-----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, Qc8xScQW7SwlteiiAqqm2qhn/gv3lz15nRX+TaLBPpnr2v3zVkEEYJ/PIZJDGljU sNI+Q0xTNjJD3F7SbPHBFg== 0000799033-97-000002.txt : 19970514 0000799033-97-000002.hdr.sgml : 19970514 ACCESSION NUMBER: 0000799033-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 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: 97601912 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 1997 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, 1997 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, 1997 and December 31, 1996................. 3 Statements of Income -- Three months ended March 31, 1997 and 1996........... 4 Condensed Statements of Cash Flows Three months ended March 31, 1997 and 1996........... 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
MARCH 31, 1997 DECEMBER 31, (IN THOUSANDS EXCEPT UNIT DATA) (UNAUDITED) 1996 - -------------------------------------------------------------------------------- ASSETS Cash and cash equivalents $ 1,682 $ 580 Finance leases - net 87,813 83,056 Operating leases - net 999 1,090 Notes receivable (net of allowance for doubtful accounts of $228 in 1997) 0 236 Prepaid expenses and other assets 257 168 ------- ------- Total assets $90,751 $85,130 ======= ======= LIABILITIES AND PARTNERS' EQUITY LIABILITIES Distribution payable to partners $ 2,102 $ 5,045 Accounts payable and accrued liabilities 1,235 972 Long-term notes payable 23,307 14,071 ------- ------- Total liabilities 26,644 20,088 ------- ------- COMMITMENTS AND CONTINGENCIES PARTNERS' EQUITY Limited partners (4,625,000 units outstanding) 63,466 64,391 General partner 641 651 ------- ------- Total partners' equity 64,107 65,042 ------- ------- Total liabilities and partners' equity $90,751 $85,130 ======= =======
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== STATEMENTS OF INCOME
THREE MONTHS ENDED (UNAUDITED; IN THOUSANDS MARCH 31, EXCEPT PER UNIT AMOUNTS) 1997 1996 - ------------------------------------------------- REVENUES Finance lease income $2,263 $2,253 Operating lease rentals 85 599 Gain on sale of equipment 0 556 Other income 10 23 ------ ------ Total revenues 2,358 3,431 ------ ------ EXPENSES Interest 472 523 Depreciation - operating leases 71 443 Provision for doubtful accounts 228 0 Management fee - general partner 176 192 Investor reporting 201 63 General and administrative 43 39 ------ ------ Total expenses 1,191 1,260 ------ ------ Net Income $1,167 $2,171 ====== ====== Net Income Allocated To: General Partner $ 12 $ 22 ====== ====== Limited Partners $1,155 $2,149 ====== ====== Net Income Per Limited Partnership Unit $ 0.25 $ 0.46 ====== ======
- ------------------------------------------- See NOTES TO CONDENSED FINANCIAL STATEMENTS AIRLEASE LTD., A CALIFORNIA LIMITED PARTNERSHIP =============================================== STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, (UNAUDITED; IN THOUSANDS) 1997 1996 - -------------------------------------------------------------------------------- NET CASH FLOWS FROM OPERATING ACTIVITIES $ 1,660 $2,689 CASH FLOWS FROM INVESTING ACTIVITIES Aircraft equipment purchase (5,753) 0 Proceeds from sale of equipment 0 6,559 Decrease in notes receivable 8 167 Rental receipts in excess of earned finance lease income 996 1,007 ------- ------ Net cash provided (used) by investing activities (4,749) 7,733 ------- ------ CASH FLOWS FROM FINANCING ACTIVITIES Borrowing/(repayment) under lines of credit, net 1,405 (2,781) Proceeds from issuance of long-term debt 9,000 0 Repayment of long-term debt (1,169) (1,538) Distributions paid to partners (5,045) (2,336) -------- ------- Net cash provided (used) by financing activities 4,191 (6,655) -------- ------- Increase in cash 1,102 3,767 Cash at beginning of period 580 0 ------ ------ Cash at end of period $1,682 $3,767 ====== ====== ADDITIONAL INFORMATION Interest paid $ 234 $ 426 ===== =====
- ------------------------------------------- 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, 1996 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, 1996, 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, 1996. 