services.  They generate revenues by
                  maintaining   the   highest  lease  rates   and   the  highest
                  utilization  factors that market  conditions will  allow,  and
                  by  augmenting  this   income  with  proceeds  from  sales  of
                  insurance, drop-off fees, and other special  charges.  A large
                  percentage of lease revenues  earned by car  rental  companies
                  are generated under corporate rate agreements  wherein,  for a
                  stated   period   of   time,   employees  of  a  participating
                  corporation can rent cars at specific  terms,  conditions  and
                  rental rates. Buying the cars at fleet prices and selling them
                  in  the  secondary  market  are   also  key  elements  to  the
                  successful operation of a rental car business.

                  Container  leasing  companies and the Registrant  operate in a
                  similar manner by owning and leasing a worldwide  fleet of new
                  and used transportation  containers to international  shipping
                  companies  hauling various types of goods among numerous trade
                  routes. In addition to paying a daily rental rate, all lessees
                  must either provide physical damage and liability insurance or
                  purchase a damage  waiver from the  Registrant,  in which case
                  the  Registrant  agrees  to pay  the  cost  of  repairing  any
                  physical  damage  to  containers  caused by  lessees,  special
                  handling fees and/or  drop-off  charges may also be charged in
                  certain markets.  Container leasing companies compete with one
                  another on the basis of lease rates, availability of equipment
                  and services  provided.  Revenues and profits are generated by
                  maintaining the highest lease rates and the highest  equipment
                  utilization  factors  allowed  by  market  conditions.  Rental
                  revenues from the  Registrant's  containers  result  primarily
                  under master leases which are comparable to the corporate rate
                  agreements  used by rental car  companies.  The master  leases
                  provide  that  container  leasing  customers,  for a specified
                  period  of  time,  may  rent  containers  at  specific  terms,
                  conditions and rental rates.  Although the terms of the master
                  lease  governing  each  container  do not vary,  the number of
                  containers  in use can vary from time to time  within the term
                  of the master  lease.  The terms and  conditions of the master
                  lease provide that the lessee pays a daily rental rate for the
                  entire time the container is in his possession (whether or not
                  he is actively using it), is responsible  for any damage,  and
                  must  insure the  container  against  liabilities.  For a more
                  detailed   discussion  of  the  leases  for  the  Registrant's
                  Equipment,   see  "Leasing  Policy"  under  "Business  of  the
                  Partnership" in the Registrant's Prospectus,  as supplemented.
                  Rental car companies usually purchase only new cars, but since
                  containers  are completely  standardized,  a used container in
                  serviceable condition usually rents for the same rate as a new
                  one although the purchase price is lower. For this reason, the
                  Registrant  occasionally buys used containers.  The Registrant
                  also  sells  containers  in  the  course  of its  business  if
                  opportunities  arise or at the end of the  container's  useful
                  life. See "Business of the  Partnership"  in the  Registrant's
                  Prospectus, as supplemented.

(c)(1)(ii)        Inapplicable.

(c)(1)(iii)       Inapplicable.

(c)(1)(iv)        Inapplicable.

(c)(1)(v)         Inapplicable.

(c)(1)(vi)        Inapplicable.

(c)(1)(vii)       No single  lessee  had  rental  revenue  for  the  year  ended
                  December 31, 1997 which was 10% or more of  the  total  rental
                  revenue of the Registrant.

(c)(1)(viii)      Inapplicable.

(c)(1)(ix)        Inapplicable.

(c)(1)(x)         There  are   approximately  80  container   leasing  companies
                  of  which  the top ten control approximately  92% of the total
                  equipment held by all container leasing companies. The top two
                  container  leasing  companies  combined control  approximately
                  47%  of  the  total  equipment  held  by all container leasing
                  companies.   Textainer   Equipment   Management   Limited,  an
                  Associate General Partner of the  Registrant  and the  manager
                  of its  marine  container  Equipment,  is  the  third  largest
                  container  leasing  company and manages  approximately  8% of 
                  the equipment  held by all container  leasing  companies.  The
                  Registrant  alone  is  not  a   material  participant  in  the
                  worldwide container leasing market.   The  principal   methods
                  of  competition  are  price, availability and the provision of
                  worldwide  service to the  international  shipping  community.
                  Additionally,   shipping   alliances  and   other  operational
                  consolidations among  shipping  lines  have  recently  allowed
                  shipping lines  to  operate  with  fewer  containers,  thereby
                  decreasing the demand for leased  containers. This decrease in
                  demand,   along  with   the  entry  of  new   leasing  company
                  competitors  offering low  container  rental rates to shipping
                  lines has  increased  competition among lessors  such  as  the
                  Registrant.

(c)(1)(xi)        Inapplicable.

(c)(1)(xii)       Inapplicable.

(c)(1)(xiii)      The Registrant has no employees.  Textainer Financial Services
                  Corporation   (TFS),  the  Managing  General  Partner  of  the
                  Registrant,  is responsible for the overall  management of the
                  business  of the  Registrant  and has 7  employees.  Textainer
                  Equipment  Management  Limited  (TEM),  an  Associate  General
                  Partner,  is  responsible  for the  management  of the leasing
                  operations of the Registrant and has a total of 149 employees.

(d)      Financial Information about Foreign and Domestic Operations and  Export
         Sales.

         The  Registrant  is involved in the leasing of shipping  containers  to
         international   shipping   companies   for  use  in  world   trade  and
         approximately  14.55%,  15.27%  and 13.16% of the  Registrant's  rental
         revenue  during the years ended  December  31,  1997,  1996,  and 1995,
         respectively,   was  derived  from  operations  sourced  or  terminated
         domestically.  These  percentages  do not reflect the proportion of the
         Partnership's  income from operations  generated in domestic waterways.
         Substantially  all of  the  Partnership's  income  from  operations  is
         derived from assets  employed in foreign  operations.  See "Business of
         the  Partnership",  and  for a  discussion  of  the  risks  of  leasing
         containers for use in world trade,  "Risk Factors" in the  Registrant's
         Prospectus, as supplemented.

ITEM 2 - PROPERTIES

As of December 31, 1997, the Registrant owned the following types and quantities
of equipment:

         20-foot standard dry freight containers                          13,846
         40-foot standard dry freight containers                          17,040
         40-foot high cube dry freight containers                          5,523
                                                                         -------
                                                                          36,409
                                                                         =======

During  December 1997,  approximately  83% of these shipping  containers were on
lease to international shipping companies,  and the balance were being stored at
shipping  container  manufacturers'  locations  and at a large number of storage
depots located worldwide.

For  information  about  the  Registrant's   property,   see  "Business  of  the
Partnership" and "Risk Factors" in the Registrant's Prospectus, as supplemented.

ITEM 3 - LEGAL PROCEEDINGS

The Registrant is not subject to any legal proceedings.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

Inapplicable.


                                     PART II


ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER 
         MATTERS

ITEM 201:

(a)      Market Information.

(a)(1)(i)         The units of limited  partnership  in the  Registrant  are not
                  publicly traded and there is no established trading market for
                  such  Units.  The  Registrant  has a program  whereby  limited
                  partners  may redeem Units for a specified  redemption  price.
                  The program  operates only when the Managing  General  Partner
                  determines,  among other  maters,  that  payment for  redeemed
                  units  will  not  impair  the  capital  or  operations  of the
                  Registrant.

(a)(1)(ii)        Inapplicable.

(a)(1)(iii)       Inapplicable.

(a)(1)(iv)        Inapplicable.

(a)(1)(v)         Inapplicable.

(a)(2)            Inapplicable.

(b)      Holders.

(b)(1)            As of January 1, 1998,  there were 8,287  holders of record of
                  limited  partnership  interests in the Registrant.

(b)(2)            Inapplicable.

(c)      Dividends.

                  Inapplicable.

For details of the distributions which are made monthly by the Registrant to its
limited partners, see Item 6 "Selected Financial Data".

ITEM 701 - Inapplicable.

ITEM 6 - SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>

                                                       (Amounts in thousands except for per unit amounts)
                                                                      Year Ended December 31:
                                             -------------------------------------------------------------------------
                                                    1997          1996          1995            1994          1993
                                                 ---------      ---------     ---------       ---------     --------

<S>                                           <C>           <C>            <C>            <C>          <C>        
Rental income                                 $   21,297    $   23,664     $  26,797      $   24,948   $    17,962

Net earnings                                  $    5,750    $    8,329     $  11,463      $    8,242   $     2,681

Net earnings per unit of
  limited partnership interest                $     0.82    $     1.20     $    1.65      $     1.25   $      0.55

Distributions per unit of
  limited partnership interest                $     1.90    $     2.07     $    2.02      $     1.67   $      1.75

Distributions per unit of limited
   partnership interest representing
   a return of capital                        $     1.08    $     0.87     $    0.37      $     0.42   $      1.20

Total assets                                  $   96,084    $  104,029     $ 109,740      $  112,119   $   114,897

Outstanding balance on
revolving credit line                         $        -    $        -     $       -      $        -   $    10,000

Intercompany borrowings for
Equipment purchases                           $      826    $        -     $       -      $        -   $         -
</TABLE>



ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

           (Amounts in thousands except for unit and per unit amounts)

The Financial Statements contain information which will assist in evaluating the
financial  condition of the  Partnership  for the years ended December 31, 1997,
1996 and 1995.  Please refer to the  Financial  Statements  and Notes thereto in
connection with the following discussion.

Liquidity and Capital Resources

From April 30,  1992 until  April 30,  1994,  the  Partnership  offered  limited
partnership  interests  to the  public.  The  Partnership  received  its minimum
subscription  amount  of  $5,000  on June 11,  1992 and on  April  30,  1994 the
Partnership had received a total subscription amount of $136,918.

From time to time,  the  Partnership  redeems units from limited  partners for a
specified  redemption  value.  The redemption price is set by formula and varies
depending on length of time units are outstanding. Up to 2% of the Partnership's
outstanding  units  may be  redeemed  each  year,  although  the 2% limit may be
exceeded,  at the Managing  General  Partner's  discretion.  All redemptions are
subject to the Managing General Partner's good faith  determination that payment
for the  redeemed  units  will not (i)  cause the  Partnership  to be taxed as a
corporation,  (ii) impair the capital or operations of the Partnership, or (iii)
impair the ability of the  Partnership to pay  distributions  in accordance with
its  distribution  policy.   During  the  year  ended  December  31,  1997,  the
Partnership redeemed 8,020 units for a total dollar amount of $104, representing
an average redemption price of $13.03.

The Partnership  invests working capital and cash flow from operations  prior to
its  distribution  to  the  partners  in  short-term,  liquid  investments.  The
Partnership's  cash is  affected  by  cash  provided  by or  used in  operating,
investing and financing  activities.  These  activities  are discussed in detail
below.

