-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PPMMDcTrAu829V+KEXemFIBU9o4i1sgCreNWphML2O4WhZspQZhbImIIAKYpWr/8 rDR6vNReG78eCRl8rNAugA== 0000785857-97-000004.txt : 19971113 0000785857-97-000004.hdr.sgml : 19971113 ACCESSION NUMBER: 0000785857-97-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATEL CASH DISTRIBUTION FUND CENTRAL INDEX KEY: 0000785857 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 942985201 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-16843 FILM NUMBER: 97715187 BUSINESS ADDRESS: STREET 1: 235 PINE ST 6TH FLR CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4159898800 MAIL ADDRESS: STREET 1: 235 PINE STREET SIXTH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94104 FORMER COMPANY: FORMER CONFORMED NAME: ATEL CASH DISTRIBUTION FUND-1986A DATE OF NAME CHANGE: 19870128 10QSB 1 QUARTERLY REPORT, NINE MONTHS ENDING 9/30/97 Form 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended September 30, 1997 |_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the transition period from _______ to _______ Commission File Number 000-16843 ATEL Cash Distribution Fund, a California Limited Partnership (Exact name of registrant as specified in its charter) California 94-2985201 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 235 Pine Street, 6th Floor, San Francisco, California 94104 (Address of principal executive offices) Registrant's telephone number, including area code: (415) 989-8800 Former name, former address and former fiscal year, if changed since last report Indicate by a 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. Yes |X| No |_| DOCUMENTS INCORPORATED BY REFERENCE None Part I. FINANCIAL INFORMATION Item 1. Financial Statements. ATEL CASH DISTRIBUTION FUND (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEET SEPTEMBER 30, 1997 (Unaudited) ASSETS Cash and cash equivalents $191,684 Accounts receivable, net of allowance for doubtful accounts of $1,097 2,091 Investment in leases and equipment 129,251 --------------- $323,026 =============== LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $125,686 Accounts payable and accruals 7,670 Accrued interest 970 Unearned operating lease income 988 --------------- Total liabilities 135,314 Partners' capital: General Partners 21,494 Limited Partners 166,218 --------------- Total partners' capital 187,712 --------------- $323,026 =============== See accompanying notes. ATEL CASH DISTRIBUTION FUND (A CALIFORNIA LIMITED PARTNERSHIP) INCOME STATEMENTS NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ---- ---- ---- ---- Revenues: Lease income: Operating $59,571 $81,607 $16,627 $24,533 Direct financing 24,571 33,493 18,745 8,802 Gain on sale of equipment 25,000 12,719 - 7,523 Other 2,986 26,037 - 82 Interest income 3,099 697 1,389 336 --------------- ---------------- --------------- --------------- 115,227 154,553 36,761 41,276 --------------- ---------------- --------------- --------------- Expenses: Depreciation and amortization 27,433 51,356 9,747 29,784 Professional fees 8,291 9,512 3,928 4,477 Other 10,282 5,526 2,158 879 Interest 9,642 12,227 2,987 3,869 Taxes 3,045 3,326 - - Provision for losses - 1,546 - 413 --------------- ---------------- --------------- --------------- 58,693 83,493 18,820 39,422 --------------- ---------------- --------------- --------------- Net income $56,534 $71,060 $17,941 $1,854 =============== ================ =============== =============== Net income: General Partners $565 $711 $179 $19 Limited Partners 55,969 70,349 17,762 1,835 --------------- ---------------- --------------- --------------- $56,534 $71,060 $17,941 $1,854 =============== ================ =============== =============== Net income per Limited Partnership unit $2.80 $3.52 $0.89 $0.09 Weighted average number of units outstanding 19,962 19,962 19,962 19,962
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL NINE MONTHS ENDED SEPTEMBER 30, 1997
