-----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, FiZerHz3LUJ0HHq/PL9EwoKlfVijyPYme6eE88cAbxcBwHyHJprQ3nzNs+FGoHUj DAVVhYPFV2pn2pXppAk/rg== 0000799033-96-000006.txt : 19961113 0000799033-96-000006.hdr.sgml : 19961113 ACCESSION NUMBER: 0000799033-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961112 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: 1934 Act SEC FILE NUMBER: 001-09259 FILM NUMBER: 96658883 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 THIRD QUARTER 1996 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 September 30, 1996 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 -- September 30, 1996 and December 31, 1995................3 Statements of Income -- Three and nine months ended September 30, 1996 and 1995....................................................4 Condensed Statements of Cash Flows Nine months ended September 30, 1996 and 1995...........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 AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP ----------------------------------------------- BALANCE SHEETS
SEPTEMBER 30, 1996 DECEMBER 31, (IN THOUSANDS EXCEPT UNIT DATA) (UNAUDITED) 1995 - -------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 1 $ 0 Finance leases - net 84,824 91,564 Operating leases - net 2,463 10,259 Notes receivable 417 933 Prepaid expenses and other assets 177 265 ------- -------- Total assets $87,882 $103,021 ======= ======== LIABILITIES AND PARTNERS' EQUITY LIABILITIES Distribution payable to partners $ 2,102 $ 2,336 Accounts payable and accrued liabilities 923 1,490 Long-term notes payable 18,130 27,483 ------- -------- Total liabilities 21,155 31,309 ------- -------- COMMITMENTS AND CONTINGENCIES PARTNERS' EQUITY Limited partners (4,625,000 units outstanding) 66,060 70,995 General partner 667 717 ------- ------- Total partners' equity 66,727 71,712 ------- -------- Total liabilities and partners' equity $87,882 $103,021 ======= ========
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP ----------------------------------------------- STATEMENTS OF INCOME
THREE MONTHS ENDED NINE MONTHS ENDED (UNAUDITED; IN THOUSANDS SEPTEMBER 30, SEPTEMBER 30, EXCEPT PER UNIT AMOUNTS) 1996 1995 1996 1995 - --------------------------------------------------------------------------- REVENUES Finance lease income $2,185 $2,413 $6,653 $7,171 Operating lease rentals 399 699 1,398 2,184 Gain on sale of equipment 0 0 556 0 Other income 14 67 139 148 ------ ------ ------ ------ Total revenues 2,598 3,179 8,746 9,503 ------ ------ ------ ------ EXPENSES Interest 427 581 1,441 1,815 Depreciation - operating leases 353 581 1,148 1,625 Management fee - general partner 180 196 559 591 Investor reporting 62 58 186 170 General and administrative 44 38 121 128 ------ ------ ------ ------ Total expenses 1,066 1,454 3,455 4,329 ------ ------ ------ ------ Net Income $1,532 $1,725 $5,291 $5,174 ====== ====== ====== ====== Net Income Allocated To: General Partner $ 15 $ 17 $ 53 $ 52 ====== ====== ====== ====== Limited Partners $1,517 $1,708 $5,238 $5,122 ====== ====== ====== ====== Net Income Per Limited Partner- ship Unit $ 0.33 $ 0.37 $ 1.13 $ 1.11 ====== ====== ====== ======
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP ----------------------------------------------- STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, (UNAUDITED; IN THOUSANDS) 1996 1995 - ----------------------------------------------------------------------------- NET CASH FLOWS FROM OPERATING ACTIVITIES $ 6,050 $7,137 ------- ------ CASH FLOWS FROM INVESTING ACTIVITIES Aircraft equipment purchase 0 (66) Proceeds from sale of equipment 6,559 0 (Increase)/decrease in notes receivable 516 (423) Casualty settlement proceeds 0 444 Rental receipts in excess of earned finance lease income 6,740 503 ------- ------ Net cash from investing activities 13,815 458 ------- ------ CASH FLOWS FROM FINANCING ACTIVITIES Borrowing/(repayment) under lines of credit, net (4,588) 553 Proceeds from issuance of long-term debt 0 600 Repayment of long-term debt (4,765) (2,020) Distributions paid to partners (10,511) (6,728) --------- ------- Net cash used by financing activities (19,864) (7,595) -------- ------- Increase in cash 1 0 Cash at beginning of period 0 0 ---- ---- Cash at end of period $ 1 $ 0 ==== ======= ADDITIONAL INFORMATION Interest paid $ 1,594 $ 1,356 ====== ======
