-----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, Nqit2ClcJLGr2CzRcet7Lnayz8K7RHZOJa+ZzEwAYEtG6aG44t44kcGg7N3CVYq5 FVluWHX2nXaydhKj5KA8sg== 0000879812-97-000002.txt : 19970515 0000879812-97-000002.hdr.sgml : 19970515 ACCESSION NUMBER: 0000879812-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 97603826 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, 1997 |_| 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, 1997 AND DECEMBER 31, 1996 (Unaudited) ASSETS 1997 1996 ---- ---- Cash and cash equivalents $1,302,622 $696,421 Accounts receivable 514,324 633,329 Investments in leases 45,501,068 52,264,526 --------------- --------------- Total assets $47,318,014 $53,594,276 =============== =============== LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $16,813,490 $20,450,921 Lines of credit 1,000,000 1,500,000 Accounts payable: Equipment purchases - 42,227 General Partner 67,218 74,487 Other 117,414 138,590 Deposit due to lessee - 97,772 Accrued interest payable 65,349 96,904 Unearned operating lease income 470,064 463,160 --------------- --------------- Total liabilities 18,533,535 22,864,061 Partners' capital: General Partner 74,245 67,497 Limited Partners 28,710,234 30,662,718 --------------- --------------- Total partners' capital 28,784,479 30,730,215 --------------- --------------- Total liabilities and partners' capital $47,318,014 $53,594,276 =============== =============== See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. INCOME STATEMENTS THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996 (Unaudited)
1997 1996 ---- ---- Revenues: Leasing activities: Operating leases $2,295,887 $2,732,327 Direct financing leases 292,127 291,182 Leveraged leases 62,013 47,133 Gain on sale of assets 527,355 32,398 Interest 10,242 7,303 Other 1,142 922 --------------- --------------- 3,188,766 3,111,265 --------------- --------------- Expenses: Depreciation and amortization 1,748,461 2,028,154 Interest 433,375 505,484 Equipment and incentive management fees to General Partner 205,025 222,691 Administrative cost reimbursements to General Partner 69,901 45,820 Professional fees 4,871 6,860 Provision for losses 31,888 31,107 Other 20,405 20,461 --------------- --------------- 2,513,926 2,860,577 --------------- --------------- Net income $674,840 $250,688 =============== =============== Net income: General Partner $6,748 $2,507 Limited Partners 668,092 248,181 --------------- --------------- $674,840 $250,688 =============== =============== Net income per Limited Partnership unit $0.09 $0.03 Weighted average number of units outstanding 7,487,350 7,488,850
STATEMENT OF CHANGES IN PARTNERS' CAPITAL THREE MONTH PERIOD ENDED MARCH 31, 1997 (Unaudited)
Limited Partners General Units Amount Partner Total Balance December 31, 1996 7,487,350 $30,662,718 $67,497 $30,730,215 Distributions to limited partners (2,620,576) - (2,620,576) Net income 668,092 6,748 674,840 ----------------- ---------------- --------------- --------------- Balance March 31, 1997 7,487,350 $28,710,234 $74,245 $28,784,479 ================= ================ =============== ===============
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996 (Unaudited)
1997 1996 ---- ---- Operating activities: Net income $674,840 $250,688 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 1,748,461 2,028,154 Leveraged lease revenues - (43,415) Gain on sale of asset (527,355) (32,398) Provision for losses 31,888 31,107 Changes in operating assets and liabilities: Accounts receivable 119,005 (28,893) Notes receivable - 33,756 Bank overdrafts - 334,627 Accounts payable, General Partner (7,269) (100,663) Accounts payable, other (21,176) (63,190) Deposits due to lessees (97,772) (771,024) Accrued interest payable (31,555) (18,752) Unearned operating lease income 6,904 (38,978) --------------- --------------- Net cash from operations 1,895,971 1,581,019 --------------- --------------- Investing activities: Purchase of equipment on operating leases (42,227) (1,611,981) Reduction in investment in direct financing leases 729,869 1,023,762 Purchase of equipment on direct financing leases (77,518) (898,949) Proceeds from sales of lease assets 4,763,034 636,395 Reduction in investment in leveraged leases 95,079 - --------------- --------------- Net cash provided by (used in) investing activities 5,468,237 (850,773) --------------- --------------- Financing activities: Distributions to limited partners (2,620,576) (2,529,787) Borrowings on line of credit - 2,000,000 Repayment of line of credit (500,000) - Repayment of non-recourse debt (3,637,431) (1,507,595) --------------- --------------- Net cash used in financing activities (6,758,007) (2,037,382) --------------- --------------- Net increase (decrease) in cash and cash equivalents 606,201 (1,307,136) Cash and cash equivalents at beginning of period 696,421 7,152,081 --------------- --------------- Cash and cash equivalents at end of period $1,302,622 $5,844,945 =============== ===============
ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS (Continued) THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996 (Unaudited)
1997 1996 ---- ---- Supplemental disclosures of cash flow information: Cash paid during period for interest $464,930 $524,236 =============== =============== 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, 1997 (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, 7,487,350 Units ($74,873,500) were issued and outstanding as of March 31, 1997. The Partnership's business consists of leasing various types of equipment. As of March 31, 1997, 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, 1997 (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, 1996 Additions of Leases Dispositions 1997 ---- --------- --------- -------------- ---- Net investment in operating leases $33,943,386 ($1,556,443) ($4,204,121) $28,182,822 Net investment in direct financing leases 11,855,610 $77,518 (729,869) (2,737) 11,200,522 Net investment in leveraged leases 4,844,014 - (95,079) - 4,748,935 Residual value interests 610,878 - - (28,821) 582,057 Reserve for losses (305,978) (31,888) - - (337,866) Assets held for sale or lease 16,464 - - - 16,464 Initial direct costs, net of accumulated amortization of $1,365,512 in 1996 and $1,304,175 in 1997 1,300,152 - (192,018) - 1,108,134 ---------------- ----------------- ---------------- --------------- --------------- $52,264,526 $45,630 ($2,573,409) ($4,235,679) $45,501,068 ================ ================= ================ =============== ===============
The following schedule provides an analysis of the Partnership's investment in property on operating leases by major classifications as of December 31, 1996, acquisitions and dispositions during the quarter ended March 31, 1997 and as of March 31, 1997.