Limited Partners General Units Amount Partners Total Balance December 31, 1996 19,962 $277,924 $20,929 $298,853 Net income 55,969 565 56,534 Distributions (167,675) (167,675) --------------- ---------------- --------------- --------------- Balance September 30, 1997 19,962 $166,218 $21,494 $187,712 =============== ================ =============== ===============
See accompanying notes. ATEL CASH DISTRIBUTION FUND (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENTS OF CASH FLOWS NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ---- ---- ---- ---- Operating activities: Net income $56,534 $71,060 $17,941 $1,854 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization expense 27,433 51,356 9,747 29,784 Gain on sales of assets (25,000) (12,719) - (7,523) Provision for losses - 1,546 - 413 Changes in operating assets and liabilities: Accounts receivable 44,786 3,786 15,762 1,098 Accounts payable and accruals (3,504) 1,749 1,008 1,744 Accrued interest (225) (205) (77) (70) Unearned operating lease income 988 (915) 988 (1,254) --------------- ---------------- --------------- --------------- Net cash provided by operations 101,012 115,658 45,369 26,046 --------------- ---------------- --------------- --------------- Investing activities: Proceeds from sales of equipment 57,000 33,365 - 19,365 Reductions in net investment in direct financing leases 25,023 67,755 (2,213) 20,643 --------------- ---------------- --------------- --------------- Net cash provided by (used in) investing activities 82,023 101,120 (2,213) 40,008 --------------- ---------------- --------------- --------------- Financing activities: Repayments of non-recourse debt (29,094) (26,528) (9,923) (9,047) Distributions to Limited Partners (167,675) (179,971) (55,892) (55,892) --------------- ---------------- --------------- --------------- Net cash used in financing activities (196,769) (206,499) (65,815) (64,939) --------------- ---------------- --------------- --------------- Net (decrease) increase in cash and cash equivalents (13,734) 10,279 (22,659) 1,115 Cash and cash equivalents at beginning of period 205,418 91,084 214,343 100,248 --------------- ---------------- --------------- --------------- Cash and cash equivalents at end of period $191,684 $101,363 $191,684 $101,363 =============== ================ =============== =============== Supplemental disclosure of cash flow information: Cash paid for interest $9,642 $12,227 $2,987 $3,869 =============== ================ =============== =============== Supplemental disclosure of non-cash transactions: Allowance for doubtful accounts reclassified as loss reserves $21,000 $21,000 =============== ===============
See accompanying notes. ATEL CASH DISTRIBUTION FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (Unaudited) 1. Interim financial statements: The unaudited interim financial statements reflect all adjustments which are, in the opinion of the general partners, necessary to a fair statement of financial position and results of operations for the interim periods presented. All such adjustments are of a normal recurring nature. These unaudited interim financial statements should be read in conjunction with the most recent report on Form 10K. 2. Investment in leases: The Partnership's investment in leases consists of the following:
Depreciation Expense or Reclass- December 31, Amortization ifications & September 30, 1996 Additions of Leases Dispositions 1997 ---- --------- --------- ------------ ---- Net investment in operating leases $200,690 ($27,433) ($32,000) $141,257 Net investment in direct financing leases 40,467 (25,023) - 15,444 Reserve for losses (6,450) ($21,000) - - (27,450) ------------------- --------------- ---------------- --------------- --------------- $234,707 ($21,000) ($52,456) ($32,000) $129,251 =================== =============== ================ =============== ===============
Operating leases: The following schedule provides an analysis of the Partnership's investment in property on operating leases by major classifications as of December 31, 1996, acquisitions and dispositions during the quarters ended March 31, June 30 and September 30, 1997 and as of September 30, 1997.