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS 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, 1995 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, 1995, but does not include all disclo- sures required by generally accepted accounting principles. The statements should be read in conjunction with the Organization and Significant Account- ing Policies and other notes to financial statements included in the Partnership's Annual Report for the year ended December 31, 1995. CASH AND CASH EQUIVALENTS - Cash and cash equivalents consist of highly liquid investments with a maturity of three months or less at the time of purchase. For Cash and Cash Equivalents, the carrying amount is stated at fair value. 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). 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 three long-term debt facilities. At September 30, 1996, the following amounts were outstanding: $9.0 million on an 8.75% non-recourse note collateralized by three aircraft leased to USAir; $6.3 million on a 7.4% non-recourse note collateralized by one aircraft leased to FedEx; and $2.8 million under a non-recourse long-term revolving declining variable interest loan facility collateralized by a fourth aircraft leased to USAir. Approximately $3.2 million remains available under the revolving loan facility. Long-term borrowing at September 30, 1996 represented 13% 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 nine months of 1996 amounted to $10.5 million versus $6.7 million in the first nine months of 1995, an increase of $3.8 million. The increase reflects the special cash distribution paid in May 1996 from the proceeds of the sale in March of the partnership's 50% interest in one MD-82 aircraft. In September 1996, the partnership declared a $0.45 per unit quarterly distribution amounting to $2,102,000 payable on November 15, 1996 to unitholders of record on September 30, 1996. This distribution exceeded third quarter net income of $1,532,000. Results of Operations - --------------------- Net income for the third quarter ended September 30, 1996 declined by 11% over the comparable 1995 three-month period, primarily due to reduced revenues as a result of the March 1996 aircraft sale. For the nine-month period ended September 30, 1996 net income increased by 2% over the comparable 1995 nine-month period primarily due to the gain on the March 1996 aircraft sale. Total revenues for the three- and nine-month period ended September 30, 1996 were $2,598,000 and $8,746,000, respectively, compared with $3,179,000 and $9,503,000 for the comparable 1995 periods. For both periods, finance lease income declined reflecting the normal reduction as the portfolio matures, and operating rentals declined due primarily to the sale of the partnership's 50% interest in one MD-82 aircraft in March at a gain of $556,000. Change in Ownership - ------------------- On October 31, 1996, BA Leasing & Capital Corporation ("BALCAP") purchased the stock of Airlease Management Services, Inc., the General Partner of Airlease Ltd., and the stock of United States Airlease Holding, Inc. ("USAH") which owns 5 % of the limited partnership units. As a result of this purchase, and the September purchase of 17% of the units from USL Capital, BALCAP now owns the general partner and 22 percent of the limited partnership units. As sole stockholder, BALCAP may be deemed to control AMSI and thus may be deemed to control the operations of the partnership. With the change in ownership, three new directors have been elected: Richard V. Harris, Chairman and President of BALCAP, K. Thomas Rose, Executive Vice President and Chief Operating Officer of BALCAP, and Richard C. Walter, Senior Vice President/Controller of BALCAP. The two outside directors, Leonard Marks, Jr. and William A. Hasler, will remain on the board. David B. Gebler will also serve as Chairman and Chief Executive Officer. Portfolio Matters - ----------------- Six Boeing 737-200 aircraft on lease to Continental Airlines are scheduled to be sold on December 31, 1996, the lease expiration date. Assuming the transaction is consummated, the sale will result in net sale proceeds to the partnership of $2.9 million and a gain on sale of approximately $1.9 million. The General Partner has not yet determined the best use of the sale proceeds, which may include reinvestment, repayment of debt, or a special cash distribution. A reinvestment opportunity presently under consideration is the acquisition of the remaining 50% interest in the MD-82 aircraft on lease to Trans World Airlines. The aircraft currently is owned jointly by the partnership and USL Capital Corporation. If purchased, the partnership would own the entire aircraft. 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. Form 8-K was filed on August 20, 1996, regarding a Change in Control of Registrant. 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 November 12, 1996 By: /s/ David B. Gebler - ----------------------- --------------------- Date David B. Gebler President November 12 , 1996 By: /s/ Richard C. Walter - ------------------------ ----------------------- Date Richard C. Walter Chief Financial Officer EX-27 2
5 1,000 9-MOS DEC-31-1996 SEP-30-1996 1 0 87,704 0 0 0 0 0 87,882 0 18,130 0 0 0 66,727 87,882 8,746 8,746 0 1,148 0 0 1,441 5,291 0 5,291 0 0 0 5,291 0 0
-----END PRIVACY-ENHANCED MESSAGE-----