-----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, IkUUkiEX7V3wtHvx9zRoLHLPevmpBjRf+1gWWCxrHIXKtLw8Ett5wbYANMaecrnZ bjvZDKw4WqiBZV013eYIPw== 0000846927-96-000005.txt : 19961118 0000846927-96-000005.hdr.sgml : 19961118 ACCESSION NUMBER: 0000846927-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JETFLEET AIRCRAFT L P CENTRAL INDEX KEY: 0000846927 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 943087300 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19216 FILM NUMBER: 96666176 BUSINESS ADDRESS: STREET 1: 1440 CHAPIN AVENUE STREET 2: SUITE 310 CITY: BURLINGAME STATE: CA ZIP: 94010 BUSINESS PHONE: 415-696-3900 MAIL ADDRESS: STREET 1: 1440 CHAPIN AVENUE STREET 2: SUITE 310 CITY: BURLINGAME STATE: CA ZIP: 94010 10-Q 1 JETFLEET AIRCRAFT, L.P. 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 or [ ] 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: 0-19216 JETFLEET AIRCRAFT, L.P. (Exact name of registrant as specified in its charter) CALIFORNIA (State or other jurisdiction of incorporation or organization) 94-3087300 (I.R.S. Employer Identification Number) 1440 CHAPIN AVENUE, SUITE 310 BURLINGAME, CALIFORNIA (Address of principal executive office) 94010 (Zip Code) Registrant's telephone number, including area code: (415) 696-3900 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 the filing requirements for the past 90 days. X Yes No On November 14, 1996, 296,069 Limited Partnership Units were outstanding. PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
JetFleet Aircraft, L.P. Balance Sheets ASSETS September 30, December 31, 1996 1995 (Unaudited) Current assets: Cash $ 83,995 $ 96,184 Lease payments receivable 180,000 180,000 Receivable from affiliates - 45,856 ------------- ------------ Total current assets 263,995 322,040 Aircraft under operating leases and aircraft held for operating leases, net of accumulated depreciation of $3,794,970 in 1996 and $3,014,002 in 1995 2,588,667 3,369,635 Lease payments receivable 30,000 165,000 Organization costs, net of accumulated amortization of $66,400 in 1996 and $64,966 in 1995 214 1,649 ------------- ------------ $ 2,882,876 $ 3,858,324 ============= ============ LIABILITIES AND PARTNERS' CAPITAL Current liabilities: Accounts payable $ 1,167 $ 28,109 Accrued maintenance costs - 58,984 Payable to affiliates 30,280 45,000 Prepaid rents 11,113 - Unearned interest income 22,869 45,417 ------------- ----------- Total current liabilities 65,429 177,510 Unearned interest income 510 14,674 ------------- ----------- Total liabilities 65,939 192,184 Partners' capital 2,816,937 3,666,140 ------------- ----------- $ 2,882,876 $ 3,858,324 ============= =========== See accompanying notes.
JetFleet Aircraft, L.P. Statements of Operations (Unaudited) For the Nine Months For the Three Months Ended September 30, Ended September 30, 1996 1995 1996 1995 Revenues: Rental income $ 436,708 $ 426,625 $ 160,386 $ 149,788 Interest income 36,916 56,872 10,532 17,379 ----------- ----------- ----------- ----------- 473,624 483,497 170,918 167,167 Costs and expenses: Amortization of organization costs 1,435 6,676 405 1,727 General and administrative 90,024 47,570 28,408 15,008 Maintenance costs 35,000 32,006 - - Depreciation of aircraft 780,968 780,968 260,323 260,323 ----------- ----------- ----------- ----------- 907,427 867,220 289,136 277,058 ----------- ----------- ----------- ----------- Net loss $ ( 433,803) $ ( 383,723) $ ( 118,218) $ ( 109,891) ============ =========== =========== =========== Allocation of net loss: General partners $ ( 4,338) $ ( 3,838) $ ( 1,182) $ ( 1,099) Limited partners ( 429,465) ( 379,885) ( 117,036) ( 108,792) ----------- ----------- ----------- ---------- $ ( 433,803) $ ( 383,723) $ ( 118,218) $( 109,891) =========== =========== =========== ========== Per Limited Partnership Unit $ ( 1.45) $ ( 1.28) $ ( 0.40) $ ( 0.37) =========== =========== =========== ========== Limited Partnership Units outstanding 296,069 296,069 296,069 296,069 =========== =========== =========== ========== See accompanying notes.
JetFleet Aircraft, L.P. Statements of Cash Flows (Unaudited) For the Nine Months Ended September 30, 1996 1995 Net cash provided by operating activities $ 268,211 $ 290,508 Investing activities- Payments received on capital lease 135,000 105,000 Financing activities - Distributions ( 415,400) ( 365,149) ----------- ---------- Net (decrease) / increase in cash ( 12,189) 30,359 Cash, beginning of period 96,184 117,027 ----------- ----------- Cash, end of period $ 83,995 $ 147,386 =========== =========== See accompanying notes.