December 31, ----- Dispositions ----- September 30, 1996 1st Quarter 2nd Quarter 3rd Quarter 1997 ---- ----------- ----------- ----------- ---- Materials handling $208,787 $208,787 Food processing 35,653 35,653 Manufacturing equipment 30,263 ($25,988) 4,275 Motor vehicles 220,787 (220,787) - ------------------- ---------------- --------------- 495,490 (246,775) 248,715 Less accumulated depreciation (294,800) ($9,509) $206,598 ($9,747) (107,458) ------------------- --------------- ---------------- --------------- --------------- $200,690 ($9,509) ($40,177) ($9,747) $141,257 =================== =============== ================ =============== ===============
Equipment on operating leases was acquired in 1987, 1988, 1989, 1990, 1992, 1993 and 1995. ATEL CASH DISTRIBUTION FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (Unaudited) 2. Investment in leases: (continued) At September 30, 1997, the aggregate amounts of future minimum lease payments from direct financing leases and operating leases are as follows: Direct Financing Operating Total --------- --------- ----- Three months ending December 31, 1997 $16,531 $12,987 $29,518 Year ending December 31, 1998 - 51,948 51,948 1999 - 51,948 51,948 2000 - 25,974 25,974 =========== =========== =========== $16,531 $142,857 $159,388 =========== =========== =========== 3. Non-recourse debt: Note payable to financial institution is due in monthly installments of principal and interest. The note is secured by an assignment of lease payments and a pledge of the assets which were purchased with the proceeds of the note. Interest on the note is at an annual rate of 9.25%. The balance remaining at September 30, 1997 is due in monthly payments through 2000. Future minimum principal and interest payments of debt as of September 30, 1997 are as follows: Principal Interest Total --------- -------- ----- Three months ending December 31, 1997 $10,155 $2,832 $12,987 Year ending December 31, 1998 43,042 8,906 51,948 1999 47,203 4,745 51,948 2000 25,286 688 25,974 =========== =========== =========== $125,686 $17,171 $142,857 =========== =========== =========== ATEL CASH DISTRIBUTION FUND (A CALIFORNIA LIMITED PARTNERSHIP) NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 (Unaudited) 4. Related party transactions: The terms of the Limited Partnership Agreement provide that the General Partners and/or their Affiliates are entitled to receive certain fees for equipment acquisition, management and resale and for management of the Partnership. The General Partners earned partnership management fees equal to 5% of cash distributed from operations and equipment management fees equal to 2% of full payout lease rentals and 5% of operating lease rentals pursuant to the Limited Partnership Agreement. Effective April 1, 1994, the General Partners elected to waive all management fees. The Limited Partnership Agreement allows for the reimbursement of costs incurred by ATEL in providing administrative services to the Partnership. Administrative services provided include partnership accounting, investor relations, legal counsel and lease and equipment documentation. ATEL is not reimbursed for services where it is entitled to receive a separate fee as compensation for such services, such as acquisition and disposition of equipment. Reimbursable costs incurred by ATEL are allocated to the Partnership based upon actual time incurred by employees working on Partnership business and an allocation of rent and other costs based on utilization studies. Effective May 1, 1994, the General Partners have elected to waive all reimbursements of administrative costs. In 1996, $39,919 was waived. In 1997, $12,471 was waived. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity At September 30, 1997, the Partnership had cash balances of $191,684. During the nine months and the quarter ended September 30, 1997, the Partnership's primary sources of liquidity were cash flows from leasing operations. The liquidity of the Partnership will vary in the future, increasing to the extent cash flows from operations exceed expenses, and decreasing as distributions are made to the Limited Partners and to the extent expenses exceed cash flows from leases. The Partnership currently has available adequate reserves to meet contingencies. As of September 30, 1997, the Partnership had borrowed approximately $2,817,500 with a remaining unpaid balance of approximately $126,000. There were no borrowings between December 31, 1996 and September 30, 1997. The borrowings are non-recourse to the Partnership, that is the only recourse of the lender for a lessee default is to the equipment or corresponding lease acquired with the loan proceeds. The Partnership Agreement limits such borrowings to 80% of the total cost of equipment, in aggregate. No commitments of capital have been made or are expected to be made in connection with the acquisition of additional equipment. The General Partners have determined that the Partnership's investment objectives will be best served by making limited additional investments by means of non-recourse debt. The Partnership may acquire an asset for lease without use of any cash or exposure of any of its other assets by using 100% financing on a non-recourse basis. The Partnership may sell the asset when its lease terminates or sell it subject to the lease and debt. In either case, the potential residual proceeds may provide additional liquidation distributions to the Limited Partners. The Partnership will have the ability to dispose of the asset at any time consistent with the final liquidation of its portfolio and termination of the Partnership. The General Partners have in certain cases determined that waiver of fees or reimbursement of expenses to which they were entitled under the terms of the Agreement of Limited Partnership would be in the best