-----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, JrPpjWrgNEnUzffhx7qZQ5RkJsCQcyBCSx4JfOeKfMuT+5NcaT/INlveA97owEW0 m5B8EPUX2MIfZ5brtf55WQ== 0000879812-96-000001.txt : 19960515 0000879812-96-000001.hdr.sgml : 19960515 ACCESSION NUMBER: 0000879812-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ATEL CASH DISTRIBUTION FUND IV L P CENTRAL INDEX KEY: 0000879812 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EQUIPMENT RENTAL & LEASING, NEC [7359] IRS NUMBER: 943145429 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21552 FILM NUMBER: 96562971 BUSINESS ADDRESS: STREET 1: 235 PINE ST STREET 2: 6TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94104 BUSINESS PHONE: 4159898800 MAIL ADDRESS: STREET 1: 235 PINE ST STREET 2: 6TH FL CITY: SAN FRANCISCO STATE: CA ZIP: 94104 10-Q 1 QUARTERLY REPORT ON FORM 10Q Form 10-Q 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 March 31, 1996 |_| 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 000-21552 ATEL Cash Distribution Fund IV, L.P. (Exact name of registrant as specified in its charter) California 94-3145429 (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 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 IV, L.P. BALANCE SHEETS MARCH 31, 1996 AND DECEMBER 31, 1995 (Unaudited) ASSETS 1996 1995 ---- ---- Cash and cash equivalents $48,122 $1,355,258 Accounts receivable 711,100 682,207 Investments in leases 62,792,302 63,967,204 Notes receivable 101,266 135,022 --------------- --------------- Total assets $63,652,790 $66,139,691 =============== =============== LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $23,791,172 $25,298,767 Lines of credit 2,000,000 - Bank overdrafts 334,627 - Accounts payable: Equipment purchases - 42,227 General Partner 115,684 216,347 Other 138,452 201,642 Deposit due to lessee 213,189 984,213 Accrued interest payable 104,877 123,629 Unearned operating lease income 374,128 413,106 --------------- --------------- Total liabilities 27,072,129 27,279,931 Partners' capital: General Partner 47,338 44,831 Limited Partners 36,533,323 38,814,929 --------------- --------------- Total partners' capital 36,580,661 38,859,760 --------------- --------------- Total liabilities and partners' capital $63,652,790 $66,139,691 =============== =============== See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. INCOME STATEMENTS THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995 (Unaudited) 1996 1995 ---- ---- Revenues: Leasing activities: Operating leases $2,732,327 $2,895,467 Direct financing leases 291,182 223,266 Leveraged leases 47,133 48,729 Gain on sale of assets 32,398 51,916 Interest 7,303 32,819 Other 922 1,332 --------------- --------------- 3,111,265 3,253,529 --------------- --------------- Expenses: Depreciation and amortization 2,028,154 2,110,596 Interest 505,484 514,520 Equipment and incentive management fees to General Partner 222,691 210,600 Administrative cost reimbursements to General Partner 45,820 64,470 Professional fees 6,860 37,636 Provision for losses 31,107 31,524 Other 20,461 22,487 --------------- --------------- 2,860,577 2,991,833 --------------- --------------- Net income $250,688 $261,696 =============== =============== Net income: General Partner $2,507 $2,617 Limited Partners 248,181 259,079 --------------- --------------- $250,688 $261,696 =============== =============== Net income per Limited Partnership unit $0.03 $0.03 Weighted average number of units outstanding 7,488,850 7,492,850 STATEMENT OF CHANGES IN PARTNERS' CAPITAL THREE MONTH PERIOD ENDED MARCH 31, 1996 (Unaudited)
Limited Partners General Units Amount Partner Total Balance December 31, 1995 7,488,850 $38,814,929 $44,831 $38,859,760 Distributions to limited partners (2,529,787) (2,529,787) Net income 248,181 2,507 250,688 ----------------- ---------------- --------------- --------------- Balance March 31, 1996 7,488,850 $36,533,323 $47,338 $36,580,661 ================= ================ =============== ===============
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995 (Unaudited) Operating activities: 1996 1995 ---- ---- Net income $250,688 $261,696 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 2,028,154 2,110,596 Leveraged lease revenues (43,415) - Gain on sale of asset (32,398) (51,916) Provision for losses 31,107 31,524 Changes in operating assets and liabilities: Accounts receivable (28,893) 106,730 Notes receivable 33,756 33,755 Bank overdrafts 334,627 - Accounts payable, General Partner (100,663) (633,599) Accounts payable, other (63,190) 19,852 Deposits due to lessees (771,024) - Accrued interest payable (18,752) 41,178 Unearned operating lease income (38,978) (57,049) --------------- --------------- Net cash from