-----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, CPl4WHdhDS+3g6Yu2g8TNKDt7DzDQTT+ZWlKePg9i4eaMLsTNDNTdL4AcsNOHh+i j3Uf1deVCoLiHc7+lrU1Gg== 0000879812-01-500003.txt : 20010809 0000879812-01-500003.hdr.sgml : 20010809 ACCESSION NUMBER: 0000879812-01-500003 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010808 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: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-21552 FILM NUMBER: 1700607 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 10QSB 1 fund410q2q2001.txt REPORT FOR THE SIX MONTHS ENDED JUNE 30, 2001 Form 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 |X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the quarterly period ended June 30, 2001 |_| 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 0-21552 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 1 Part I FINANCIAL INFORMATION Item 1. Financial Statements. 2 ATEL CASH DISTRIBUTION FUND IV, L.P. BALANCE SHEET JUNE 30, 2001 (Unaudited) ASSETS Cash and cash equivalents $ 770,206 Accounts receivable, net of allowance for doubtful accounts of $67,211 238,370 Investments in leases 3,047,162 ---------------- $ 4,055,738 ================ LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $ 402,258 Accounts payable 120,545 Accrued interest payable 2,904 Unearned operating lease income 81,862 ---------------- Total liabilities 607,569 Partners' capital: General partners 227,897 Limited partners 3,220,272 ---------------- Total partners' capital 3,448,169 ---------------- $ 4,055,738 ================ See accompanying notes. 3 ATEL CASH DISTRIBUTION FUND IV, L.P. INCOME STATEMENTS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- 2001 2000 2001 2000 ---- ---- ---- ---- Revenues: Lease revenues: Operating leases $ 315,013 $ 1,226,291 $ 166,121 $ 574,504 Direct financing leases 288,615 358,880 143,005 178,265 (Loss) gain on sale of assets (1,916) 1,223,154 (9,279) 1,166,793 Interest income 13,599 110,120 5,368 44,885 Other income 1,182 37,778 144 2,589 ---------------- ---------------- ---------------- ---------------- 616,493 2,956,223 305,359 1,967,036 Expenses: Cost reimbursements to General Partner 251,284 107,487 150,813 63,500 Depreciation and amortization 249,378 560,683 114,167 276,828 Other 61,268 56,168 24,974 48,219 Professional fees 26,075 35,817 20,455 21,520 Interest 23,851 99,896 10,005 40,271 Equipment and incentive management fees - 150,232 (30,928) 85,827 Railcar maintenance - 111,237 - - ---------------- ---------------- ---------------- ---------------- 611,856 1,121,520 289,486 536,165 ---------------- ---------------- ---------------- ---------------- Net income $ 4,637 $ 1,834,703 $ 15,873 $ 1,430,871 ================ ================ ================ ================ Net income: General partners $ 46 $ 18,347 $ 159 $ 14,309 Limited partners 4,591 1,816,356 15,714 1,416,562 ---------------- ---------------- ---------------- ---------------- $ 4,637 $ 1,834,703 $ 15,873 $ 1,430,871 ================ ================ ================ ================ Net income per limited partnership unit $0.00 $0.24 $0.00 $0.19 Weighted average number of units outstanding 7,487,350 7,487,350 7,487,350 7,487,350
STATEMENT OF CHANGES IN PARTNERS' CAPITAL SIX MONTH PERIOD ENDED JUNE 30, 2001 (Unaudited)
Limited Partners General Units Amount Partners Total Balance December 31, 2000 7,487,350 $ 4,546,863 $ 227,851 $ 4,774,714 Distributions to limited partners (1,331,182) - (1,331,182) Net income 4,591 46 4,637 ---------------- ---------------- ---------------- ---------------- Balance June 30, 2001 7,487,350 $ 3,220,272 $ 227,897 $ 3,448,169 ================ ================ ================ ================
See accompanying notes. 4 ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 2001 AND 2000 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, -------------- -------------- 2001 2000 2001 2000 ---- ---- ---- ---- Operating activities: Net income $ 4,637 $ 1,834,703 $ 15,873 $ 1,430,871 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 249,378 560,683 114,167 276,828 Gain on sale of assets 1,916 (1,223,154) 9,279 (1,166,793) Changes in operating assets and liabilities: Accounts receivable 1,985,623 1,212,465 88,081 46,088 Bank overdrafts (230,243) - - - Accounts payable, general partner (32,722) (26,449) (30,928) (56,675) Accounts payable, other 27,426 (239,940) 82,129 (55,092) Accrued interest payable (2,552) (3,149) (1,288) (1,590) Unearned operating lease income 27,617 (47,792) 77,197 3,715 ---------------- ---------------- ---------------- ---------------- Net cash from operations 2,031,080 2,067,367 354,510 477,352 ---------------- ---------------- ---------------- ---------------- Investing activities: Proceeds from sales of assets 180,790 2,276,805 45,146 2,127,197 Reduction in investment in direct financing leases 241,222 83,127 157,059 (146,733) ---------------- ---------------- ---------------- ---------------- Net cash provided by investing activities 422,012 2,359,932 202,205 1,980,464 ---------------- ---------------- ---------------- ---------------- Financing activities: Payments of non-recourse debt (407,149) (776,163) (205,482) (391,875) Distributions to limited partners (1,331,182) (5,241,642) 2,853 (2,621,012) ---------------- ---------------- ---------------- ---------------- Net cash used in financing activities (1,738,331) (6,017,805) (202,629) (3,012,887) ---------------- ---------------- ---------------- ---------------- Net increase (decrease) in cash and cash equivalents 714,761 (1,590,506) 354,086 (555,071) Cash at beginning of period 55,445 5,864,559 416,120 4,829,124 ---------------- ---------------- ---------------- ---------------- Cash at end of period $ 770,206 $ 4,274,053 $ 770,206 $ 4,274,053 ================ ================ ================ ================ Supplemental disclosures of cash flow information: Cash paid during period for interest $ 26,403 $ 103,045 $ 11,293 $ 41,861 ================ ================ ================ ================
