-----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, LaFAAOIv1jbuiyrHFzp9NHsjdh2gGyMKKipunlrTFWRbIFaikIWjD+Wf5NKlU/lf p9jj+QRRkQdQVFfM7IV+fw== 0000009672-98-000022.txt : 19980504 0000009672-98-000022.hdr.sgml : 19980504 ACCESSION NUMBER: 0000009672-98-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980501 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AIRLEASE LTD CENTRAL INDEX KEY: 0000799033 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE LESSORS [6172] IRS NUMBER: 943008908 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09259 FILM NUMBER: 98608401 BUSINESS ADDRESS: STREET 1: 733 FRONT ST STREET 2: P.O. BOX 193985 CITY: SAN FRANCISCO STATE: CA ZIP: 94119 BUSINESS PHONE: 4156279289 10-Q 1 FIRST QUARTER 1998 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1998 Commission file number 1-9259 AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 94-3008908 - ------------------------ ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 555 California Street, San Francisco, California 94104 - ------------------------------------------------ ---------- (Address of principal executive offices) (Zip Code) (415) 765-1814 ---------------------------------------------------- (Registrant's telephone number, including area code) 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. Yes X No --- --- AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== I N D E X Page No. Part I - Financial Information: Item 1. Financial Statements Balance Sheets -- March 31, 1998 and December 31, 1997............3 Statements of Income -- Three months ended March 31, 1998 and 1997......4 Condensed Statements of Cash Flows Three months ended March 31, 1998 and 1997......5 Notes to Condensed Financial Statements...........6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.....7 Part II - Other Information: Item 6. Exhibits and Reports on Form 8-K..................9 Signatures.......................................10 PART I - FINANCIAL INFORMATION AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== BALANCE SHEETS
March 31, 1998 December 31, (In thousands except unit data) (Unaudited) 1997 - -------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 51 $ 1 Finance leases - net 81,001 82,590 Operating leases - net 0 0 Prepaid expenses and other assets 334 268 ------ -------- Total assets $81,386 $82,859 ======= ======= LIABILITIES AND PARTNERS' EQUITY LIABILITIES Distribution payable to partners $ 1,915 $ 2,102 Accounts payable and accrued liabilities 462 553 Income Taxes Payable 160 0 Long-term notes payable 18,379 19,115 ------- ------ Total liabilities 20,916 21,770 ====== ====== COMMITMENTS AND CONTINGENCIES PARTNERS' EQUITY Limited partners (4,625,000 units outstanding) 59,864 60,478 General partner 605 611 ------- ------- Total partners' equity 60,469 61,089 ------- ------- Total liabilities and partners' equity $81,386 $82,859 ======= =======
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS 3 AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== STATEMENTS OF INCOME
Three Months Ended (Unaudited; in thousands March 31, except per unit amounts) 1998 1997 - -------------------------------------------------------------------------------- REVENUES Finance lease income $2,170 $2,263 Operating lease rentals 0 85 Other income 0 10 ------ ------ Total revenues 2,170 2,358 ------ ------ EXPENSES Interest 460 472 Depreciation - operating leases 0 71 Provision for doubtful accounts 0 228 Management fee - general partner 165 176 Investor reporting 52 201 General and administrative 37 43 ------ ------ Total expenses 714 1,191 ------ ------ Income before Income Taxes 1,456 1,167 Provision for Income Taxes 160 0 ------ ------ Net Income and Comprehensive Income $1,296 $1,167 ====== ====== Net Income Allocated To: General Partner $ 13 $ 12 ====== ====== Limited Partners $1,283 $1,155 ====== ====== Net Income Per Limited Partnership Unit $ 0.28 $ 0.25 ====== ======
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS 4 AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, (Unaudited; in thousands) 1998 1997 - -------------------------------------------------------------------------------- NET CASH FLOWS FROM OPERATING ACTIVITIES $ 1,299 $ 1,660 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Aircraft equipment purchase 0 (5,753) Decrease in notes receivable 0 8 Rental receipts in excess of earned finance lease income 1,589 996 -------- -------- Net cash (used in) provided by investing activities 1,589 (4,749) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Borrowing under lines of credit, net 770 1,405 Proceeds from issuance of long-term debt 0 9,000 Repayment of long-term debt (1,506) (1,169) Distributions paid to partners (2,102) (5,045) -------- -------- Net cash (used in) provided by financing activities (2,838) 4,191 -------- -------- Increase in cash 50 1,102 Cash at beginning of period 1 580 -------- -------- Cash at end of period $ 51 $ 1,682 ======== ======== ADDITIONAL INFORMATION Interest paid $ 419 $ 234 ======== ========