operations 1,581,019 1,862,767 --------------- --------------- Investing activities: Purchase of equipment on operating leases (1,611,981) (5,413,239) Reduction in investment in direct financing leases 1,023,762 473,566 Purchase of equipment on direct financing leases (898,949) (431,945) Proceeds from sales of lease assets 636,395 375,580 Reduction in investment in leveraged leases - 329,903 Initial direct costs paid to General Partner (258,269) Purchase of residual value interests - (175,974) Initial direct costs paid to others - (64,940) --------------- --------------- Net cash (used in) provided by investing activities (850,773) (5,165,318) --------------- --------------- Financing activities: Distributions to limited partners (2,529,787) (2,433,418) Borrowings on line of credit 2,000,000 819,349 Repayment of non-recourse debt (1,507,595) (1,517,771) Payment of syndication costs to General Partner - (5,368) --------------- --------------- Net cash used in financing activities (2,037,382) (3,137,208) --------------- --------------- Net decrease in cash and cash equivalents (1,307,136) (6,439,759) Cash and cash equivalents at beginning of period 1,355,258 7,152,081 --------------- --------------- Cash and cash equivalents at end of period $48,122 $712,322 =============== =============== ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS (Continued) THREE MONTH PERIODS ENDED MARCH 31, 1996 AND 1995 (Unaudited) 1996 1995 ---- ---- Supplemental disclosures of cash flow information: Cash paid during period for interest $524,236 $473,342 =============== =============== Supplemental schedule of non-cash transactions: Operating lease assets reclassified to assets held for sale or lease $439,677 Less accumulated depreciation (306,125) ---------------- $133,552 ================ See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995 (Unaudited) 1. Summary of significant accounting policies: 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. Organization and partnership matters: ATEL Cash Distribution Fund IV, L.P. (the Partnership), was formed under the laws of the State of California on September 19, 1991, for the purpose of acquiring equipment to engage in equipment leasing and sales activities. Contributions in the aggregate of $600 were received as of October 8, 1991, $100 of which represented the General Partner's continuing interest, and $500 of which represented the Initial Limited Partners' capital investment. Upon the sale of the minimum amount of Units of Limited Partnership interest (Units) of $1,200,000 and the receipt of the proceeds thereof on March 6, 1992, the Partnership commenced operations. The Partnership or the General Partner on behalf of the Partnership, will incur costs in connection with the organization, registration and issuance of the Units. The amount of such costs to be born by the Partnership is limited by certain provisions in the Partnership Agreement. As of February 3, 1993, the Partnership had received subscriptions for 7,500,000 Limited Partnership Units ($75,000,000) in addition to the Initial Limited Partners' 50 Units. Of those subscriptions, 7,488,850 Units ($74,888,500) were issued and outstanding as of March 31, 1996. The Partnership's business consists of leasing various types of equipment. As of March 31, 1996, the original terms of the Partnership's leases were from two to ten years. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995 (Unaudited) 3. Investment in leases: The Partnership's investment in leases consists of the following:
Depreciation Expense or Reclassi- December 31, Amortization fications or March 31, 1995 Additions of Leases Dispositions 1996 ---- --------- --------- -------------- ---- Net investment in operating leases $45,593,701 $1,569,754 ($1,899,679) ($737,549) $44,526,227 Net investment in direct financing leases 11,948,261 898,949 (1,023,762) - 11,823,448 Net investment in leveraged leases 4,675,926 - 43,415 - 4,719,341 Residual value interests 610,878 - - - 610,878 Reserve for losses (714,139) (31,107) - (745,246) Assets held for sale or lease - - - 133,552 133,552 Initial direct costs, net of accumulated amortization of $1,318,238 in 1995 and $1,393,418 in 1996 1,852,577 - (128,475) - 1,724,102 ----------------- ---------------- ---------------- --------------- --------------- $63,967,204 $2,437,596 ($3,008,501) ($603,997) $62,792,302 ================= ================ ================ =============== ===============
The following schedule provides an analysis of the Partnership's investment in property on operating leases by major classifications as of December 31, 1995, acquisitions and dispositions during the quarter ended March 31, 1996 and as of March 31, 1996.