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 four long-term debt facilities. At March 31, 1997, the following amounts were outstanding: $7.0 million on an 8.75% non-recourse note collateralized by three aircraft leased to USAirways (formerly USAir); $6.0 million on a 7.4% non-recourse note collateralized by one aircraft leased to FedEx and $1.4 million under a non-recourse long-term revolving declining variable interest loan facility collateralized by a fourth aircraft leased to USAirways. Approximately $3.8 million remains available under the revolving loan facility. On January 31, 1997, the partnership entered into a fourth long-term non-recourse note agreement in the amount of $9 million, part of which was used to purchase an additional 50% interest in the MD-82 aircraft leased to Trans World Airlines. At the time of the acquisition, the partnership already owned a 50% interest in this aircraft. The opportunity to purchase the additional interest in this aircraft was available because Airlease had originally negotiated the right to match a purchase offered to USL Capital Corporation by a third party. The loan is collateralized by this aircraft and at March 31, 1997, $8.9 million was outstanding. Long-term borrowing at March 31, 1997 represented 18% 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. In March the partnership recorded an allowance for doubtful accounts of $228,000 relating to the outstanding note receivable representing advances made to Continental Airlines to finance certain aircraft modifications. The agreement for this financing was entered into as part of a 1991 stipulation in Continental's bankruptcy. Continental had advised the partnership that because the lease has terminated these amounts are no longer due. The partnership is reviewing Continental's claim and has recorded the allowance until the matter can be resolved. Cash distributions paid in the first three months of 1997 amounted to $1.08 per limited partnership unit consisting of the regular fourth quarter 1996 cash distribution of $0.45 per unit and a special cash distribution of $0.63 per unit, compared to a distribution of $0.50 per unit in the first quarter of 1996. The special cash distribution was paid in January 1997 from the proceeds of the sale on December 31, 1996 of the partnership's one-third interest in six 737-200 aircraft. In March the partnership declared a first quarter cash distribution of $0.45 per unit amounting to $2,102,000 payable on May 15, 1997 to unitholders of record on March 31, 1997. This distribution exceeded first quarter net income of $1,167,000, resulting in a return of capital of $935,000 or 20 cents per unit. The 1996 first quarter cash distribution was $0.50 per unit. Results of Operations - --------------------- Net income for the first quarter ended March 31, 1997 was $1,167,000, a decrease of $1,004,000 or 46% from the comparable 1996 three-month period. First quarter revenues were $2,358,000, a decrease of $1,073,000 or 31% from the comparable three-month period. These declines reflect the sale of an aircraft in the first quarter of 1996 and recognition of a gain of $556,000, while no aircraft were sold in the first quarter of 1997. In addition, the sale of seven aircraft during 1996 reduced the size of the portfolio and reduced revenue from operating lease rentals by $514,000. At March 31, 1997, the partnership owned an interest in one aircraft subject to an operating lease, compared to interests in seven aircraft subject to operating leases at March 31, 1996. Total expenses declined by $69,000 from the first quarter of 1996. Depreciation expense declined by $372,000 reflecting the 1996 sales of the seven aircraft subject to operating leases. Offsetting this reduction were an allowance for doubtful accounts of $228,000 (see Liquidity and Capital Resources above), and higher investor reporting expenses incurred in connection with the 1998 change in tax status. Interest expense declined due to lower average outstanding balances on the partnership's borrowing facilities for the first quarter 1997 compared with last year's first quarter. Other Developments - ------------------ The lease with Sun Jet International Airlines, Inc., which expires in December 1997, contains a fixed-price purchase option and Sun Jet has advised the partnership that it wishes to exercise this option. However, Sun Jet has experienced financial difficulties, and no assurance can be made as to whether or at what price this purchase will be consummated. If Sun Jet does not purchase the aircraft, the partnership intends to remarket the aircraft, which would include attempting to sell or lease the aircraft. At March 31, 1997, this aircraft represented about one percent of the partnership's total assets. 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. The partnership filed Form 8-K on March 14, 1997 Following Issu- ance of Press Release Regarding Plan to Delist From the New York Stock Exchange and To Cease Reinvesment. 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 13, 1997 By: /s/ DAVID B. GEBLER - ------------ ------------------- Date David B. Gebler Chairman, Chief Executive Officer and President May 13, 1997 By: /s/ RICHARD C. WALTER - ------------ ----------------------- Date Richard C. Walter Chief Financial Officer EX-27 2
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 1,682 0 42,541 228 0 0 4,501 3,502 90,751 0 23,307 0 0 0 64,107 90,751 2,348 2,358 0 71 420 228 472 1,167 0 1,167 0 0 0 1,167 .25 .25
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