During  the  year  ended  December  31,  1997,  the  Partnership  declared  cash
distributions  to limited  partners  pertaining to the period from December 1996
through November 1997, in the amount of $12,972. These distributions represent a
return of 9.5% on original  capital  (measured on an  annualized  basis) on each
unit. Of these  distributions,  on a GAAP basis,  $7,358 was a return of capital
and the  balance  was from  net  earnings.  On a cash  basis,  $12,495  of these
distributions were from operations and the balance was from reserves.  Beginning
with the cash  distribution  to limited  partners for the month of January 1998,
payable February 1998, the Partnership will make  distributions at an annualized
rate of 9% on each Unit. This reduction in the  Partnership's  distribution rate
is a result of the continued  decline in demand for leasing of the Partnership's
container rental fleet, which is discussed in detail below.

For the years ended  December 31, 1997 and 1996,  the  Partnership  had net cash
provided by  operating  activities  of $12,495 and $16,578,  respectively.  This
decrease  was  primarily  attributable  to  decreases  in net  earnings,  due to
affiliates,  net and warranty claims of $2,579, $915 and $62, respectively.  The
decline in due to affiliates,  net was due to timing  differences in the accrual
and payment of expenses and fees or in the accrual and  remittance of net rental
revenues.  During  1996,  warranty  claims  were  settled  against an  Equipment
manufacturer,  resulting in an increase in the warranty reserves. No such claims
were settled during 1997. Net earnings decreased 31% in 1997 from 1996 primarily
due to a 10%  decrease  in rental  revenues.  The  decrease  in rental  revenues
between  periods was due to a decline in  utilization  and rental  rates.  These
decreases are discussed more fully in "Results of Operations".

Net cash used in investing  activities  (the purchase and sale of Equipment) for
the year ended  December  31,  1997 was $2,135  compared  with $696 for the year
ended  December 31, 1996.  This  fluctuation  is due to the fact that, on a cash
basis, the Partnership bought more Equipment in 1997 than during the same period
in 1996.  The General  Partners  believe that these  differences  reflect normal
fluctuations in Equipment sales and purchases.  The Partnership  sells Equipment
at the  end  of its  estimated  useful  life.  Consistent  with  its  investment
objectives  and  the  General  Partners'  determination  that  Equipment  can be
profitably sold or bought at any time, the  Partnership  intends to reinvest all
or a significant  amount of proceeds from future  Equipment  sales in additional
Equipment.  Such additional units of Equipment purchased may not, however, equal
the number of units sold.

At December 31, 1997, the Partnership had no commitments to purchase Equipment.

During 1997 the Partnership  borrowed $826 from a General Partner which was used
to  purchase  Equipment.  It is the policy of the  Partnership  and the  General
Partners  to  charge  interest  on  intercompany   balances   arising  from  the
Partnership's  acquisition of Equipment  which are outstanding for more than one
month.  Interest is charged to the  Partnership  at a rate not greater  than the
General  Partners' own cost of funds.  There was $10 of interest  charged by the
General  Partner  during the year ended  December 31, 1997. The interest rate in
effect at December 31, 1997 was 8.5%. The Partnership  anticipates  repaying the
loan in 1998 with cash  provided by  operations  and  proceeds  from the sale of
Equipment.

Results of Operations

The  Partnership's  income from operations,  which primarily  consists of rental
income, container depreciation,  direct container expenses, management fees, and
reimbursement of administrative expenses was directly related to the size of the
container fleet ("inventory")  during each of the years ended December 31, 1997,
1996 and 1995. The following is a summary of the size of the container fleet (in
units) available for lease during those periods:

                                           1997            1996            1995
                                           ----            ----            ----

        Opening Inventory..........       35,931           36,297         35,132
        Closing Inventory..........       36,409           35,931         36,297
        Average....................       36,170           36,114         35,715

Rental  income and direct  container  expenses  are also  affected  by the lease
utilization  percentages  for the  Equipment  which  were 80%,  83%,  and 92% on
average during the years ended December 31, 1997,  1996 and 1995,  respectively.
In addition, rental income is affected by daily rental rates.

The  following is a comparative  analysis of the results of  operations  for the
years ended December 31, 1997, 1996 and 1995.

The  Partnership's  income from operations for the years ended December 31, 1997
and 1996 was $5,454 and $7,882,  respectively,  on rental  income of $21,297 and
$23,664,  respectively.  The decrease in total rental income from the year ended
December  31,  1996 to the same  period in 1997 was  primarily  attributable  to
income from container rentals, the major component of total rental income, which
decreased by $2,176,  or 10%. Income from container rentals is largely dependent
upon three factors:  average on-hire  (utilization)  percentages,  average daily
rental  rates and  Equipment  available  for lease  (average  inventory).  While
average  inventory  remained at  approximately  the same level for both periods,
average  utilization  decreased 4%, and average daily rental rates  decreased 7%
from the year ended December 31, 1996 to the year ended December 31, 1997.

The  Partnership's  income from  operations for the year ended December 31, 1996
and 1995 was $7,882 and $11,007,  respectively,  on rental income of $23,664 and
$26,797,  respectively.  The decrease in total rental income from the year ended
December  31,  1995 to the same  period in 1996 was  primarily  attributable  to
income from  container  rentals,  which  decreased  by $2,829,  or 12%.  Average
inventory  increased 1%,  average  utilization  decreased 10%, and average daily
rental  rates  decreased  3% from the year ended  December  31, 1995 to the year
ended December 31, 1996.

The declines in container utilization during 1996 and part of 1997 and in rental
rates during 1996 and 1997 were  primarily  due to  decreased  demand for leased
containers  and  increased  competition.  The  decrease  in  demand  for  leased
containers  resulted  from  changes in the business of shipping  line  customers
consisting  primarily  of (i)  over-capacity  resulting  from  the 1995 and 1996
additions of new, larger ships to the existing container ship fleet at a rate in
excess of the growth rate in  containerized  cargo  trade;  (ii)  shipping  line
alliances and other operational  consolidations that have allowed shipping lines
to operate with fewer containers;  and (iii) shipping lines reducing their ratio
of leased  versus owned  containers  by purchasing  containers.  This  decreased
demand,  along with the entry of new leasing  company  competitors  offering low
container rental rates to shipping lines,  resulted in the downward  pressure on
rental  rates,  and  also  caused  leasing  companies  to offer  higher  leasing
incentives and other discounts to shipping lines.

Utilization  increased  during the second and third  quarters  of 1997 and began
declining  again  during the fourth  quarter of 1997 and into the  beginning  of
1998. Rental rates continued to decline into the beginning of 1998. For the near
term,  the General  Partners  do not  foresee  any  changes in  existing  market
conditions and caution that both  utilization  and lease rates could continue to
decline, adversely affecting the Partnership's operating results.

Substantially  all of the  Partnership's  rental income was  generated  from the
leasing of the Partnership's Equipment under short-term operating leases.

The balance of total  rental  income  consisted  of other  lease-related  items,
primarily income from handling and returning containers,  charges to the lessees
for pick-up of containers  from prime  locations less credits granted to lessees
for leasing  containers from less desirable  locations  (location  income),  and
income from charges to the lessees for a Damage  Protection Plan (DPP).  For the
year ended  December 31, 1997,  the total of these other rental income items was
$1,847, a decrease of $191 over the equivalent  period in 1996. This decline was
primarily due to a decrease in location income of $360, offset by an increase in
handling  income  of $200.  Location  income  decreased  primarily  due to lower
demand,  which resulted in an increase in credits granted to lessees for picking
up containers from lower demand locations. Handling income increased as a result
of increased container movement and a slightly higher average handling price per
container during the year ended December 31, 1997, compared to 1996.

For the year ended  December  31, 1996,  the total of these other rental  income
items was $2,038,  a decrease of $304 over the equivalent  period in 1995.  This
decline was primarily due to a decrease in location income of $362, offset by an
increase in charges to lessees under DPP of $60. The decrease in location income
is largely due to lower demand which  resulted in increased  credits  granted to
lessees for picking up containers from less desirable locations. The increase in
DPP revenue is primarily due to the increase in the number of lessees under DPP.

Direct container  expenses  increased $406, or 10%, from the year ended December
31, 1996,  to the same period in 1997.  The primary  components of this increase
were  increases  in  repositioning  and  storage  expenses  of  $418  and  $164,
respectively,  offset by a decrease of $223 in DPP costs.  Repositioning expense
increased due to a greater number of containers  being  transported from surplus
locations  to demand  locations  during  1997  compared to 1996.  Storage  costs
increased due to the decline in  utilization.  The decrease in DPP costs was due
to a lower  per  container  repair  cost,  offset  by a higher  number  of units
requiring repair.

Direct  container  expenses  increased  by $981,  or 32%,  from  the year  ended
December 31, 1995,  to the same period in 1996.  The primary  components of this
increase were increases in storage  expense of $804 and costs incurred under DPP
of $281. Storage costs increased due to the decline in utilization. The increase
in DPP costs was due to an  increase  in the  number of units  requiring  repair
under DPP.

Bad debt expense  decreased  $46, or 20%, for the year ended  December 31, 1997,
compared  to the same  period  in 1996.  The  decrease  was  primarily  due to a
reduction in reserve requirements during the year ended December 31, 1997.

Bad debt expense  decreased  $488, or 68%, for the year ended December 31, 1996,
compared  to the same  period  in 1995.  The  decrease  was  primarily  due to a
reduction in reserve  requirements  for a specific  lessee during the year ended
December 31, 1996.

Management  fees to  affiliates  decreased by $213,  or 10%, from the year ended
December 31, 1996 to the equivalent period in 1997 due to a decline in equipment
and  incentive  management  fees.  Equipment  management  fees,  which are based
primarily  on gross  revenue,  decreased  as a result of the  decrease in rental
income and were  approximately  7% of gross  revenue for the periods.  Incentive
management  fees,  which  are based on the  Partnership's  limited  and  general
partner  distribution  percentage and partners'  capital,  decreased $44, or 7%,
between the year ending  December 31, 1997 and 1996  primarily due to the change
in distribution rate from 10.5% of original capital to 9.5% in October 1996.

Management  fees to  affiliates  decreased  $176,  or 7%,  from the  year  ended
December 31, 1995 to the equivalent period in 1996 primarily due to a decline in
Equipment  management fees. Equipment management fees, which are based primarily
on gross  revenue,  decreased as a result of the  decrease in rental  income and
were  approximately  7% of gross  revenue for the period.  Incentive  management
fees,  which  are  based  on  the  Partnership's  limited  and  general  partner
distribution  percentage and partners' capital,  remained comparable at $590 and
$592 for the years ending December 31, 1996 and 1995, respectively.

General and administrative  costs to affiliates  decreased by 2%, or $29, in the
year ended  December  31,  1997  compared  to 1996,  due to a decrease  in costs
allocated from TFS. General and administrative  costs to affiliates decreased by
24%, or $432,  in the year ended  December 31, 1996  compared to 1995,  due to a
decrease in overhead costs allocated by TEM.

Other income provided $296 of additional  income for the year ended December 31,
1997, representing a decrease of $151 or 34% from the equivalent period in 1996.
The decrease was due to a $128 decrease in gain from sale of Equipment, combined
with a decrease in interest income of $23.

Other income provided $447 of additional  income for the year ended December 31,
1996,  representing a decrease of $9 or 2% from the  equivalent  period in 1995.
The decrease was due to a $43 decrease in gain from sale of Equipment, offset by
an increase in interest income of $34.

