-----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, OxvVKHNPbpHbe+GX3+XTjxvE34EZJG+hc0H/02VODmatT2RpNGFPFcQZTAV8338a paSkQMCeHaL38yXo/iGSkQ== 0000879812-99-000004.txt : 19990816 0000879812-99-000004.hdr.sgml : 19990816 ACCESSION NUMBER: 0000879812-99-000004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990813 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: SEC FILE NUMBER: 000-21552 FILM NUMBER: 99687447 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 REPORT FOR THE SECOND QUARTER OF 1999 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, 1999 |_| 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 Part I FINANCIAL INFORMATION Item 1. Financial Statements. ATEL CASH DISTRIBUTION FUND IV, L.P. BALANCE SHEET JUNE 30, 1999 (Unaudited) ASSETS Cash and cash equivalents $6,865,020 Accounts receivable 305,939 Investments in leases 12,530,869 ---------------- $19,701,828 ================ LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $ 3,529,819 Accounts payable: General partners 45,975 Other 199,454 Accrued interest payable 15,528 Unearned operating lease income 157,866 ---------------- Total liabilities 3,948,642 Partners' capital: General partners 179,809 Limited partners 15,573,377 ---------------- Total partners' capital 15,753,186 ---------------- $19,701,828 ================ See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. INCOME STATEMENTS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, 1999 1998 1999 1998 Revenues: Lease revenues: Operating leases $1,505,948 $1,906,135 $611,212 $1,001,732 Direct financing leases 356,176 565,799 148,925 270,191 Leveraged leases 80,864 93,742 13,245 46,870 Gain on sale of assets 5,137,639 48,343 3,157,632 17,211 Interest income 47,838 59,687 45,744 26,248 Other income 12,012 4,093 7,161 1,051 ---------------- ---------------- ---------------- ---------------- 7,140,477 2,677,799 3,983,919 1,363,303 Expenses: Depreciation 854,275 1,086,519 406,248 529,067 Equipment and incentive management fees 353,153 265,280 170,756 155,199 Interest 173,756 251,740 74,295 123,328 Other 141,984 59,228 81,282 41,134 Amortization 111,445 117,593 21,877 61,261 Administrative cost reimbursements 100,007 119,085 69,398 40,287 Professional fees 20,959 8,369 15,000 5,231 Provision for losses - 13,145 - - ---------------- ---------------- ---------------- ---------------- 1,755,579 1,920,959 838,856 955,507 ---------------- ---------------- ---------------- ---------------- Net income $5,384,898 $756,840 $3,145,063 $407,796 ================ ================ ================ ================ Net income: General partners $53,849 $7,568 $31,451 $4,078 Limited partners 5,331,049 749,272 3,113,612 403,718 ---------------- ---------------- ---------------- ---------------- $5,384,898 $756,840 $3,145,063 $407,796 ================ ================ ================ ================ Net income per limited partnership unit $0.71 $0.10 $0.42 $0.05 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, 1999 (Unaudited)
Limited Partners General Units Amount Partners Total Balance December 31, 1998 7,487,350 $15,484,740 $ 125,960 $15,610,700 Distributions to limited partners (5,242,412) - (5,242,412) Net income 5,331,049 53,849 5,384,898 ---------------- ---------------- ---------------- ---------------- Balance June 30, 1999 7,487,350 $15,573,377 $179,809 $15,753,186 ================ ================ ================ ================
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS SIX AND THREE MONTH PERIODS ENDED JUNE 30, 1999 AND 1998 (Unaudited)
Six Months Three Months Ended June 30, Ended June 30, 1999 1998 1999 1998 Operating activities: Net income $ 5,384,898 $ 756,840 $ 3,145,063 $ 407,796 Adjustments to reconcile net income to net cash provided by operations: Depreciation 854,275 1,086,519 406,248 529,067 Amortization 111,445 117,593 21,877 61,261 Leveraged lease income (80,864) (93,742) (13,245) (93,742) Gain on sale of assets (5,137,639) (48,343) (3,157,632) (17,211) Provision for losses - 13,145 - - Changes in operating assets and liabilities: Accounts receivable 102,809 124,157 203,070 44,869 Accounts payable, general partner (412,269) (165,490) (58,868) (211,813) Accounts payable, other (17,727) 549,983 (60,978) 575,791 Accrued interest payable (4,678) (634) (2,224) 2,659 Unearned operating lease income (105,059) (54,865) 32,698 (4,385) ---------------- ---------------- ---------------- ---------------- Net cash from operations 695,191 2,285,163 516,009 1,294,292 ---------------- ---------------- ---------------- ---------------- Investing activities: Proceeds from sales of assets 11,397,850 496,550 7,777,411 365,874 Reduction in investment in direct financing leases 747,394 1,279,275 352,400 612,437 Reduction in investment in leveraged