-----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, Bt6HfPH2VSgYrjLe9JAV5v5VkHQFmlgtIgVIix5BI592EYyE5i5fFpZvZOZ3qEuH m0bPds/amWPAFUXKiwYxXQ== 0000879812-99-000006.txt : 19991117 0000879812-99-000006.hdr.sgml : 19991117 ACCESSION NUMBER: 0000879812-99-000006 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 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: 99751461 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 THIRD QUARTER OF 1999 Form 10-QSB 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, 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 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 SHEET SEPTEMBER 30, 1999 (Unaudited) ASSETS Cash and cash equivalents $7,859,670 Accounts receivable 185,198 Investment in leases 9,177,825 ----------------- $ 17,222,693 ================= LIABILITIES AND PARTNERS' CAPITAL Non-recourse debt $3,021,087 Accounts payable: General Partner 56,503 Other 165,343 Accrued interest 13,463 Unearned operating lease income 299,619 ----------------- Total liabilities 3,556,015 Partners' capital: General Partner 185,153 Limited Partners 13,481,525 ----------------- Total partners' capital 13,666,678 ----------------- $ 17,222,693 ================= See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. INCOME STATEMENTS NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, Revenues: 1999 1998 1999 1998 ---- ---- ---- ---- Lease revenues: Operating $2,156,039 $ 2,751,484 $ 650,091 $ 845,349 Direct financing 515,961 821,370 159,785 255,571 Leveraged 80,864 140,614 - 46,872 Gain on sales of assets 5,423,105 153,476 285,466 105,133 Interest income 138,558 71,424 90,720 11,737 Other 13,303 26,486 1,291 22,393 ----------------- ----------------- ----------------- ----------------- 8,327,830 3,964,854 1,187,353 1,287,055 Expenses: Depreciation and amortization 1,328,425 1,762,137 362,705 558,025 Management fees 525,619 366,309 172,466 101,029 Interest 238,336 352,431 64,580 100,691 Administrative cost reimbursements 168,992 189,635 68,985 70,550 Other 118,289 75,113 (23,695) 15,885 Professional fees 28,834 25,767 7,875 17,398 Provision for losses - 13,145 - - ----------------- ----------------- ----------------- ----------------- 2,408,495 2,784,537 652,916 863,578 ----------------- ----------------- ----------------- ----------------- Net income $5,919,335 $ 1,180,317 $ 534,437 $ 423,477 ================= ================= ================= ================= Net income: General Partner $ 59,193 $ 11,803 $ 5,344 $ 4,235 Limited Partners 5,860,142 1,168,514 529,093 419,242 ----------------- ----------------- ----------------- ----------------- $5,919,335 $ 1,180,317 $ 534,437 $ 423,477 ================= ================= ================= ================= Net income per Limited Partnership unit $0.78 $0.16 $0.07 $0.06 Weighted average number of units outstanding 7,487,350 7,487,350 7,487,350 7,487,350
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENT OF CHANGES IN PARTNERS' CAPITAL NINE MONTH PERIOD ENDED SEPTEMBER 30, 1999 (Unaudited)
Limited Partners General Units Amount Partner Total Balance December 31, 1998 7,487,350 $ 15,484,740 $ 125,960 $ 15,610,700 Distributions to limited partners (7,863,357) - (7,863,357) Net income 5,860,142 59,193 5,919,335 ----------------- ----------------- ----------------- ----------------- Balance September 30, 1999 7,487,350 $ 13,481,525 $ 185,153 $ 13,666,678 ================= ================= ================= =================
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. STATEMENTS OF CASH FLOWS NINE AND THREE MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (Unaudited)
Nine Months Ended Three Months Ended September 30, September 30, ------------- ------------- 1999 1998 1999 1998 ---- ---- ---- ---- Operating activities: Net income $5,919,335 $ 1,180,317 $ 534,437 $ 423,477 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 1,328,425 1,762,137 362,705 558,025 Leveraged lease income (80,864) (140,614) - (46,872) Gain on sales of assets (5,423,105) (153,476) (285,466) (105,133) Provision for losses - 13,145 - - Changes in operating assets and liabilities: Accounts receivable 223,550 155,611 120,741 31,454 Accounts payable, General Partner (401,741) 721 10,528 166,211 Accounts payable, other (51,838) 1,248,094 (34,111) 698,111 Accrued interest (6,743) (8,679) (2,065) (8,045) Unearned operating lease income 36,694 (244,111) 141,753 (189,246) ----------------- ----------------- ----------------- ----------------- Net cash from operations 1,543,713 3,813,145 848,522 1,527,982 ----------------- ----------------- ----------------- ----------------- Investing activities: Reduction of net investment in direct financing leases 1,100,207 1,871,948 352,813 592,673 Proceeds from sales of lease assets 14,320,842 652,642 2,922,992 156,092 ----------------- ----------------- ----------------- ----------------- Net cash provided by investing activities 15,421,049 2,524,590 3,275,805 748,765 ----------------- ----------------- ----------------- ----------------- Financing activities: Repayment of non-recourse debt (1,613,626) (1,709,200) (508,732) (574,097) Distributions to limited partners (7,863,357) (7,862,543) (2,620,945) (2,620,630) ----------------- ----------------- ----------------- ----------------- Net cash used in financing activities (9,476,983) (9,571,743) (3,129,677) (3,194,727) ----------------- ----------------- ----------------- ----------------- Net increase (decrease) in cash and cash equivalents 7,487,779 (3,234,008) 994,650 (917,980) Cash and cash equivalents at beginning of period 371,891 3,990,096 6,865,020 1,674,068 ================= ================= ================= ================= Cash and cash equivalents at end of period $7,859,670 $ 756,088 $7,859,670 $ 756,088 ================= ================= ================= ================= Supplemental disclosures of cash flow information: Cash paid for interest $ 245,079 $ 361,110 $ 66,645 $ 108,736 ================= ================= ================= =================
See accompanying notes. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1999 AND 1998 (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, 1998 of Leases Dispositions 1999 ---- --------- - ------------- ---- Net investment in operating leases $9,415,647 $(1,190,219) $ (2,888,802) $5,336,626 Net investment in direct financing leases 5,252,294 (1,100,207) (318,458) 3,833,629 Net investment in leveraged leases 4,791,326 80,864 (4,872,190) - Equipment held for sale or lease 964,358 - (960,927) 3,431 Residual value interests 582,057 - - 582,057 Initial direct costs, net of accumulated amortization of $514,804 in 1999 and $934,748 in 1998 333,647 (138,206) (121,277) 74,164 Reserve for losses (915,999) - 263,917 (652,082) ----------------- ----------------- ----------------- ----------------- $20,423,330 $(2,347,768) $ (8,897,737) $9,177,825 ================= ================= ================= =================
At September 30, 1999, equipment on operating leases consists of the following:
Balance Balance December 31, Acquisitions, Dispositions & Reclassifications September 30, 1998 1st Quarter 2nd Quarter 3rd Quarter 1999 ---- ----------- ----------- ----------- ---- Printing $ 4,393,249 $1,160,500 $5,553,749 Transportation 3,005,244 $ (795,725) $ (761,633) 2,025,313 3,473,199 Construction equipment 4,985,297 (2,534,118) 2,451,179 Ground support equipment 1,127,988 - - - 1,127,988 Manufacturing 1,587,670 - - (991,870) 595,800 Materials handling 786,160 - - (522,089) 264,071 Data processing 419,412 - - (394,290) 25,122 Other 2,130,174 - (61,152) (2,069,022) - Corporate aircraft 1,328,569 - - (1,328,569) - Office equipment 216,080 (152,104) (63,976) - ------------------- ----------------- ----------------- ----------------- ----------------- 19,979,843 (947,829) (886,761) (4,654,145) 13,491,108 Accumulated depreciation (10,564,196) 160,989 163,233 2,085,492 (8,154,482) ------------------- ----------------- ----------------- ----------------- ----------------- $ 9,415,647 $ (786,840) $ (723,528) $ (2,568,653) $5,336,626 =================== ================= ================= ================= =================
All of the equipment on operating leases was acquired during 1992, 1993, 1994, 1995 and 1996. ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1999 AND 1998 (Unaudited) 2. Investment in lease assets (continued): At September 30, 1999, the aggregate amounts of future minimum lease payments are as follows:
Direct Operating Financing Total Three months ending December 31, 1999 $ 504,408 $ 427,188 $ 931,596 Year ending December 31, 2000 1,655,807 1,437,289 3,093,096 2001 995,166 921,709 1,916,875 2002 845,013 483,677 1,328,690 2003 613,561 396,720 1,010,281 Thereafter - 176,700 176,700 ----------------- ----------------- ----------------- $ 4,613,955 $3,843,283 $8,457,238 ================= ================= =================
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 6.69% to 8.95%. Future minimum principal payments of non-recourse debt as of September 30, 1999 are as follows:
Principal Interest Total Three months ending December 31, 1999 $ 431,670 $ 57,240 $ 488,910 Year ending December 31, 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 ----------------- ----------------- ----------------- $ 3,021,087 $ 287,689 $3,308,776 ================= ================= =================
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: 1999 1998 ---- ---- Incentive and equipment management fees $ 525,619 $ 366,309 Administrative cost reimbursements 168,992 189,635 ----------------- ----------------- $ 694,611 $ 555,944 ================= ================= ATEL CASH DISTRIBUTION FUND IV, L.P. NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1999 AND 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 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 $95,000,000 revolving credit agreement with a group of financial institutions which expires on January 28, 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. At September 30, 1999, the Partnership had no 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, 1999. 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 1999 was 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 September 30, 1999, the Partnership had borrowed approximately $38,342,000, with a remaining unpaid balance of approximately $3,021,000. 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 does not expect that there will be additional borrowings in the future. 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 28, 2000. No commitments of capital have been or are expected to be made other than for the acquisition of additional equipment. As of September 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. 1999 vs. 1998: Nine months: During the first nine months of 1999, the primary source of operating cash flows was operating lease revenues. Total lease revenues decreased by $960,604 compared to 1998. In 1999, the most significant source cash flows from investing activities was the proceeds from the sales of assets. Proceeds from asset sales are not comparable to prior periods nor are they expected to be comparable to future periods. In 1998, the most important source of cash from investing activities was rents from direct financing leases. Such rents decreased by $83,441 compare to 1998. There were no sources of cash from financing activities in 1999 or in 1998. Cash used to repay non-recourse debt has decreased due to scheduled 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 1999 and 1998 were the same as noted above for the nine month period. There were no sources of cash from financing activities in 1999 or in 1998. Repayments of debt decreased for the same reasons as noted above for the nine month period. Distributions to the limited partners were unchanged. Results of Operations In 1999, operations resulted in net income of $5,919,335 for the nine month period and $534,437 for the three month period. Operations in 1998 resulted in net income of $1,180,317 for the nine month period and $423,477 for the three month period. 1999 vs. 1998: Operating lease revenues and direct financing lease revenues have decreased due to sales of leased assets during the last twelve months. Revenues from leveraged leases decreased as a result of the sale of the remaining assets on such leveraged leases in the second quarter of 1999. Gains on sales of lease assets increased significantly and resulted largely due to the sale of leveraged lease assets that had been on lease to Liquid Carbonics. Depreciation expense is directly related to the amounts of operating lease assets and has decreased from 1998 to 1999 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, equipment management fees have also decreased. This was offset by an increase in incentive management fees (which are related to the distributions of operating cash flows to the limited partners). As a result of reductions in t outstanding non-recourse debt, interest expense has decreased compared to 1998. 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, 1999 and December 31, 1998. Income statements for the nine and three month periods ended September 30, 1999 and 1998. Statement of changes in partners' equity for the nine month period ended September 30, 1999. Statements of cash flows for the nine and three month periods ended September 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: November 12, 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 9-mos Dec-31-1999 Sep-30-1999 7859670 0 185198 0 0 0 0 0 17222693 0 0 0 0 0 13666678 17222693 0 8327830 0 0 2170159 0 238336 5919335 0 5919335 0 0 0 5919335 0 0
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