Net earnings per limited partnership Unit decreased from $1.20 to $0.82 from the
year ended  December 31, 1996, to the year ended  December 31, 1997,  reflecting
the decrease in net earnings  allocated to limited  partners from $8,180 for the
year ended December 31, 1996 to $5,614 for the same period in 1997.

Net earnings per limited partnership Unit decreased from $1.65 to $1.20 from the
year ended  December 31, 1995, to the year ended  December 31, 1996,  reflecting
the decrease in net earnings  allocated to limited partners from $11,308 for the
year ended December 31, 1995 to $8,180 for the same period in 1996.

Many computer systems may experience difficulty processing dates beyond the year
1999 and, as such, some computer  hardware and software will need to be modified
prior to the year 2000 to  remain  functional.  The  Partnership's  and  General
Partner's  certain core internal systems that have recently been implemented are
year 2000  compliant.  The remaining  core internal  systems are scheduled to be
revised  to be year  2000  compliant  by the end of 1998.  Based on its  initial
evaluation,  the  Partnership  and the General  Partners do not believe that the
cost of remedial  actions relating to these systems will have a material adverse
effect on the  Partnership's  results of  operations  and  financial  condition.
Additionally,  the  Partnership  and the General  Partners are also completing a
preliminary  assessment  of year 2000  issues not  related to its core  systems,
including issues surrounding systems that interface with external third parties.

Although  substantially  all of the  Partnership's  income  from  operations  is
derived from assets employed in foreign operations, virtually all of this income
is  denominated  in United  States  dollars.  The  Partnership's  customers  are
international  shipping  lines  which  transport  goods on  international  trade
routes.  The  domicile  of the lessee is not  indicative  of where the lessee is
transporting  the  Equipment.  The  Partnership's  business  risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep the Equipment under lease,  rather than the geographic  location
of the  Equipment  or the domicile of the  lessees.  The  Equipment is generally
operated on the international high seas rather than on domestic  waterways.  The
Equipment is subject to the risk of war or other  political,  economic or social
occurrence  where  the  Equipment  is  used,  which  may  result  in the loss of
Equipment,  which,  in turn,  may have a  material  impact on the  Partnership's
results of operations  and  financial  condition.  The General  Partners are not
aware of any  conditions  as of December  31, 1997 which would  result in such a
risk materializing.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  Equipment  after  it  comes  off-lease,  the  risk of an
uninsured  loss,  increases in maintenance  expenses or other costs of operating
the  Equipment,  and the effect of world trade,  industry  trends and/or general
business and economic cycles on the Partnership's operations. See "Risk Factors"
in the Partnership's Prospectus, as supplemented,  for additional information on
risks of the Partnership's business.

ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Inapplicable

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attached pages 11 to 22.


<PAGE>










                          Independent Auditors' Report



The Partners
Textainer Equipment Income Fund IV, L.P.:

We have audited the  accompanying  balance sheets of Textainer  Equipment Income
Fund IV, L.P. (a  California  limited  partnership)  as of December 31, 1997 and
1996, the related  statements of earnings,  partners' capital and cash flows for
each of the years in the  three-year  period  ended  December  31,  1997.  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  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits 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 Textainer Equipment Income Fund
IV, L.P. as of December  31, 1997 and 1996,  and the results of its  operations,
its partners' capital and its cash flows for each of the years in the three-year
period ended December 31, 1997, in conformity with generally accepted accounting
principles.



                              KPMG Peat Marwick LLP



San Francisco, California
February 18, 1998


<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (a California Limited Partnership)

                                 Balance Sheets

                           December 31, 1997 and 1996
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                     1997                    1996
                                                                          -----------------       ----------------

<S>                                                                      <C>                      <C>
Assets
Container rental equipment, net of accumulated
   depreciation of $36,080 (1996:  $29,128)                                 $       90,205        $        95,626
Cash                                                                                   664                  2,694
Accounts receivable, net of allowance
   for doubtful accounts of $1,433 (1996:  $1,391)                                   5,020                  5,647
Organization costs, net of accumulated
   amortization of $236 (1996:  $220)                                                    -                     16
Prepaid expenses                                                                       195                     46
                                                                          -----------------       ----------------

                                                                            $       96,084        $       104,029
                                                                          =================       ================

Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                         $          478        $           544
   Accrued liabilities                                                                  88                      -
   Accrued recovery costs (note 1(k))                                                  139                     85
   Accrued damage protection plan costs (note 1(l))                                    405                    520
   Warranty claims (note 1(m))                                                         537                    599
   Due to affiliates, net (note 2)                                                     791                    815
   Deferred quarterly distribution (note 1(g))                                         202                    199
   Equipment purchases payable                                                           -                    361
                                                                          -----------------       ----------------

      Total liabilities                                                              2,640                  3,123
                                                                          -----------------       ----------------

Partners' capital:
   General partners                                                                      -                      -
   Limited partners                                                                 93,444                100,906
                                                                          -----------------       ----------------

      Total partners' capital                                                       93,444                100,906
                                                                          -----------------       ----------------


                                                                            $       96,084        $       104,029
                                                                          =================       ================

See accompanying notes to financial statements
</TABLE>
<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (a California Limited Partnership)

                             Statements of Earnings

                     Years ended December 31, 1997, 1996 and
                 1995 (Amounts in thousands except for unit and
                                per unit amounts)
<TABLE>
<CAPTION>

                                                                       1997                1996                1995
                                                                 -----------------    ----------------   -----------------

<S>                                                              <C>                  <C>                <C>             
Rental Income                                                    $         21,297     $        23,664    $         26,797
                                                                 -----------------    ----------------   -----------------

Costs and expenses:
   Direct container expenses                                                4,449               4,043               3,062
   Bad debt expense                                                           280                 234                 722
   Depreciation and amortization                                            7,509               7,587               7,495
   Professional fees                                                           36                  35                  42
   Management fees to affiliates (note 2)                                   2,020               2,233               2,409
   General and administrative costs to affiliates (note 2)                  1,318               1,347               1,779
   Other general and administrative costs                                     231                 303                 281
                                                                 -----------------    ----------------   -----------------

                                                                           15,843              15,782              15,790
                                                                 -----------------    ----------------   -----------------

   Income from operations                                                   5,454               7,882              11,007
                                                                 -----------------    ----------------   -----------------

Other income:
   Interest income, net                                                        66                  89                  55
   Gain on sale of equipment                                                  230                 358                 401
                                                                 -----------------    ----------------   -----------------

                                                                              296                 447                 456
                                                                 -----------------    ----------------   -----------------

   Net earnings                                                  $          5,750     $         8,329    $         11,463
                                                                 =================    ================   =================

Allocation of net earnings (note 1(g)):
   General partners                                              $            136     $           149    $            155
   Limited partners                                                         5,614               8,180              11,308
                                                                 -----------------    ----------------   -----------------

                                                                 $          5,750     $         8,329    $         11,463
                                                                 =================    ================   =================
Limited partners' per unit share
   of net earnings                                               $           0.82     $          1.20    $           1.65
                                                                 =================    ================   =================

Limited partners' per unit share
   of distributions                                              $           1.90     $          2.07    $           2.02
                                                                 =================    ================   =================

Weighted average number of limited
   partnership units outstanding (note 1(n))                            6,827,168           6,837,104           6,845,440
                                                                 =================    ================   =================

See accompanying notes to financial statements
</TABLE>


<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (a California Limited Partnership)

                         Statements of Partners' Capital

                  Years ended December 31, 1997, 1996 and 1995
                             (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                                     Partners' Capital
                                                                   ------------------------------------------------------
                                                                      General             Limited             Total
                                                                   ---------------     ---------------    ---------------

<S>                                                               <C>                 <C>                <C>           
Balances at December 31, 1994                                      $            -      $      109,574     $      109,574

Distributions                                                                (155)            (13,861)           (14,016)

Redemptions (note 1(o))                                                         -                 (95)               (95)

Net earnings                                                                  155              11,308             11,463
                                                                   ---------------     ---------------    ---------------

Balances at December 31, 1995                                                   -             106,926            106,926

Distributions                                                                (149)            (14,129)           (14,278)

Redemptions (note 1(o))                                                         -                 (71)               (71)

Net earnings                                                                  149               8,180              8,329
                                                                   ---------------     ---------------    ---------------

Balances at December 31, 1996                                                   -             100,906            100,906

Distributions                                                                (136)            (12,972)           (13,108)

Redemptions (note 1(o))                                                         -                (104)              (104)

Net earnings                                                                  136               5,614              5,750
                                                                   ---------------     ---------------    ---------------

Balances at December 31, 1997                                      $            -      $       93,444     $       93,444
                                                                   ===============     ===============    ===============


See accompanying notes to financial statements
</TABLE>


<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (a California Limited Partnership)

                            Statements of Cash Flows

                  Years ended December 31, 1997, 1996 and 1995
                             (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                                           1997             1996             1995
                                                                                  ---------------  --------------   --------------

<S>                                                                              <C>               <C>              <C>
Cash flows from operating activities:
   Net earnings                                                                   $        5,750   $       8,329    $      11,463
   Adjustments to reconcile net earnings to
      net cash provided by operating activities:
         Depreciation                                                                      7,493           7,540            7,448
         Increase (decrease) in allowance for doubtful accounts                               42              42              (83)
         Amortization of organization costs                                                   16              47               47
         Gain on sale of equipment                                                          (230)           (358)            (401)
         Changes in assets and liabilities:
            Decrease in accounts receivable                                                  589             500              525
            (Increase) decrease in prepaid expenses                                         (149)              -                3
            Increase (decrease) in accounts payable & accrued liabilities                     22             (95)             184
            Increase (decrease) in accrued recovery costs                                     54              77               (1)
            Decrease in accrued damage protection plan costs                                (115)            (36)            (118)
            (Decrease) increase in warranty claims                                           (62)            512               87
            (Decrease) increase in due to affiliates, net                                   (915)             20            1,333
                                                                                  ---------------  --------------   --------------

               Net cash provided by operating activities                                  12,495          16,578           20,487
                                                                                  ---------------  --------------   --------------

Cash flows from investing activities:
   Proceeds from sale of equipment                                                         1,335           1,497            1,768
   Equipment purchases                                                                    (3,470)         (2,193)          (8,456)
                                                                                  ---------------  --------------   --------------

              Net cash used in investing activities                                       (2,135)           (696)          (6,688)
                                                                                  ---------------  --------------   --------------

Cash flows from financing activities:
    Borrowings from affiliates                                                               826               -                -
    Redemptions of limited partnership units                                                (104)            (71)             (95)
    Distributions to partners                                                            (13,112)        (14,410)         (13,958)
                                                                                  ---------------  --------------   --------------

               Net cash used in financing activities                                     (12,390)        (14,481)         (14,053)
                                                                                  ---------------  --------------   --------------

Net (decrease) increase in cash                                                           (2,030)          1,401             (254)

Cash at beginning of period                                                                2,694           1,293            1,547
                                                                                  ---------------  --------------   --------------

Cash at end of period                                                             $          664   $       2,694    $       1,293
                                                                                  ===============  ==============   ==============