December 31, 1st Quarter March 31, 1995 Acquisitions Dispositions 1996 ---- ------------ ------------ ---- Transportation $24,984,962 ($1,847,200) $23,137,762 Corporate aircraft 9,635,969 - 9,635,969 Mining 6,570,460 - 6,570,460 Printing 5,523,249 - 5,523,249 Construction 4,985,297 - 4,985,297 Other 4,726,040 - 4,726,040 Materials handling 3,915,999 - 3,915,999 Manufacturing 1,587,670 $1,412,500 - 3,000,170 Furniture and fixtures 2,353,608 - - 2,353,608 Ground support 1,127,988 - - 1,127,988 Data processing 694,308 157,254 - 851,562 Office equipment 216,080 - - 216,080 ----------------- ---------------- --------------- --------------- 66,321,630 1,569,754 (1,847,200) 66,044,184 Less accumulated depreciation (20,727,929) (1,899,679) 1,109,651 (21,517,957) ----------------- ---------------- --------------- --------------- $45,593,701 ($329,925) ($737,549) $44,526,227 ================= ================ =============== ===============
All of the property on operating leases was acquired during 1992, 1993, 1994, 1995 and 1996. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995 (Unaudited) 3. Investment in leases (continued): At March 31, 1996, the aggregate amounts of future minimum lease payments are as follows: Year ending Operating Direct Financing December 31, Leases Leases Total 1996 $8,116,645 $2,952,328 $11,068,973 1997 9,241,518 3,583,271 12,824,789 1998 7,360,169 3,050,529 10,410,698 1999 6,142,265 1,795,839 7,938,104 2000 2,547,270 822,289 3,369,559 Thereafter 3,790,590 967,407 4,757,997 ----------------- ---------------- --------------- $37,198,457 $13,171,663 $50,370,120 ================= ================ =============== 4. Non-recourse debt: Notes payable to financial institutions are due in varying monthly, quarterly and semi-annual installments of principal and interest. The notes are secured by assignments of lease payments and pledges of the assets which were purchased with the proceeds of the particular notes. Interest rates on the notes vary from 6.81% to 11.2%. Future minimum principal payments of non-recourse debt are as follows: Year ending December 31, Principal Interest Total 1996 $5,188,646 $1,279,567 $6,468,213 1997 5,751,246 1,297,574 7,048,820 1998 4,964,117 867,372 5,831,489 1999 4,451,560 490,837 4,942,397 2000 1,668,488 227,786 1,896,274 Thereafter 1,767,115 154,322 1,921,437 ----------------- ---------------- --------------- $23,791,172 $4,317,458 $28,108,630 ================= ================ =============== ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1995 (Unaudited) 5. Related party transactions: The terms of the Limited Partnership Agreement provide that the General Partner and/or Affiliates are entitled to receive certain fees for equipment acquisition, management and resale and for management of the Partnership. The General Partner and/or Affiliates earned the following fees, commissions and reimbursements, pursuant to the Limited Partnership Agreement as follows: 1996 1995 ---- ---- Reimbursement of other syndication costs $5,368 Acquisition fees equal to 3.5% of the equipment purchase price, for evaluating and selecting equipment to be acquired (not to exceed 4.75% of Gross Proceeds, included in net investment in direct financing leases and property on operating leases in the balance sheet) 258,269 Incentive management fees (computed as 5% of distributions of cash from operations, as defined in the Limited Partnership Agreement) and equipment management fees (computed as 5% of gross revenues from operating leases, as defined in the Limited Partnership Agreement plus 2% of gross revenues from full payout leases, as defined in the Limited Partnership Agreement). $222,691 210,600 Administrative costs reimbursed to General Partner 45,820 64,470 --------------- --------------- $268,511 $538,707 =============== =============== 6. Line of credit: The Partnership participates with ATEL and certain of its Affiliates in a $70,000,000 revolving line of credit with a financial institution that includes certain financial covenants. The line of credit expires on January 31, 1997. The current line of credit, when used, is collateralized by (i) specific lease assets assigned or (ii) all lease receivables and other lease related proceeds owned by the Partnership, all equipment subject to leases and related insurance policies and maintenance contracts owned by the Partnership and all deposit accounts with the lender and all cash on deposit. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Capital Resources and Liquidity Funds which have been received, but which have not yet been invested in leased equipment, are invested in interest-bearing accounts or high-quality/short-term commercial paper. The Partnership's public offering provided for a total maximum capitalization of $75,000,000. As of February 3, 1993, the Partnership had received subscriptions for a total of 7,500,000 Units ($75,000,000) and the offering was completed. As of March 31, 1996, 7,488,850 Units were issued and outstanding. During 1996 and 1995, the Partnership's primary source of liquidity was rents from operating leases. The liquidity of the Partnership will vary in the future, increasing to the extent cash flows from leases exceed expenses and proceeds from lease asset sales, and decreasing as lease assets are acquired, as distributions are made to the limited partners and to the extent expenses exceed cash flows from leases and proceeds from lease asset sales. As another source of liquidity, the Partnership has contractual obligations with a diversified group of lessees for fixed lease terms at fixed rental amounts. As the initial lease terms expire the Partnership will re-lease or sell the equipment. The future liquidity beyond the contractual minimum rentals will depend on the General Partner's success in re-leasing or selling the equipment as it comes off lease. The Partnership participates with the General Partner and certain of its affiliates in a $70,000,000 revolving line of credit with a financial institution. The