See accompanying notes. 5 ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 (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. The Partnership's business consists of leasing various types of equipment. As of June 30, 2001, the original terms of the leases were from six months to eight years. 3. Investment in leases: The Partnership's investment in leases consists of the following:
Depreciation Expense or Reclass- December 31, Amortization ifications & June 30, 2000 of Leases Dispositions 2001 ---- --------- -------------- ---- Net investment in operating leases $ 2,589,544 $ (243,072) $ (92,541) $ 2,253,931 Net investment in direct financing leases 1,674,127 (241,222) (79,795) 1,353,110 Initial direct costs, net of accumulated amortization of $99,456 in 2000 and $105,762 in 2001 30,560 (6,306) - 24,254 Equipment held for lease 11,108 - (10,370) 738 Reserve for losses (584,871) - - (584,871) ------------------ ---------------- ---------------- ---------------- $ 3,720,468 $ (490,600) $ (182,706) $ 3,047,162 ================== ================ ================ ================
6 ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 (Unaudited) 3. Investments in leases (continued): The Partnership's investment in property on operating leases consists of the following:
Reclassifications & December 31, Dispositions June 30, 2000 1st Quarter 2nd Quarter 2001 ---- ----------- ----------- ---- Transportation $ 3,196,692 $ (124,809) $ (112,294) $ 2,959,589 Construction 1,756,195 - - 1,756,195 Manufacturing 457,670 - - 457,670 Materials handling 291,920 - - 291,920 Other 26,092 - - 26,092 ---------------- ---------------- ---------------- ---------------- 5,728,569 (124,809) (112,294) 5,491,466 Less accumulated depreciation (3,139,025) (57,186) (41,324) (3,237,535) ---------------- ---------------- ---------------- ---------------- $ 2,589,544 $ (181,995) $ (153,618) $ 2,253,931 ================ ================ ================ ================
All of the property on operating leases was acquired from 1992 through 1997. At June 30, 2001, the aggregate amounts of future minimum lease payments are as follows: Year ending Direct December 31, Financing Operating Total ------------ --------- --------- ----- 2001 $ 283,626 $ 429,942 $ 713,568 2002 561,360 725,017 1,286,377 2003 561,360 554,385 1,115,745 2004 423,999 - 423,999 ---------------- ---------------- ---------------- $ 1,830,345 $ 1,709,344 $ 3,539,689 ================ ================ ================ 7 ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 (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 7.1% to 9.1%. Future minimum principal payments of long-term non-recourse debt as of June 30, 2001 are as follows: Year ending December 31, Principal Interest Total ------------ --------- -------- ----- 2001 $ 107,862 $ 15,433 $ 123,295 2002 187,916 18,137 206,053 2003 106,480 2,861 109,341 ---------------- ---------------- ---------------- $ 402,258 $ 36,431 $ 438,689 ================ ================ ================ 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, commissions and reimbursements, pursuant to the Limited Partnership Agreement during the six month periods ended June 30, 2001 and 2000 as follows : 2001 2000 ---- ---- Reimbursement of administrative costs $ 251,284 $ 107,487 Incentive and equipment management fees - 150,232 ---------------- ---------------- $ 251,284 $ 257,719 ================ ================ Effective January 1, 2001, the General Partners have ceased charging the Partnership any further fees. 8 ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 2001 (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 Partners. As more fully described in the Agreement of Limited Partnership, 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. 9 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 primary source of liquidity during 2001 were lease revenues and proceeds from the 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 June 30, 2001, the Partnership had borrowed approximately $38,342,000, with a remaining unpaid balance of $402,258. 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. No commitments of capital have been or are expected to be made. As of June 30, 2001, 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. Cash Flows, 2001 vs. 2000: Six months: During the first six months of 2001, lease rents were the primary source of cash flows. During the first six months of 2000, proceeds from sales of lease assets was the primary sources of cash flows. Cash flows from operations decreased by $36,287 from ($2,067,367 in 2000 to $2,031,080 in 2001). Sources of cash from investing activities consisted of proceeds from the sales of lease assets and from direct financing lease rents accounted for as reductions of the net investment in such leases. Proceeds from sales of assets decreased from $2,276,805 in 2000 to $180,790 in 2001. 