Interest paid during the period                                                   $            3   $           -    $           -
                                                                                  ===============  ==============   ==============

See accompanying notes to financial statements
</TABLE>


<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (A California Limited Partnership)

                      Statements of Cash Flows - Continued

                  Years ended December 31, 1997, 1996 and 1995
                             (Amounts in thousands)

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of Equipment purchases, distributions
to  partners  and  proceeds  from sale of  Equipment  which had not been paid or
received  by the  Partnership  as of  December  31,  1997,  1996,  1995 and 1994
resulting in differences in amounts recorded and amounts paid or received by the
Partnership, as shown in the Statements of Cash Flows.
<TABLE>
<CAPTION>

                                                                    1997          1996            1995          1994
                                                                    ----          ----            ----          ----
<S>                                                                <C>           <C>            <C>            <C>
Equipment purchases included in:
   Due to affiliates, net................................              2             5             53            170
   Equipment purchases payable...........................              -           361            349          1,191

Distributions to partners included in:
   Due to affiliates.....................................             11            18            115             75
   Deferred quarterly distribution.......................            202           199            234            216

Proceeds from sale of Equipment included in:
   Due from affiliates...................................            286           361            360            272
   Accounts receivable...................................              -             -              2            212
</TABLE>

The following table summarizes the amounts of Equipment purchases, distributions
to partners and proceeds from sale of Equipment  recorded by the Partnership and
the amounts  paid or received as shown on the  Statements  of Cash Flows for the
years ended December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>

                                                                                1997            1996          1995
                                                                                ----            ----          ----

<S>                                                                          <C>             <C>            <C>    
Equipment purchases recorded.........................................        $ 3,106         $ 2,157        $ 7,497
Equipment purchases paid.............................................          3,470           2,193          8,456

Distributions to partners declared...................................         13,108          14,278         14,016
Distributions to partners paid.......................................         13,112          14,410         13,958

Proceeds from sale of Equipment recorded.............................          1,260           1,496          1,646
Proceeds from sale of Equipment received.............................          1,335           1,497          1,768



See accompanying notes to financial statements
</TABLE>


<PAGE>

                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (a California Limited Partnership)

                          Notes to Financial Statements

                  Years ended December 31, 1997, 1996 and 1995
               (Amounts in thousands except for unit and per unit
                                    amounts)


Note 1.  Summary of Significant Accounting Policies

      (a)  Nature of Operations

      Textainer  Equipment Income Fund IV, L.P. (TEIF IV or the Partnership),  a
      California  limited  partnership,  with a maximum  life of 20  years,  was
      formed on October 30, 1991.  The  Partnership  was formed to engage in the
      business  of  owning,  leasing  and  selling  both new and used  equipment
      related  to  the  international  containerized  cargo  shipping  industry,
      including,  but not limited to, containers,  marine vessels,  trailers and
      other container related  equipment (the Equipment).  TEIF IV offered units
      representing  limited  partnership  interests  (Units) to the public until
      April  30,  1994,  the  close  of the  offering  period,  when a total  of
      6,845,903 Units had been purchased for a total of $136,918.

      Textainer  Financial  Services  Corporation  (TFS) is the managing general
      partner of the Partnership  and is a wholly-owned  subsidiary of Textainer
      Capital Corporation (TCC).  Textainer  Equipment  Management Limited (TEM)
      and  Textainer  Limited  (TL) are the  associate  general  partners of the
      Partnership.  The  managing  general  partner  and the  associate  general
      partners  are  collectively  referred to as the General  Partners  and are
      commonly  owned by Textainer  Group Holdings  Limited  (TGH).  The General
      Partners  also  act in  this  capacity  for  other  limited  partnerships.
      Textainer  Acquisition  Services  Limited  (TAS)  is an  affiliate  of the
      General  Partners which performs  services  related to the  acquisition of
      Equipment  outside  the United  States on behalf of the  Partnership.  TCC
      Securities  Corporation  (TSC), a licensed broker and dealer in securities
      and an affiliate of the General Partners, was the managing sales agent for
      the offering of Units for sale.  The General  Partners  manage and control
      the affairs of the Partnership.

      (b)  Basis of Accounting

      The  Partnership  utilizes the accrual  method of  accounting.  Revenue is
      recorded  when  earned  according  to the  terms of the  Equipment  rental
      contracts.  These contracts are classified as operating  leases, or direct
      financing   leases  if  they  so  qualify  under  Statement  of  Financial
      Accounting Standards No. 13: "Accounting for Leases". Substantially all of
      the  Partnership's  rental  income was  generated  from the leasing of the
      Partnership's Equipment under short-term operating leases.


      (c)  Use of Estimates

      Certain   estimates  and  assumptions  were  made  by  the   Partnership's
      management that affect the reported  amounts of assets and liabilities and
      disclosures  of  contingent  assets  and  liabilities  at the  date of the
      financial  statements  and the  reported  amounts of revenue and  expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.

      (d)  Fair Value of Financial Instruments

      In accordance  with Statement of Financial  Accounting  Standards No. 107,
      "Disclosures  about Fair Value of Financial  Instruments," the Partnership
      calculates  the fair value of  financial  instruments  and  includes  this
      additional  information in the notes to the financial  statements when the
      fair  value  is  different   than  the  book  value  of  those   financial
      instruments.  At  December  31,  1997  and  1996,  the  fair  value of the
      Partnership's  financial instruments approximate the related book value of
      such instruments. 

      (e) Equipment

      The  Equipment  is  recorded  at the cost of the assets  purchased,  which
      includes   acquisition  fees,  less  depreciation.   Depreciation  of  new
      Equipment is computed  using the  straight-line  method over its estimated
      useful  life  of 12  years  to a 28%  salvage  value.  Used  Equipment  is
      depreciated based upon its estimated  remaining useful life at the date of
      acquisition  (from 2 to 11 years).  When assets are  retired or  otherwise
      disposed  of, the cost and related  accumulated  depreciation  are removed
      from the accounts and any  resulting  gain or loss is recognized in income
      for the period.

      In accordance  with Statement of Financial  Accounting  Standards No. 121,
      "Accounting for the Impairment of Long-Lived  Assets and Long-Lived Assets
      to be Disposed  of", the  Partnership  periodically  compares the carrying
      value of the  Equipment  to expected  future cash flows for the purpose of
      assessing  the  recoverability  of the recorded  amounts.  If the carrying
      value exceeds  expected future cash flows,  the assets are written down to
      fair  value.  There  were  no  reductions  to the  carrying  value  of the
      Equipment made during 1997, 1996 or 1995.

      (f)  Nature of Income from Operations

      Although  substantially all of the Partnership's income from operations is
      derived from assets employed in foreign operations,  virtually all of this
      income  is  denominated  in  United  States  dollars.   The  Partnership's
      customers  are  international  shipping  lines  that  transport  goods  on
      international  trade routes.  The domicile of the lessee is not indicative
      of where the  lessee is  transporting  the  Equipment.  The  Partnership's
      business risk in its foreign operations lies with the  creditworthiness of
      the lessees  rather than the  geographic  location of the Equipment or the
      domicile of the lessees.

      For the years  ended  December 31,  1997,  1996 and 1995 no single  lessee
      accounted  for more than 10% of the Partnership's revenues.

      (g)  Allocation of Net Earnings and Partnership Distributions

      In accordance with the Partnership Agreement,  net earnings or losses, and
      partnership distributions are allocated 1% to the General Partners and 99%
      to the limited partners with the exception of gross income,  as defined in
      the  Partnership  agreement.  Gross  income is  allocated  to the  General
      Partners to the extent that their capital  accounts'  deficits  exceed the
      portion  of  syndication   and  offering  costs   allocated  to  them.  On
      termination of the  Partnership,  the General  Partners shall be allocated
      gross income equal to their allocations of syndication and offering costs.

      Actual  cash  distributions  to  the  Limited  Partners  differ  from  the
      allocated net earnings as presented in these financial  statements because
      cash  distributions  are based on cash  available for  distribution.  Cash
      distributions  are paid to the general  and limited  partners on a monthly
      basis in accordance with the provisions of the Partnership Agreement. Some
      limited partners have elected to have their  distributions paid quarterly.
      The  Partnership has recorded these  distributions  of $202 and $199 as an
      accrued liability at December 31, 1997 and 1996, respectively.

      (h)  Income Taxes

      The Partnership is not subject to income taxes. Accordingly,  no provision
      for income taxes has been made.  The  Partnership  files federal and state
      information  returns  only.  Taxable  income or loss is  reportable by the
      individual partners.

      (i)  Organization Costs

      Organization  costs which  resulted from the formation of the  Partnership
      were  capitalized  and were amortized on a  straight-line  basis over five
      years. These costs were fully amortized in 1997.

      (j)  Acquisition Fees

      In accordance with the Partnership Agreement, acquisition fees are paid to
      TAS equal to 5% of the Equipment  purchase  price (see note 2). These fees
      are capitalized as part of the cost of the Equipment.

      (k)  Recovery Costs

      The  Partnership  accrues an estimate  for  recovery  costs as a result of
      defaults under its leases that it expects to incur, which are in excess of
      estimated insurance  proceeds.  At December 31, 1997 and 1996, the amounts
      accrued were $139 and $85, respectively.

      (l)  Damage Protection Plan

      The  Partnership  offers a Damage  Protection Plan (DPP) to lessees of its
      Equipment.  Under  the  terms of DPP,  the  Partnership  earns  additional
      revenues  on a daily  basis  and,  in return,  has agreed to bear  certain
      repair costs.  It is the  Partnership's  policy to recognize  revenue when
      earned  and  provide  a  reserve  sufficient  to cover  the  Partnership's
      obligation for estimated future repair costs. DPP expenses are included in
      direct  container  expenses in the  Statements of Earnings and the related
      reserve at December 31, 1997 and 1996, was $405 and $520, respectively.

      (m)  Warranty Claims

      During 1996 and 1995, the Partnership  settled warranty claims against two
      equipment  manufacturers.  The  Partnership  is amortizing  the settlement
      amount over the  remaining  estimated  useful life of the  equipment  (ten
      years),  reducing  maintenance  costs over that time. At December 31, 1997
      and 1996, the  unamortized  portion of the settlement  amount was $537 and
      $599, respectively.

      (n)  Limited Partners' Per Unit Share of Net Earnings and Distributions

      Limited  partners'  per unit share of both net earnings and  distributions
      were  computed  using the  weighted  average  number of units  outstanding
      during  the years  ended  December  31,  1997,  1996 and  1995,  which was
      6,827,168, 6,837,104, and 6,845,440, respectively.