JetFleet Aircraft, L.P. Notes to Financial Statements September 30, 1996 (Unaudited) 1. Basis of Presentation JetFleet Aircraft, L.P. ("JetFleet"), a California limited partnership, was formed on February 16, 1989 and commenced operations in November 1989. The accompanying unaudited financial statements reflect all adjustments (consisting of only normal recurring accruals) which are, in the opinion of CMA Capital Group, the Corporate General Partner, necessary for a fair presentation of the financial results for such periods. The results of operations for such periods are not necessarily indicative of results of operations for a full year. The statements should be read in conjunction with the Summary of Significant Accounting Policies and other notes to financial statements included in JetFleet's Annual Report on Form 10-K for the year ended December 31, 1995. 2. Aircraft Under Operating Leases deHavilland Aircraft JetFleet owns a 24.37% undivided interest in a deHavilland DHC-7-103 aircraft, serial number 72 ("S/N 72") and a 95.90% undivided interest in a deHavilland DHC-7-102 aircraft, serial number 57 ("S/N 57"). The remaining undivided interests in these two aircraft are owned by the seller and JetFleet Aircraft II, L.P. ("JetFleet II "), a California limited partnership and an affiliate of JetFleet (collectively, the "Co-Owners"). S/N 57 was subject to a triple net lease with Johnson Controls World Services, Inc. ("JCWS") for a two year term, renewable in one year increments for an aggregate period of eight years. JCWS operated S/N 57 under an eight year contract, which commenced in 1986, with the United States Army for use in the Marshall Islands at the site of the Army's deep space research center where missile guidance systems are tested. During 1994, the lease with JCWS for S/N 57 was extended through September 30, 1995, at reduced rent of $46,000 per month, of which JetFleet's share was $44,114. A new contract with the United States Army commenced on February 15, 1995 for a term of two years with three two-year renewal options. The contract was awarded to Range Systems Engineering, a subsidiary of Raytheon Service Company ("Raytheon"). JetFleet's management anticipates that the lease will continue for as long as the underlying government contract continues, although there is no contractual requirement to this effect. During 1995 the lease was extended through September 30, 1996. An agreement recently has been reached to extend the lease for S/N 57 through September 30, 1998 at a reduced rental rate of $38,500 per month, of which JetFleet's share is $36,922, with an option to extend the term for two additional years. JetFleet Aircraft, L.P. Notes to Financial Statements September 30, 1996 (Unaudited) 2. Aircraft Under Operating Leases (continued) S/N 72, which, at the time of purchase, was subject to the same contract with JCWS as S/N 57, was returned by JCWS during June 1993. In August 1993, S/N 72 was leased to Eclipse Airlines. Upon its return from Eclipse, S/N 72 was leased to The AGES Group, L.P. ("AGES") for the period December 22, 1993 through September 1, 1994 at a monthly rental rate of $38,800. Upon its return by AGES, S/N 72 underwent certain scheduled maintenance and other repair work. On March 31, 1995, S/N 72 was leased to the National Airline Commission of Papua New Guinea (trading as Air Niugini) ("Air Niugini") for a term of six months at a monthly rental rate of $35,000 to be paid to the Co-Owners based upon their pro rata ownership of the aircraft. Air Niugini paid a security deposit of $105,000. The lease was subsequently extended until October 31, 1995. JetFleet collected a total of $53,060 in monthly lease payments from Air Niugini during the term of the lease. In addition, Air Niugini paid JetFleet its pro-rata share of maintenance costs of $31,710. Upon its return by Air Niugini, S/N 72 underwent certain scheduled maintenance and other repair work. On April 25, 1996, S/N 72 was leased to Air Tindi Limited ("Air Tindi") for a term of thirty-six months at a monthly rental rate of $47,500 to be paid to the Co-Owners based upon their pro rata ownership of the aircraft. Air Tindi has provided a letter of credit in the amount of $142,000 which serves as a security deposit under the lease. In addition, Air Tindi pays JetFleet its pro-rata share of maintenance costs of $265.00 per hour of usage, which amount is to be applied for scheduled overhauls and inspections. Air Tindi is a regional airline headquartered in Yellowknife, Northwest Territories, Canada and provides charter and regularly scheduled flights throughout the Northwest Territories. 3. Investment in Capital Lease McDonnell Douglas DC-9-32 Aircraft JetFleet owns a 50.00% interest in a McDonnell Douglas DC-9-32, serial number 47236 (the "DC-9"). The remaining 50.00% interest is owned by JetFleet II . The DC-9 is leased back to the seller, Interglobal, Inc. for thirty-six months at a monthly rate of $30,000 (the "DC-9 Lease"), of which JetFleet is entitled to $15,000. The DC-9 is currently sub-leased to and being operated by Aero California S.A. de CV. As part of the sale and leaseback described above, Interglobal, Inc. assigned its rights under the sublease to the Co-Owners. JetFleet's investment in the DC-9 is being accounted for as a capital lease. JetFleet recorded $10,530 and $36,710 of interest income attributable to the DC-9 Lease during the three months and nine months ended September 30, 1996, respectively. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity At the end of the third quarter of 1996, JetFleet had cash balances of $83,995. This amount was held for the distribution made to the Unitholders in October 1996 and to pay accrued expenses. During the quarter, JetFleet's primary sources of liquidity were cash flows from leasing operations and capital lease payments. JetFleet's liquidity will vary in the future, increasing to the extent cash flows from operations exceed expenses, and decreasing as distributions are made to the Unitholders and to the extent expenses exceed cash flows from leases. JetFleet uses substantially all its operating cash flow to make cash distributions to its Unitholders. Since JetFleet's leases are triple net leases (the lessee pays operating and maintenance expenses, insurance and taxes), JetFleet does not anticipate that it will incur significant operating expenses in connection with ownership of its aircraft as long as they remain on lease. However, JetFleet has incurred repair costs in 1996 for S/N 72 which are $35,000 in excess of the amounts collected from lessees. These repair costs are the result of maintenance performed to enhance the aircraft's marketability. JetFleet currently has available adequate reserves to meet its immediate cash requirements. Since May 1995, JetFleet has made distributions at an annualized rate of 4%, as compared to 3% from January through April 1995, primarily because S/N 72 was on lease from April through October 1995. As discussed above, S/N 72 was delivered to Air Tindi on April 25, 1996 under a thirty-six month lease. 1996 versus 1995 Cash flows from operations decreased by approximately $22,000 primarily due to an increase in net loss and decreases in trade payables, accrued maintenance and unearned interest income which were only partially offset by a net decrease in receivables from affiliates, prepaid rents and amortization of organization costs. Cash flows from investing activities increased approximately $30,000 in 1996 primarily because the capital lease for the DC-9, entered into in December, 1994, included an initial prepayment provision requiring three monthly payments in advance (December 1994 and January and February 1995). In 1996 and 1995, there were no financing sources of cash. Cash distributions to Unitholders increased by approximately $50,000, or by $0.17 per Limited Partnership Unit outstanding. The increased distributions to Unitholders resulted from distributing the cash received in excess of operating expenses from S/N 72 during its on-lease periods during 1995 and 1996. Results of Operations JetFleet recorded net losses of ($433,803) and ($383,723) or ($1.45) and ($1.28) per Limited Partnership Unit outstanding for the nine months ended September 30, 1996 and 1995, respectively, and ($118,218) and ($109,891) or ($0.40) and ($0.37) per Limited Partnership Unit outstanding for the three months ended September 30, 1996 and 1995, respectively. The increased loss for the nine month period in 1996 relative to 1995 was primarily a result of the increase of approximately $42,000 in general and administrative costs as well as a decrease of approximately $20,000 in income recognized from the capital lease for the DC-9 which were partially offset by an increase of $10,000 in rental income. The $9,000 increase in net loss for the three month period in 1996 versus 1995 was primarily due to a $13,000 increase general and administrative expenses and a $7,000 decrease in interest income recognized from the capital lease which were only partially offset by an increase of $11,000 in rental income. 1996 versus 1995 Rental income was $10,000 higher during the nine month period in 1996 versus 1995 and $11,000 higher during the three month period in 1996 versus 1995 due to the increased monthly rent received from S/N 72 during 1996. Interest income from the capital lease for the DC-9 was $20,000 lower during the nine month period in 1996 versus 1995 and $7,000 lower during the three month period in 1996 versus 1995 due to the decreasing lease payments receivable. There was no change in depreciation from 1995 to 1996. There was no accrual or payment of the base management, incentive management or re-lease fees for 1996 or 1995 as the annualized rate of distributions in those years did not meet the Preferred Return as defined in the Prospectus. General and administrative expenses increased approximately $42,000 and $13,000 for the nine month and three month periods, respectively, of 1996 versus 1995, due to increased costs associated with the ongoing management of JetFleet's portfolio as well as the increased costs of administering investor-related inquiries. As mentioned above, JetFleet has incurred repair costs in 1996 for S/N 72 which are $35,000 in excess of the amounts collected from lessees, an increase of approximately $3,000 from 1995. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 14, 1996.
JETFLEET AIRCRAFT, L.P. By: CMA Capital Group, Managing General Partner By: /s/ Neal D. Crispin Neal D. Crispin Title: Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities indicated on November 14, 1996.
Signature Title - ---------------------- ------------------------------------ /s/ Neal D. Crispin Chief Executive and Chief Financial - ---------------------- Neal D. Crispin Officer and Chairman of the Board of Directors of the Managing General Partner /s/ Richard D. Koehler Executive Vice President and - ---------------------- Richard D. Koehler Director of the Managing General Partner
10 EXHIBIT INDEX Exhibit No. Description Page No. - ----------- ----------- -------- EX-27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE FOR 3RD QUARTER OF 1996
5 1 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 83,995 0 180,000 0 0 263,995 6,383,637 3,794,970 2,882,876 65,429 0 0 0 0 2,816,937 2,882,876 0 473,624 0 0 907,427 0 0 (433,803) 0 (433,803) 0 0 0 (433,803) 0 0
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