10 In 2001 and 2000, there were no sources of cash from financing activities. As scheduled debt payments have been made over the last year, debt balances have been reduced. As a result, the amounts of cash used to make such debt payments has also decreased. The Partnership has made no distributions from 2001 operations. This has resulted in a decrease in the amount of cash used for such distributions. Three months: Lease rents were the primary source of cash flows in the second quarter of 2001. Proceeds from sales of lease assets was the primary source of cash flows in the second quarter of 2000. Operating lease rents have decreased by $408,383 from the prior year due to asset sales during the preceding twelve months. These rents are the primary source of cash from operations. In 2000, proceeds from lease assets sales were the most significant source of cash from investing activities. Proceeds from asset sales has decreased as most of the Partnership's lease assets have been sold over the last eighteen months. Rents from direct financing leases also provided cash flows from investing activities but has decreased as a result of asset sales. Such rents were the primary source of cash from investing activities in 2001. During the second quarter of 2001 and 2000, there were no financing sources of cash. Payments of non-recourse debt and distributions to the Limited Partners decreased for the same reasons as noted above for the six month period. Results of Operations Operations in 2000, operations resulted in net income of $4,367 for the six month period and $15,873 for the three month period. Operations in the 2000 resulted in net income of $1,834,703 for the six month period and $1,430,871 for the three month period. Operating lease revenues decreased by $911,278 for the six month period and by $408,383 for the three month period. Revenues have declined as leases have matured and as the underlying assets have been sold. The Partnership's investment in lease assets has decreased from $8,049,422 at December 31, 1999 to $3,047,162 at June 30, 2001. Most of the decrease has been as a result of sales of assets. As leases mature and the related assets are sold, lease revenues are expected to continue to decline. Gains and losses from the sales of those assets are not expected to be consistent from one period to another. The Partnership's operating expenses decreased by $509,664 for the six month period and by $246,679 for the three month period. Most of the decrease resulted from decreased depreciation expense. Depreciation has decreased as operating leases have matured and as the underlying assets have been sold. Management fees have decreased as the General Partner has determined to charge the Partnership no further fees. These decreases were partially offset by increased administrative costs in both the six and three month periods. PART II OTHER INFORMATION Item 1. LEGAL PROCEEDINGS. No material legal proceedings are currently pending against the Partnership or against any of its assets. 11 On December 31, 1997, Quaker Coal Company requested a moratorium on lease payments from January through March 1998. No lease payments were made by the lessee through June of 1998, and as a result, the General Partner declared the lease in default. Subsequently, the lessee cured the outstanding payments and eventually satisfied substantially all lease payments due under the Lease; however, the General Partner refused to waive the default and insisted on contractual damages. The General Partner filed a suit against the lessee for its contractual damages in the U.S. District Court of Northern California (the "Court") (Case No. 98-02971 THE). On June 16, 2000, the lessee filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The amounts of these damages have not been included in the financial statements included in Part I, Item 1 of this report. The Partnership obtained a stipulation for relief from the automatic bankruptcy stay to allow the Court to issue its ruling, and filed a request to participate on the Official Committee of Unsecured Creditors in the bankruptcy proceedings. The Partnership succeeded upon securing the return of its equipment, which has been liquidated, netting approximately 17% of the original equipment cost. The Court issued a ruling on March 4, 2001, denying the Partnership's claim for damages. The Lessee subsequently filed a claim against the Partnership, for reimbursement of its legal expenses. The General Partner believes the Court's decision is erroneous, as a matter law, and has filed an appeal of the decision in the U.S. District Court of Appeals. The lessee filed a plan of reorganization, which has been objected to by several large creditors, including the General Partner. These creditors are also seeking a formal role on the creditors committee or formation of their own committee. Currently, the likelihood of recovery of amounts above the payment of the lease rent and the liquidation of the equipment is speculative and highly uncertain. 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 Sheet, June 30, 2001 Income statements for the six and three month periods ended June 30, 2001 and 2000. Statement of changes in partners' equity for the six months ended June 30, 2001. Statements of cash flows for the six and three month periods ended June 30, 2001 and 2000. 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 12 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: August 8, 2001 ATEL CASH DISTRIBUTION FUND IV, L.P. (Registrant) By: ATEL Financial Services, LLC General Partner of Registrant By: /s/ DEAN L. CASH --------------------------------- Dean L. Cash President and Chief Executive Officer of General Partner By: /s/ PARITOSH K. CHOKSI ------------------------------------ Paritosh K. Choksi Executive Vice President of General Partner, Principal financial officer of registrant By: /s/ DONALD E. CARPENTER ------------------------------------- Donald E. Carpenter, Principal accounting officer of registrant -----END PRIVACY-ENHANCED MESSAGE-----