      (o)  Redemptions

      The following  redemption  offerings were  consummated by the  Partnership
      during the years ended December 31, 1997, 1996 and 1995:
<TABLE>
<CAPTION>

                                                        Units                  Average
                                                       Redeemed           Redemption Price           Amount Paid

<S>                                                   <C>                 <C>                         <C>
        Year ended December 31, 1995:
              3rd quarter..............                 6,025                  $15.70                    $  95
                                                        -----                                              ---

        Year ended December 31, 1996:
              1st quarter..............                 2,068                  $15.60                    $  32
              3rd quarter..............                 2,622                  $14.87                       39
                                                        -----                                               --

                                                        4,690                  $15.19                    $  71
                                                        -----                                              ---

        Year ended December 31, 1997:
              1st quarter..............                 8,020                  $13.03                    $ 104
                                                        -----                                             ----

         Partnership to date..................         18,735                  $14.43                    $ 270
                                                       =======                                            ====
</TABLE>

          The redemption  price is fixed by formula and varies  depending on the
          length of time the units have been outstanding.

      (p)  Reclassifications

      Certain  reclassifications,  not affecting net earnings, have been made to
      prior years' amounts in order to conform with the 1997 financial statement
      presentation.

Note 2.  Transactions with Affiliates

      As part of the operation of the Partnership,  the Partnership is to pay to
      the General  Partners or TAS an incentive  management  fee, an acquisition
      fee, an equipment  management fee and an equipment  liquidation fee. These
      fees  are  for  various   services   provided  in   connection   with  the
      administration and management of the Partnership. The Partnership incurred
      $546,  $590, and $592 of incentive  management fees during the years ended
      December  31,  1997,  1996  and  1995,  respectively,   and  incurred  and
      capitalized $165, $104, and $397 of equipment  acquisition fees as part of
      Equipment  costs during the same periods.  No equipment  liquidation  fees
      were incurred in 1997, 1996 or 1995.

      The  Equipment  of the  Partnership  is  managed  by TEM.  In its  role as
      manager,  TEM has  authority to acquire,  hold,  manage,  lease,  sell and
      dispose of the Partnership's Equipment.  Additionally,  TEM holds, for the
      payment  of direct  operating  expenses,  as an offset to the  amount in a
      reserve of cash that has been collected from Equipment leasing operations;
      such cash is included as an offset to the amount in due to affiliates, net
      at December 31, 1997 and 1996.

      Subject to certain reductions, TEM receives a monthly Equipment management
      fee equal to 7% of gross revenues  attributable to operating leases and 2%
      of gross revenues  attributable  to full payout net leases.  In 1997, 1996
      and 1995,  equipment  management fees totaled $1,474,  $1,643, and $1,817,
      respectively.  The Partnership's Equipment is leased by TEM to third party
      lessees on operating  master  leases,  spot  leases,  term leases and full
      payout net leases.  The majority of the Partnership's  Equipment is leased
      under operating leases with limited terms and no purchase option.

      Certain  indirect  general  and  administrative  costs  such as  salaries,
      employee  benefits,   taxes  and  insurance  are  incurred  in  performing
      administrative  services  necessary to the  operation of the  Partnership.
      These  costs  are  incurred  and paid by TFS and TEM.  Total  general  and
      administrative costs allocated to the Partnership were $1,318,  $1,347 and
      $1,779 for the years ended December 31, 1997, 1996 and 1995, respectively,
      of which $717, $708, and $847 were for salaries.

      TEM allocates these general and administrative costs based on the ratio of
      the Partnership's interest in the managed Equipment to the total Equipment
      managed by TEM during the period.  TFS allocates  these costs based on the
      ratio of the Partnership's Equipment to the total Equipment of all limited
      partnerships managed by TFS. General and administrative costs allocated to
      the Partnership by TEM were $1,166, $1,173, and $1,500 for the years ended
      December 31, 1997, 1996 and 1995, respectively.  TFS allocated $152, $174,
      and $279 of general and administrative costs to the Partnership during the
      same periods.

      The General  Partners or TAS may acquire  Equipment  in their own name and
      hold  title on a  temporary  basis for the  purpose  of  facilitating  the
      acquisition of such Equipment for the Partnership.  The Equipment may then
      be resold to the  Partnership on an all-cash basis at a price equal to the
      actual cost, as defined in the  Partnership  Agreement.  In addition,  the
      General  Partners  or TAS  are  entitled  to an  acquisition  fee  for any
      Equipment resold to the Partnership.

      At December 31, 1997 and 1996, due to affiliates, net is comprised of:

                                                            1997            1996
                                                            ----            ----
      Due from affiliates:
        Due from TEM...........................           $  120       $       -
                                                           -----           -----
      Due to affiliates:
        Due to TEM.............................                -             723
        Due to TL..............................              834               1
        Due to TCC.............................               20              36
        Due to TAS.............................                2               5
        Due to TFS.............................               55              50
                                                           -----           -----
                                                             911             815
                                                           -----           -----
      Due to affiliates, net                              $  791          $  815
                                                           =====           =====

      Included in the  amounts  due to TL at December  31, 1997 is $826 in loans
      used to facilitate Equipment  purchases.  There were no intercompany loans
      between the  Partnership  and  affiliates  during 1996.  All other amounts
      receivable  from and payable to  affiliates  were incurred in the ordinary
      course  of  business  between  the  Partnership  and  its  affiliates  and
      represent  timing  differences  in the accrual and payment of expenses and
      fees described  above or the accrual and remittance of net rental revenues
      from TEM.

      It is the policy of the  Partnership  and the  General  Partners to charge
      interest on intercompany  balances outstanding for more than one month, to
      the extent such balances relate to loans for Equipment purchases. Interest
      is charged at a rate not greater  than the General  Partners'  own cost of
      funds.  The Partnership  incurred  interest expense of $10 on intercompany
      balances  for the year  ended  December  31 1997.  There  was no  interest
      expense incurred on intercompany balances for the years ended December 31,
      1996 or 1995.

Note 3.   Rentals under Operating Leases

      The following are the future  minimum rent  receivables  under  cancelable
      long-term  operating leases at December 31, 1997.  Although the leases are
      generally  cancelable  at  the  end of  each  twelve-month  period  with a
      penalty,  the  following  schedule  assumes  that the  leases  will not be
      terminated.

      Year ending December 31,

      1998......................................................         $ 1,203
      1999......................................................             318
      2000......................................................              79
                                                                          ------
      Total minimum future rentals receivable...................         $ 1,600
                                                                          ======

Note 4.   Income Taxes

      At December 31, 1997, 1996 and 1995,  there were temporary  differences of
      $57,135,  $44,197,  and  $31,485,  respectively,   between  the  financial
      statement carrying value of certain assets and liabilities and the federal
      income tax basis of such assets and liabilities. The reconciliation of net
      income for financial statement purposes to net loss for federal income tax
      purposes  for the years ended  December  31,  1997,  1996,  and 1995 is as
      follows:
<TABLE>
<CAPTION>

                                                                              1997               1996          1995
                                                                              ----               ----          ----

<S>                                                                       <C>              <C>              <C>       
        Net income per financial statements......................         $  5,750         $    8,329       $   11,463

        Increase (decrease) in provision for bad debt.............              42                 42              (83)
        Depreciation for income tax purposes in excess
          of depreciation for financial statement purposes........         (13,367)           (13,198)         (12,761)
        Gain on sale of fixed assets for federal income tax
          purposes in excess of  gain recognized
          for financial statement purposes........................             547                362              242
        Decrease in damage protection plan reserve................            (115)               (36)            (118)
        Warranty reserve income for tax purposes in excess
          of financial statement purposes.........................             (61)                78                -
        Other.....................................................              16                 40               38
                                                                          ---------          ---------         --------

        Net loss for federal income tax purposes                          $ (7,188)          $ (4,383)     $    (1,219)
                                                                          =========          =========         ========


</TABLE>


<PAGE>



ITEM 9 -  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE.

There have been none.

                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant has no officers or directors.

As described in the Prospectus, the Registrant's three original general partners
were TCC, TEM and TI which comprised the Textainer Group.  Effective  October 1,
1993, the Textainer Group  streamlined its organization by forming a new holding
company,  Textainer Group Holdings  Limited (TGH),  and the  shareholders of the
underlying  companies which include the General Partners  accepted shares in TGH
in exchange for their shares in the individual  companies.  Textainer  Financial
Services  Corporation  (TFS) is the Managing  General Partner of the Partnership
(prior to its name change on April 4, 1994,  TFS was known as Textainer  Capital
Corporation).  TFS is a wholly-owned subsidiary of Textainer Capital Corporation
(TCC)  (prior to its name  change on April  4,1994,  TCC was known as  Textainer
(Delaware) Inc.).  Textainer Equipment  Management Limited (TEM) is an Associate
General Partner of the Partnership. Textainer Inc. (TI) was an Associate General
Partner of the  Partnership  through  September 30, 1993 when it was replaced in
that capacity by Textainer Limited (TL), pursuant to a corporate  reorganization
effective October 1, 1993, which caused TFS, TEM and TL to fall under the common
ownership of TGH. (The Managing  General Partner and Associate  General Partners
are  collectively  referred  to as  the  General  Partners).  Pursuant  to  this
restructuring,  TI has transferred substantially all of its assets including all
of its rights and duties as associate  general  partner to TL. This transfer was
effective  from  October  1, 1993.  The end result was that TFS,  TEM and TL now
serve  as  General   Partners  for  the  Registrant  and  are   wholly-owned  or
substantially-owned  subsidiaries of TGH. The General  Partners also act in this
capacity for other limited partnerships.  Textainer Acquisition Services Limited
(TAS) is an affiliate of the General Partners,  which performs services relative
to the  acquisition  of  Equipment  outside  the United  States on behalf of the
Partnership.  TCC Securities  Corporation (TSC), a licensed broker and dealer in
securities  and an affiliate  of the General  Partners,  was the managing  sales
agent for the offering of Units for sale.

TFS,  as  the  Managing  General  Partner,   is  responsible  for  managing  the
administration  and operation of the  Registrant,  and for the  formulation  and
administration of investment policies.

TEM, an Associate  General Partner,  manages all aspects of the operation of the
Registrant's Equipment.

TL, an Associate  General  Partner,  owns a fleet of container  rental Equipment
which is  managed  by TEM.  TL  provides  advice  to the  Partnership  regarding
negotiations  with financial  institutions,  manufacturers and Equipment owners,
and regarding the terms upon which particular items of Equipment are acquired.

Section 16(a) Beneficial Ownership Reporting Compliance.

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  the
      Partnership's  General Partners,  policy-making  officials and persons who
      beneficially  own more than ten  percent  of the Units to file  reports of
      ownership  and  changes in  ownership  with the  Securities  and  Exchange
      Commission.  Copies  of  these  reports  must  also  be  furnished  to the
      Partnership.

      Based  solely on a review of the  copies of such  forms  furnished  to the
      Partnership or on written  representations  that no forms were required to
      be filed,  the  Partnership  believes that with respect to its most recent
      fiscal year ended December 31, 1997, all Section 16(a) filing requirements
      were  complied  with (except that Robert D.  Pedersen,  a newly  appointed
      director of TEM,  filed his initial  statement of  beneficial  interest on
      Form 3 late, which Form was filed on Form 5). No member of management,  or
      beneficial  owner  owned  more  than 10  percent  of any  interest  in the
      Partnership.  None of the individuals subject to section 16(a),  including
      Mr. Pedersen,  failed to file or filed late any reports of transactions in
      the Units.