leases - - (1,240) 46,872 ---------------- ---------------- ---------------- ---------------- Net cash provided by investing activities 12,145,244 1,775,825 8,128,571 1,025,183 ---------------- ---------------- ---------------- ---------------- Financing activities: Payments of non-recourse debt (1,104,894) (1,135,103) (510,230) (574,080) Distributions to limited partners (5,242,412) (5,241,913) (2,621,410) (2,623,308) ---------------- ---------------- ---------------- ---------------- Net cash used by financing activities (6,347,306) (6,377,016) (3,131,640) (3,197,388) ---------------- ---------------- ---------------- ---------------- Net decrease in cash and cash equivalents 6,493,129 (2,316,028) 5,512,940 (877,913) Cash at beginning of period 371,891 3,990,096 1,352,080 2,551,981 ---------------- ---------------- ---------------- ---------------- Cash at end of period $ 6,865,020 $ 1,674,068 $ 6,865,020 $ 1,674,068 ================ ================ ================ ================ Supplemental disclosures of cash flow information: Cash paid during period for interest $ 178,434 $ 252,374 $ 76,519 $ 120,669 ================ ================ ================ ================
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (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, 1999, 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, 1998 of Leases Dispositions 1999 ---- --------- -------------- ---- Net investment in operating leases $ 9,415,647 $ (854,275) $ (656,093) $7,905,279 Net investment in direct financing leases 5,252,294 (747,394) (303,192) 4,201,708 Net investment in leveraged leases 4,791,326 80,864 (4,872,190) - Residual value interests 582,057 - - 582,057 Equipment held for lease 964,358 - (571,376) 392,982 Initial direct costs, net of accumulated amortization of $911,060 in 1998 and $649,058 in 1999 333,647 (111,445) (121,277) 100,925 Reserve for losses (915,999) - 263,917 (652,082) ------------------ ---------------- ---------------- ---------------- $20,423,330 $(1,632,250) $(6,260,211) $12,530,869 ================== ================ ================ ================
ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (Unaudited) 3. Investments in leases (continued): The following schedule provides an analysis of the Partnership's investment in property on operating leases by major classifications as of December 31, 1998, acquisitions and dispositions during the quarters ended March 31, 1999 and June 30, 1999 and as of June 30, 1999.
Acquisitions & December 31, Dispositions June 30, 1998 1st Quarter 2nd Quarter 1999 ---- ----------- ----------- ---- Construction $ 4,985,297 $ 4,985,297 Printing 4,393,249 4,393,249 Transportation 3,005,244 $ (795,725) $ (761,633) 1,447,886 Other 2,130,174 - - 2,130,174 Manufacturing 1,587,670 - - 1,587,670 Corporate aircraft 1,328,569 - - 1,328,569 Ground support 1,127,988 - - 1,127,988 Materials handling 786,160 - - 786,160 Data processing 419,412 - - 419,412 Office equipment 216,080 (152,104) (125,128) (61,152) ---------------- ---------------- ---------------- ---------------- 19,979,843 (947,829) (886,761) 18,145,253 Less accumulated depreciation (10,564,196) 160,989 163,233 (10,239,974) ---------------- ---------------- ---------------- ---------------- $ 9,415,647 ($786,840) ($723,528) $7,905,279 ================ ================ ================ ================
All of the property on operating leases was acquired during 1992, 1993, 1994, 1995, 1996 and 1997. At June 30, 1999, the aggregate amounts of future minimum lease payments are as follows: Year ending Direct December 31, Financing Operating Total 1999 $939,787 $1,321,865 $2,261,652 2000 1,437,289 1,659,731 3,097,020 2001 921,709 999,089 1,920,798 2002 483,677 848,936 1,332,613 2003 396,720 617,484 1,014,204 Thereafter 176,700 - 176,700 ---------------- ---------------- ---------------- $4,355,882 $5,447,105 $9,802,987 ================ ================ ================ ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (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 6.47% to 9.35%. Future minimum principal payments of long-term non-recourse debt as of June 30, 1999 are as follows: Year ending December 31, Principal Interest Total 1999 $940,402 $123,885 $1,064,287 2000 1,535,205 151,656 1,686,861 2001 697,282 56,062 753,344 2002 250,450 19,870 270,320 2003 106,480 2,861 109,341 ---------------- ---------------- ---------------- $3,529,819 $354,334 $3,884,153 ================ ================ ================ 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 as follows: 1999 1998 ---- ---- Reimbursement of administrative costs $ 100,007 $ 119,085 Incentive and equipment management fees 353,153 265,280 ---------------- ---------------- $453,160 $384,365 ================ ================ The amounts above are gross amounts incurred by the General Partners and/or Affiliates, including commissions to broker-dealers for the sales of Partnership Units. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS JUNE 30, 1998 (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. 7. Line of credit: The Partnership participates with the General Partner and certain of its Affiliates in a $95,000,000 revolving credit agreement with a group of financial institutions which expires on January 31, 2000. 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. The Partnership had no borrowings under the agreement during 1999. The credit agreement includes certain financial covenants applicable to each borrower. The Partnership was in compliance with its covenants as of June 30, 1999. 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 1999 were lease revenues, proceeds from the sales of lease assets and borrowings under the line of credit. 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. The Partnership participates with the General Partner and certain of its affiliates in a $95,000,000 revolving line of credit with a financial institution. The line of credit expires on January 31, 2000. As of June 30, 1999, the Partnership had borrowed approximately $38,342,000, with a remaining unpaid balance of $3,529,819. 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 other than for the acquisition of additional equipment. As of June 30, 1999, 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, 1999 vs. 1998: Six months: During the first six months of 1999, proceeds from sales of lease assets was the primary sources of cash flows. Cash flows from operations decreased by $1,589,972 from ($2,285,163) in 1998 to $695,191 in 1999. The decrease is a result of decreased operating and direct financing lease revenues and by increases in the amounts of cash used to reduce certain accounts payable compared to 1998. 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 increased from $496,550 in 1998 to $11,397,850 in 1999. In 1999 and 1998, there were no sources of cash from financing activities. The amounts of cash used to repay non-recourse debt and the amounts distributed to the Limited Partners did not change significantly. Three months: Proceeds from sales of lease assets was the primary source of cash flows in the second quarter of 1999. Operating lease rents have decreased by $6390,520 from the prior year due to asset sales during the preceding twelve months. These rents are the primary source of cash from operations. In 1999, proceeds from lease assets sales were the most significant source of cash from investing activities. They increased from $365,874 in 1998 to $7,777,411 in 1999 due to increased amounts of asset sales as noted above for the six month period. During the second quarter of 1999 and 1998, there were no financing sources of cash. Payments of non-recourse debt decreased slightly for the same reasons as noted above for the six month period. Results of Operations In 1999, operations resulted in net income of $5,384,898 for the six month period and $3,145,063 for the three month period. Operations in the 1998 resulted in net income of $756,840 for the six month period and $407,796 for the three month period. Revenues increased from $2,677,799 in 1998 to $7,140,477 in 1999, an increase of $4,462,678. Operating lease revenues declined by $406,187 due to lease terminations and sales of the related assets. Gains recognized on sales of assets increased by $5,089,296 compared to 1998. Most of the assets sold were assets which had been on leveraged leases. The Partnership's operating expenses decreased by $165,380 for the six month period and by $116,651 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 over the last year. 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 Sheet, June 30, 1999 Income statements for the six and three month periods ended June 30, 1999 and 1998. Statement of changes in partners' equity for the six months ended June 30, 1999. Statements of cash flows for the six and three month periods ended June 30, 1999 and 1998. 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: August 13, 1999 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/ PARITOSH K. CHOKSI ---------------------------------------------- Paritosh K. Choksi Principal financial officer of registrant By: /s/ DONALD E. CARPENTER ---------------------------------------------- Donald E. Carpenter, Principal accounting officer of registrant EX-27 2 FDS --
5 6-MOS DEC-31-1999 DEC-31-1999 6,865,020 0 305,939 0 0 0 0 0 19,701,828 0 0 0 0 0 15,753,186 19,701,828 0 7,140,477 0 0 1,581,823 0 173,756 5,384,898 0 5,384,898 0 0 0 5,384,898 0 0
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