interest of the Partnership and appropriate given the circumstances under which the Partnership was operating. Although the General Partners may be entitled to certain payments, they are fiduciaries and must analyze each payment authorized by the Partnership under all of the facts and circumstances prevailing. Any fees or reimbursements disclosed as waived will not be deferred or recovered in the future. However, unless a fee or reimbursement right is altered by an amendment to the Agreement of Limited Partnership, it is not permanently waived for any future period or transaction. The Partnership made distributions of cash from operations and sales proceeds to the Limited Partners in April, July and October 1997. The amount of the distribution was $2.50 per Unit. The distribution represents an annualized distribution rate of 2.00%. If inflation in the general economy becomes significant, it may affect the Partnership inasmuch as the residual (resale) values and rates on re-leases of the Partnership's leased assets may increase as the costs of similar assets increase. However, the Partnership's revenues from existing leases would not increase, as such rates are generally fixed for the terms of the leases without adjustment for inflation. Leases already in place, for the most part, would not be affected by changes in interest rates. Cash flows 1997 vs. 1996 Nine months: Cash flows from operations decreased for the nine month period compared to the same period in 1996. In 1997, cash flows from operating and direct financing leases were the primary sources of operating cash flows. In 1996 $25,938 was received as a part of the bankruptcy settlement regarding Financial News Network (FNN), a former lessee of the Partnership. No such amounts were received in 1997. Sources of cash from investing activities consisted of rents received on direct financing leases and the proceeds from sales of lease assets. The amounts of proceeds from the sales of assets are expected to vary considerably from one period to another but are expected to generally decline over the long-term as the Partnership's underlying portfolio of assets diminishes. There were no financing sources of cash in 1997 or 1996. Three months: In both 1997 and 1996, lease rents were the primary source of operating cash flows. In 1997, there were no sources of cash flows from investing activities. There were no financing sources of cash in either year. The primary financing use of cash continues to be distributions to the Limited Partners for both the three and nine month periods. Results of Operations As of December 29, 1986, the Partnership commenced operations in its primary business (leasing activities). Operations in the first nine months of 1997 resulted in net income of $54,534 compared to $71,060 in the previous year. 1997 vs. 1996: Nine months: Lease revenues decreased from $115,100 in 1996 to $84,142 in 1997 due to sales of lease assets over the last year. Other income in 1996 consisted of the $25,938 received in the second quarter as a part of the FNN bankruptcy settlement. No further amounts are expected. Depreciation expense and interest expense have decreased as a result of asset sales and scheduled debt payments over the last year. Three months: Lease revenues have declined from 1996 to 1997 as a result of asset sales over the last year. Depreciation and interest have decreased for the three month period for the same reasons as noted above for the nine month period. The results of operations in future periods may vary significantly from those of the first nine months of 1997 as the Partnership's lease portfolio of capital equipment matures. Revenues from leases are expected to decline as leased assets come off lease and are sold or re-leased at lower lease rates. The effect on net income is not determinable as it will depend to a large degree on the amounts received from the sales of assets or from re-leases to either the same or new lessees once the initial lease terms expire. PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS. Inapplicable. Item 2. CHANGES IN SECURITIES. Inapplicable. Item 3. DEFAULTS UPON SENIOR SECURITIES. Inapplicable. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Inapplicable. Item 5. OTHER INFORMATION. Inapplicable. Item 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Documents filed as a part of this report 1 Financial Statements . Included in Part I of this report: Balance sheet, September 30, 1997 Statements of operations for the nine and three month periods ended September 30, 1997 and 1996 Statement of changes in partners' capital for the nine months ended September 30, 1997 Statements of cash flows for the nine and three month periods ended September 30, 1997 and 1996 Notes to the financial statements 2 Financial Statement Schedules. All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and therefore have been omitted. (b) Report on Form 8-K None SIGNATURES Pursuant to the requirements 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. Date: November 12, 1997 ATEL Cash Distribution Fund, a California Limited Partnership (Registrant) By: /s/ A. J. BATT ------------------------------------------------- A. J. Batt, General Partner of registrant By: /s/ DEAN L. CASH ------------------------------------------------- Dean Cash, General Partner of registrant By: /s/ F. RANDALL BIGONY ------------------------------------------------- F. RANDALL BIGONY Principal financial officer of registrant By: /s/ DONALD E. CARPENTER ------------------------------------------------- Donald E. Carpenter, Principal accounting officer of registrant EX-27 2 FDS --
5 9-mos dec-31-1997 sep-30-1997 191,684 0 3,188 1,097 0 0 0 0 321,026 0 0 0 0 0 185,712 321,026 0 115,227 0 0 51,052 0 9,642 54,533 0 54,533 0 0 0 54,533 0 0
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