-----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, MtpyfGomssrx/UnHB55qb3nzkw8+g6pJTo6oR1ePvJE+pkWW76Oweoa4Q/zBBAi+ VRHTwllkqi9R0Cz2Z5ODAg== 0000879812-97-000007.txt : 19971113 0000879812-97-000007.hdr.sgml : 19971113 ACCESSION NUMBER: 0000879812-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 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: SEC FILE NUMBER: 000-21552 FILM NUMBER: 97715198 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 REPORT FOR THE PERIOD ENDED 9/30/97 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 September 30, 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 SEPTEMBER 30, 1997 AND DECEMBER 31, 1996 (Unaudited) ASSETS 1997 1996 ---- ---- Cash and cash equivalents $332,521 $696,421 Accounts receivable 470,514 633,329 Investment in leases 32,763,761 52,264,526 ----------------- ----------------- $33,566,796 $53,594,276 ================= ================= LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $7,778,056 $20,450,921 Lines of credit 500,000 1,500,000 Accounts payable: General Partner 91,674 74,487 Equipment purchases - 42,227 Other 348,472 138,590 Accrued interest 40,475 96,904 Deposit due to lessee - 97,772 Unearned operating lease income 198,935 463,160 ----------------- ----------------- Total liabilities 8,957,612 22,864,061 Partners' capital: General Partner 84,892 67,497 Limited Partners 24,524,292 30,662,718 ----------------- ----------------- Total partners' capital 24,609,184 30,730,215 ----------------- ----------------- $33,566,796 $53,594,276 ================= ================= See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. INCOME STATEMENTS NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, Revenues: 1997 1996 1997 1996 ---- ---- ---- ---- Lease revenues: Operating $5,420,170 $7,853,459 $1,508,791 $2,665,750 Direct financing 1,014,640 927,152 447,483 333,657 Leveraged 186,039 141,398 62,013 47,132 Gain on sales of assets 1,091,776 1,221,635 (12,859) 431,245 Other 724 9,285 (418) 6,684 Interest income 22,310 17,507 5,352 5,842 ----------------- ----------------- ----------------- ----------------- 7,735,659 10,170,436 2,010,362 3,490,310 Expenses: Depreciation and amortization 4,216,157 5,992,865 954,870 1,945,759 Interest 822,510 1,389,409 140,931 402,743 Management fees 506,568 793,726 93,261 310,428 Administrative cost reimbursements 229,871 192,711 89,615 76,017 Professional fees 30,174 41,723 14,662 18,462 Provision for losses 57,231 102,796 - 36,000 Other 133,634 77,399 46,841 19,011 ----------------- ----------------- ----------------- ----------------- 5,996,145 8,590,629 1,340,180 2,808,420 ----------------- ----------------- ----------------- ----------------- Income before extraordinary item 1,739,514 1,579,807 670,182 681,890 Extraordinary gain on early extinguishment of debt - 112,546 - 112,546 ----------------- ----------------- ----------------- ----------------- Net income $1,739,514 $1,692,353 $670,182 $794,436 ================= ================= ================= ================= Net income: General Partner $17,395 $16,924 $6,702 $7,944 Limited Partners 1,722,119 1,675,429 663,480 786,492 ----------------- ----------------- ----------------- ----------------- $1,739,514 $1,692,353 $670,182 $794,436 ================= ================= ================= ================= Income before extraordinary item per limited partnership unit $0.23 $0.21 $0.09 $0.09 Extraordinary gain on early extinguishment of debt per limited partnership unit - 0.01 - 0.01 ----------------- ----------------- ----------------- ----------------- Net income per Limited Partnership unit $0.23 $0.22 $0.09 $0.10 ================= ================= ================= ================= Weighted average number of units outstanding 7,487,350 7,487,350 7,487,350 7,487,850
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL NINE MONTH PERIOD ENDED SEPTEMBER 30, 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 (7,860,545) - (7,860,545) Net income 1,722,119 17,395 1,739,514 ----------------- ----------------- ----------------- ----------------- Balance September 30, 1997 7,487,350 $24,524,292 $84,892 $24,609,184 ================= ================= ================= =================