line of credit expires on January 31, 1997. The current line of credit, when used, is collateralized by (i) specific lease assets assigned or (ii) all lease receivables and other lease related proceeds owned by the Partnership, all equipment subject to leases and related insurance policies and maintenance contracts owned by the Partnership and all deposit accounts with the lender and all cash on deposit. The Partnership anticipates reinvesting a portion of lease payments from assets owned in new leasing transactions. Such reinvestment will occur only after the payment of all obligations, including debt service (both principal and interest), the payment of management and acquisition fees to the General Partner and providing for cash distributions to the Limited Partners. The Partnership would likely be in a position to borrow against its current portfolio to meet such requirements if its current reserves were found to be inadequate to meet contingencies. The General Partners envision no such requirements for operating purposes, nor have they explored with lenders the possibility of obtaining loans. There can be no assurance as to the terms of any such financing or that the Partnership will be able to obtain such loans. Through March 31, 1996, the Partnership had borrowed approximately $35,494,000 with a remaining unpaid balance of approximately $23,791,000. Borrowings are to be generally non-recourse to the Partnership, that is, the only recourse of the lender for a default by the lessee on the underlying lease will be to the equipment or corresponding lease acquired with the loan proceeds. The General Partners expect that aggregate borrowings in the future will not exceed 40% of aggregate equipment cost. In any event, the Agreement of Limited Partnership limits such borrowings to 40% of the total cost of equipment, in aggregate. No commitments of capital have been or are expected to be made other than for the acquisition of additional equipment. At March 31, 1996, there were no commitments to purchase additional lease assets. 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. If interest rates increase significantly, the lease rates that the Partnership can obtain on future leases will be expected to increase as the cost of capital is a significant factor in the pricing of lease financing. Leases already in place, for the most part, would not be affected by changes in interest rates. The Partnership made distributions of cash from 1996 first quarter operations in February, March and April 1996. The amount of the distributions totaled $.35 per Unit. This was paid in either monthly amounts of $.11667 per Unit or in one quarterly payment of $.35 per Unit in April 1995. These distributions are equal to an annualized distribution rate of 14%. Rents from operating leases were the primary sources of cash flows from operations in the first quarter of both 1995 and 1996. The amounts of such rents did not change significantly from 1995 to 1996. Sources of cash from investing activities in 1996 consisted of the proceeds of the sales of lease assets and cash flows from direct financing leases. Proceeds from the sales of lease assets are not expected to be consistent from one period to another. Cash flows from direct financing leases increased by $550,196, or about 116%. The increase is due to direct financing lease asset acquisitions since the beginning of 1995. The most important use of cash for investing activities was the purchase of assets on operating and direct financing leases. In the first quarter of 1995 and 1996, the only financing source of cash was borrowings under the line of credit. The funds were used to partially fund the acquisitions of lease assets. Results of Operations Operations in the first quarter of 1996 resulted in net income of $250,688 compared to $261,696 in 1995. Overall, the results of operations were virtually unchanged. Revenues decreased by $142,264. The decrease was due to decreased operating lease revenues ($163,140). The decreases in revenues were matched almost exactly by decreases of certain expenses, primarily depreciation and amortization expense and interest expense. Depreciation has decreased as operating lease assets have been sold after scheduled lease terminations. Interest expense has declined due to scheduled debt repayments. In January 1996, Barney's, Inc. (Barney's), one of the Partnership's lessees, filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The Partnership's lease transaction has been financed primarily with non-recourse debt. In addition, the Partnership holds certain deposits which may accrue to it in the event of a default. As of December 31, 1995, the Partnership had established certain reserves with regard to this transaction. The bankruptcy proceedings are still in the preliminary stages and no additional information has become available that would require any changes to those reserves through the end of the first quarter of 1996. 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 Sheets, March 31, 1996 and December 31, 1995. Income statements for the three month periods ended March 31, 1996 and 1995. Statement of changes in partners' capital for the three months ended March 31, 1996. Statements of cash flows for the three month periods ended March 31, 1996 and 1995. Notes to the Financial Statements 2. Financial Statement Schedules All other 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: May 10, 1996 ATEL CASH DISTRIBUTION FUND IV, L.P. (Registrant) By: ATEL Financial Corporation General Partner of Registrant By: /s/ A. J. Batt A. J. Batt President and Chief Executive Officer of General Partner By: /s/ Dean L. Cash Dean L. Cash Executive Vice President of General Partner 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 3-MOS DEC-31-1996 JAN-01-1996 MAR-31-1996 48122 0 711100 0 0 0 0 0 63652790 0 0 0 0 0 36580661 63652790 0 3111265 0 0 2323986 31107 505484 250688 0 250688 0 0 0 250688 0 0
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