December 31, 1st Quarter March 31, 1996 Acquisitions Dispositions 1997 ---- ------------ ------------ ---- Transportation $21,497,670 ($7,105,011) $14,392,659 Corporate aircraft 9,635,969 (1,890,000) 7,745,969 Mining 4,347,960 - 4,347,960 Printing 4,393,249 - 4,393,249 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 - 1,587,670 Ground support 1,127,988 - 1,127,988 Data processing 851,561 - 851,561 Office equipment 216,080 - 216,080 ----------------- ---------------- --------------- --------------- 57,285,483 (8,995,011) 48,290,472 Less accumulated depreciation (23,342,097) ($1,556,443) 4,790,890 (20,107,650) ----------------- ---------------- --------------- --------------- $33,943,386 ($1,556,443) ($4,204,121) $28,182,822 ================= ================ =============== ===============
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, 1997 (Unaudited) 3. Investment in leases (continued): At March 31, 1997, the aggregate amounts of future minimum lease payments are as follows:
Year ending Operating Direct Financing December 31, Leases Leases Total 1997 $5,738,967 $2,910,511 $8,649,478 1998 6,177,543 3,487,195 9,664,738 1999 5,325,941 2,407,843 7,733,784 2000 2,453,551 1,427,923 3,881,474 2001 1,831,758 867,616 2,699,374 Thereafter 1,930,449 397,917 2,328,366 ----------------- ---------------- --------------- $23,458,209 $11,499,005 $34,957,214 ================= ================ ===============
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 1997 $2,190,908 $1,035,441 $3,226,349 1998 5,167,306 992,328 6,159,634 1999 5,055,577 585,451 5,641,028 2000 2,324,358 276,272 2,600,630 2001 1,313,315 121,001 1,434,316 Thereafter 762,026 39,505 801,531 ----------------- ---------------- --------------- $16,813,490 $3,049,998 $19,863,488 ================= ================ ===============
ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS MARCH 31, 1997 (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:
1997 1996 ---- ---- 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). $205,025 $210,600 Administrative costs reimbursed to General Partner 69,901 45,820 --------------- --------------- $274,926 $256,420 =============== ===============
6. Line of credit: The Partnership participates with the General Partner and certain of its Affiliates in a $90,000,000 revolving credit agreement with a group of financial institutions which expires on October 28, 1997. The agreement includes an acquisition facility to be used by the Partnership and Affiliates to provide bridge financing for assets on leases. Draws on the acquisition facility by any individual borrower are secured only by that borrower's assets, including equipment and related leases. At March 31, 1997, the Partnership had $1,000,000 of borrowings under the line of credit. The credit agreement includes certain financial covenants applicable to each borrower. The Partnership was in compliance with its covenants as of March 31, 1997. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Capital Resources and Liquidity During 1997, the Partnership's primary source of liquidity was proceeds from sales of lease assets. During 1996, 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 $90,000,000 revolving line of credit with a financial institution. The line of credit expires on October 28, 1997. 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. Through March 31, 1997, the Partnership had borrowed approximately $38,342,000 with a remaining unpaid balance of approximately $16,813,000. 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, 1997, 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 1997 first quarter operations in February, March and April 1997. 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 1997. 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 1997 and 1996. The amounts of such rents decreased from 1996 to 1997 by $436,440. Sources of cash from investing activities in 1997 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 decreased by $293,893. Lease rents have declined due to lease terminations and sales of assets. In the first quarter of 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. There were no financing sources of cash in 1997. Repayments of non-recourse debt have increased due to borrowings over the last year. Results of Operations Operations in the first quarter of 1997 resulted in net income of $674,840 compared to $250,688 in 1996. The decreases in operating lease revenues were matched closely by decreases of depreciation and amortization expense. Depreciation has decreased as operating lease assets have been sold. The other major factor in the increase in net income was the increase in gains on sales of lease assets. Most of those assets sold were operating lease assets. The original cost of such assets sold increased from $1,407,323 in 1996 to $8,995,011 in 1997. Proceeds from asset sales increased from $636,395 in 1996 to $4,590,09 in 1997. 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, 1997 and December 31, 1996. Income statements for the three month periods ended March 31, 1997 and 1996. Statement of changes in partners' capital for the three months ended March 31, 1997. Statements of cash flows for the three month periods ended March 31, 1997 and 1996. 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 12, 1997 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-31-1997 JAN-01-1997 MAR-31-1997 1,302,622 0 514,324 0 0 0 0 0 47,318,014 0 0 0 0 0 28,784,479 47,318,014 0 3,188,766 0 0 2,048,663 31,888 433,375 674,840 0 674,840 0 0 0 674,840 0 0
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