The directors and executive officers of the General Partners are as follows:
<TABLE>
<CAPTION>

Name                             Age    Position

<S>                               <C>   <C>                                                  
Neil I. Jowell                    64    Director and Chairman of TGH, TEM, TL, TCC and TFS
James E. Hoelter                  58    President and CEO of TGH and TL, Director of TGH, TEM, TL, TCC, TFS and TSC
John A. Maccarone                 53    President  and CEO of TEM and TSC, Vice  President of TGH,  Director of TGH,
                                        TEM, TL, TCC, TFS and TSC
John R. Rhodes                    48    Executive  Vice  President,  CFO, and Secretary of TGH, TEM, TL, TCC and TFS
                                        and Director of  TEM, TCC and TFS
Alex M. Brown                     59    Director of TGH, TEM, TL, TCC, TFS and TSC
Harold J. Samson                  76    Director of TGH, TL and TSC
Philip K. Brewer                  41    President of TCC and TFS,  Senior Vice  President - Capital  Markets
                                        for TGH and TL
Robert D. Pedersen                39    Senior Vice President - Marketing for TEM, Director of TEM
Anthony C. Sowry                  45    Vice President - Operations and Acquisitions for TEM
Jens W. Palludan                  47    Regional Vice President - Americas/Africa/Australia for TEM
Wolfgang Geyer                    44    Regional Vice President - Europe/Middle East/Persian Gulf for TEM
Mak Wing Sing                     40    Regional Vice President - South Asia for TEM
Masanori Sagara                   42    Regional Vice President - North Asia for TEM
Stefan Mackula                    45    Vice President - Equipment Resale for TEM
Ernest J. Furtado                 42    Vice  President,  Finance and  Assistant  Secretary of TGH, TL, TEM, TCC and
                                        TFS, Director of TCC and TFS
Richard G. Murphy                 45    Vice President - Risk Management for TEM
Janet S. Ruggero                  49    Vice President - Administration and Marketing Services for TEM
Adnan Z. Abou Ayyash              53    Director of TGH and TL
Isam K. Kabbani                   63    Director of TGH and TL
S. Arthur Morris                  64    Director of TGH, TEM and TL
Dudley R. Cottingham              46    Assistant Secretary, Vice President and Director of TGH, TEM and TL
Cara D. Smith                     35    Member of Investment Advisory Committee
Nadine Forsman                    30    Controller of TCC, TFS and TSC
</TABLE>

          Neil I. Jowell is Director and  Chairman of TGH,  TEM, TL, TCC and TFS
and a member of the Investment  Advisory Committee (see "Committees"  below). He
has served on the Board of Trencor Ltd.  since 1966 and as Chairman  since 1973.
He is also a director of Mobile Industries, Ltd. (1969 to present), an Affiliate
of Trencor,  and a non-executive  director of Forward  Corporation Ltd. (1993 to
present).  Trencor is a publicly traded  diversified  industrial group listed on
the Johannesburg Stock Exchange. Its business is the leasing,  owning,  managing
and  financing of marine cargo  containers  worldwide  and the  manufacture  and
export of containers for international  markets.  In South Africa, it is engaged
in manufacturing, transport, trading and exports of general commodities. Trencor
also has an interest in Forward  Corporation  Ltd.,  a publicly  traded  holding
company  listed  on  the  Johannesburg  Stock  Exchange.  It  has  interests  in
industrial  and consumer  businesses  operating in South Africa and abroad.  Mr.
Jowell  became  affiliated  with the General  Partners and its  affiliates  when
Trencor became,  through its beneficial ownership in two controlled companies, a
major  shareholder of the Textainer Group in 1992. Mr. Jowell has over 36 years'
experience  in the  transportation  industry.  He holds an  M.B.A.  degree  from
Columbia University and a B.Com.L.L.B. from the University of Cape Town.

          James E. Hoelter is President and Chief  Executive  Officer of TGH and
TL, and a director of TGH,  TEM, TL, TCC,  TFS and TSC. As  President  and Chief
Executive  Officer  of TGH,  Mr.  Hoelter  is  responsible  for  overseeing  the
management  of, and  coordinating  the  activities  of, TEM, TL, TCC and TFS. In
addition,  Mr.  Hoelter is  Chairman  of the Credit  Committee,  the  Investment
Advisory  Committee and the Equipment  Investment  Committee (see  "Committees",
below).  Prior to joining the Textainer Group in 1987, Mr. Hoelter was president
of Intermodal  Equipment  Associates ("IEA"), a marine container leasing company
based in San  Francisco.  Mr.  Hoelter  co-founded IEA in 1978 and was president
from inception until 1987. From 1976 to 1978, Mr. Hoelter was vice president for
Trans Ocean Ltd., San Francisco,  a marine container  leasing company,  where he
was  responsible  for  North  America.  From 1971 to 1976,  he  worked  for Itel
Corporation,  San Francisco,  where he was director of financial leasing for the
container  division.  Mr.  Hoelter  received  his  B.B.A.  in  finance  from the
University of Wisconsin,  where he currently  serves as a member of its Business
School's Dean's Advisory Board, and his M.B.A.
from the Harvard Graduate School of Business Administration.

          John A.  Maccarone is President and CEO of TEM and TSC, Vice President
of TGH and a director of TGH,  TEM, TL, TCC, TFS and TSC. In this capacity he is
responsible  for the  performance  of  TEM's  worldwide  fleet of  marine  cargo
containers.  Additionally, he is a member of the Equipment Investment Committee,
the Credit Committee and the Investment  Advisory  Committee (see  "Committees",
below).  Mr.  Maccarone was instrumental in co-founding IEA with Mr. Hoelter and
held a variety of  executive  positions  with IEA from 1979 until 1987,  when he
joined the Textainer Group. Mr. Maccarone was previously a Director of Marketing
for Trans Ocean Leasing  Corporation  in Hong Kong with  responsibility  for all
leasing  activities in Southeast  Asia.  From 1969 to 1977, Mr.  Maccarone was a
marketing  representative  for  IBM  Corporation.  He  holds  a B.S.  degree  in
Engineering  Management  from  Boston  University  and  an  M.B.A.  from  Loyola
University of Chicago.

          John R. Rhodes is Executive Vice President,  Chief  Financial  Officer
and  Secretary of TGH,  TEM, TL, TCC and TFS and a director of TEM, TCC and TFS.
In this capacity he is responsible for all accounting, financial management, and
reporting  functions for the Textainer  Group. He is also a member of the Credit
Committee,  the Equipment Investment Committee and Investment Advisory Committee
(see  "Committees",  below).  Prior to joining  Textainer in November  1987, Mr.
Rhodes was Vice President of Finance for Greenbrier  Capital  Corporation in San
Francisco,  a trailer  leasing and management  company,  from 1986 to 1987; from
1981 to 1985, he was employed by Gelco Rail Services, an intermodal refrigerated
trailer  company in San  Francisco,  first in the capacity of Vice President and
Controller  and then as Senior Vice President and General  Manager.  Mr. Rhodes'
earlier  business  affiliations  include  serving as Vice  President and General
Manager  of Itel  Capital  Corporation  and as  senior  accountant  with  Arthur
Andersen & Co., both in San Francisco.  He is a Certified Public  Accountant and
holds a B.A. in economics from Stanford  University and an M.B.A.  in accounting
from Golden Gate University.

          Alex M. Brown is a director  of  TGH,  TEM,  TL,  TCC,  TFS  and  TSC.
Additionally,  he is a member  of the  Equipment  Investment  Committee  and the
Investment  Advisory  Committee (see  "Committees",  below). Mr. Brown is also a
director of Trencor  Ltd.  (1996 to present)  and Forward  Corporation  (1997 to
present).  Both companies are publicly traded and are listed on the Johannesburg
Stock  Exchange.  Mr. Brown became  affiliated with the Textainer Group in April
1986.  From 1987 until 1993,  he was President  and Chief  Executive  Officer of
Textainer,  Inc.  and the  Chairman of the  Textainer  Group.  Mr. Brown was the
managing  director  of Cross  County  Leasing in England  from 1984 until it was
acquired by Textainer in 1986.  From 1993 to 1997, Mr. Brown was Chief Executive
Officer  of AAF, a company  affiliated  with  Trencor  Ltd.  Mr.  Brown was also
Chairman of WACO International Corporation, based in Cleveland, Ohio until 1997.

          Harold J. Samson is a director of TGH, TL and TSC and is a  member  of
the Investment  Advisory Committee (see "Committees",  below). Mr. Samson served
as a consultant  to various  securities  firms since 1981 to 1989.  From 1974 to
1981 he was  Executive  Vice  President  of Foster & Marshall,  Inc., a New York
Stock  Exchange  member firm based in Seattle.  Mr. Samson was a director of IEA
from 1979 to 1981.  From 1957 to 1984 he served as Chief  Financial  Officer  in
several  New York Stock  Exchange  member  firms.  Mr.  Samson  holds a B.S.  in
Business  Administration  from the University of  California,  Berkeley and is a
California Certified Public Accountant.

          Philip K. Brewer is President of  TCC  and  TFS  and  is  Senior  Vice
President  Capital  Markets for TGH and TL. As President  of TCC, Mr.  Brewer is
responsible for overseeing the management of, and coordinating the activities of
TCC and TFS. As Senior Vice  President,  he is  responsible  for  optimizing the
capital  structure of and identifying new sources of finance for Textainer.  Mr.
Brewer is a member of the Credit Committee,  the Investment  Advisory  Committee
and the  Equipment  Investment  Committee  (see  "Committees"  below).  Prior to
joining Textainer in 1996, Mr. Brewer worked at Bankers Trust from 1990 to 1996,
starting  as a Vice  President  in  Corporate  Finance  and  ending as  Managing
Director  and Country  Manager  for  Indonesia;  from 1989 to 1990,  he was Vice
President in Corporate  Finance at Jarding  Fleming;  from 1987 to 1989,  he was
Capital  Markets   Advisor  to  the  United  States  Agency  for   International
Development;  and from  1984 to 1987 he was an  Associate  with  Drexel  Burnham
Lambert in New York.  Mr.  Brewer  holds an M.B.A.  in Finance from the Graduate
School of Business at Columbia University, and a B.A. in Economics and Political
Science from Colgate University.

          Robert D. Pedersen is Senior Vice  President - Marketing for TEM and a
Director  of  TEM,   responsible  for  worldwide  sales  and  marketing  related
activities.  Mr. Pedersen is a member of the Equipment  Investment Committee and
the Credit Committee (see "Committees" below). He joined TEM in 1991 as Regional
Vice President for the Americas Region. Mr. Pedersen has extensive experience in
the industry  having held a variety of  positions  with Maersk Line, a container
shipping line (from 1978 to 1984),  XTRA, a container  lessor (1985 to 1988) and
Klinge Cool, a manufacturer  of  refrigerated  container  cooling units (1989 to
1991),  where he was worldwide sales and marketing  director.  Mr. Pedersen is a
graduate of the A.P.  Moller  shipping and  transportation  program and Merkonom
Business School in Copenhagen, majoring in Company Organization.