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS 5 AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== NOTES TO CONDENSED FINANCIAL STATEMENTS 1. SIGNIFICANT ACCOUNTING POLICIES ------------------------------- BASIS OF PRESENTATION - The accompanying unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) which are, in the opinion of the Partnership, necessary to a fair statement of the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of results of operations for a full year. The December 31, 1997, balance sheet included herein is derived from the audited financial statements included in the Partnership's Annual Report and incorporated by reference in the Form 10-K for the year ended December 31, 1997, but does not include all disclosures required by generally accepted accounting principles. The statements should be read in conjunction with the Organization and Significant Accounting Policies and other notes to financial statements included in the Partnership's Annual Report for the year ended December 31, 1997. 2. NET INCOME PER LIMITED PARTNERSHIP UNIT --------------------------------------- Net Income Per Limited Partnership Unit is computed by dividing the net income allocated to the Limited Partners by the weighted average units outstanding (4,625,000). 3. INCOME TAXES ------------ In January 1998, the Partnership made an election to pay an annual combined federal and state tax at the Partnership level of 4.5% tax on its gross income beginning January 1, 1998. The election was made in order to avoid a limitation on the public trading of the Partnership's units. For the quarter ended March 31, 1998, the Partnership recorded a provision for income taxes of $160,000. This amount represents 4.5% of the first-quarter lease rental payments of $3,559,000. 6 AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources - ------------------------------- The Partnership presently has five long-term debt facilities. At March 31, 1998, the following amounts were outstanding: $2.4 million on an 8.75% non-recourse note collateralized by three aircraft leased to USAir-ways (formerly USAir); $5.6 million on a 7.4% non-recourse note collateralized by one aircraft leased to FedEx; $7.9 million on a 9.85% non-recourse note collateralized by one aircraft on lease to Trans World Airlines; $2.2 million under a non-recourse long-term revolving declining variable interest loan facility collateralized by a fourth aircraft leased to USAirways. Approximately $1.2 million remains available under this revolving loan facility. In February 1998, the Partnership obtained a $7.5 million three-year, floating rate, revolving loan facility. This loan is collatreralized by a fifth aircraft leased to USAirways, and is guaranteed by the Partnership. At March 31, 1998, $0.3 million was drawn on this revolving loan facility, and $7.1 million remained available. Long-term borrowing at March 31, 1998 represented 15% of the original cost of the aircraft presently owned by the Partnership, including capital expenditures for upgrades. The terms of the Partnership Agreement permit debt to be at a level not exceeding 50% of such cost. Cash distributions paid in the first three months of 1998 were $0.45 per limited partnership unit representing the regular fourth quarter 1997 cash distribution. In March the Partnership declared a first quarter 1998 cash distribution of $0.41 per unit totaling $1,915,000 payable on May 15, 1998 to unitholders of record on March 31, 1998. Since this distribution was in excess of earnings, Partnership equity declined to $60.5 million at March 31, 1998, and limited partner equity per unit declined to $12.94. The portion of the distribution in excess of net income constitutes a return of capital. The 1997 first quarter cash distribution was $0.45 per unit. Results of Operations - --------------------- Net income for the first quarter ended March 31, 1998 was $1,296,000, an increase of $129,000 or 11% from the comparable 1997 three-month period. Higher earnings result from a slight decline in revenue, which was more than offset by a reduction in expenses. Revenues for the quarter were $2,170,000, a decrease of $188,000 or 8% from last year's first quarter revenues of $2,358,000. The revenue reduction is primarily due to the scheduled decline in finance lease income in 1998 as the balances due from the lessees declined. Additionally, no operating lease rental income was earned in 1998, whereas $85,000 was earned in the first quarter of 1997. In September 1997, the Partnership sold the aircraft which was subject to an operating lease. 7 Expenses for the 1998 first quarter were $714,000, compared with last year's first quarter expenses of $1,191,000. In the first quarter of 1997, the Partnership incurred higher investor reporting expenses in connection with the solicitation of unitholder consents and depreciation expense related to an aircraft which was sold later in 1997, and recorded a provision for doubtful accounts. No similar expenses were incurred in 1998. A provision for income taxes of $160,000 relating to the newly imposed federal and state tax on gross income at the partnership level was recorded in the first quarter of 1998. 8 PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K -------------------------------- (a) Exhibits 27. Financial Data Schedule (b) Reports on Form 8-K. None. 9 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. AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP By: Airlease Management Services, Inc. General Partner May 1, 1998 By: /s/ David B. Gebler - ----------- ------------------------------------- Date David B. Gebler Chairman, Chief Executive Officer and President May 1, 1998 By: /s/ Richard C. Walter - ----------- ------------------------------------- Date Richard C. Walter Chief Financial Officer 10 EX-27 2 FDS -- 03/31/98
5 1,000 3-MOS DEC-31-1998 MAR-31-1998 51 0 35,501 0 0 0 0 0 81,386 0 18,379 0 0 0 60,469 81,386 2,170 2,170 0 0 254 0 460 1,456 160 1,296 0 0 0 1,296 0.28 0.28
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