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ---- ---- ---- ---- Operating activities: Net income $1,739,514 $1,692,353 $670,182 $794,436 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 4,216,157 5,992,865 954,870 1,945,759 Leveraged lease income (186,039) (141,398) (62,013) (47,132) Gain on sales of assets (1,091,776) (1,221,635) 12,859 (431,245) Provision for losses 57,231 102,796 - 36,000 Extraordinary gain on early extinguishment of non-recourse debt - (112,546) - (112,546) Changes in operating assets and liabilities: Accounts receivable 162,815 71,923 3,218,421 (88,738) Accounts payable, General Partner 17,187 49,046 28,583 108,625 Accounts payable, other 209,882 66,321 218,277 153,115 Accrued interest (56,429) (7,239) (13,338) (24,604) Deposits due to lessees (97,772) (857,895) - (86,871) Unearned operating lease income (264,225) (123,188) (116,665) (27,743) ----------------- ----------------- ----------------- ----------------- Net cash from operations 4,706,545 5,511,403 4,911,176 2,219,056 ----------------- ----------------- ----------------- ----------------- Investing activities: Purchase of equipment on operating leases (42,227) (199,481) - 1,370,272 Purchase of equipment on direct financing leases (77,518) (2,274,344) - (1,375,395) Reduction of net investment in direct financing leases 1,955,389 2,183,351 528,711 463,883 Reduction of net investment in leveraged leases 177,571 16,725 - 3,718 Proceeds from sales of lease assets 14,449,750 3,615,483 80,898 1,463,263 Principal payments received on notes receivable - 101,267 - 33,756 ----------------- ----------------- ----------------- ----------------- Net cash (used in) provided by investing activities 16,462,965 3,443,001 609,609 1,959,497 ----------------- ----------------- ----------------- -----------------
ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS (CONTINUED) NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1997 AND 1996 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, ------------- ------------- 1997 1996 1997 1996 ---- ---- ---- ---- Financing activities: Proceeds of non-recourse debt - 2,847,801 - 2,847,801 Repayment of non-recourse debt (12,672,865) (5,817,677) (2,822,170) (2,650,037) Borrowings under lines of credit 500,000 4,000,000 500,000 1,500,000 Repayments of lines of credit (1,500,000) (3,000,000) (500,000) (3,000,000) Distributions to limited partners (7,860,545) (7,773,292) (2,619,388) (2,623,777) Repurchase of units - (2,929) - - ----------------- ----------------- ----------------- ----------------- Net cash used in financing activities (21,533,410) (9,746,097) (5,441,558) (3,926,013) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in cash and cash equivalents (363,900) (791,693) 79,227 252,540 Cash and cash equivalents at beginning of period 696,421 1,355,258 253,294 311,025 ----------------- ----------------- ----------------- ----------------- Cash and cash equivalents at end of period $332,521 $563,565 $332,521 $563,565 ================= ================= ================= ================= Supplemental disclosures of cash flow information: Cash paid for interest $878,939 $1,415,797 $154,269 $488,471 ================= ================= ================= ================= Supplemental disclosure of non-cash transactions: Gain on extinguishment of non-recourse debt $112,546 $112,546 ================= =================
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996 (Unaudited) 1. 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. Investment in leases: The Partnership's investment in leases consists of the following:
Depreciation Expense or Reclass- December 31, Amortization ifications & September 30, 1996 Additions of Leases Dispositions 1997 ---- --------- --------- - ------------- ---- Net investment in operating leases $33,943,386 ($3,593,640) ($12,955,014) $17,394,732 Net investment in direct financing leases 11,855,610 $77,518 (1,955,389) (357,675) 9,620,064 Net investment in leveraged leases 4,844,014 - 8,468 - 4,852,482 Equipment held for sale or lease 16,464 - - (16,464) - Residual value interests 610,878 - - (28,821) 582,057 Initial direct costs, net of accumulated amortization of $1,222,149 in 1997 and $1,365,512 in 1996 1,300,152 - (622,517) - 677,635 Reserve for losses (305,978) (57,231) - - (363,209) ------------------- ----------------- ----------------- ----------------- ----------------- $52,264,526 $20,287 ($6,163,078) ($13,357,974) $32,763,761 =================== ================= ================= ================= =================
ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996 (Unaudited) 2. Investment in lease assets (continued): At September 30, 1997, equipment on operating leases consists of the following:
Balance Balance December 31, Acquisitions, Dispositions & Reclassifications September 30, 1996 1st Quarter 2nd Quarter 3rd Quarter 1997 ---- ----------- ----------- ----------- ---- Transportation $21,497,670 ($7,105,011) ($26,223) ($1,248,000) $13,118,436 Corporate aircraft 9,635,969 (1,890,000) - - 7,745,969 Printing 4,393,249 - - - 4,393,249 Other 4,726,040 - (1,708,303) (14,619) 3,003,118 Manufacturing 1,587,670 - - - 1,587,670 Mining 4,347,960 - (3,347,960) - 1,000,000 Ground support equipment 1,127,988 - - (274,730) 853,258 Data processing 851,561 - - - 851,561 Office equipment 216,080 - - - 216,080 Construction equipment 4,985,297 - (4,985,297) - - Materials handling 3,915,999 - (3,915,999) - - ------------------- ----------------- ----------------- ----------------- ----------------- 57,285,483 (8,995,011) (13,983,782) (1,537,349) 32,769,341 Accumulated depreciation (23,342,097) 3,234,447 4,647,253 85,788 (15,374,609) ------------------- ----------------- ----------------- ----------------- ----------------- $33,943,386 ($5,760,564) ($9,336,529) ($1,451,561) $17,394,732 =================== ================= ================= ================= =================
All of the equipment on operating leases was acquired during 1992, 1993, 1994, 1995 and 1996. At September 30, 1997, the aggregate amounts of future minimum lease payments are as follows: Direct Operating Financing Total --------- --------- ----- Three months ending December 31, 1997 $1,431,008 $985,087 $2,416,095 Year ending December 31, 1998 3,905,942 3,621,257 7,527,199 1999 3,003,855 2,579,270 5,583,125 2000 1,731,571 1,652,153 3,383,724 2001 1,202,728 1,128,109 2,330,837 Thereafter 1,501,292 580,737 2,082,029 ------------- ------------- ------------- $12,776,396 $10,546,613 $23,323,009 ============= ============= ============= ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996 (Unaudited) 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 7.04% to 13.3%. Future minimum principal payments of non-recourse debt as of September 30, 1997 are as follows: Principal Interest Total --------- -------- ----- Three months ending December 31, 1997 $838,057 $160,351 $998,408 Year ending December 31, 1998 2,305,286 458,329 2,763,615 1999 2,045,296 287,129 2,332,425 2000 1,535,205 151,656 1,686,861 2001 697,282 56,062 753,344 Thereafter 356,930 22,731 379,661 ------------ ------------ ------------ $7,778,056 $1,136,258 $8,914,314 ============ ============ ============ 5. Related party transactions: The terms of the Agreement of Limited Partnership provide that the General Partners and/or Affiliates are entitled to receive certain fees for equipment acquisition, management and resale and for management of the Partnership. The General Partners and/or Affiliates earned the following fees and commissions, pursuant to the Agreement of Limited Partnership as follows: 1997 1996 ---- ---- Incentive and equipment management fees $506,568 $793,726 Administrative cost reimbursements 229,871 192,711 ----------------- ----------------- $736,439 $986,437 ================= ================= ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1997 AND 1996 (Unaudited) 6. Partner's capital: The Fund is authorized to issue up to 7,500,000 Units of Limited Partnership interest in addition to the Initial Limited Partners. The Fund's Net Profits, Net Losses and Tax Credits are to be allocated 99% to the Limited Partners and 1% to the General Partner. As more fully described in the Partnership Agreement, available Cash from Operations and Cash from Sales or Refinancing shall be distributed as follows: First, 5% of Distributions of Cash from Operations to the General Partner as Incentive Management Fees. Second, the balance to the Limited Partners until the Limited Partners have received aggregate Distributions, as defined, in an amount equal to their Original Invested Capital, as defined, plus a 10% per annum cumulative (compounded daily) return on their Adjusted Invested Capital, as defined. Third,the General Partner will receive as Incentive Management Fees, the following: (A) 10% of remaining Cash from Operations, as defined, (B) 15% of remaining Cash from Sales or Refinancing, as defined. Fourth, the balance to the Limited Partners. 7. 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, 1998. 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 September 30, 1997, the Partnership had $500,000 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 September 30, 1997. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity The Partnership's primary source of liquidity during 1997 was proceeds from sales of lease assets. The liquidity of the Partnership will vary in the future, increasing to the extent cash flows from leases exceed expenses, 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. The Partnership currently has available adequate reserves to meet contingencies, but in the event those reserves were found to be inadequate, the Partnership would likely be in a position to borrow against its current portfolio to meet such requirements. The General Partner envisions no such requirements for operating purposes. As of September 30, 1997, the Partnership had borrowed approximately $38,342,000, with a remaining unpaid balance of approximately $7,778,000. Borrowings are to be non-recourse to the Partnership, that is, the only recourse of the lender will be to the equipment or corresponding lease acquired or secured with the loan proceeds. The General Partner expects that aggregate borrowings in the future will be approximately 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. 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, 1998. No commitments of capital have been or are expected to be made other than for the acquisition of additional equipment. As of September 30, 1997, there were no such commitments. 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. 1997 vs. 1996: Nine months: During the first nine months of 1997, the primary source of operating cash flows was operating lease revenues. Total lease revenues decreased by $2,301,160 compared to 1996. In 1997 and 1996, the most significant source cash flows from investing activities was the proceeds from the sales of assets. Proceeds from asset sales and the use of cash for asset acquisitions are not comparable to prior periods nor are they expected to be comparable to future periods. In 1997, the only source of cash from financing activities was borrowings under the line of credit. In 1996 , proceeds from non-recourse debt and borrowings under the line of credit were the only sources of financing cash flows. Cash used to repay non-recourse debt has increased due to both scheduled and unscheduled debt reductions. Distributions to Limited Partners have not changed significantly. Three months: The primary source of cash from operations for the third quarter was lease rents. Lease rents have decreased from the prior year due to asset sales during the preceding twelve months. The investing sources of cash in 1997 were the same as noted above for the nine month period. Amounts of cash used for purchases of assets is not comparable nor is it expected to be comparable from one period to another. In 1997, the only source of cash from financing activities was borrowings under the line of credit. In 1996, proceeds from non-recourse debt and borrowings under the line of credit were the Partnership's only financing sources of cash. Results of Operations Operations in 1996 resulted in net income of $1,692,353 for the nine month period and $794,436 for the three month period. In 1997, operations resulted in net income of $1,739,514 for the nine month period and $670,182 for the three month period. 1997 vs. 1996: Operating lease revenues have decreased due to sales of leased assets during the last twelve months. Revenues from financing and leveraged leases have not changed significantly compared to 1996. Depreciation expense is directly related to the amounts of operating lease assets and has decreased from 1996 to 1997 as a result of sales of operating lease assets over the last year. Management fees are related to the amounts of lease revenues and distributions to Limited Partners. As assets have been sold, lease revenues have decreased and as a result, management fees have also decreased. 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, September 30, 1997 and December 31, 1996. Income statements for the nine and three month periods ended September 30, 1997 and 1996. Statement of changes in partners' equity for the nine month period ended September 30, 1997. Statements of cash flows for the nine and three month periods ended September 30, 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: November 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 9-mos dec-31-1997 sep-30-1997 332,521 0 470,514 0 0 0 0 0 33,566,796 0 0 0 0 0 24,609,184 33,566,796 0 7,735,659 0 0 5,116,404 57,231 822,510 1,739,514 0 1,739,514 0 0 0 1,739,514 0 0
-----END PRIVACY-ENHANCED MESSAGE-----