          Anthony C. Sowry is Vice President - Operations and  Acquisitions  for
TEM. He is also a member of the Credit  Committee and the  Equipment  Investment
Committee (see  "Committees",  below).  Mr. Sowry  supervises all  international
container  operations  and  maintenance  and technical  functions for the fleets
under management.  In addition, he is responsible for the acquisition of all new
and used containers for the Textainer  Group. He began his affiliation  with TEM
in 1988 and  previously  served as Fleet Quality  Control  Manager for Textainer
Inc. from 1982 through March 1988. From 1980 to 1982, he was operations  manager
for  Trans  Container  Services  in  London;  and from  1978 to  1982,  he was a
technical  representative  for Trans Ocean Leasing,  also in London. He received
his B.A. degree in business  management from the London School of Business.  Mr.
Sowry is a member of the Technical  Committee of the International  Institute of
Container Lessors and a certified container inspector.

          Jens W.  Palludan is based in  Hackensack,  New Jersey and is Regional
Vice President - Americas/Africa/Australia for TEM, responsible for coordinating
all leasing  activities  in North and South  America,  Africa and  Australia/New
Zealand.  Mr.  Palludan spent his career from 1969 through 1992 with Maersk Line
of Copenhagen,  Denmark in a variety of key management positions in both Denmark
and  overseas.  Prior to joining TEM in 1993 Mr.  Palludan was General  Manager,
Equipment and Terminals,  where he was  responsible  for a fleet of over 200,000
TEUs.  Mr.  Palludan  holds an  M.B.A.  from  the  Centre  European  D'Education
Permanente, Fontainebleau, France.

         Wolfgang  Geyer is based  in  Hamburg,  Germany  and is  Regional  Vice
President  -  Europe/  Middle  East/  Persian  Gulf  for  TEM,  responsible  for
coordinating  all leasing  activities  in these areas of  operation.  Mr.  Geyer
joined Textainer in 1993 and was the Marketing  Director in Hamburg through July
1997. Mr. Geyer most recently was the Senior Vice President,  for Clou Container
Leasing,  responsible for Clou's leasing  activities on a worldwide  basis.  Mr.
Geyer work for Clou from 1991 to 1993.  Mr.  Geyer  spent the  remainder  of his
leasing career,  1975 through 1991,  with Itel  Container,  during which time he
held numerous positions in both operations and marketing within the company.

         Mak Wing Sing is based in Singapore  and is the Regional Vice President
-  South  Asia  for  TEM,   responsible  for  container  leasing  activities  in
North/Central  People's  Republic of China, Hong Kong and South China (PRC), and
Southeast Asia. Mr. Mak most recently was the Regional Manager,  Southeast Asia,
for Trans Ocean Leasing, working there from 1994 to 1996. From 1987 to 1994, Mr.
Mak worked with Tiphook as their Regional  General  Manager,  and with OOCL from
1976 to 1987 in a  variety  of  positions,  most  recently  as  their  Logistics
Operations Manager.

          Masanori  Sagara is based in Yokohama,  Japan and is the Regional Vice
President - North Asia for TEM, responsible for Textainer's marketing activities
in Japan,  Korea,  and Taiwan.  Mr. Sagara joined  Textainer in 1990 and was the
company's  Marketing  Director in Japan through 1996.  From 1987 to 1990, he was
the Marketing  Manager with IEA. Mr. Sagara's other  experience in the container
leasing business includes marketing  management at Genstar from 1984 to 1987 and
various  container  operations  positions  with  Thoresen & Company from 1979 to
1984.  Mr.  Sagara holds a Bachelor of Science  degree in Economics  from Aoyama
Bakuin University.

          Stefan Mackula is Vice President - Equipment  Resale for TEM, in which
capacity he coordinates the worldwide sale of Equipment into secondary  markets.
Mr. Mackula also served as Vice President - Marketing for TEM, in which capacity
he was responsible for  coordinating all leasing  activities in Europe,  Africa,
and the Middle  East.  He joined TEM in 1983 as Leasing  Manager  for the United
Kingdom. Prior to joining TEM, Mr. Mackula held, beginning in 1972, a variety of
positions in the international container shipping industry.

          Ernest J. Furtado is Vice President,  Finance and Assistant  Secretary
of TGH, TL, TEM, TCC and TFS and a Director of TCC and TFS, in which capacity he
is responsible for all accounting, financial management, and reporting functions
for TGH, TL, TEM,  TCC and TFS.  Additionally,  he is a member of the  Equipment
Investment  Committee and the Investment  Advisory  Committee (see "Committees",
below).  Prior to joining  Textainer in May 1991, Mr. Furtado was Controller for
Itel Instant Space and manager of accounting for Itel  Containers  International
Corporation,  both in San Francisco,  from 1984 to 1991. Mr.  Furtado's  earlier
business  affiliations include serving as audit manager for Wells Fargo Bank and
as senior  accountant with John F. Forbes & Co., both in San Francisco.  He is a
Certified Public Accountant and holds a B.S. in business administration from the
University of California at Berkeley and an M.B.A.  in information  systems from
Golden Gate University.

          Richard G. Murphy is Vice  President,  Risk  Management  for TEM.  Mr.
Murphy is responsible for all credit and risk  management  functions for TEM and
supervises the administrative aspects of Equipment acquisitions.  He is a member
of and acts as secretary to the Credit and Equipment Investment  Committees (see
"Committees",  below). He previously served as TEM's Director of Credit and Risk
Management from 1989 to 1991 and as Controller  from 1988 to 1989.  Prior to the
takeover of the management of the Interocean  Leasing Ltd. fleet by TEM in 1988,
Mr. Murphy held various  positions in the  accounting  and financial  areas with
that company  from 1980,  acting as Chief  Financial  Officer from 1984 to 1988.
Prior to 1980, he held various positions with firms of public accountants in the
U.K. Mr.  Murphy is an Associate of the  Institute of Chartered  Accountants  in
England  and Wales and holds a Bachelor of  Commerce  degree  from the  National
University of Ireland.

          Janet S.  Ruggero  is Vice  President,  Administration  and  Marketing
Services for TEM.  Ms.  Ruggero is  responsible  for the tracking and billing of
fleets under TEM management,  including direct  responsibility for ensuring that
all data is input in an accurate and timely  fashion.  She assists the marketing
and  operations  departments by providing  statistical  reports and analyses and
serves on the  Credit  Committee  (see  "Committees",  below).  Prior to joining
Textainer in 1986,  Ms.  Ruggero held various  positions with Gelco CTI over the
course of 15 years, the last one as Director of Marketing and Administration for
the North American Regional office in New York City. She has a B.A. in education
from Cumberland College.

          Dr. Adnan Z. Abou Ayyash is a director of TGH and TL.  Since  1974  he
has been General Manager and Chief Executive Officer of one of the largest firms
of consulting  engineers in Saudi  Arabia,  Rashid  Engineering.  Dr. Adnan Abou
Ayyash holds a B.S. degree in Civil Engineering from the American  University of
Beirut,  as well as M.S.  and  Ph.D.  degrees  in  Civil  Engineering  from  the
University of Texas.

          Sheikh Isam K. Kabbani is a director of TGH and TL. He is Chairman and
principal  stockholder of the IKK Group,  Jeddah,  Saudi Arabia, a manufacturing
and trading group which is active both in Saudi Arabia and  internationally.  In
1959 Sheikh Isam Kabbani joined the Saudi Arabian  Ministry of Foreign  Affairs,
and in 1960 moved to the Ministry of Petroleum for a period of ten years. During
this time he was seconded to the Organization of Petroleum  Exporting  Countries
(OPEC).  After a period as Chief  Economist of OPEC, in 1967 he became the Saudi
Arabian  member of OPEC's  Board of  Governors.  In 1970 he left the ministry of
Petroleum to establish his own business, the National Marketing Group, which has
been his principal business activity for the past 18 years. Sheikh Kabbani holds
a B.A.  degree from  Swarthmore  College,  Pennsylvania,  and an M.A.  degree in
Economics and International Relations from Columbia University.

          S. Arthur  Morris is a director  of TGH,  TEM and TL. He is a founding
partner in the firm of Morris and Kempe,  Chartered Accountants  (1962-1977) and
currently  functions  as a  correspondent  member of a number  of  international
accounting  firms through his firm Arthur Morris and Company (1978 to date).  He
is also President and director of Continental Management Limited (1977 to date).
Continental  Management Limited is a Bermuda corporation that provides corporate
representation,   administration  and  management  services  and  corporate  and
individual  trust  administration   services.  Mr.  Morris  has  over  30  years
experience in public  accounting and serves on numerous  business and charitable
organizations in the Cayman Islands and Turks and Caicos Islands. Mr.
Morris became a director of TL and TGH in 1993, and TEM in 1994.

          Dudley R.  Cottingham  is Assistant  Secretary,  Vice  President and a
director  of TGH,  TEM and TL. He is a partner  with  Arthur  Morris and Company
(1977 to date) and a Vice  President  and  director  of  Continental  Management
Limited (1978 to date), both in the Cayman Islands and Turks and Caicos Islands.
Continental  Management Limited is a Bermuda corporation that provides corporate
representation,   administration  and  management  services  and  corporate  and
individual  trust  administration  services.  Mr.  Cottingham  has over 20 years
experience  in  public   accounting  with   responsibility   for  a  variety  of
international and local clients.  Mr. Cottingham became a director of TL and TGH
in 1993, and TEM in 1994.

          Cara D. Smith was the  President and Chief  Executive  Officer of  TSC
through June 1997 and a director of TCC and TFS through  August 1997.  Ms. Smith
is a member of the Investment Advisory Committee (see "Committees",  below). Ms.
Smith  joined  Textainer  in 1992,  and  prior to 1996,  was Vice  President  of
Marketing.  Ms.  Smith has  worked in the  securities  industry  for the past 13
years.  Ms. Smith's  extensive  experience  ranges from  compliance and investor
relations to  administration  and marketing of equipment  leasing,  multi-family
housing and tax credit investment  programs.  She holds five securities licenses
and is a registered  principal.  Ms. Smith is also a member of the International
Association of Financial Planners.

         Nadine  Forsman is the Controller of TCC, TFS and TSC. In this capacity
she is responsible for accounting,  financial management and reporting functions
for TCC, TFS and TSC as well as overseeing all  communications  with the Limited
Partners and as such, supervises personnel in performing this function. She is a
member  of the  Equipment  Investment  Committee  and  the  Investment  Advisory
Committee (See "Committees"  below).  Prior to joining Textainer in August 1996,
Ms. Forsman was employed by KPMG Peat Marwick LLP,  holding  various  positions,
the most recent of which was manager, from 1990 to 1996. Ms Forsman holds a B.S.
in  Accounting  and Finance  from San  Francisco  State  University  and holds a
financial and operations principal securities license.

Committees

          The Managing  General  Partner has  established  the  following  three
committees to facilitate decisions involving credit and organizational  matters,
negotiations,  documentation,  management and final disposition of Equipment for
the Partnership and for other programs organized by the Textainer Group:

          Equipment  Investment  Committee.  The Equipment Investment  Committee
will review the Equipment leasing programs of the Partnership on a regular basis
with emphasis on matters involving Equipment purchases, the Equipment mix in the
Partnership's  portfolio,  Equipment remarketing issues, and decisions regarding
ultimate  disposition  of  Equipment.  The members of the committee are James E.
Hoelter (Chairman), John A. Maccarone, John R. Rhodes, Anthony C. Sowry, Richard
G. Murphy  (Secretary),  Alex M. Brown,  Philip K. Brewer,  Robert D.  Pedersen,
Ernest J. Furtado and Nadine Forsman.

          Credit  Committee.  The Credit Committee will establish credit  limits
for every lessee and potential lessee of Equipment and periodically review these
limits. In setting such limits,  the Credit Committee will consider such factors
as customer trade routes,  country,  political risk, operational history, credit
references, credit agency analyses, financial statements, and other information.
The members of the Credit  Committee  are James E. Hoelter  (Chairman),  John A.
Maccarone,  Richard G. Murphy  (Secretary),  Janet S.  Ruggero,  John R. Rhodes,
Anthony C. Sowry, Philip K. Brewer and Robert D. Pedersen.

          Investment  Advisory   Committee.   The  Investment Advisory Committee
will  review  investor  program  operations  on  at  least  a  quarterly  basis,
emphasizing  matters  related  to cash  distributions  to  investors,  cash flow
management,  portfolio  management,  and  liquidation.  The Investment  Advisory
Committee is organized  with a view to applying an  interdisciplinary  approach,
involving management,  financial, legal and marketing expertise, to the analysis
of investor program operations. The members of the Investment Advisory Committee
are James E. Hoelter  (Chairman),  John A. Maccarone,  Cara D. Smith,  Ernest J.
Furtado (Secretary), Philip K. Brewer, John R. Rhodes, Nadine Forsman, Harold J.
Samson, Alex M. Brown and Neil I. Jowell.


ITEM 11 - EXECUTIVE COMPENSATION

The Registrant  has no executive  officers and does not reimburse TFS, TEM or TL
for the  remuneration  payable  to their  executive  officers.  For  information
regarding  reimbursements  made by the Registrant to the General  Partners,  see
Note 2 of the Financial Statements.

ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

a)       Security Ownership of Certain Beneficial Owners

         There is no person or "Group" who is known to the  Registrant to be the
         beneficial owner of more than five percent of the outstanding  units of
         limited partnership interest in the Registrant.

b)       Security Ownership of Management

         As of January 1, 1998:

                                                     Number
          Name of Beneficial Owner                  Of Units         % All Units

          James E. Hoelter.......................       10,995          0.1610%
          John A. Maccarone......................        5,500          0.0806%
                                                        ------          -------

          Officers and Management
             as a Group..........................       16,495          0.2416%
                                                        ======          =======

c) Changes in control.

         Inapplicable.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                             (Amounts in thousands)

(a)      Transactions with Management and Others.

      At December 31, 1997 and 1996 due to affiliates, net is comprised of:

                                                             1997           1996
                                                             ----           ----
      Due from affiliates:
        Due from TEM......................................   $120       $      -
                                                             ----           ----

      Due to affiliates:
        Due to TEM........................................      -            723
        Due to TL.........................................    834              1
        Due to TCC........................................     20             36
        Due to TAS........................................      2              5
        Due to TFS........................................     55             50
                                                             ----           ----
                                                              911            815
                                                             ----           ----

      Due to affiliates, net                                 $791           $815
                                                             ====           ====

         Included in the amounts due to TL at December 31, 1997 is $826 in loans
         used to facilitate  Equipment  purchases.  All other amounts receivable
         from and payable to affiliates  were incurred in the ordinary course of
         business  between the  Partnership  and its  affiliates  and  represent
         timing  differences  in the accrual and payment of expenses and fees or
         in the accrual and remittance of net rental revenues from TEM.

         It is the policy of the Partnership and the General  Partners to charge
         interest on intercompany  balances outstanding for more than one month,
         to the extent such balances  relate to loans for  Equipment  purchases.
         Interest  is charged at a rate not greater  than the General  Partners'
         own cost of funds. The Partnership  incurred interest expense of $10 on
         intercompany balances for the year ended December 31 1997. There was no
         interest expense incurred on intercompany  balances for the years ended
         December 31, 1996 or 1995.

         In addition,  the Registrant paid or will pay the following  amounts to
         the General Partners or TAS:


         Acquisition fees in connection with the purchase of Equipment on behalf
         of the Registrant:

                                            1997             1996           1995
                                            ----             ----           ----

         TAS....................           $ 165            $ 104          $ 397
                                             ===              ===            ===

         Management fees in connection with the operations of the Registrant:

                                            1997            1996            1995
                                            ----            ----            ----

         TFS....................        $    426        $    460        $    462
         TEM....................           1,594           1,773           1,947
                                           -----           -----           -----
         Total..................        $  2,020        $  2,233        $  2,409
                                           =====           =====           =====

         Reimbursement  for  administrative  costs  in  connection  with  of the
         operations of the Registrant:

                                            1997            1996            1995
                                            ----            ----            ----

         TFS....................        $    152        $    174        $    279
         TEM....................           1,166           1,173           1,500
                                           -----           -----           -----
         Total..................        $  1,318        $  1,347        $  1,779
                                           =====           =====           =====

(b)      Certain Business Relationships.

         Inapplicable.

(c)      Indebtedness of Management

         Inapplicable.

(d)      Transactions with Promoters

         Inapplicable.

See the "Compensation of Affiliates" section of the Registrant's Prospectus,  as
supplemented, and the Notes to the Financial Statements in Item 8.




<PAGE>


                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      1.       Audited  financial  statements  of the Registrant for the year
                  ended  December  31,  1997  are  contained  in  Item 8 of this
                  Report.

         2.       Financial Statement Schedules.

                  (i)      Independent Auditors' Report on Supplementary 
                           Financial Schedule.

                  (ii)     Schedule II - Valuation and Qualifying Accounts.

         3.       Exhibits Incorporated by reference.

                  (i)      The   Registrant's   Prospectus   as   contained   in
                           Pre-Effective  Amendment  No.  2 to the  Registrant's
                           Registration Statement (No. 33-44687),  as filed with
                           the  Commission  April 10, 1992, as  supplemented  by
                           Post-Effective   Amendment   No.  3  filed  with  the
                           Commission  under Section 8(c) of the  Securities Act
                           of 1993  on May  25,  1993,  and as  supplemented  by
                           Supplement  No. 8 as filed  under Rule  424(b) of the
                           Securities Act of 1933 on March 1, 1994.

                  (ii) The Registrant's limited partnership agreement, Exhibit A
                       to the Prospectus.

(b) During the year  ended  1997,  no reports on Form 8-K have been filed by the
Registrant.



<PAGE>




             Independent Auditors' Report on Supplementary Schedule



The Partners
Textainer Equipment Income Fund IV, L.P.:

Under the date of February  18,  1998,  we  reported  on the  balance  sheets of
Textainer  Equipment  Income Fund IV, L.P. (the  Partnership) as of December 31,
1997 and 1996,  and the related  statements of earnings,  partners'  capital and
cash flows for each of the years in the  three-year  period  ended  December 31,
1997,  which are included in the 1997 annual  report on Form 10-K. In connection
with our audits of the aforementioned financial statements,  we also audited the
related  financial  statement  schedule  as  listed in Item 14.  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  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.



                              KPMG Peat Marwick LLP



San Francisco, California
February 18, 1998


<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                       (A California Limited Partnership)

                 Schedule II - Valuation and Qualifying Accounts

                             (Amounts in thousands)
<TABLE>
<CAPTION>


                                                          Charged                                     Balance
                                         Balance at      to Costs       Charged                       at End
                                          Beginning         and         to Other                        of
                                          of Period      Expenses       Accounts      Deduction       Period

<S>                                      <C>            <C>            <C>            <C>             <C>
For the year ended December 31, 1997:

Allowance for
  doubtful accounts                       $   1,391       $    280    $        -       $   (238)     $   1,433
                                             ------         ------      ---------        -------        ------

Accrued Recovery Costs                    $      85       $    279    $        -       $   (225)     $     139
                                             ------         ------      ---------        -------       -------

Damage protection
  plan reserve                            $     520       $    291    $        -       $   (406)     $     405
                                            -------         ------      ---------        -------       -------


For the year ended December 31, 1996:

Allowance for
  doubtful accounts                       $   1,349       $    234    $        -       $   (192)     $   1,391
                                              -----         ------      ---------        -------       -------

Recovery costs reserve                    $       8       $    261    $        -       $   (184)      $     85
                                              -----         ------      ---------        -------        ------

Damage protection
  plan reserve                            $     556       $    513    $        -       $   (549)     $     520
                                             ------         ------      ---------        -------       -------


For the year ended December 31, 1995:

Allowance for
  doubtful accounts                       $   1,432       $    722    $        -       $   (805)     $   1,349
                                              -----         ------      ---------        -------        ------

Recovery cost reserve                     $       9       $    225    $        -       $   (226)     $       8
                                             ------          -----      ---------        -------         -----

Damage protection
  plan reserve                            $     674       $    232    $        -       $   (350)     $     556
                                             ------         ------      ---------        -------       -------
</TABLE>

<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                                     A California Limited Partnership

                                     By Textainer Financial Services Corporation
                                     The Managing General Partner

                                     By________________________________
                                        John R. Rhodes
                                        Executive Vice President

Date:  March 26, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>

Signature                                         Title                                        Date


<S>                                               <C>                                          <C>
________________________________                  Executive Vice President                     March 26, 1998
John R. Rhodes                                    (Principal Financial and
                                                  Accounting Officer), and
                                                  Secretary

________________________________                  President (Principal Executive               March 26, 1998
Philip K. Brewer                                  Officer)


________________________________                  Vice President, Assistant Secretary          March 26, 1998
Ernest J. Furtado                                 and Director


________________________________                  Director                                     March 26, 1998
James E. Hoelter


________________________________                  Director                                     March 26, 1998
John A. Maccarone


</TABLE>

<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     TEXTAINER EQUIPMENT INCOME FUND IV, L.P.
                                     A California Limited Partnership


                                     By Textainer Financial Services Corporation
                                     The Managing General Partner

                                     By /s/John R. Rhodes
                                        ________________________________
                                        John R. Rhodes
                                        Executive Vice President

Date: March 26, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>

Signature                                         Title                                        Date



<S>                                               <C>                                         <C> 
/s/John R. Rhodes                                 Executive Vice President                     March 26, 1998
________________________________                  (Principal Financial and
John R. Rhodes                                    Accounting Officer), and
                                                  Secretary

/s/Philip K. Brewer                               President (Principal Executive               March 26, 1998
________________________________                  Officer)
Philip K. Brewer                                  


/s/Ernest J. Furtado                              Vice President, Assistant Secretary,         March 26, 1998
________________________________                  and Director
Ernest J. Furtado                                 


/s/James E. Hoelter                               Director                                     March 26, 1998
________________________________
James E. Hoelter


/s/John A. Maccarone                              Director                                     March 26, 1998
________________________________
John A. Maccarone

</TABLE>